Equity Analysis

To the Members

Your Board of Directors are pleased to present the 31^st Annual Report and Audited Accounts for the year ended 31^st March, 2024.

(Rs. In Lakhs)

During the year under review the company reported a growth of 11% in revenue as compare to previous year and PBT has been decreased by Rs.88crores from the previous year and also PAT has been decreased by 20% from the previous year. The Basic EPS of the Company is Rs. 33.58/- as compared to Rs. 42.43/- in the previous year and the Diluted EPS of the Company is Rs. 33.51/- as compared to Rs. 42.39/- in the previous year.

In Fiscal 2024 the global economy remained resilient even though there were many disruptions like Inflation spiked following a Russian-Ukraine war, followed by a globally synchronized tightening of monetary policy, and attacks on commercial shipping in the Red Sea which led to a rise in global freight rates. However, India has shown resilience and is poised for further growth because of the strong economic policies in place.

In Fiscal 2024, your Company reported a growth of 15% in net revenues to reach Rs. 2,415crore due to performance in the manufacturing and consumer segment, and EBITDA stood at Rs. 184crores. EBITDA margins were at 8% due to the higher input costs, and investments in the IMFL segment. Net profit stood at Rs. 97Crores in the year under review. The share of consumer business was 34% in Fiscal 2024. The Company continued to perform well in its key markets like Rajasthan with higher growth in the Value Plus (Medium Liquor) and continues to be the market leader, in this segment we enjoy a healthy EBITDA margin which leads to strong return ratios and is a fast-moving cash-cycle with a low asset base which helps us to invest in company's future growth opportunity which is the Prestige & Above segment. In Fiscal 2024, the sales from the IMFL segment picked up and contributed 6% of the top line of consumer revenue. We have been able to enter brand new categories such as the Read to Drink category, as well as the Beer category thanks to this vote of confidence. A premium segment currently contributes 2% of your company's revenue, and the company believes it will contribute to its next phase of growth. Your company has developed a strong portfolio of Prestige & Above segment brands, with six brands spread across six states. In the upcoming year, several launches of new products in select markets and existing products in new markets will be planned and executed. The share of the manufacturing business was 66% in Fiscal 2024. It witnessed a growth of 17% as the plants were running at optimum utilisation and raw material prices increased which we partially passed on because of the strong nature of our business. Our incremental capacities of 60 KLPD each at Jharkhand and West Bengal will be operational from Q1 of FY25 and we expect further boost in topline from here on. There is no doubt that your company's strong presence in the manufacturing sector is the backbone of the business.

As a manufacturing company with a solid foundation, we are confident in exploring opportunities in the consumer segment.

Your Directors are pleased to recommend dividend of Re. 3.50/-i.e. 35% per equity share of the company for the year 2023-24.

The Company has neither accepted nor Invited any deposits from public under the provisions of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules 2014 and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

Mr. Santosh Kumar Bishwal, Mr. Kunal Agarwal and Mr. Vivek Gupta, have resigned from the Board of Directors of the company w.e.f. 30^th May 2024. The Board of Directors places on record its appreciation of the valuable contribution made by them. Further, Mr Amit Bhatiani has been inducted in the Board as an Independent Director and Mr. Sunil Chadha has been appointed as Chairman of the Board of Directors of the company w.e.f. 30th May 2024.

Dr. Bhaskar Roy, Executive Director of the company, retire by rotation and being eligible offer himself for re-appointment. The Board recommends his re-appointment.

Your Company has one subsidiary viz., M/s Bored Beverages Private Limited (Indian subsidiary).

In terms of proviso to sub section (3) of Section 129 of the Act, the salient features of the financial statement of the subsidiary is set out in the prescribed form AOC-1, which forms part of the annual report.

As per requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Compliance Report on Corporate Governance has been annexed as part of the Annual Report.

The CSR Policy of the Company and the details about the initiatives taken by the Company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been disclosed in Annexure-II to this Report. Further details of composition of the Corporate Social Responsibility Committee and other details are provided the Corporate Governance Report which forms part of this report. The policy on Corporate Social Responsibility as approved by the Board of Directors is available on the website of the Company www. globusspirits.com.

The Nomination & Remuneration Policy as approved by the Board on recommendation of the Nomination & Remuneration Committee is available on website of the Company www. globusspirits.com.

Pursuant to the provisions of Section 139 (1) and (2) of the Act 2013, M/s Walker Chandiok & Co. LLP, Chartered Accountants, New Delhi, having ICAI Firm Registration No. 001076N/N500013, the Statutory Auditors of the Company was appointed in 30^th AGM of the company to hold office till the conclusion of 35^th AGM of the Company at the remuneration to be fixed by the Board of Directors / senior management of the Company, in addition to applicable taxes and actual out of pocket expenses incurred in connection with the audit of the accounts of the Company.

The Auditors in their report have given a qualification and the response of your Directors with regards to it is as follows : During the year ended 31 March 2023, the Income Tax Department had carried out search and seizure operation at the head office and other premises of the Company from 30^th January 2023 to 03^rd February 2023 under section 132 of the Income-tax Act, 1961 (‘IT Act'). Subsequent to year end, the Company has received assessment orders for the last 10 assessment years in the first week of April'24 disallowing certain expenses resulting in an aggregate tax impact of Rs. 5,649 lacs (including interest). The Company has no tax demand for the AY 2014-15 to AY 2020-21 and for the remaining 3 years, the amount of tax demand is Rs. 4,093 lacs, out of which Rs. 532 lacs was paid as self-assessment tax during the quarter ended on 31 December 2023. The Company has filed an appeal u/s 246A of the IT Act for all the assessment years covered by the order and has paid Rs. 2,511 lacs under protest. The management has appointed an independent firm to review these disallowances and report to Audit committee and the Company has been legally advised that the tax demand may not be sustainable at the appellate forums. While the outcome is awaited, based on legal advice and company's preliminary assessment, management has determined that no material adjustments are needed with respect to the aforementioned matter in the financial results.

Your Company is required to maintain the Cost records as required under Section 148(1) of the Act and accordingly, such accounts and records are maintained by the Company. The Board of Directors appointed M/s JSN & Co., Cost Accountants, having Firm's registration no. 455, its office at 462/1, 1st Floor, Old MB Road, Lado Sarai, New Delhi-110030, as Cost Auditor for conducting the Cost Audit for the financial year 2024-25. The audit committee recommended their appointment and remuneration. The Company has also received necessary certificate under Section 141 of the Act 2013 conveying their eligibility for re-appointment. The remuneration fixed by the board, based on the recommendation of the audit committee is required to be ratified by the members at the Annual General

Meeting (‘AGM') as per the provision of Section 148(3) of the Act 2013.

Secretarial Audit Report has been annexed herewith and forms part of the this Report.

Statement pursuant to u/s 197 (12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the particulars of top ten employees are as follows :-

Notes: 1. The percentage of equity share holding mentioned as above is as on 31^st March 2024.

2. None of the Directors or employees are inter related to each other except Sh. Ajay K. Swarup, Managing Director of the company is the father of Sh. Shekhar Swarup, Joint Managing Director of the company.

The Employee Stock Option Scheme was approved by the shareholders in the Annual General Meeting held on September 24, 2021. Total 2,87,992 Options were approved under the Employee Stock Option Scheme. Disclosure under SEBI (Share Based Employees Benefits and Sweat Equity) Regulations, 2021 regarding details of the "ESOP 2021" is given in Annexure-III. The Employee Stock Option Scheme containing all the relevant terms & conditions can be access at https://www.globusspirits. com/investors_corporate_governance.php.

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2024 can be accessed on the Company's website at https://www.globusspirits.com/ investors_corporate_governance.php

Particulars as required under Rule 8 (3) of the Companies (Accounts) Rules, 2014 are given in Annexure I and form part of this report.

Management's Discussion and Analysis Report has been annexed and forms part of the this Report.

1. That in preparation of the Annual Accounts for the financial year 2023-24, the applicable Accounting Standards have been followed along with explanation relating to material departures, if any.

2. That 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 31^st March, 2024 and of the results of the Company for that period.

3. That the directors had 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.

4. That the directors had prepared the Annual Accounts for the financial year 2023-24 on a going concern basis.

5. That they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating properly ; and

6. That they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

NUMBER OF MEETINGS OF THE BOARD

Five meetings of the Board of Directors of the Company were held during the financial year. For details of the meetings of the Board, please refer to the Corporate Governance Report, which forms part of the Annual Report. .

Composition and other details pertaining to various Committees of the Board of Directors have been disclosed in the Corporate Governance Report.

INDEPENDENT DIRECTORS' DECLARATION

All the Independent Directors, have submitted a declaration that each of them meets the criteria of independence as provided in Sub-Section (6) of Section 149 of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further, there has been no change in the circumstances which may affect their status as independent director during the year.

Company's policy on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under section 178(3) of the Act are covered in Corporate Governance Report which forms part of this Report.

The Directors and members of Senior Management have affirmed compliance with the Code of Conduct for Directors and Senior Management of the Company. A declaration to this effect has been signed by the Managing Director and forms part of the Annual Report.

Your Company has adopted a comprehensive ‘Code of Conduct to Regulate, Monitor and Report of Trading by Insiders'and also a ‘Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information' relating to the Company, under the provisions of the Securities Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. The Board of Directors have approved and adopted the ‘Code of Conduct to Regulate, Monitor and Report of Trading by Insiders' and a ‘Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information'.

None of the Directors are related to each other within the meaning of the term "relative" as per Section 2(77) of the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 except Sh. Shekhar Swarup (Joint Managing Director) is the son of Sh. Ajay Kumar Swarup (Managing Director) of the Company.

The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors including Independent Directors pursuant to the provisions of the Companies Act 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 The performance was evaluated by the Board after seeking inputs from all the directors on the basis of criteria such as the board composition & structure, Board meetings & Procedures, Board Development, Risk Management, effectiveness of board processes, information and functioning, succession planning etc.

The particulars of loans, guarantees and investments , as per Section 186 of the Act, have been disclosed in the financial statements.

All the provisions of Secretarial standards has been complied by the Company during Financial Year 2023-24.

The Company has entered into contract / arrangements with the related parties in the ordinary course of business and on arm's length basis. The details are mentioned in the notes to accounts of the financial statements. Policy on materiality of Related Party Transactions can be accessed on the company's website www.globusspirits.com.

The information about internal controls is set out in the Management Discussion & Analysis report which is attached and forms part of this Report.

The Company has a Risk Management Committee & also it has in place a Risk Management Policy to deal with various risks arising in the course of business. The key responsibilities of

Risk Management Committee are namely, Identification of risks, Implementing and monitoring the risk management plan for the Company and reframe the risk management plan and policy as it may deem fit, lay down procedures to inform Board members about the risk assessment and minimization procedures, Monitoring and reviewing of the risk management plan from time to time and activities as may be required to be done under the Companies Act 2013 or SEBI listing Regulations.

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received on sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaint on sexual harassment was received during the period under review.

The Company has established a vigil mechanism for Directors and employees to report their genuine concerns.

As required under Regulation 43A of the Listing Regulations, the Company has formulated a Dividend Distribution Policy. This policy can be viewed on the Company's website at https:// www.globusspirits.com/documents/key-policies/Dividend%20 Distribution%20Policy-GSL.pdf

The information required under section 197 of the Companies Act, 2013 and the rules made there under, in respect of employees of the Company, is follows :(a) The ratio of the remuneration of each director to the median remuneration of the employees of the Company

* for the purpose of comparison 12 months salary has been considered for all the employees even though any employee has worked for less than 12 months

(b) The percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Company Secretary or Manager, if any, in the financial year

7.28% (Since there is lot of variation in the no. of employees during the current year as compare to previous year, comparison of the exact median remuneration may not be accurate.)

(d) The number of permanent employees on the rolls of Company as on 31/03/2024 : 908

(e) The average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration :

The average increase in salaries of employees other than managerial personnel in 2023-24 was 9% approximately. Percentage increase in the managerial remuneration for the year was also approximately 15%.

(f) The affirmation that the remuneration is as per the remuneration policy of the Company :

The Company's remuneration policy is driven by the success and performance of the individual employees and the Company. Through its compensation package, the Company endeavors to attract, retain, develop and motivate a high performance staff. The Company follows a compensation mix of fixed pay, benefits and performance based variable pay. Individual performance pay is determined by business performance and the performance of the individuals measured through the annual appraisal process. The Company affirms remuneration is as per the remuneration policy of the Company.

During the year, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company.

Details in respect of frauds reported by auditors under subsection (12) of section 143 other than those which are reportable to the Central Government : The Auditors have not reported any fraud under section 143(12) of the Act.

The amounts, if any, which it proposes to carry to any reserves: There is no amount which is transferred to reserves. The closing balance of the retained earnings of the Company after all appropriation and adjustments forms part of surplus retained by the Company.

Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report: There have been no material changes and commitment, affecting the financial position of the Company which occurred between the end of the FY2024 till the date of this Report, other than those already mentioned in this Report.

The change in the nature of business, if any: There was no change in the nature of business during the year under review

The names of companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies during the year: No company has become or ceased to be a subsidiary, joint venture or associate company of the Company, during the year except that M/s Bored Beverages Private Limited (Indian subsidiary) has become subsidiary of the Company during the financial year under review.

The details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future : No significant and material orders were passed by the regulators or court or tribunals impacting the going concern status and Company's operations in future

The details in respect of adequacy of internal financial controls with reference to the Financial Statements: The Company has adequate internal financial control systems in place. The control systems are regularly reviewed and updated as per the requirement and circumstances.

The details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof: During the financial year, no one time settlement was made with respect to any amount of loan raised by the Company from any banks or financial institution.

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: During the financial year under review, the Company has neither made any application nor any proceedings are pending under the Insolvency and Bankruptcy Code, 2016.

The Board wishes to place on record its appreciation for the wholehearted support and valuable co-operation extended to the Company by the Central & the State Governments, Bankers, Suppliers, Associates, Contractors, employees and shareholders.