Radico Khaitan Ltd Management Discussions.



Global economy is on its path to recovery with growth likely to approach 6.0% in 2021, after an estimated contraction of (3.3%) in CY2020. Advanced economies are expected to recover significantly faster due to rapid policy response and a widespread vaccination drive. Emerging markets and developing economies are expected to take longer time for recovery due to medium-term socio-economic losses because of low rates of vaccination and a lack of support to vulnerable groups during COVID-19 induced economic contractions. Youth, women workers and the informally employed have been hit the hardest by these contractions which are also expected to significantly increase income inequality.

IMF expects that the downturn would have been much higher if it had not been for exceptional policy assistance in CY2020. Although GDP recovered faster than anticipated in the second half of CY2020, it is still below pre-pandemic levels in most countries. IMF projects an economic recovery in CY2021 and CY2022. Both developing economies and advanced economies are expected to have strong growth rates and undo some of the economic damage caused directly and indirectly due to the pandemic.

The following years are likely to be characterised by diverging recovery paths and agile policy making influenced primarily by the stage of recovery. Despite a wide range of outlooks across economies, the overarching policy priorities remain strikingly consistent, which is resolving the immediate health problem and restoring prosperity to pre-crisis levels. While the projected recovery brings some respite to low income nations and the aforementioned vulnerable groups, future recoveries depend on the global health situation which still remains uncertain. New strains of the virus may prove to be resistant to current vaccines which can prolong the pandemic and postpone global economic recovery. Different regions and countries are likely to see a significantly different path to recovery depending on the evolution of viral strains and the implementation of health policies to deal with them.

Despite the current uncertainty regarding the global health paradigm, there are reasons to be confident about the future. Vaccines have proven to be incredibly effective. Countries with high vaccination rates like Canada and USA have seen a stark decline in daily cases and the removal of many public restrictions.


The Indian economy has faced its worst crisis ever and is projected to contract by (7.3%) in FY2021. The recent surge in daily coronavirus cases has sparked fears that Indias recovery could be slower than expected. In Q3 and Q4 of CY2020, economic growth had started to pick up. The progress indicated that the economy is gaining traction, with GDP growth gaining momentum in the short term.

Coupled with the GDP contraction, India is facing significant supply side bottlenecks, which is leading to a situation dubbed stagflation. This situation has partially led to RBI facing a conundrum where easy monetary policies may help encourage GDP growth but also worsen the already high inflation. Given the incredibly complex economic situation, it is difficult to predict the policies the government and RBI will implement to turn the situation around.

Nevertheless, IMF predicts strong rebound and real GDP growth of 12.5% in FY2022. The rebound is clearly evidenced by the uptick in consumption, manufacturing activity and bank credit. India is experiencing a V-shaped recovery. Global agencies such as the World Bank have acknowledged the fact that this recovery is phenomenal, given how the country has now opened up, and is organising large-scale vaccination drives on priority.

Even as the Indian economy faces multi-dimensional challenges in the short term, it remains one of the most dynamic major economies in the world with significant growth potential. With structural drivers firmly in place, the pace of economic growth is expected to pick up over time. Moreover, the expansionary growth inducing Union Budget 2021 aimed to significantly increase the spending would support the GDP growth and provide impetus to build Indias competitiveness on global platform and foster inclusive growth.



With one of the largest consumer economies, India normally represents an incredibly attractive market given its significant growth opportunities. A growing upper- middle class, more people being pushed out of poverty, low penetration rates for FMCG in rural areas, and rapidly rising consumerism has been the trend in India in the last decade. With a large number of people being pushed into poverty due to the economic recession induced by the pandemic, the short run attractiveness of the consumer sector in India has been impacted.

Consumer mind-set will evolve when it comes to shopping, as considerations such as price and a faster transition to digital platforms will play a key role. After declining for the previous five years, savings have increased since February 2020, owing to decreased mobility and lack of spending due to lockdowns, indicating consumption-led growth and high optimism in the future. Once the COVID-19 related restrictions are eased out and situation starts to normalise, consumer discretionary spending is expected to increase given people have been constrained for so long.

The pandemic has been incredibly disruptive to supply chains and has significantly changed the way business is conducted. With lockdowns and the looming third wave being a potential threat, online storefronts are likely to become the primary form through which selling activities are conducted at least for some goods in the short run. With the increase in the accessibility of internet, especially amongst the younger demography, this transition can be an opportunity as it will help firms in the consumer sector develop additional supply chains. A number of states have recently allowed online booking/home deliveries of alcohol. Although still at a nascent stage, such developments open up new route to market opportunities in the long run.

Consumer goods companies are rethinking their existing strategies in order to gain traction in the industry and grab a larger share of consumer spending. As demand habits are evolving, it is posing new obstacles and opening up new opportunities for businesses. Understanding consumer behaviour after COVID-19 (their new demands and pain points), as well as the significance of technology and digital platforms, will go a long way toward improving the customer experience and fostering long-term connections.


Overall, the spirits industry volumes in FY2021 suffered significantly due to COVID-19 induced lockdowns during the early part of the year. The second half of FY2021, however, featured quarter-on-quarter improvement with strong sales momentum as India emerged from national lockdown and approached a situation with some semblance of normality. By the fourth quarter of FY2021, eight out of eleven top liquor consuming states had returned to above pre-COVID levels. The strong recovery made by the industry in third and fourth quarters of FY2021 demonstrate the fundamental strength and resilience in the spirits industry in India.

This recovery is despite the high tax rates implemented on alcohol during the pandemic. Post reopening in May 2020, to cover the loss of revenues, many states increased duties and taxes in the range of 10% to 75%. A partial recovery being made despite these factors suggest that price elasticity of demand for alcoholic beverages is still low, particularly for the premium category brands. Demand should continue to rise as supply chains are restored and things return to normal.

Government has fixed a target of 10% blending of fuel grade ethanol with petrol by 2022 and 20% blending by 2025. It is expected that in the current ethanol supply year 2020-21, about 325 Crore litres of ethanol is likely to be supplied to the oil marketing companies (OMCs) to achieve 8.5% blending levels. It is likely that the Government will achieve 10% blending target by 2022 with supply of 400 Crore litres of ethanol. Given this focus on ethanol blending, there may be some headwinds in the Extra neutral alcohol (ENA) prices. Furthermore, towards the end of the year, commodity prices, particularly dry good such as packaging materials, experienced sharp increase. Any short term raw material price increase is not expected to have a significant impact on profitability margins for the companies who are focused on premiumization.

According to Euromonitor International, during CY2020 overall Indian Made Foreign Liquor (IMFL) volumes declined as much as (18.0)% to 274 Million cases of 9 litres each. Traditionally, brown spirits which include Whisky, Brandy and Dark Rum, have been the major contributors towards overall IMFL sales volume. During CY2020, whisky constituted the largest segment with 65.4% of the sales volumes and 74.2% of the value. The largest segment of the industry also suffered severly with volume decline of (16.3)% and value degrowth of (22.7)%. White Spirits such as vodka and gin account for 3.6% of the total IMFL volumes and 6.8% of the value indicating a premiumization trend.

Flavored vodka continues to gain popularity and market share. It now constitutes about a third of the overall vodka industry. During CY2020, premium and super premium category vodka accounted for about 68% of the total vodka volumes compared with around 65% five years ago. This trend is expected to continue and the share of premium category vodka is anticipated to increase further.

The industrys focus on premium brands has enabled manufacturers to identify consumers who have relatively lower price sensitivities that ultimately drive value growth. Single malt scotch and blended scotch are expected to grow with CY2021-25 CAGR of 13.0% and 7.3%, respectively.


Businesses are under pressure to rapidly adapt their operations to develop a resilient customer experience while maintaining convenience. COVID-19 lockdowns left restaurants and bars closed for a good part of last year and led to the subsequent rise of the at-home drinking. This is likely to have a long lasting impact on the way liquor is consumed in India. Furthermore, the launch of online sale and home delivery of liquor in certain states opened up an all-new route to market for consumers. It is still at a nascent stage and requires a lot of efforts from both the state governments and the brand owners to make it successful.

Demand for premium brands is relatively less impacted by the industry slowdown due to COVID-19. Furthermore, where spend on commuting, social activities or holidays are reducing, consumers are having more disposable incomes which they can use to have quality experience at home. Therefore, premium brands are likely to show much more resilience and grow in the near future.

The ready-to-drink (RTD) alcohol category, which includes hard seltzers, flavored alcohol beverages, and pre-mixed cocktails, is under rapid transformation across leading global markets, with volume growth out-pacing that of other beverage alcohol categories. This segment is likely to catch the fancy of Indian consumer.

India has an incredibly large young demography which presents many opportunities to firms in the industry. As the youth approaches the legal drinking age and becomes more affluent, they are likely to drive much of the expected and projected future demand. Brand owners are focused on appealing to the younger generation through online marketing and storefronts to capture as much of this segment as possible.

According to Euromonitor International, IMFL volume is expected to reach 353 Million cases in CY2025. During the CY2021-2025 period, IMFL sales volume is expected to grow at a CAGR of 4.2%. During the same period IMFL industry value is expected to grow by 4.6%. The vodka industry is expected to perform better during the same period with volume growth of 5.6% and value growth of 11.0%.


Economic Growth: The Indian economy has grown at a strong pace in the recent past, outperforming most of the emerging markets to become one of the fastest growing major economies in the world. Although, FY2020 and FY2021 have been impacted by global slowdown, IMF predicts a strong rebound and real GDP growth of 12.5% in FY2022. In the longer term, India is bound to be an important contributor of the global economic growth.

Favourable Demographics: India has a young demographic profile and over 15 million people are expected enter the drinking age every year which represents significant growth opportunities for the industry. Total household consumption is expected to reach 300 trillion by 2030. Further, with proportion of high-income households getting widely distributed, the contribution from tier 2, 3 and 4 cities to the consumption is likely to increase.

Urbanisation: Huge population in India are migrating towards bigger cities, where they are exposed to a wider variety of alcoholic beverage products, including IMFL and significantly contributing to the market growth. Rapid urbanization is expected to enhance disposable income, which is favourable for the growth of the industry.

Growth of rural consumption: Rural consumption is expected to grow faster with growing incomes and greater internet penetration. Even during the COVID-19 period, rural economy has shown more resilience over the last year due to better crops season and ongoing policy support.

Changing consumer Preferences: Rising affluence is the biggest driver of increasing consumption. Additionally, consumer behaviour and spending patterns are shifting as disposable incomes rise and Indian society evolves with a preference for lifestyle and aspirational brands. The rise in premiumization is evident in the higher focus of the big players on semi-premium and premium categories with an increase in launches and marketing of these categories.

Increased Alcohol Accessibility and Availability: Over the past few years, there has been a huge change in attitudes and lifestyle, making consumption of alcohol more socially acceptable. This acceptability of alcohol extends to drinking in family environments, at social events, and by females/ youngsters. There has been an increase in the variety of alcoholic beverages and brands with most of them easily available in government licensed outlets, government shops, private licensed retail chains, restaurants, pubs and bars.

Improved operating environment:

The importance of the liquor industry to the states exchequer cannot be understated. A significantly improved operating environment led by state-wide price increases and favourable policy changes resulted in this robust industry performance. Most of the excise policy changes last year have focused on enhancing state revenues without increasing taxes which bodes well for the organic growth in the industry.

company overview

Radico Khaitan Limited (herein after referred as ‘Radico Khaitan" or the Company) is one of the oldest and the largest manufacturers of Indian Made Foreign Liquor ("IMFL") in India. The Company commenced its operations in 1943 and was earlier known as Rampur Distillery Company. Over the years, Radico Khaitan has emerged as a major bulk spirits supplier and bottler to other spirit manufacturers. It has become one of the most admired liquor brands across India.

The Company started its journey of building its own brand portfolio with the launch of 8PM Whisky in 1998. During the first decade (i.e. 1998-2006), the Company concentrated on building a strong manufacturing platform, establishing a robust pan India distribution network and achieved sales volume of over 10 Million cases. The next decade (i.e. 2006 onwards) was the era of premiumisation that started with the launch of Magic Moments vodka, which became the largest selling vodka in India and one of the largest globally. During this period, Radico Khaitan achieved premium sales volume of over 7 Million cases.

In the last ten years, Radico Khaitan has been able to successfully expand its premium brand portfolio. The Company has launched twelve new brands over the last decade of which eleven has been from the premium category. Radico Khaitan is one of the few companies in India, which has developed its entire brand portfolio organically with in-house capabilities. This truly reflects the Companys focus on innovation, R&D strength and understanding of customer preferences.


Over the years, the Company has developed robust brand portfolio across the IMFL category comprising of Whisky, Brandy, Rum and White Spirits includes Magic Moments and Magic Moments Verve Vodka, Morpheus and Morpheus Blue Brandy, 8PM and 8PM Premium Black Whisky, 1965 - The Spirit of Victory Rum, Rampur Indian Single Malt Whisky, Jaisalmer Indian Craft Gin, Contessa Rum, Old Admiral Brandy, After Dark Whisky, Pluton Bay Rum and Regal Talon Whisky. The Companys portfolio currently includes five millionaire brands namely 8PM Whisky, Contessa Rum, Old Admiral Brandy, Magic Moments Vodka and 8PM Premium Black Whisky.

Despite the impact of COVID-19 in FY2021, 8 PM family of brands continued the growth trajectory and achieved sales volumes of 10.7 million cases. 8PM Premium Black whisky achieved sales volume of over a million case during the year.

Radico Khaitan is also one of the largest providers of branded IMFL to the Canteen Stores Department (CSD). There are stringent conditions for entering into CSD segment leading to entry barriers for new players. The recent restriction on the availability of BIO products in the CSD opens up significant opportunities for Radico Khaitans luxury products such as Rampur Indian Single Malt and Jaisalmer Indian Craft Gin. The Company has been successfully building its brand equity in international markets and currently exports its products to more than 85 countries. The Company has been able to establish a niche position for itself in the global spirits market.


The Company has three distilleries in Rampur (Uttar Pradesh) and two in joint venture RNV in Aurangabad (Maharashtra) in which Radico Khaitan owns 36% equity. The Company operates 5 own and 28 contract bottling units spread across the country with a combined capacity of 160 Million litres. Its strategically located manufacturing facilities and distribution centres at various locations provide easy access to key markets. Apart from a nationwide presence, strategic location also helps to avoid the high taxes levied on interstate movement of finished and in-process liquor. Radico Khaitan remains focused on high productivity levels and product excellence across its manufacturing platform. The Company continues to introduce best practices to become more agile such as Demand-Driven Supply Chain, Total Productivity Management and Six-Sigma. Radico Khaitan has adopted the strategy of reduce, recycle and reuse with the objective to recover clean and green energy which is utilized in boiler as fuel and power generation through back pressure turbine and biogas gensets without affecting water, air and environment quality.


Radico Khaitan has a strong sales and distribution network with a presence in retail and on-trade through over 75,000 retail and 8,000 on-premise outlets in the relevant segments in different parts of India. Apart from wholesalers, a total of around 300 employees divided into four zones, each headed by a regional profit center head, ensure an adequate on-the-ground sales and distribution presence across the country. The robust distribution system enables the Company to ensure availability of products across channels and geographies.


Operational Snapshot (million cases)

Year FY2021 FY2020 YoY 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 Volume 29.1% 29.0%

Financial Snapshot


Year FY2021 FY2020 YoY Change
Net Sales 2,418.14 2,427.04 (0.4)%
Gross Profit 1,215.72 1,178.85 3.1%
EBITDA* 407.79 368.19 10.8%
Profit Before Tax (PBT) 353.10 272.69 29.5%
Total Comprehensive Income ** 269.70 224.80 20.0%

Note: Above numbers are on standalone basis

* EBITDA for 12M FY2020 adjusted for 24.17 Crore pertaining to exceptional items: Write off of debtors in Bihar of 8.56 Crore in Q4 FY2020, 8.59 Crore paid under the SV Scheme during Q3 FY2020 and Environmental Compensation of 7.02 Crore paid during HI FY2020

** Tax provision last year included 25.76 Crore of Deferred Tax benefit

Key Financial Ratios

Ratios FY2021 FY2020 YoY change
Debtors Turnover (days) (on Gross Sales basis) 25 32 (23.0)%
Inventory Turnover (days) (on Gross Sales basis) 17 15 18.7%
Creditor Turnover (days) (on Gross Sales basis) 9 10 (10.0)%
Interest Coverage Ratio (x) 17.05 10.28 65.9%
Current Ratio (x) 1.98 1.69 17.7%
Debt Equity Ratio (x) 0.15 0.26 (41.2)%
EBITDA Margin (%) 16.9% 15.2% 169 bps
Total Comprehensive Income Margin (%) 11.2% 9.3% 189 bps
Return on Average Equity (%) 16.4% 15.9% 56 bps
Return on Average Capital Employed (%) 17.9% 17.7% 21 bps

Over the years, Radico Khaitan has been focused on strong cash flow generation and deleveraging. Despite COVID-19 led disruptions in FY2021, the Company has successfully managed to reduce net debt by another 184 Crore. Consequently, there was significant improvement in debt equity ratio and interest coverage ratio in FY2021.


The COVID 19 pandemic and its associated government measures limited the mobility, impacted patterns and places of alcohol consumption. During the lock down period, the Companys IMFL bottling was fully suspended from 24-March to 4-May 2021, but manufacturing of ENA was partially operational as the Company started production of sanitizers to support the nations fight against COVID-19. Radico Khaitan has undertaken a number of preventive measures to ensure safety of its employees in the offices and manufacturing units. The Company has sufficient liquidity and demand of its products to continue its operations. There is no significant impact due to the COVID-19 pandemic and lockdown as assessed by the management.


Economy Risk: The slowdown in global economic growth and other declines or disruptions in the Indian economy in general may result in a reduction in disposable income of consumers and slowdown in the IMFL industry. This could adversely affect the Companys business and financial performance.

Mitigation: Radico Khaitan focuses on driving strong business growth, strategic investments in innovative products and marketing to gain market share, coupled with narrowing of operating expenses and reducing debt. Despite the lock down during the month of April 2020, the Company has registered a stable top line during the year and was able to expand profitability margins. Overall, Radico Khaitan is well placed to overcome the economy challenges due to its resilient business model, strong premium product portfolio and excellent execution capabilities.

Regulatory Risk: Given a state subject, the Indian spirit industry is highly regulated and complex as each state has its own regulations governing the manufacture and sale of spirits. The industry faces challenges in the form of manufacturing setup duties and compliance state- wise, taxation, no direct advertising, licensing to produce, store and distribute products. Any change in rules and regulations by the respective state governments and non- compliance with laws and regulations could adversely impact the business.

Mitigation: With over 75 years of experience of liquor manufacturing and 25 years in IMFL business, Radico Khaitan is well versed with applicable laws and regulations across almost all states of India. The Company has in place the code of business conduct and supporting policies to comply with the laws and regulations of the country. The legal and compliance team is closely involved in monitoring and reviewing the practices and policies to provide reasonable assurance that the Companys operations are in line with all relevant laws and legal obligations.

Competition Risk: The Company might face competition from international peers as the lucrative growth prospects of the spirit industries in India due to low per capital liquor consumption are always attracting new players to the market.

Mitigation: Given the strong barriers to entry in this industry it is difficult for a foreign player to establish footprints in India. Radico Khaitan has competitive edge with its strong brand loyalty among consumers and offering of better quality products across price points with a value for money proposition.

Raw Material Risk: ENA and packaging materials are the two key components of the raw materials required for the Companys product portfolio and hence commodity price volatility remains one of the key considerations. The governments ethanol blending policy may put pressure on the ENA prices in the future. Further there has been pressure on global commodity prices in the recent times which may have a bearing on the Companys profitability.

Mitigation: Given the Companys premiumization strategy, it continues to move towards grain based ENA which is impacted to a lesser extent by the ethanol blending policy. Grain production in India has been on all-time highs level last year therefore there is high availability of raw material. There are new capacities of grain alcohol coming up. Moreover, with the backward integration into captive ENA production, the Company is insulated from fluctuations in ENA prices to a large extent. Furthermore, as the Company moves up the premiumization ladder, the margins are less susceptible to commodity price increases.


Radico Khaitan is aimed at creating economic value and is committed to actively contributing towards the development of a sustainable society. Several projects are executed with better governance and ethical business practices. The Company has a Corporate Social Responsibility ("CSR") Committee in place, to formulate and recommend CSR Policy to the Board. The aim is to establish the Company image as a reliable, credible, responsible business partner by making a positive difference in the society, where the Company operates its business. During the year under review, the Company has spent an amount of 5.28 Crore towards CSR activities with primary focus on community development, enhancing livelihood, promoting education and health care including preventive health care and ensuring environmental sustainability. In addition, Radico Khaitan has pledged to give back to the society and lend its support to the government during the second wave of the COVID-19 pandemic with the installation of oxygen generators in 6 districts of Uttar Pradesh.


Radico Khaitan has evolved stronger, despite the challenges of the COVID- 19 pandemic, primarily due to the resilience and responsiveness shown by Radico Khaitans team. This has strengthened the Companys belief that human capital remains at the core for driving strategic growth. The Company has evolved a work culture which focuses on a future ready organisation and the pillars of this culture include:

• Respect for people by recognising human capital and rewarding individual and team contributions

• Continual innovation to stay ahead of the consumer expectations

• Customer focus to stay connected with existing customers to deliver a superior experience

• Working for excellence reflected in the attitude to do it better every time and set new benchmarks for excellence

Radico Khaitans human resources management focuses on facilitating each employee to explore his/her potential and synergize it to work towards achieving corporate goals. This journey is facilitated by an inclusive work culture, which keeps throwing new work challenges and thereby helping continuous learning. Employee training and re- training on structured learning paths and upgrading skills enhances the resource value. Talent development focuses on recognizing potential employees as New Generation Managers and developing them on capsuled learning plans to make them ready for taking up new roles in the future.

Digitalizing the employee life cycle processes and employee engagement on the intranet platform is strengthening the work culture and belongingness of people. All employees have well defined performance plans and parameters for evaluating their performance. This objective based assessment ensures outcomes-based rewards, which further strengthens the Companys performance management system and the culture of accountability. With the evolving culture, the Human Resources (HR) function is focused on creating a platform for employees to make a larger impact by doing more purposeful work and getting recognised and appreciated for it.

Holistic development, welfare and wellbeing of employees is the core of the HR agenda, which was well recognized in the pandemic. HR teams pro-actively mobilised resources to avoid medical emergencies and scarcity of medical aid for employees and their families. To ensure the wellbeing of the family after the death of an employee in the pandemic, policy initiatives were taken for financial support for the family, education for the children and term insurance coverage of employees ensured a strong sense of security. HR function at Radico Khaitan will continue to strive to create new benchmarks for its culture and holistic well being of employees who will create more value for the Company.


Radico Khaitan leverages its technology and data for the efficient management of its business operations, better customer experience, enhancing the supply chain, and making the sourcing and supply forecasts more accurate. The Company focuses on infusing digital technologies into business to ensure future readiness and meet the intrinsic needs of the business.

During the unprecedented times of COVID-19, the IT team, supported by strong and stable network infrastructure, enabled the business to work as usual along with maintaining balance between access and security. Microsoft Teams and Zoom as communication solutions were successfully deployed and used by employees for secure communication. Disaster Recovery (DR) has been setup to ensure business operations should continue as usual without any interruptions in case of any event failure.

Data Security: The Company is implementing Data Leakage Protection (DLP) and cloud security tools to further strengthen its data protection along with on cloud advanced threat protection technology and data encryption tool. Radico Khaitan will implement Advanced Technology Program (ATP) to protect endpoints from advanced threats and from email phishing as well. To monitor and report real time threat status and compliance the Company will implement various dashboards. The Company uses various softwares to protect systems against Malware, Hacking & Phishing. Latest IT tools are being deployed to take care of IT assets, Networks, Servers etc.

Data Analytics: Data analytics will help Radico Khaitan to build strategies to achieve next level of growth. In order to further enhance the Companys market reach and simultaneously get rich data of real time business, the Company has undertaken various digital initiatives for driving business efficiencies. Few of them are as follows:

i. Sales Force Automation (SFA): SFA mobile application is being used by approx. 550 field executives to cover 60500 retailers pan India with geo tagging technology

ii. Factory is enabled with Track and Trace technology

iii. Employee Self Service (ESS) Portal

iv. Most recently the Company has also started the implementation of SAP SAC based EPM (enterprise performance management) tool. It will help the Company plan, budget and forecast across finance, supply chain and sales, streamline the financial close process, and drive better decisions through the provision of data analytics, what-if and predictive tools.


The Company has an effective and reliable internal control system. In line with the business operations, Radico Khaitan has well-planned internal control framework, which covers various aspects of governance, compliance, audit, control and reporting. It ensured adherence to local statutory requirements for orderly and efficient conduct of business, safeguarding of assets, the detection and prevention of frauds and errors, adequacy and completeness of accounting records and timely preparation of reliable financial information. The efficacy of the internal checks and control systems is validated by and internal auditors and re-examined by the management.

A CEO and CFO Certificate, forming part of the Corporate Governance Report, confirms the existence and effectiveness of internal controls and reiterates their responsibilities to report deficiencies to the Audit Committee and rectify the same. The Company has appointed Grant Thornton as their internal auditors, which in turn submits quarterly reports to the Audit Committee. The Audit Committee monitors and provides an effective supervision of the financial reporting process of the Company with a view to ensure accurate and timely disclosures with the highest level of transparency, integrity and quality. It also confirms adequacy and effectiveness of internal control systems and suggests for the improvements required.


Statements in this Management Discussion and Analysis contains "forward looking statements" including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to Radico Khaitans future business developments and economic performance. While these forward-looking statements indicate our assessment and future expectations concerning the development of our business, a number of risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. Radico Khaitan undertakes no obligation to publicly revise any forward-looking statements to reflect future / likely events or circumstances.