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UNITED SPIRITS LTD.

17 September 2021 | 12:00

Industry >> Beverages & Distilleries

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ISIN No INE854D01024 52Week High 777 Book Value (Rs.) 56.70 Face Value 2.00
Bookclosure 21/08/2019 52Week Low 494 EPS 5.28 P/E 140.51
Market Cap. 53898.43 Cr. P/BV 13.08 Div Yield (%) 0.00 Market Lot 1.00
Security Type Other

DIRECTOR'S REPORT

You can view full text of the latest Director's Report for the company.
Year End :2021-03 

Dear Members,

Your directors are pleased to present the 22nd Report of Directors of your Company and the audited financial statements for the year ended March 31, 2021.

' in Million

Particulars

Standalone

Consolidated

2020-21

2019-20

2020-21

2019-20

The working of your Company for the year under review resulted in

Revenue from operations

271,764

285,892

274,185

288,237

Profit / Loss from operations

8,697

13,609

9,033

13,790

Exceptional and other non-recurring

(1,514)

13

(643)

666

Less:

Depreciation

2,493

2,275

2,991

2,853

Taxation (including deferred tax)

1,587

4,300

1,778

5,397

Profit / (Loss) after tax

3,103

7,047

3,621

6,206

Profit B/F from previous year

(21,623)

(28,396)

(25,840)

(32,159)

Impact of change in Revenue Recognition policy on adoption of IND AS 115

-

-

-

-

Reinstated Profit B/F from previous year

(21,623)

(28,396)

(25,840)

(32,159)

Minority Interest appropriation

-

-

217

382

Foreign Currency Translation Reserve Considered separately

-

-

(15)

(49)

Total Comprehensive Income

57

(274)

63

(220)

Transfer between reserves

-

-

-

-

Profit / (Loss) available for appropriation

(18,463)

(21,623)

(21,954)

(25,840)

Your Directors have made the following appropriations:

General Reserve

NIL

NIL

NIL

NIL

Dividend paid in respect to previous years

NIL

NIL

NIL

NIL

Proposed dividend

NIL

NIL

NIL

NIL

Balance carried to the Balance Sheet

(18,463)

(21,623)

(21,954)

(25,840)

EPS-Basic & Diluted (Rupees)

4.27

9.70

5.41

9.29

Balance carried to the Balance Sheet

(21,623)

(28,396)

(25,840)

(32,159)

EPS-Basic & Diluted (Rupees)

4.27

9.70

5.41

9.29

As can be seen from the above table, the revenue from operations decreased by 4.94% during the year on standalone basis and decreased by 4.88% on consolidated basis. Profit after tax has decreased during the year by 55.97% on standalone basis and decreased by 41.64% on consolidated basis. The challenges which the Company faced during the year and the environment in which the Company operates have been detailed in Management Discussion and Analysis Report which is forming part of this Annual Report ('Report').

1. Performance of the Company

During the year under review, your Company's sales volume was about 70.7 million cases resulting in a volume decline of 11.3% compared to previous year. Net sales/income from operations (net of duties and taxes) of your Company declined by 13.2% in the financial year ended March 31, 2021 which stood at ' 78,890 million (previous year ' 90,908 million). Adjusted one-off sale of bulk Scotch, net sales/ income from operations declined by 10.8% for the year. Sales volume of the Company's brands in the 'Prestige and Above' segment declined by 9% in the financial year ended March 31, 2021 which stood at 37.2 million cases (previous year 40.9 million cases). Net sales of the 'Prestige and Above' segment declined by 7.2% which stood at ' 55,035 million net of duties and taxes (previous year ' 59,311 million). The 'Prestige and Above' segment represented 69.8% of total net sales and 52.6% of total sale volume during the year.

2. Board's responses to observations, qualifications and adverse remarks in auditor's report

The statutory and secretarial auditors have given unqualified opinion on the financial statements and in the secretarial audit report for the year ended March 31,2021 and hence this is not applicable.

Secretarial Audit Report for financial year 2020-21 is annexed as Annexure - 3.

3. Material changes and commitments / events subsequent to the date of the financial statements

Certain events arising out of COVID-19 Virus Pandemic having impact on businesses worldwide have been covered in detail in the Management Discussion and Analysis Report forming part of this Report. The sharp rise in COVID-19 cases across India has led to implementation of lockdown order at most of the states in the country, while some states have imposed strict lockdown orders, others are partial in nature. Out of the 47 manufacturing sites including tie-up manufacturing units, 3 factories are not in operation currently due to complete lockdown while 6 factories are operating with government restrictions.

4. Change in nature of business, if any

The details of change in nature of business, if any, are provided under Management Discussion and Analysis Report and the Report on Risk Management forming part of this Report.

5. Dividend

In view of the accumulated losses of the preceding years, your directors could not recommend any dividend.

6. Transfer to reserve

During the year under review, there was no amount transferred to reserves of the Company.

7. Capital

The authorized share capital of your Company remains unchanged at 2,740,000,000 equity shares of ' 2/- each and 171,200,000 preference shares of ' 10/- each. The issued, subscribed and paid-up capital of the Company is 726,638,715 equity shares of ' 2/- each aggerating ' 1,453,277,430. There was no change in the issued, subscribed and paid-up capital of the Company during the year under review.

8. Details of subsidiary companies and associate companies and their financial position

The performance of subsidiaries and associate Companies and their contribution to the overall performance of the Company is covered as part of the consolidated financial statement and form AOC-1 annexed as part of this Report as Annexure - 1. The Company has 14 subsidiary companies and 1 associate company. Out of 14 subsidiary companies, 12 subsidiary companies are non-operative.

During the year, 3 companies ceased to be subsidiary viz., (i) UB Sports Management Overseas Limited, a wholly owned overseas subsidiary consequent upon its merger with Palmer Investment Group Limited, another wholly owned overseas subsidiary; (ii) Liquidity Inc, an overseas subsidiary, consequent upon the sale of entire stake held by the Company and (iii) Tern Distilleries Private Limited, a wholly owned subsidiary, consequent upon sale of entire stake held by the Company.

After the end of financial year 2020-21, Montrose International (S.A.), Panama, a wholly owned overseas subsidiary of your Company was liquidated effective April 16, 2021 and thus ceased to be a subsidiary.

On June 25, 2018, the Company had subscribed to 4,567,568 equity shares of Hip Bar Private Limited ("Hip Bar"), constituting 26% of the paid-up equity share capital of Hip Bar. In April 2020, compulsory convertible preference shares (CCPS) were issued by Hip Bar to Hip Bar's promoter Group for ' 3 crore, to which the Company did not subscribe. While the exact conversion ratio of these CCPS would be fixed at a later date, the dilution of Company's equity in Hip Bar consequent to the aforesaid CCPS issuance is expected to be in the range of 2.4% to 3.4%. Further, in October 2020, the Company made an investment of ' 1.95 crore in CCPS of Hip Bar which is expected to be 2.4% to 3.4% based on the valuation at the

time of conversion. The shareholding of the Company in Hip Bar on fully diluted basis including the existing shareholding is expected to be 26% when the CCPS is exercised. During the year, investment in Hip Bar has been impaired, as the operations have been closed.

Highlights

The Board of Directors ("Board") of Pioneer Distilleries Limited, a listed subsidiary of the Company ("PDL") and of the Company at their meetings held on December 2, 2019 considered and approved a scheme of amalgamation and arrangement (the "Scheme") in relation to the proposed merger of PDL with the Company under Sections 230 - 232 and other applicable provisions of the Companies Act, 2013 and the rules thereunder. Upon completion of the merger, the non-promoter shareholders of PDL will receive 10 equity shares of the Company (face value of ' 2 each) for every 47 equity shares of PDL (face value of ' 10 each), held by them as on the record date. Post the merger, the Company's issued capital is expected to expand by 712,138 shares and the revised shareholding of Relay BV (the holding Company, a subsidiary of Diageo PLC) in the Company will change from 55.94% to 55.88%. The Scheme is subject to the receipt of requisite approvals from the relevant statutory authorities and the respective shareholders and creditors of PDL and of the Company. The BSE Limited and the National Stock Exchange of India Limited have issued their no-objection to the draft scheme and related documents filed, vide observation letters dated October 21, 2020 and October 22, 2020, respectively. The Company jointly with PDL have filed application under Sections 230 to 232 of the Companies Act, 2013 on November 27, 2020 with the National Company Law Tribunal, Bangalore ("NCLT") and again an Interlocutory Application was filed before NCLT on April 07, 2021.

Royal Challengers Sports Private Limited (RCSPL), a wholly owned subsidiary of your Company, reported a revenue from operations of ' 272 million during the year which was mainly attributed to the increase in central rights income from Board of Cricket Control of India (BCCI) and as a result of Royal Challengers Bangalore, a franchisee team of Indian Premier League (IPL), securing fourth position in the IPL Season 2020. RCSPL also accounted for a profit of ' 541 million with an increase of ' 504 million accounting to 326% of increase during the year.

The Company's policy for determining material subsidiaries is available at the Company's website at https://www. diageoindia.com/investors/shareholder-centre/policies/ policy-for-determining-material-subsidiaries/.

In accordance with the third proviso to Section 136(1) of the Companies Act, 2013 the annual report and financial

statements of each of the subsidiary companies have also been placed on the website of the Company https://www. diageoindia.com/investors/subsidiaries-financial/.

9. Prospects/Outlook

The details about prospects/outlook of your Company are provided under the Management Discussion and Analysis Report, forming part of this Report.

10. Appointment/reappointment and resignation/ retirement/step down of Executive Directors and Key Managerial Personnel during the financial year:

A. i) Retirement of Mr. V Ramachandran as Company Secretary & appointment of Mr. Mital Sanghvi as Company Secretary (CS) - Key Managerial Personnel (KMP)

As already updated in the annual report for the year ended 2019-20, the Board at its meeting held on January 27, 2020 appointed Mr. Mital Sanghvi as CS of the Company with effect from June 01, 2020 in the place of Mr. V Ramachandran, erstwhile CS who retired from the services of the Company effective end of day May 31, 2020.

ii) Resignation of Executive Director and Chief Financial Officer (ED & CFO) - Key Managerial Personnel (KMP)

The Board at its meeting held on September 18, 2020 noted the resignation of Mr. Sanjeev Churiwala as ED & CFO of the Company effective end of day September 30, 2020. Mr. Sanjeev Churiwala resigned as an ED & CFO as he was promoted within Diageo group at Singapore.

iii) Appointment of Chief Financial Officer (CFO)

The Board at its meeting held on September 18, 2020 appointed Mr. Pradeep Jain as CFO of the Company with effect from October 01, 2020.

iv) Stepping down of Mr. Anand Kripalu as Managing Director and Chief Executive Officer (MD & CEO) - Key Managerial Personnel (KMP)

The Board at its meeting held on December 10, 2020 approved the stepping down of Mr. Anand Kripalu as MD & CEO of the Company effective end of day June 30, 2021. Mr. Anand Kripalu is stepping down as MD & CEO owing to his retirement.

v) Appointment of Managing Director and Chief Executive Officer (MD & CEO)

The Board at its meeting held on December 10, 2020 approved the appointment of Ms. Hina Nagarajan (Ms. Nagarajan) as Additional Director and MD &

CEO with effect from July 01, 2021. Ms. Nagarajan assumed office as Chief Executive Officer - Designate with effect from April 01, 2021 and continue in that position till June 30, 2021. Details about Ms. Nagarajan is provided in the Notice of the 22nd annual general meeting of the Company.

Apart from the aforesaid appointment, there was no appointment of executive director during the year.

vi) Re-appointment of Mr. John Thomas Kennedy

As per the provisions of the Companies Act, 2013, Mr. John Thomas Kennedy (Mr. Kennedy) retires by rotation at the ensuing annual general meeting (AGM) and being eligible, offered himself for reappointment.

Members may please note that Mr. Kennedy, who is a nominee of Relay B V, was appointed as a director at the 19th AGM held on September 07, 2018. Mr. Kennedy is not debarred from holding the directorship under any statutory regulations. Details about Mr. Kennedy is provided in the Notice of the 22nd annual general meeting of the Company.

vii) Appointment of Mr. Vegulaparanan Kasi Viswanathan as an Independent Director of the Company for the second term.

The tenure of office of Mr. Vegulaparanan Kasi Viswanathan (Mr. V K Viswanathan), who was appointed as an Independent Director of the Company on October 17, 2016 and whose first term of 5 years expires on October 16, 2021. The Board of Directors at their meeting held on May 21, 2021 has accepted the recommendation of the Nomination & Remuneration Committee for re-appointment of Mr. V K Viswanathan as an Independent Director for a further period of 5 years with effect from October 17, 2021. Details about Mr. V K Viswanathan is provided in the Notice of the 22nd annual general meeting of the Company.

viii) Continuation of Mr. Mahendra Kumar Sharma as Director of the Company on completion of 75 years of age.

Mr. Mahendra Kumar Sharma (Mr. M K Sharma), non-executive Chairman, was re-appointed as an Independent Director at the Annual General Meeting of the Company held on August 21, 2019 for a further period of 5 years. During his tenure in the Office, he will be attaining the age of 75 years. Details about Mr. M K Sharma is provided in the Notice of this 22nd annual general meeting of the Company.

B. Independent Directors

Your Company did not appoint any new Independent Director or Nominee Director in the financial year 2020-21. Criteria for selection/appointment or reappointment of Independent Directors include skills, expertise of the Director, qualifications, experience and domain knowledge. The required skills of Independent Directors are leadership, managerial experience, diversity, risk management and corporate governance. All our Independent Directors viz., Mr. Mahendra Kumar Sharma, Mr. V K Viswanathan, Mr. D Sivanandhan, Mr. Rajeev Gupta and Dr. (Mrs.) Indu Shahani possess the aforesaid skills.

C. Declaration by Independent Directors

Independent Directors have given a declaration pursuant to sub-section (6) of Section 149 of the Companies Act, 2013. In the opinion of the Board, Independent Directors fulfill the conditions specified in Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI (LODR) Regulations) and are independent of the management.

D. Number of meetings of the Board

The details of the Board Meetings and other Committee Meetings held during the financial year 2020-21 are stated in the Corporate Governance Report which is forming part of this Report.

E. Board Committees

The Company has the following committees of the Board:

• Audit Committee

• Risk Management Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship and General Committee

• Corporate Social Responsibility Committee.

The composition of each of the above Committees, their respective roles and responsibilities are provided in the Corporate Governance Report which forms part of this Report.

F. Policies

The Company has adopted all policies as required to be maintained by the Company under the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations and the same are uploaded on the website of the Company wherever required and the salient features of the policies are detailed in Corporate Governance Report.

G. Recommendations of the audit committee and other committees

All the recommendations of the Audit Committee and of the other Committees were accepted by the Board.

H. Details of remuneration to directors

As required under Section 197(12) of the Companies Act, 2013 information relating to remuneration paid to Directors during the financial year 2020-21 is provided in the Corporate Governance Report. The Company has also prepared a draft annual return in revised e-form MGT-7 for FY 2020-21 and uploaded the same on Company's website at https://www.diageoindia.com/investors/financials/ annual-and-financial-reports/annual-return-2020-21. Members may also note that the annual return uploaded on the website is a draft and the final annual return will be uploaded after the same is filed with the Ministry of Corporate Affairs ('MCA').

As stated in the Corporate Governance Report, sitting fees is paid to Independent Directors for attending Board/Committee meetings. They are also entitled to reimbursement of actual travel expenses, boarding and lodging, conveyance and incidental expenses incurred in attending such meetings in accordance with the travel policy for directors. In addition, the Independent Directors are also eligible for commission every year as may be recommended by the Nomination and Remuneration Committee and approved by the Board within the overall limit of ' 4 Crore or 1% of the net profits of the Company calculated in accordance with Section 198 of the Companies Act, 2013, whichever is higher, as approved by the shareholders through Postal Ballot Resolution effective January 18, 2019. Criteria for payment of remuneration to Independent Directors are as given below:

i. Membership of Committees

ii. Chairmanship of the Committees/Board

iii. Benchmarking with other companies

The Board of Directors have approved payment of commission of ' 20 million to five independent directors after applying the criteria stated above for the financial year 2020-21.

The criteria for payment of remuneration to executive directors is determined by the Nomination and Remuneration Committee based on various criteria including performance criteria. Remuneration Policy is available on the Company's website at https://www.diageoindia.com/investors/shareholder-centre/policies/remuneration-reward-policy/.

I. Board evaluation criteria

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of the SEBI (LODR) Regulations, the Board has carried out an annual performance evaluation, based on parameters which, inter alia, include performance of the Board on deciding strategy, rating the composition & mix of Board members, discharging of their duties and handling critical issues etc. The parameters for the performance evaluation of the Directors include contribution made at the Board meeting, attendance, instances of sharing information on best practices applied in other industries, domain knowledge, vision, strategy, engagement with senior management, etc. The Independent Directors at their separate meetings, review the performance of non-independent directors and the Board as a whole. Chairperson of the Company after taking into account the views of Executive Director and non-executive directors, reviews the quality, quantity and timeliness of flow of information between the management and the Board for the Board to effectively and reasonably perform their duties. Based on the outcome of the performance evaluation exercise, areas have been identified for the Board to engage itself with and the same would be acted upon. The details of the evaluation process are set out in the Corporate Governance Report which forms part of this Report.

J. Vigil Mechanism

The Company has a whistle blower mechanism known as SpeakUp, which is independently operated by a third-party agency. The Company encourage the employees/ representatives acting on behalf of the Company to raise their compliance concerns through this mechanism, apart from other internal reporting channels viz. Line Manager or HR Business Partner, Legal Business Partner and Business Integrity partner. A structured Breach Management Standard is in place which is in line with the Global Standard, for timely and conclusive resolution of compliance concerns raised through the whistle blower mechanism.

The quality of investigation reports and remedial actions are reviewed and monitored by the Global Business Integrity team. The decision on sanctions on the reported breaches are determined and monitored by a Compliance Committee, in order to ensure that there is a collective and a fair decision-making process and consistent action is undertaken in resolving the breaches.

This mechanism also provides for adequate safeguards against the victimization of employees who avail the vigil mechanism for reporting the compliance complaint

in good faith and without fear of being punished for raising that concern. Access to the Chairman of the Audit Committee is provided as required under the Companies Act, 2013 and the SEBI (LODR) Regulations.

The SpeakUp channel is available on the Company's website at https://www.diageoindia.com/about-us/ corporate-governance/speak-up/, and the toll-free number is available in english and other prominent regional languages.

K. Related party transactions

The Company's policy on dealing with related party transactions was adopted by the Board on June 15, 2015 and further amended from time to time. This policy is available on the Company's website at https://www. diageoindia.com/investors/shareholder-centre/policies/ policy-on-related-party-transactions/.

Form AOC-2 pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out in the Annexure-2 to this Report.

All related party transactions that were entered into during the financial year, were at arm's length basis and were in the ordinary course of business. There are no material significant related party transactions entered into by the Company with promoters, directors, key managerial personnel or other designated persons which may have a conflict of interest with the Company at large.

L. Meeting amongst Independent Directors

Schedule IV of the Companies Act, 2013, SEBI (LODR) Regulaions and Secretarial Standard - 1 on Meetings of the Board of Directors mandates that the Independent Directors of the Company hold at least one meeting in a year, without the attendance of Non-Independent Directors.

The Independent Directors met amongst themselves without the presence of any other persons on May 27, 2020, July 27, 2020 and November 04, 2020.

11. Auditors

i) Financial audit

M/s Price Waterhouse & Co Chartered Accountants LLP, (FRN 304026E/E-300009) were appointed as Statutory Auditors of your Company at the 17th AGM of the Company for a period of 5 years and their term comes to an end at the conclusion of the 22nd AGM of the Company. The Audit Committee at their

meeting held on May 20 & 21, 2021, recommended the re-appointment of M/s Price Waterhouse & Co Chartered Accountants LLP, (FRN 304026E/E-300009) ('PWC') who have given their consent and willingness to be re-appointed as Auditors of your Company. PWC, being one of the reputed international audit firm and given their expertise in the field of audit, the Board of Directors at their meeting held on May 21, 2021, approved the recommendation of the Audit Committee and proposed to re-appoint PWC as Auditors of your Company for a period of 5 years, from the conclusion of the ensuing 22nd AGM till the conclusion of the 27th AGM of the Company subject to the approval of the members of the Company at the ensuing AGM.

ii) Secretarial audit

Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a Secretarial Audit has been carried out by Mr. Sudhir V Hulyalkar, Practicing Company Secretary (FCS: 6040 and CP No. 6137) and his report is annexed as Annexure - 3.

In addition, Pursuant to Regulation 24A of the SEBI (LODR) Regulation, the Secretarial Compliance Report for the financial year ended March 31, 2021, in relation to compliance of all applicable SEBI Regulations/ circulars/guidelines issued thereunder, is annexed as Annexure - 3A. The Secretarial Compliance Report has been voluntarily disclosed as part of this Report as good disclosure practice. The said report has been submitted to the stock exchanges and is also available on the Company's website at https://www.diageoindia.com/ investors/shareholder-centre/notice-board/annual-secretarial-compliance-report-2021/.

iii) Cost audit

The Company is not covered by the requirement of maintenance of cost records, as specified under subsection (1) of Section 148 of the Companies Act, 2013.

12. Reporting of fraud by Auditors

During the year under review, neither the statutory auditors nor the secretarial auditor have reported to the Audit Committee or the Board, under Section 143(12) of the Companies Act 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in this Report.

13. Corporate governance

A Corporate Governance Report is annexed separately as part of this Report. Board confirms compliance with Secretarial Standards.

14. Management discussion and analysis report

The Management Discussion and Analysis Report is annexed separately as part of this Report.

15. Fixed deposits

As reported in the earlier annual reports, your Company discontinued accepting fixed deposits from the public and shareholders effective January 1, 2014. In addition, pursuant to section 74(1)(b) of the Companies Act, 2013, the Board of Directors at their meeting held on August 1, 2014 decided to repay all fixed deposits maturing on or after March 31, 2015 by March 31, 2015 by paying additional interest of 1% per annum on those fixed deposits repaid before the maturity date pursuant to the contract entered into with the Fixed Deposit holders. Fixed Deposits from the public and shareholders which remained unclaimed and for which no discharge certificates were received from the depositors as on March 31, 2021 stood at ^17,97,000. Unclaimed amount was transferred into a separate non-interest bearing escrow account opened specifically for the purpose of re-payment pursuant to the provisions of the Companies Act, 2013 and the rules made thereunder. Out of this amount, a sum of ^1,15,000/- has since been paid as per instructions received after the year end and balance unclaimed amount as of May 21, 2021 is ?16,82,000/-. The balance unclaimed fixed deposits continue to remain in the escrow account as on May 21, 2021.

16. Annual return

The draft Annual Return of the Company as on March 31, 2021 in E-Form MGT - 7 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at https://www.diageoindia.com/investors/financials/annual-and-financial-reports/annual-return-2020-21.

17. Transfer to Investor Education and Protection Fund (IEPF)

The details of unclaimed/unpaid dividends and fixed deposits which have not been transferred to the IEPF account as the period of seven years have not been completed is given

below pursuant to the provisions of the Companies Act, 2013 and the applicable rules there under.

i) Dividend:

The Company has not declared any dividend from financial year 2013-14 onwards owing to accumulated losses. Hence, there are no unclaimed/unpaid dividends from financial year 2013-14 onwards.

No shares were transferred during the year ended March 31, 2021 to Investor Education and Protection Fund pursuant to Section 124(6) of the Companies Act, 2013.

ii) Fixed Deposits:

1. Accepted during the year NIL

2. Remained unpaid or unclaimed as at the ^17,97,000 end of the year

3. Whether there has been any default

in repayment of deposits or payment of NIL interest thereon during the year and if so, number of such cases and the total amount involved

4. The details of deposits which are not

in compliance with the requirements of Not Applicable Chapter V of the Companies Act, 2013

Necessary compliance under rule 3 of the Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, has been ensured.

18. Human resources

Employee relations remained cordial at all the locations of the Company. Particulars of employees drawing an aggregate remuneration of ' 1,02,00,000/- or above per annum or ' 8,50,000/- or above per month, as well as additional information on employee remuneration as required under the provisions of rule 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as part of this Report in Annexure - 4 hereto.

19. Employees stock option scheme

Your Company has not offered any stock options to its employees during the year 2020-21 within the meaning of SEBI (Share Based Employee Benefit) Regulations, 2014.

20. Particulars of loans, guarantees and investments

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 are detailed in Notes to the financial statements under Note 4, relating to investments and Note 5 relating to loans given as per the standalone

financial statements for the year ended March 31, 2021. The Company has not given any guarantee to any Company as on March 31, 2021.

21. Risk management

Details on Risk Management is annexed as Annexure - 5 to this Report.

22. Internal financial controls

During the year Controls, Compliance & Ethics (CC&E) team have implemented a detailed plan under the direction of the Executive Committee of the Company, to reinforce the code of business conduct and to further embed compliance across the business. The CC&E team also undertook comprehensive review of existing controls (SOX & non-SOX controls) & added additional attributes in the existing controls. The same has been shared with the statutory auditors who have confirmed that they are aligned with the same. The controls with additional attributes have been tested both by Management tester (Deloitte) and by the Statutory auditors in March 2021 for its effectiveness. The Board after considering the materials placed before it, reviewed the confirmation received from external parties and the effectiveness of the policies and procedures adopted by the Company for ensuring orderly and efficient conduct of its business, including adherence to Company's policy, safeguarding its assets, prevention and detection of frauds and errors and completeness of accounting records and timely preparation of financial statements. The Board has satisfied itself that the Company has laid down internal financial controls which are commensurate with the size of the Company and that such internal financial controls are broadly adequate and are operating effectively. The certification by the auditors on internal financial control forms part of the audit report. A statement to this effect is also appearing in the Directors' Responsibility Statement.

23. Corporate social responsibility

Information on the composition of the Corporate Social Responsibility (CSR) Committee is provided in the Corporate Governance Report that forms part ofthis Report. Furthermore, as required by Section 135 of the Companies Act, 2013 and the rules made thereunder, additional information on the policy and implementation of CSR activities by your Company during the year are provided in Annexure - 6 to this Report.

24. Conservation of energy, technology absorption, foreign exchange earnings and outgo

The particulars prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, are set out in Annexure - 7 to this Report.

25. Details of significant and material orders passed by the regulators or courts impacting the going concern status and Company's operations in future pursuant to Rule 8(5)(vii) of Companies (Accounts) Rules, 2014

The Company has not received any significant or material order passed by regulators or courts or tribunals impacting the Company's going concern status or the Company's operations in future. The details of notices received from regulatory authorities and related matters have been disclosed as part of note no. 40(e) to the audited standalone financial statements for the year ended March 31,2021 and as note no. 40(e) of the consolidated financial statements for the year ended March 31, 2021.

26. Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

As per requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (SHWWA), the Company has implemented the policy and framework. Moreover, the Company's policy is all gender inclusive and the process ensures complete anonymity and confidentiality to the parties.

Internal Committees (IC) have been constituted for all locations. While maintaining the highest governance norms, the various Internal Committee has appointed internal members and an external member who have extensive experience in the field. The IC's meet on quarterly basis to discuss the matters on policy awareness, best practices, judicial trends, etc. During the year, IC has also been trained on nuances of the SHWWA.

The IC's role is to consider and resolve the complaints reported on sexual harassment at workplace. Investigation is conducted and decisions are made by the IC at the respective location, and a senior woman employee is the presiding officer over every case.

i) Number of complaints filed during the financial year: 1

ii) Number of complaints disposed of during the financial year : 1

iii) Number of complaints pending as on end of the financial year: NIL

To build awareness in this area, the Company has been publishing newsletter, emailers, posters, conducting online training module and IBegin-induction training for newly joined employees. Besides the refresher, virtual training programmes are conducted in the organisation on a continuous basis for employees, consultants, contractual employees and permanent/contractual workers in regional

languages. The IC has also conducted informal sessions to check the pulse at the grassroot levels.

27. Business Responsibility Report (BRR)

In accordance with the SEBI (LODR) Regulations, 2015, the BRR has been placed on the Company's website at https:// www.diageoindia.com/investors/financials/annual-and-financial-reports/business-responsibility-report-2020-21.

28. Other Disclosures

a) The Company has not issued equity shares with differential rights as to dividend, voting or otherwise.

b) The Company has not issued any sweat equity shares to its directors or employees.

c) No application has been made under the Insolvency and Bankruptcy Code; hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year is not applicable.

d) The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.

29. Directors' responsibility report

Pursuant to Section 134 (5) of the Companies Act, 2013 in relation to financial statements (together with the notes to such financial statements) for the year 2020-21, the Board of Directors report that:

(i) in the preparation of the annual accounts for the financial year ended March 31, 2021, the applicable accounting standards have been followed and there are no material departures;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as

to give a true and fair view of the state of affairs of the Company as at March 31, 2021 and of the profit of the Company for 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 Directors have prepared the financial statements on a going concern basis;

(v) the Directors have laid down internal financial controls to be followed by the Company commensurate with the size and nature of its business and the complexity of its operations and that such internal financial controls are adequate and are operating effectively.

(vi) Proper systems have been devised to ensure compliance with the provisions of all applicable laws by implementing an automated process having comprehensive systems and securing reports of statutory compliances periodically from the functional units and that such systems are adequate and are operating effectively.

The Board of Directors place on record sincere gratitude and appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year. The Board conveys its appreciation for its customers, shareholders, suppliers as well as vendors, bankers, business associates, regulatory and government authorities for their continued support.

By Order of the Board

Mahendra Kumar Sharma

Chairman DIN:00327684

<html><head><meta http-equiv="content-type" content="text/html; charset=UTF-8"/><meta name="generator" content="ABBYY FineReader 12"/><meta name="author" content="Ka, Shrinidhi"/><link rel="stylesheet" href="AR032FA_files/AR032FA.css" type="text/css"/></head><body><p><span class="font0" style="font-weight:bold;">Dear Members,</span></p><p><span class="font0">Your directors are pleased to present the 22<sup>nd</sup> Report of Directors of your Company and the audited financial statements for the year ended March 31, 2021.</span></p><table border="1"><tr><td colspan="5"><p><span class="font0">' in Million</span></p></td></tr><tr><td rowspan="2" style="vertical-align:middle;"><p><span class="font0">Particulars</span></p></td><td colspan="2" style="vertical-align:middle;"><p><span class="font0">Standalone</span></p></td><td colspan="2" style="vertical-align:middle;"><p><span class="font0">Consolidated</span></p></td></tr><tr><td style="vertical-align:middle;"><p><span class="font0" style="font-weight:bold;">2020-21</span></p></td><td style="vertical-align:middle;"><p><span class="font0">2019-20</span></p></td><td style="vertical-align:middle;"><p><span class="font0" style="font-weight:bold;">2020-21</span></p></td><td style="vertical-align:middle;"><p><span class="font0">2019-20</span></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">The working of your Company for the year under review resulted in</span></p></td><td><p></p></td><td><p></p></td><td><p></p></td><td><p></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">Revenue from operations</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">271,764</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">285,892</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">274,185</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">288,237</span></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">Profit / Loss from operations</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">8,697</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">13,609</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">9,033</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">13,790</span></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">Exceptional and other non-recurring</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">(1,514)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">13</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">(643)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">666</span></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">Less:</span></p></td><td><p></p></td><td><p></p></td><td><p></p></td><td><p></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">Depreciation</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">2,493</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">2,275</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">2,991</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">2,853</span></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">Taxation (including deferred tax)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">1,587</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">4,300</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">1,778</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">5,397</span></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">Profit / (Loss) after tax</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">3,103</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">7,047</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">3,621</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">6,206</span></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">Profit B/F from previous year</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">(21,623)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">(28,396)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">(25,840)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">(32,159)</span></p></td></tr><tr><td style="vertical-align:middle;"><p><span class="font0">Impact of change in Revenue Recognition policy on adoption of IND AS 115</span></p></td><td style="vertical-align:middle;"><p><span class="font0" style="font-weight:bold;">-</span></p></td><td style="vertical-align:middle;"><p><span class="font0">-</span></p></td><td style="vertical-align:middle;"><p><span class="font0" style="font-weight:bold;">-</span></p></td><td style="vertical-align:middle;"><p><span class="font0">-</span></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">Reinstated Profit B/F from previous year</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">(21,623)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">(28,396)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">(25,840)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">(32,159)</span></p></td></tr><tr><td style="vertical-align:middle;"><p><span class="font0">Minority Interest appropriation</span></p></td><td style="vertical-align:middle;"><p><span class="font0" style="font-weight:bold;">-</span></p></td><td style="vertical-align:middle;"><p><span class="font0">-</span></p></td><td style="vertical-align:middle;"><p><span class="font0" style="font-weight:bold;">217</span></p></td><td style="vertical-align:middle;"><p><span class="font0">382</span></p></td></tr><tr><td style="vertical-align:middle;"><p><span class="font0">Foreign Currency Translation Reserve Considered separately</span></p></td><td style="vertical-align:middle;"><p><span class="font0" style="font-weight:bold;">-</span></p></td><td style="vertical-align:middle;"><p><span class="font0">-</span></p></td><td style="vertical-align:middle;"><p><span class="font0" style="font-weight:bold;">(15)</span></p></td><td style="vertical-align:middle;"><p><span class="font0">(49)</span></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">Total Comprehensive Income</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">57</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">(274)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">63</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">(220)</span></p></td></tr><tr><td style="vertical-align:middle;"><p><span class="font0">Transfer between reserves</span></p></td><td style="vertical-align:middle;"><p><span class="font0" style="font-weight:bold;">-</span></p></td><td style="vertical-align:middle;"><p><span class="font0">-</span></p></td><td style="vertical-align:middle;"><p><span class="font0" style="font-weight:bold;">-</span></p></td><td style="vertical-align:middle;"><p><span class="font0">-</span></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">Profit / (Loss) available for appropriation</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">(18,463)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">(21,623)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">(21,954)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">(25,840)</span></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">Your Directors have made the following appropriations:</span></p></td><td><p></p></td><td><p></p></td><td><p></p></td><td><p></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">General Reserve</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">NIL</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">NIL</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">NIL</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">NIL</span></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">Dividend paid in respect to previous years</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">NIL</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">NIL</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">NIL</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">NIL</span></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">Proposed dividend</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">NIL</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">NIL</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">NIL</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">NIL</span></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">Balance carried to the Balance Sheet</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">(18,463)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">(21,623)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">(21,954)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">(25,840)</span></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">EPS-Basic & Diluted (Rupees)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">4.27</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">9.70</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">5.41</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">9.29</span></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">Balance carried to the Balance Sheet</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">(21,623)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">(28,396)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">(25,840)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">(32,159)</span></p></td></tr><tr><td style="vertical-align:bottom;"><p><span class="font0">EPS-Basic & Diluted (Rupees)</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">4.27</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">9.70</span></p></td><td style="vertical-align:bottom;"><p><span class="font0" style="font-weight:bold;">5.41</span></p></td><td style="vertical-align:bottom;"><p><span class="font0">9.29</span></p></td></tr><tr><td colspan="5" style="vertical-align:bottom;"><p><span class="font0">As can be seen from the above table, the revenue from operations decreased by 4.94% during the year on standalone basis and decreased by 4.88% on consolidated basis. Profit after tax has decreased during the year by 55.97% on standalone basis and decreased by 41.64% on consolidated basis. The challenges which the Company faced during the year and the environment in which the Company operates have been detailed in Management Discussion and Analysis Report which is forming part of this Annual Report ('Report').</span></p></td></tr></table><a name="caption1"></a><h1><a name="bookmark0"></a><span class="font1" style="font-weight:bold;">1. Performance of the Company</span></h1><p><span class="font0">During the year under review, your Company's sales volume was about 70.7 million cases resulting in a volume decline of 11.3% compared to previous year. Net sales/income from operations (net of duties and taxes) of your Company declined by 13.2% in the financial year ended March 31, 2021 which stood at ' 78,890 million (previous year ' 90,908 million). Adjusted one-off sale of bulk Scotch, net sales/ income from operations declined by 10.8% for the year. Sales volume of the Company's brands in the 'Prestige and Above' segment declined by 9% in the financial year ended March 31, 2021 which stood at 37.2 million cases (previous year 40.9 million cases). Net sales of the 'Prestige and Above' segment declined by 7.2% which stood at ' 55,035 million net of duties and taxes (previous year ' 59,311 million). The 'Prestige and Above' segment represented 69.8% of total net sales and 52.6% of total sale volume during the year.</span></p><h1><a name="bookmark1"></a><span class="font1" style="font-weight:bold;">2. Board's responses to observations, qualifications and adverse remarks in auditor's report</span></h1><p><span class="font0">The statutory and secretarial auditors have given unqualified opinion on the financial statements and in the secretarial audit report for the year ended March 31,2021 and hence this is not applicable.</span></p><p><span class="font0">Secretarial Audit Report for financial year 2020-21 is annexed as </span><span class="font0" style="font-weight:bold;">Annexure - 3.</span></p><h1><a name="bookmark2"></a><span class="font1" style="font-weight:bold;">3. Material changes and commitments / events subsequent to the date of the financial statements</span></h1><p><span class="font0">Certain events arising out of COVID-19 Virus Pandemic having impact on businesses worldwide have been covered in detail in the Management Discussion and Analysis Report forming part of this Report. The sharp rise in COVID-19 cases across India has led to implementation of lockdown order at most of the states in the country, while some states have imposed strict lockdown orders, others are partial in nature. Out of the 47 manufacturing sites including tie-up manufacturing units, 3 factories are not in operation currently due to complete lockdown while 6 factories are operating with government restrictions.</span></p><h1><a name="bookmark3"></a><span class="font1" style="font-weight:bold;">4. Change in nature of business, if any</span></h1><p><span class="font0">The details of change in nature of business, if any, are provided under Management Discussion and Analysis Report and the Report on Risk Management forming part of this Report.</span></p><h1><a name="bookmark4"></a><span class="font1" style="font-weight:bold;">5. Dividend</span></h1><p><span class="font0">In view of the accumulated losses of the preceding years, your directors could not recommend any dividend.</span></p><h1><a name="bookmark5"></a><span class="font1" style="font-weight:bold;">6. Transfer to reserve</span></h1><p><span class="font0">During the year under review, there was no amount transferred to reserves of the Company.</span></p><h1><a name="bookmark6"></a><span class="font1" style="font-weight:bold;">7. Capital</span></h1><p><span class="font0">The authorized share capital of your Company remains unchanged at 2,740,000,000 equity shares of ' 2/- each and 171,200,000 preference shares of ' 10/- each. The issued, subscribed and paid-up capital of the Company is 726,638,715 equity shares of ' 2/- each aggerating ' 1,453,277,430. There was no change in the issued, subscribed and paid-up capital of the Company during the year under review.</span></p><h1><a name="bookmark7"></a><span class="font1" style="font-weight:bold;">8. Details of subsidiary companies and associate companies and their financial position</span></h1><p><span class="font0">The performance of subsidiaries and associate Companies and their contribution to the overall performance of the Company is covered as part of the consolidated financial statement and form AOC-1 annexed as part of this Report as </span><span class="font0" style="font-weight:bold;">Annexure - 1</span><span class="font0">. The Company has 14 subsidiary companies and 1 associate company. Out of 14 subsidiary companies, 12 subsidiary companies are non-operative.</span></p><p><span class="font0">During the year, 3 companies ceased to be subsidiary viz., (i) UB Sports Management Overseas Limited, a wholly owned overseas subsidiary consequent upon its merger with Palmer Investment Group Limited, another wholly owned overseas subsidiary; (ii) Liquidity Inc, an overseas subsidiary, consequent upon the sale of entire stake held by the Company and (iii) Tern Distilleries Private Limited, a wholly owned subsidiary, consequent upon sale of entire stake held by the Company.</span></p><p><span class="font0">After the end of financial year 2020-21, Montrose International (S.A.), Panama, a wholly owned overseas subsidiary of your Company was liquidated effective April 16, 2021 and thus ceased to be a subsidiary.</span></p><p><span class="font0">On June 25, 2018, the Company had subscribed to 4,567,568 equity shares of Hip Bar Private Limited ("Hip Bar"), constituting 26% of the paid-up equity share capital of Hip Bar. In April 2020, compulsory convertible preference shares (CCPS) were issued by Hip Bar to Hip Bar's promoter Group for ' 3 crore, to which the Company did not subscribe. While the exact conversion ratio of these CCPS would be fixed at a later date, the dilution of Company's equity in Hip Bar consequent to the aforesaid CCPS issuance is expected to be in the range of 2.4% to 3.4%. Further, in October 2020, the Company made an investment of ' 1.95 crore in CCPS of Hip Bar which is expected to be 2.4% to 3.4% based on the valuation at the</span></p><p><span class="font0">time of conversion. The shareholding of the Company in Hip Bar on fully diluted basis including the existing shareholding is expected to be 26% when the CCPS is exercised. During the year, investment in Hip Bar has been impaired, as the operations have been closed.</span></p><p><span class="font1" style="font-weight:bold;">Highlights</span></p><p><span class="font0">The Board of Directors ("Board") of Pioneer Distilleries Limited, a listed subsidiary of the Company ("PDL") and of the Company at their meetings held on December 2, 2019 considered and approved a scheme of amalgamation and arrangement (the "Scheme") in relation to the proposed merger of PDL with the Company under Sections 230 - 232 and other applicable provisions of the Companies Act, 2013 and the rules thereunder. Upon completion of the merger, the non-promoter shareholders of PDL will receive 10 equity shares of the Company (face value of ' 2 each) for every 47 equity shares of PDL (face value of ' 10 each), held by them as on the record date. Post the merger, the Company's issued capital is expected to expand by 712,138 shares and the revised shareholding of Relay BV (the holding Company, a subsidiary of Diageo PLC) in the Company will change from 55.94% to 55.88%. The Scheme is subject to the receipt of requisite approvals from the relevant statutory authorities and the respective shareholders and creditors of PDL and of the Company. The BSE Limited and the National Stock Exchange of India Limited have issued their no-objection to the draft scheme and related documents filed, vide observation letters dated October 21, 2020 and October 22, 2020, respectively. The Company jointly with PDL have filed application under Sections 230 to 232 of the Companies Act, 2013 on November 27, 2020 with the National Company Law Tribunal, Bangalore ("NCLT") and again an Interlocutory Application was filed before NCLT on April 07, 2021.</span></p><p><span class="font0">Royal Challengers Sports Private Limited (RCSPL), a wholly owned subsidiary of your Company, reported a revenue from operations of ' 272 million during the year which was mainly attributed to the increase in central rights income from Board of Cricket Control of India (BCCI) and as a result of Royal Challengers Bangalore, a franchisee team of Indian Premier League (IPL), securing fourth position in the IPL Season 2020. RCSPL also accounted for a profit of ' 541 million with an increase of ' 504 million accounting to 326% of increase during the year.</span></p><p><span class="font0">The Company's policy for determining material subsidiaries is available at the Company's website at </span><span class="font0" style="text-decoration:underline;"><a href="https://www">https://www</a>. diageoindia.com/investors/shareholder-centre/policies/ policy-for-determining-material-subsidiaries/</span><span class="font0">.</span></p><p><span class="font0">In accordance with the third proviso to Section 136(1) of the Companies Act, 2013 the annual report and financial</span></p><p><span class="font0">statements of each of the subsidiary companies have also been placed on the website of the Company </span><span class="font0" style="text-decoration:underline;"><a href="https://www">https://www</a>. diageoindia.com/investors/subsidiaries-financial/</span><span class="font0">.</span></p><p><span class="font1" style="font-weight:bold;">9. Prospects/Outlook</span></p><p><span class="font0">The details about prospects/outlook of your Company are provided under the Management Discussion and Analysis Report, forming part of this Report.</span></p><p><span class="font1" style="font-weight:bold;">10. Appointment/reappointment and resignation/ retirement/step down of Executive Directors and Key Managerial Personnel during the financial year:</span></p><p><span class="font0" style="font-weight:bold;">A. i) Retirement of Mr. V Ramachandran as Company Secretary & appointment of Mr. Mital Sanghvi as Company Secretary (CS) - Key Managerial Personnel (KMP)</span></p><p><span class="font0">As already updated in the annual report for the year ended 2019-20, the Board at its meeting held on January 27, 2020 appointed Mr. Mital Sanghvi as CS of the Company with effect from June 01, 2020 in the place of Mr. V Ramachandran, erstwhile CS who retired from the services of the Company effective end of day May 31, 2020.</span></p><p><span class="font0" style="font-weight:bold;">ii) Resignation of Executive Director and Chief Financial Officer (ED & CFO) - Key Managerial Personnel (KMP)</span></p><p><span class="font0">The Board at its meeting held on September 18, 2020 noted the resignation of Mr. Sanjeev Churiwala as ED & CFO of the Company effective end of day September 30, 2020. Mr. Sanjeev Churiwala resigned as an ED & CFO as he was promoted within Diageo group at Singapore.</span></p><p><span class="font0" style="font-weight:bold;">iii) Appointment of Chief Financial Officer (CFO)</span></p><p><span class="font0">The Board at its meeting held on September 18, 2020 appointed Mr. Pradeep Jain as CFO of the Company with effect from October 01, 2020.</span></p><p><span class="font0" style="font-weight:bold;">iv) Stepping down of Mr. Anand Kripalu as Managing Director and Chief Executive Officer (MD & CEO) - Key Managerial Personnel (KMP)</span></p><p><span class="font0">The Board at its meeting held on December 10, 2020 approved the stepping down of Mr. Anand Kripalu as MD & CEO of the Company effective end of day June 30, 2021. Mr. Anand Kripalu is stepping down as MD & CEO owing to his retirement.</span></p><p><span class="font0" style="font-weight:bold;">v) Appointment of Managing Director and Chief Executive Officer (MD & CEO)</span></p><p><span class="font0">The Board at its meeting held on December 10, 2020 approved the appointment of Ms. Hina Nagarajan (Ms. Nagarajan) as Additional Director and MD &</span></p><div><p><span class="font0">CEO with effect from July 01, 2021. Ms. Nagarajan assumed office as Chief Executive Officer - Designate with effect from April 01, 2021 and continue in that position till June 30, 2021. Details about Ms. Nagarajan is provided in the Notice of the 22<sup>nd</sup> annual general meeting of the Company.</span></p><p><span class="font0">Apart from the aforesaid appointment, there was no appointment of executive director during the year.</span></p><p><span class="font0" style="font-weight:bold;">vi) Re-appointment of Mr. John Thomas Kennedy</span></p><p><span class="font0">As per the provisions of the Companies Act, 2013, Mr. John Thomas Kennedy (Mr. Kennedy) retires by rotation at the ensuing annual general meeting (AGM) and being eligible, offered himself for reappointment.</span></p><p><span class="font0">Members may please note that Mr. Kennedy, who is a nominee of Relay B V, was appointed as a director at the 19<sup>th</sup> AGM held on September 07, 2018. Mr. Kennedy is not debarred from holding the directorship under any statutory regulations. Details about Mr. Kennedy is provided in the Notice of the 22<sup>nd</sup> annual general meeting of the Company.</span></p><p><span class="font0" style="font-weight:bold;">vii) Appointment of Mr. Vegulaparanan Kasi Viswanathan as an Independent Director of the Company for the second term.</span></p><p><span class="font0">The tenure of office of Mr. Vegulaparanan Kasi Viswanathan (Mr. V K Viswanathan), who was appointed as an Independent Director of the Company on October 17, 2016 and whose first term of 5 years expires on October 16, 2021. The Board of Directors at their meeting held on May 21, 2021 has accepted the recommendation of the Nomination & Remuneration Committee for re-appointment of Mr. V K Viswanathan as an Independent Director for a further period of 5 years with effect from October 17, 2021. Details about Mr. V K Viswanathan is provided in the Notice of the 22<sup>nd</sup> annual general meeting of the Company.</span></p><p><span class="font0" style="font-weight:bold;">viii) Continuation of Mr. Mahendra Kumar Sharma as Director of the Company on completion of 75 years of age.</span></p><p><span class="font0">Mr. Mahendra Kumar Sharma (Mr. M K Sharma), non-executive Chairman, was re-appointed as an Independent Director at the Annual General Meeting of the Company held on August 21, 2019 for a further period of 5 years. During his tenure in the Office, he will be attaining the age of 75 years. Details about Mr. M K Sharma is provided in the Notice of this 22<sup>nd </sup>annual general meeting of the Company.</span></p></div><br clear="all"/><h2><a name="bookmark8"></a><span class="font0" style="font-weight:bold;">B. Independent Directors</span></h2><p><span class="font0">Your Company did not appoint any new Independent Director or Nominee Director in the financial year 2020-21. Criteria for selection/appointment or reappointment of Independent Directors include skills, expertise of the Director, qualifications, experience and domain knowledge. The required skills of Independent Directors are leadership, managerial experience, diversity, risk management and corporate governance. All our Independent Directors viz., Mr. Mahendra Kumar Sharma, Mr. V K Viswanathan, Mr. D Sivanandhan, Mr. Rajeev Gupta and Dr. (Mrs.) Indu Shahani possess the aforesaid skills.</span></p><h2><a name="bookmark9"></a><span class="font0" style="font-weight:bold;">C. Declaration by Independent Directors</span></h2><p><span class="font0">Independent Directors have given a declaration pursuant to sub-section (6) of Section 149 of the Companies Act, 2013. In the opinion of the Board, Independent Directors fulfill the conditions specified in Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI (LODR) Regulations) and are independent of the management.</span></p><h2><a name="bookmark10"></a><span class="font0" style="font-weight:bold;">D. Number of meetings of the Board</span></h2><p><span class="font0">The details of the Board Meetings and other Committee Meetings held during the financial year 2020-21 are stated in the Corporate Governance Report which is forming part of this Report.</span></p><h2><a name="bookmark11"></a><span class="font0" style="font-weight:bold;">E. Board Committees</span></h2><p><span class="font0">The Company has the following committees of the Board:</span></p><p><span class="font0">• Audit Committee</span></p><p><span class="font0">• Risk Management Committee</span></p><p><span class="font0">• Nomination and Remuneration Committee</span></p><p><span class="font0">• Stakeholders Relationship and General Committee</span></p><p><span class="font0">• Corporate Social Responsibility Committee.</span></p><p><span class="font0">The composition of each of the above Committees, their respective roles and responsibilities are provided in the Corporate Governance Report which forms part of this Report.</span></p><p><span class="font0" style="font-weight:bold;">F. Policies</span></p><p><span class="font0">The Company has adopted all policies as required to be maintained by the Company under the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations and the same are uploaded on the website of the Company wherever required and the salient features of the policies are detailed in Corporate Governance Report.</span></p><h2><a name="bookmark12"></a><span class="font0" style="font-weight:bold;">G. Recommendations of the audit committee and other committees</span></h2><p><span class="font0">All the recommendations of the Audit Committee and of the other Committees were accepted by the Board.</span></p><h2><a name="bookmark13"></a><span class="font0" style="font-weight:bold;">H. Details of remuneration to directors</span></h2><p><span class="font0">As required under Section 197(12) of the Companies Act, 2013 information relating to remuneration paid to Directors during the financial year 2020-21 is provided in the Corporate Governance Report. The Company has also prepared a draft annual return in revised e-form MGT-7 for FY 2020-21 and uploaded the same on Company's website at </span><span class="font0" style="text-decoration:underline;"><a href="https://www.diageoindia.com/investors/financials/">https://www.diageoindia.com/investors/financials/</a> annual-and-financial-reports/annual-return-2020-21</span><span class="font0">. Members may also note that the annual return uploaded on the website is a draft and the final annual return will be uploaded after the same is filed with the Ministry of Corporate Affairs ('MCA').</span></p><p><span class="font0">As stated in the Corporate Governance Report, sitting fees is paid to Independent Directors for attending Board/Committee meetings. They are also entitled to reimbursement of actual travel expenses, boarding and lodging, conveyance and incidental expenses incurred in attending such meetings in accordance with the travel policy for directors. In addition, the Independent Directors are also eligible for commission every year as may be recommended by the Nomination and Remuneration Committee and approved by the Board within the overall limit of ' 4 Crore or 1% of the net profits of the Company calculated in accordance with Section 198 of the Companies Act, 2013, whichever is higher, as approved by the shareholders through Postal Ballot Resolution effective January 18, 2019. Criteria for payment of remuneration to Independent Directors are as given below:</span></p><p><span class="font0">i. Membership of Committees</span></p><p><span class="font0">ii. Chairmanship of the Committees/Board</span></p><p><span class="font0">iii. Benchmarking with other companies</span></p><p><span class="font0">The Board of Directors have approved payment of commission of ' 20 million to five independent directors after applying the criteria stated above for the financial year 2020-21.</span></p><p><span class="font0">The criteria for payment of remuneration to executive directors is determined by the Nomination and Remuneration Committee based on various criteria including performance criteria. Remuneration Policy is available on the Company's website at <a href="https://www.diageoindia.com/investors/shareholder-centre/policies/remuneration-reward-policy/">https://www.diageoindia.com/investors/shareholder-centre/policies/remuneration-reward-policy/</a>.</span></p><h2><a name="bookmark14"></a><span class="font0" style="font-weight:bold;">I. Board evaluation criteria</span></h2><p><span class="font0">Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of the SEBI (LODR) Regulations, the Board has carried out an annual performance evaluation, based on parameters which, </span><span class="font0" style="font-style:italic;">inter alia,</span><span class="font0"> include performance of the Board on deciding strategy, rating the composition & mix of Board members, discharging of their duties and handling critical issues etc. The parameters for the performance evaluation of the Directors include contribution made at the Board meeting, attendance, instances of sharing information on best practices applied in other industries, domain knowledge, vision, strategy, engagement with senior management, etc. The Independent Directors at their separate meetings, review the performance of non-independent directors and the Board as a whole. Chairperson of the Company after taking into account the views of Executive Director and non-executive directors, reviews the quality, quantity and timeliness of flow of information between the management and the Board for the Board to effectively and reasonably perform their duties. Based on the outcome of the performance evaluation exercise, areas have been identified for the Board to engage itself with and the same would be acted upon. The details of the evaluation process are set out in the Corporate Governance Report which forms part of this Report.</span></p><h2><a name="bookmark15"></a><span class="font0" style="font-weight:bold;">J. Vigil Mechanism</span></h2><p><span class="font0">The Company has a whistle blower mechanism known as SpeakUp, which is independently operated by a third-party agency. The Company encourage the employees/ representatives acting on behalf of the Company to raise their compliance concerns through this mechanism, apart from other internal reporting channels viz. Line Manager or HR Business Partner, Legal Business Partner and Business Integrity partner. A structured Breach Management Standard is in place which is in line with the Global Standard, for timely and conclusive resolution of compliance concerns raised through the whistle blower mechanism.</span></p><p><span class="font0">The quality of investigation reports and remedial actions are reviewed and monitored by the Global Business Integrity team. The decision on sanctions on the reported breaches are determined and monitored by a Compliance Committee, in order to ensure that there is a collective and a fair decision-making process and consistent action is undertaken in resolving the breaches.</span></p><p><span class="font0">This mechanism also provides for adequate safeguards against the victimization of employees who avail the vigil mechanism for reporting the compliance complaint</span></p><p><span class="font0">in good faith and without fear of being punished for raising that concern. Access to the Chairman of the Audit Committee is provided as required under the Companies Act, 2013 and the SEBI (LODR) Regulations.</span></p><p><span class="font0">The SpeakUp channel is available on the Company's website at </span><span class="font0" style="text-decoration:underline;"><a href="https://www.diageoindia.com/about-us/">https://www.diageoindia.com/about-us/</a> corporate-governance/speak-up/,</span><span class="font0"> and the toll-free number is available in english and other prominent regional languages.</span></p><h2><a name="bookmark16"></a><span class="font0" style="font-weight:bold;">K. Related party transactions</span></h2><p><span class="font0">The Company's policy on dealing with related party transactions was adopted by the Board on June 15, 2015 and further amended from time to time. This policy is available on the Company's website at </span><span class="font0" style="text-decoration:underline;"><a href="https://www">https://www</a>. diageoindia.com/investors/shareholder-centre/policies/ policy-on-related-party-transactions/</span><span class="font0">.</span></p><p><span class="font0">Form AOC-2 pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out in the </span><span class="font0" style="font-weight:bold;">Annexure-2 </span><span class="font0">to this Report.</span></p><p><span class="font0">All related party transactions that were entered into during the financial year, were at arm's length basis and were in the ordinary course of business. There are no material significant related party transactions entered into by the Company with promoters, directors, key managerial personnel or other designated persons which may have a conflict of interest with the Company at large.</span></p><h2><a name="bookmark17"></a><span class="font0" style="font-weight:bold;">L. Meeting amongst Independent Directors</span></h2><p><span class="font0">Schedule IV of the Companies Act, 2013, SEBI (LODR) Regulaions and Secretarial Standard - 1 on Meetings of the Board of Directors mandates that the Independent Directors of the Company hold at least one meeting in a year, without the attendance of Non-Independent Directors.</span></p><p><span class="font0">The Independent Directors met amongst themselves without the presence of any other persons on May 27, 2020, July 27, 2020 and November 04, 2020.</span></p><h1><a name="bookmark18"></a><span class="font1" style="font-weight:bold;">11. Auditors</span></h1><p><span class="font0" style="font-weight:bold;">i) Financial audit</span></p><p><span class="font0">M/s Price Waterhouse & Co Chartered Accountants LLP, (FRN 304026E/E-300009) were appointed as Statutory Auditors of your Company at the 17<sup>th</sup> AGM of the Company for a period of 5 years and their term comes to an end at the conclusion of the 22<sup>nd </sup>AGM of the Company. The Audit Committee at their</span></p><p><span class="font0">meeting held on May 20 & 21, 2021, recommended the re-appointment of M/s Price Waterhouse & Co Chartered Accountants LLP, (FRN 304026E/E-300009) ('PWC') who have given their consent and willingness to be re-appointed as Auditors of your Company. PWC, being one of the reputed international audit firm and given their expertise in the field of audit, the Board of Directors at their meeting held on May 21, 2021, approved the recommendation of the Audit Committee and proposed to re-appoint PWC as Auditors of your Company for a period of 5 years, from the conclusion of the ensuing 22<sup>nd</sup> AGM till the conclusion of the 27<sup>th</sup> AGM of the Company subject to the approval of the members of the Company at the ensuing AGM.</span></p><h2><a name="bookmark19"></a><span class="font0" style="font-weight:bold;">ii) Secretarial audit</span></h2><p><span class="font0">Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a Secretarial Audit has been carried out by Mr. Sudhir V Hulyalkar, Practicing Company Secretary (FCS: 6040 and CP No. 6137) and his report is annexed as </span><span class="font0" style="font-weight:bold;">Annexure - 3.</span></p><p><span class="font0">In addition, Pursuant to Regulation 24A of the SEBI (LODR) Regulation, the Secretarial Compliance Report for the financial year ended March 31, 2021, in relation to compliance of all applicable SEBI Regulations/ circulars/guidelines issued thereunder, is annexed as </span><span class="font0" style="font-weight:bold;">Annexure - 3A</span><span class="font0">. The Secretarial Compliance Report has been voluntarily disclosed as part of this Report as good disclosure practice. The said report has been submitted to the stock exchanges and is also available on the Company's website at </span><span class="font0" style="text-decoration:underline;"><a href="https://www.diageoindia.com/">https://www.diageoindia.com/</a> investors/shareholder-centre/notice-board/annual-secretarial-compliance-report-2021/</span><span class="font0">.</span></p><h2><a name="bookmark20"></a><span class="font0" style="font-weight:bold;">iii) Cost audit</span></h2><p><span class="font0">The Company is not covered by the requirement of maintenance of cost records, as specified under subsection (1) of Section 148 of the Companies Act, 2013.</span></p><h1><a name="bookmark21"></a><span class="font1" style="font-weight:bold;">12. Reporting of fraud by Auditors</span></h1><p><span class="font0">During the year under review, neither the statutory auditors nor the secretarial auditor have reported to the Audit Committee or the Board, under Section 143(12) of the Companies Act 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in this Report.</span></p><h1><a name="bookmark22"></a><span class="font1" style="font-weight:bold;">13. Corporate governance</span></h1><p><span class="font0">A Corporate Governance Report is annexed separately as part of this Report. Board confirms compliance with Secretarial Standards.</span></p><h1><a name="bookmark23"></a><span class="font1" style="font-weight:bold;">14. Management discussion and analysis report</span></h1><p><span class="font0">The Management Discussion and Analysis Report is annexed separately as part of this Report.</span></p><h1><a name="bookmark24"></a><span class="font1" style="font-weight:bold;">15. Fixed deposits</span></h1><p><span class="font0">As reported in the earlier annual reports, your Company discontinued accepting fixed deposits from the public and shareholders effective January 1, 2014. In addition, pursuant to section 74(1)(b) of the Companies Act, 2013, the Board of Directors at their meeting held on August 1, 2014 decided to repay all fixed deposits maturing on or after March 31, 2015 by March 31, 2015 by paying additional interest of 1% per annum on those fixed deposits repaid before the maturity date pursuant to the contract entered into with the Fixed Deposit holders. Fixed Deposits from the public and shareholders which remained unclaimed and for which no discharge certificates were received from the depositors as on March 31, 2021 stood at ^17,97,000. Unclaimed amount was transferred into a separate non-interest bearing escrow account opened specifically for the purpose of re-payment pursuant to the provisions of the Companies Act, 2013 and the rules made thereunder. Out of this amount, a sum of ^1,15,000/- has since been paid as per instructions received after the year end and balance unclaimed amount as of May 21, 2021 is ?16,82,000/-. The balance unclaimed fixed deposits continue to remain in the escrow account as on May 21, 2021.</span></p><h1><a name="bookmark25"></a><span class="font1" style="font-weight:bold;">16. Annual return</span></h1><p><span class="font0">The draft Annual Return of the Company as on March 31, 2021 in E-Form MGT - 7 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at </span><span class="font0" style="text-decoration:underline;"><a href="https://www.diageoindia.com/investors/financials/annual-and-financial-reports/annual-return-2020-21">https://www.diageoindia.com/investors/financials/annual-and-financial-reports/annual-return-2020-21</span><span class="font0"></a>.</span></p><h1><a name="bookmark26"></a><span class="font1" style="font-weight:bold;">17. Transfer to Investor Education and Protection Fund (IEPF)</span></h1><p><span class="font0">The details of unclaimed/unpaid dividends and fixed deposits which have not been transferred to the IEPF account as the period of seven years have not been completed is given</span></p><p><span class="font0">below pursuant to the provisions of the Companies Act, 2013 and the applicable rules there under.</span></p><h2><a name="bookmark27"></a><span class="font0" style="font-weight:bold;">i) Dividend:</span></h2><p><span class="font0">The Company has not declared any dividend from financial year 2013-14 onwards owing to accumulated losses. Hence, there are no unclaimed/unpaid dividends from financial year 2013-14 onwards.</span></p><p><span class="font0">No shares were transferred during the year ended March 31, 2021 to Investor Education and Protection Fund pursuant to Section 124(6) of the Companies Act, 2013.</span></p><h2><a name="bookmark28"></a><span class="font0" style="font-weight:bold;">ii) Fixed Deposits:</span></h2><p><span class="font0">1. Accepted during the year NIL</span></p><p><span class="font0">2. Remained unpaid or unclaimed as at the ^17,97,000 end of the year</span></p><p><span class="font0">3. Whether there has been any default</span></p><p><span class="font0">in repayment of deposits or payment of NIL interest thereon during the year and if so, number of such cases and the total amount involved</span></p><p><span class="font0">4. The details of deposits which are not</span></p><p><span class="font0">in compliance with the requirements of Not Applicable Chapter V of the Companies Act, 2013</span></p><p><span class="font0">Necessary compliance under rule 3 of the Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, has been ensured.</span></p><h1><a name="bookmark29"></a><span class="font1" style="font-weight:bold;">18. Human resources</span></h1><p><span class="font0">Employee relations remained cordial at all the locations of the Company. Particulars of employees drawing an aggregate remuneration of ' 1,02,00,000/- or above per annum or ' 8,50,000/- or above per month, as well as additional information on employee remuneration as required under the provisions of rule 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as part of this Report in </span><span class="font0" style="font-weight:bold;">Annexure - 4 </span><span class="font0">hereto.</span></p><h1><a name="bookmark30"></a><span class="font1" style="font-weight:bold;">19. Employees stock option scheme</span></h1><p><span class="font0">Your Company has not offered any stock options to its employees during the year 2020-21 within the meaning of SEBI (Share Based Employee Benefit) Regulations, 2014.</span></p><h1><a name="bookmark31"></a><span class="font1" style="font-weight:bold;">20. Particulars of loans, guarantees and investments</span></h1><p><span class="font0">Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 are detailed in Notes to the financial statements under Note 4, relating to investments and Note 5 relating to loans given as per the standalone</span></p><div><p><span class="font0">financial statements for the year ended March 31, 2021. The Company has not given any guarantee to any Company as on March 31, 2021.</span></p><p><span class="font1" style="font-weight:bold;">21. Risk management</span></p><p><span class="font0">Details on Risk Management is annexed as </span><span class="font0" style="font-weight:bold;">Annexure - 5 </span><span class="font0">to this Report.</span></p><p><span class="font1" style="font-weight:bold;">22. Internal financial controls</span></p><p><span class="font0">During the year Controls, Compliance & Ethics (CC&E) team have implemented a detailed plan under the direction of the Executive Committee of the Company, to reinforce the code of business conduct and to further embed compliance across the business. The CC&E team also undertook comprehensive review of existing controls (SOX & non-SOX controls) & added additional attributes in the existing controls. The same has been shared with the statutory auditors who have confirmed that they are aligned with the same. The controls with additional attributes have been tested both by Management tester (Deloitte) and by the Statutory auditors in March 2021 for its effectiveness. The Board after considering the materials placed before it, reviewed the confirmation received from external parties and the effectiveness of the policies and procedures adopted by the Company for ensuring orderly and efficient conduct of its business, including adherence to Company's policy, safeguarding its assets, prevention and detection of frauds and errors and completeness of accounting records and timely preparation of financial statements. The Board has satisfied itself that the Company has laid down internal financial controls which are commensurate with the size of the Company and that such internal financial controls are broadly adequate and are operating effectively. The certification by the auditors on internal financial control forms part of the audit report. A statement to this effect is also appearing in the Directors' Responsibility Statement.</span></p><p><span class="font1" style="font-weight:bold;">23. Corporate social responsibility</span></p><p><span class="font0">Information on the composition of the Corporate Social Responsibility (CSR) Committee is provided in the Corporate Governance Report that forms part ofthis Report. Furthermore, as required by Section 135 of the Companies Act, 2013 and the rules made thereunder, additional information on the policy and implementation of CSR activities by your Company during the year are provided in </span><span class="font0" style="font-weight:bold;">Annexure - 6 </span><span class="font0">to this Report.</span></p><p><span class="font1" style="font-weight:bold;">24. Conservation of energy, technology absorption, foreign exchange earnings and outgo</span></p><p><span class="font0">The particulars prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, are set out in </span><span class="font0" style="font-weight:bold;">Annexure - 7 </span><span class="font0">to this Report.</span></p></div><br clear="all"/><p><span class="font1" style="font-weight:bold;">25. Details of significant and material orders passed by the regulators or courts impacting the going concern status and Company's operations in future pursuant to Rule 8(5)(vii) of Companies (Accounts) Rules, 2014</span></p><p><span class="font0">The Company has not received any significant or material order passed by regulators or courts or tribunals impacting the Company's going concern status or the Company's operations in future. The details of notices received from regulatory authorities and related matters have been disclosed as part of note no. 40(e) to the audited standalone financial statements for the year ended March 31,2021 and as note no. 40(e) of the consolidated financial statements for the year ended March 31, 2021.</span></p><p><span class="font1" style="font-weight:bold;">26. Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013</span></p><p><span class="font0">As per requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (SHWWA), the Company has implemented the policy and framework. Moreover, the Company's policy is all gender inclusive and the process ensures complete anonymity and confidentiality to the parties.</span></p><p><span class="font0">Internal Committees (IC) have been constituted for all locations. While maintaining the highest governance norms, the various Internal Committee has appointed internal members and an external member who have extensive experience in the field. The IC's meet on quarterly basis to discuss the matters on policy awareness, best practices, judicial trends, etc. During the year, IC has also been trained on nuances of the SHWWA.</span></p><p><span class="font0">The IC's role is to consider and resolve the complaints reported on sexual harassment at workplace. Investigation is conducted and decisions are made by the IC at the respective location, and a senior woman employee is the presiding officer over every case.</span></p><p><span class="font0">i) Number of complaints filed during the financial year: 1</span></p><p><span class="font0">ii) Number of complaints disposed of during the financial year : 1</span></p><p><span class="font0">iii) Number of complaints pending as on end of the financial year: NIL</span></p><p><span class="font0">To build awareness in this area, the Company has been publishing newsletter, emailers, posters, conducting online training module and IBegin-induction training for newly joined employees. Besides the refresher, virtual training programmes are conducted in the organisation on a continuous basis for employees, consultants, contractual employees and permanent/contractual workers in regional</span></p><div><p><span class="font0">languages. The IC has also conducted informal sessions to check the pulse at the grassroot levels.</span></p><p><span class="font1" style="font-weight:bold;">27. Business Responsibility Report (BRR)</span></p><p><span class="font0">In accordance with the SEBI (LODR) Regulations, 2015, the BRR has been placed on the Company's website at </span><span class="font0" style="text-decoration:underline;">https:// <a href="http://www.diageoindia.com/investors/financials/annual-and-financial-reports/business-responsibility-report-2020-21">www.diageoindia.com/investors/financials/annual-and-financial-reports/business-responsibility-report-2020-21</span><span class="font0"></a>.</span></p><p><span class="font1" style="font-weight:bold;">28. Other Disclosures</span></p><p><span class="font0">a) The Company has not issued equity shares with differential rights as to dividend, voting or otherwise.</span></p><p><span class="font0">b) The Company has not issued any sweat equity shares to its directors or employees.</span></p><p><span class="font0">c) No application has been made under the Insolvency and Bankruptcy Code; hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year is not applicable.</span></p><p><span class="font0">d) The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.</span></p><p><span class="font1" style="font-weight:bold;">29. Directors' responsibility report</span></p><p><span class="font0">Pursuant to Section 134 (5) of the Companies Act, 2013 in relation to financial statements (together with the notes to such financial statements) for the year 2020-21, the Board of Directors report that:</span></p><p><span class="font0">(i) in the preparation of the annual accounts for the financial year ended March 31, 2021, the applicable accounting standards have been followed and there are no material departures;</span></p><p><span class="font0">(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as</span></p></div><br clear="all"/><p><span class="font0">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 year ended on that date;</span></p><p><span class="font0">(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;</span></p><p><span class="font0">(iv) the Directors have prepared the financial statements on a going concern basis;</span></p><p><span class="font0">(v) the Directors have laid down internal financial controls to be followed by the Company commensurate with the size and nature of its business and the complexity of its operations and that such internal financial controls are adequate and are operating effectively.</span></p><p><span class="font0">(vi) Proper systems have been devised to ensure compliance with the provisions of all applicable laws by implementing an automated process having comprehensive systems and securing reports of statutory compliances periodically from the functional units and that such systems are adequate and are operating effectively.</span></p><p><span class="font0">The Board of Directors place on record sincere gratitude and appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year. The Board conveys its appreciation for its customers, shareholders, suppliers as well as vendors, bankers, business associates, regulatory and government authorities for their continued support.</span></p><p><span class="font0">By Order of the Board</span></p><h2><a name="bookmark32"></a><span class="font0" style="font-weight:bold;">Mahendra Kumar Sharma</span></h2><p><span class="font0">Chairman DIN:00327684</span></p>