Sula Vineyards Ltd Directors Report

Dear Members,

Your Board of Directors ("Board") present the Twenty First (21^st) Annual Report of Sula Vineyards Limited ("the Company") together with the Audited Financial Statements of the Company for the Financial Year ended March 31, 2024.

1. Key Financial Highlights (Standalone and Consolidated)

The Companys financial performance, for the year ended March 31, 2024 is summarized below:

(H crores)

	Consolidated		Standalone
	2023-24	2022-23	2023-24	2022-23
Gross Income	616.37	556.96	598.93	535.43
Earnings Before Interest, Depreciation, Tax and Amortization (EBITDA)	183.57	160.96	177.56	161.54
Finance Charges	26.16	21.08	23.59	19.44
Depreciation and amortisation expense	31.63	25.89	26.81	23.84
Net profit before tax	125.78	113.99	127.16	118.26
Tax expense	32.47	29.94	32.47	29.94
Other comprehensive gain / (loss) (net of tax)	(0.66)	0.81	(0.64)	0.72
Total comprehensive income	92.65	84.86	94.05	89.04
Balance of Profit brought forward	192.40	152.94	216.26	172.63
Balance available for appropriation	92.65	84.86	94.05	89.04
Amount transferred to retained earnings	0.01	-	-	-
Dividend paid on Equity Shares	(78.01)	(45.41)	(78.01)	(45.41)
Surplus carried to Balance Sheet	207.03	192.40	232.30	216.26

2. Business Performance & State of Company Affairs

Key Highlights

FY24 was a landmark year for Sula, achieving record Revenue, EBITDA and Profits. Sula also expanded its wine tourism footprint by acquiring N D Wines, a winery strategically located less than 50kms the Gujarat border, laying the groundwork for long-term growth of Wine Tourism. Customer demand continues to rise, with Sula tastings increasing by 42% compared to the previous year taking total tastings to 2.7 Lakhs. To cater to the growing demand and stay ahead in terms of innovation, we introduced three of our iconic brands in 250ml cans for the first time. We have been certified as a Great Place to Work for the third consecutive year, earning a place among Indias Top 100 companies.

As we enter FY25, the demand for our wines continues to soar, reaffirming Sula as the preferred choice for Indian consumers embracing wine as their preferred drink.

Financial Overview

Net Revenues grew by 10.67% to H 616.37 crores in FY24 from H 556.96 crores in FY23, with H 534.21 crores revenue from our Own Brands jumping 11.13%. EBITDA increased by 14.05% to H 183.57 crores from H 160.96 crores last year with the EBITDA margin increasing to 30.16% from 29.08% last year. PAT increased by 11.01% to H 93.31 crores from H 84.5 crores last year with the PAT margin increasing to 15.33% from 15.19% last year.

Sales

In FY24, we crossed 1.1 million cases with a continued focus on premiumization, resulting in 13.44% Elite and Premium volume growth. The share of Elite & Premium volumes grew from 46.09% in FY21 to 54.98% in FY24.

Our commercial agenda of increasing width of distribution in tier 2 markets paid off; as a result, growth in tier 2 markets was higher than that in key markets of Maharashtra and Karnataka. We successfully tapped price increase opportunities across markets; as a result, we initiated price increase in the markets of Maharashtra, Karnataka, CSD and West Bengal.

We have maintained a small Imports portfolio comprising just 3 brands - Le Grand Noir, Torres, and Trapiche which give us good depth of volume and profitability.

Production and Harvest

Harvest 24 was our fourth successive harvest with great quality and quantity. We crushed ~ 11,400 tons of wine grapes an increase of 11% over Harvest 23. Our total installed capacity grew by 0.5 million litres in FY24, an increase of 4%. This came from a 0.26 million litre increase at ASPL (York), representing a ~50% capacity increase for ASPL and a 0.3 million litre increase at DD and exit from Indian Ambience, one of our leased wineries.

Our Source Pinot Noir is the latest release in this iconic range of The Source, the most successful premium Indian wine brand launched in the past decade. We simplified our packaging material requirement by introducing common outer cartons for all our premium brands as well as common plain black screwcaps for Madera, Mosaic and Port Gold. In line with our sustainability goals we aim to almost double the use of recycled glass bottles from 0.09 cr bottles in FY24.

Wine Tourism

Our wine tourism holds a pivotal position in fostering awareness and boosting wine consumption in India. In FY24 we achieved a strong 20% growth in Wine Tourism business closing the year at 96 crores We welcomed 4.34 lakh wine enthusiasts across all our facilities this year - crossing the 4 lakh mark for the first time, a 12% jump from the last year.

During FY24, we conducted 29% more tastings at our premises, amounting to over 1.72 lakh. Our on-site wine sales have all played a role in driving a 20% rise in our revenue for FY24. We have added three stylish new villas at Beyond overlooking the picturesque Gangapur lake in Nashik and 27 new rooms. We now have over 100+ keys at our iconic Nashik resorts, a big jump from 67 keys in March23. We sold 28% more rooms in FY24 compared to last year indicating the rising demand.

A record 11,670 visitors enjoyed a day at Sula over the three days of Independence Day weekend, a massive jump from the previous record of 8,532 visitors in the year-ago period. Revenues for three days touched H 2.08 crores, 40% higher than the previous three-day record of H 1.47 crores.

This record was once again broken on Christmas day weekend, clocking the highest single-day, two-day, and three-day revenue, reaching H 2.28 crores Visitor numbers set record with over 12,000 visitors (not including the erstwhile Sula fest music festival) with over 5,300 individual tastings over the 3-day period, a jump from the previous 3-day record of 4,700 tastings over Independence Day 2023.

Marketing

In FY24, our marketing efforts have driven significant achievements. We surpassed our follower target, securing the No. 11 spot on the Top Wineries on Instagram list. Our total digital brand reach exceeded 9.5cr and we are now a strong community of 150K+ wine lovers.

Sulas The Source Chenin Blanc Reserve won the countrys first ever wine medal at the prestigious Concours Mondial de Bruxelles 2023, arguably Indias finest dry Chenin Blanc, making it a proud day for India. Sulas Rasa Syrah and Dindori Reserve Chardonnay also won two golds at the 2023 Paris Wine Cup.

We conducted 80,000 in-person tastings, explored 66 tier 2 cities, and successfully listed The Source and Rasa at prestigious institutions like Pizza Express Mumbai, PF Changs Mumbai Ritz Carlton Pune, Club Mahindra Goa, Quorum Gurgaon. Additionally, we held our own Sula events like Monsoon Tasting and for the first-time Harvest Tasting, aiming to strengthen our relationships with institutions and media. We had successful participation in 15 key events like the Sunday Soul Sante - Hyderabad, Upper Crust - Mumbai. The introduction of rice husk glasses was highly successful at such events.

Sustainability

Sustainability continues to be one of the key arrow of our company. We proudly secured the prestigious IWCA (International Wineries for Climate Action) Gold membership, marking a milestone as the first winery in Asia to achieve this recognition.

Aligning with our ambitious 2050 Net-Zero goal, we have installed nearly 700 kW of solar panels across our facilities, augmenting our total solar capacity to over 3300 kW. Currently, 59% of our energy needs are met through solar energy sources. Additionally, in FY24, we introduced BESS (Battery Energy Storage System) with capacity of 422Kwh to efficiently store solar energy. We remain unwavering in our commitment to spearhead sustainability initiatives.

We have developed a sophisticated water management tool that guides us in minimizing freshwater usage and maximizing recycled water utilization. This initiative has led to a strong 8% YoY reduction in water consumption per liter of wine produced. Additionally, in FY24 Q4, we introduced partition-less cartons and reduced bottle weight, resulting in a 2% decrease in emissions from packaging materials, in turn reducing our carbon footprint.

3. Reserves

There is no amount proposed to be transferred to the Reserves.

4. Dividend

The Board of Directors at its meeting held on February 13, 2024, declared an Interim Dividend of H 4/- per equity share of face value of H 2/- each aggregating to H 33,75,98,516/- (Rupees Thirty-Three Crores Seventy-Five Lakhs Ninety- Eight Thousand Five Hundred and Sixteen only). The Interim Dividend was paid to the shareholders holding shares as on Wednesday, February 21, 2024.

The Board recommends to declare a Final Dividend of H 4.50/- per equity share of face value H 2/- each for FY23-24 aggregating to H 37,97,98,330.50 (Rupees Thirty Seven Crores Ninety Seven Lakhs Ninety Eight Thousand Three Hundred Thirty and Fifty paise only) out of the profits of financial year 2023-24 to the equity shareholders of the Company whose names appear in the Registrar of Members of the Company as on Wednesday, May 22, 2024.

5. Management Discussion and Analysis

The Management Discussion and Analysis for the year under review, as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to this Report (Annexure - V)

6. 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.

Other than, as disclosed in the financial statements, the directors are not aware of any other matters or circumstances that have arisen since the end of the financial year, which have significantly affected or may significantly affect the operations of the Company, the results of those operations and the state of affairs of the Company.

The Company acquired N D Wines Private Limited by executing a share purchase agreement ("SPA") dated April 4, 2024 with its existing shareholders. The agreement entails the purchase of the entire shareholding of 32,80,000 equity shares, thereby granting the Company 100% ownership of N D Wines Private Limited and making it a wholly owned subsidiary.

7. Extract of Annual Return

The Annual Return of the Company as on March 31, 2024 in Form MGT-7 in accordance with Section 92(3) and Section 134 (3) (a) of the Companies Act and Rule 12 of the Companies (Management and Administration) Rules, 2014 will be available on the Companys website at: https://www.sulavinevards.com/investor-relations.php

8. Directors and Key Managerial Personnel

During the year under review, there was a change in the composition of the Board of Directors and Key Managerial Personnel of the Company.

Retirement by rotation and subsequent re-appointment

In accordance with the provisions of Section 152 of the Companies Act read with provisions contained in the Articles of Association of the Company, Mr. Nicholas Cator is liable to retire by rotation at the ensuing Annual General Meeting of the Company and being eligible has offered his candidature for re-appointment. As per the provisions of the Act, the Independent Directors are not liable to retire by rotation.

Brief resume, nature of expertise, disclosure of relationship between directors inter-se, details of directorships and committee membership held in other companies of the Directors proposed to be appointed/re-appointed, along with their shareholding in the Company, as stipulated under Secretarial Standard-2 and Regulation 36 of the Listing Regulations, is appended as an Annexure to the Notice of the ensuing Annual General Meeting.

Change in Directors Resignations:

• Mr. Roberto Italia (DIN: 09228481) stepped down as a Non-Executive Nominee Director effective from the close of business hours on November 9, 2023.

• Mr. Arjun Anand (DIN: 07639288) resigned as a Non- Executive Nominee Director due to the sale of entire shareholding of Verlinvest in the Company, effective as of the close of business hours on April 4, 2024.

• Mr. Riyaaz Amlani (DIN: 00261209) stepped down as a Non-Executive Independent Director, effective as of the close of business hours on April 4, 2024.

Appointments:

• Mr. Riyaaz Amlani (DIN: 00261209) was appointed as an Independent Director for a three year term starting from April 19, 2023.

• Mr. Nicholas Cator (DIN: 07068629) was appointed as a Non-Executive Director effective from November 9, 2023.

• Mr. Deepak Shahdadpuri (DIN: 00444270) was appointed as an Additional Non-Executive Director effective from April 4, 2024, subject to shareholder approval.

Key Managerial Personnel

In accordance with the provisions of Sections 2(51) and

203 of the Companies Act, 2013 read with the Companies

(Appointment and Remuneration of Managerial Personnel)

Rules, 2014 the following are the Key Managerial

Personnel of the Company:

1. Mr. Rajeev Samant, Managing Director and Chief Executive Officer

2. Mr. Karan Vasani, Chief Operating Officer

3. Mr. Abhishek Kapoor, Chief Financial Officer

4. Ms. Ruchi Sathe, Company Secretary and Compliance Officer

Resignations:

• Mr. Bittu Varghese resigned from his position as Chief Financial Officer of the Company and Whole Time Director & Chief Financial Officer of Artisan Spirits Private Limited, a wholly-owned subsidiary, effective from the close of business hours on June 9, 2023.

• Mr. Chaitanya Rathi resigned from his position as Chief Operating Officer (COO) of the Company, effective from the close of business hours on September 30, 2023.

Appointments:

• Mr. Abhishek Kapoor was appointed as the Chief Financial Officer of the Company and Chief Financial Officer of Artisan Spirits Private Limited, a wholly owned subsidiary of the Company, effective from August 28, 2023.

• Mr. Karan Vasani was appointed as the Chief Operating Officer (COO) of the Company, effective from October 1, 2023.

Director(s) Disclosure

Based on the declarations and confirmations received from the Directors, none of the Directors of the Company are disqualified from being appointed/ continuing as Directors of the Company.

Independent Directors Declaration

The Company has received the necessary declaration from each Independent Director in accordance with Section 149(7) of the Act and Regulations 16(1) (b) and 25(8) of the SEBI Listing Regulations, that he/she meets the criteria of independence as laid out in Section 149(6) of the Act and Regulations 16(1) (b) of the SEBI Listing Regulations. The Company has also received from them declaration of compliance of Rule 6 (1) & (2) of the Companies (Appointment and Qualifications of Directors) Rules, 2014, regarding online registration with the Indian Institute of Corporate Affairs at Manesar, for inclusion of name in the data bank of Independent Directors.

Statement regarding opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the Independent Directors appointed during the year:

With regard to integrity, expertise and experience (including the proficiency) of the Independent Directors appointed during the Financial year 2023-24, the Board of Directors have taken on record the declarations and confirmations submitted by the Independent Directors and is of the opinion that the Independent Director is a person of integrity and possesses relevant expertise and experience and his continued association as Director will be of immense benefit and in the best interest of the Company.

In the opinion of the Board, all Independent Directors possess requisite qualifications, experience, expertise and hold high standards of integrity required to discharge their duties with an objective independent judgment and without any external influence. List of key skills, expertise and core competencies of the Board, including the Independent Directors, forms a part of the Corporate Governance Report of this Integrated Annual Report.

9. Board of Directors:

a) Composition of the Board

The composition of the Board is in conformity with Regulation 17 of the SEBI (Listing Obligation and Disclosure Requirement) Regulations 2015, which, inter alia, stipulates that the Board should have an optimum combination of Executive and Non-Executive directors.

As on March 31, 2024 the Board comprised of seven Directors including four Independent Directors which includes Independent Woman Director and Non-Executive Directors.

Sr. No.	DIN	Name of the Directors	Category	Designation
1.	00020675	Mr. Rajeev Samant	Executive	Managing Director & CEO
2.	03595319	Mr. Chetan Desai	Non - Executive	Chairperson & Independent Director
3.	00019098	Mr. Alok Vajpeyi	Non - Executive	Independent Director
4.	03321646	Mrs. Sangeeta Pendurkar	Non - Executive	Independent Director
5.	00261209	Mr. Riyaaz Amlani	Non - Executive	Independent Director
6.	07639288	Mr. Arjun Anand	Non - Executive	Nominee Director
7.	07068629	Mr. Nicholas Cator	Non - Executive	Director

b) Meetings of the Board

The Board of Directors duly met 6 times during the financial year from April 01, 2023 to March 31,2024. The dates on which the meetings were held are April 19, 2023; May 3, 2023; May 31, 2023; August 9, 2023; November 9, 2023 and February 13, 2024.

10. Familiarization Programme for Independent Directors

As a practice, all new Directors (including Independent Directors) inducted to the Board are given a formal orientation. The Directors are usually encouraged to visit the manufacturing facility and resorts of the Company and interact with members of Senior Management as part of the induction programme. The Senior Management makes presentations giving an overview of the Companys strategy, operations, products, markets, group structure and subsidiaries, Board constitution and guidelines, matters reserved for the Board and the major risks and risk management strategy. This enables the Directors to get a deep understanding of the Company, its people, values and culture and facilitates their active participation in overseeing the performance of the Management.

As stated in the Boards Report, the details of orientation given to our existing Independent Directors are available on our website at: https://sulavinevards.com/files/0524/ Familiarisation%20Programme%2for%20Inrtepenrtent.% 20Directors.pdf

Further, based on the confirmations/disclosures received from the Non-Executive Independent Director in terms of Regulation 25(9) of the Listing Regulations, the Board of Directors is of the opinion that the Non-Executive Independent Directors fulfil the criteria or conditions specified under the Act and under the Listing Regulations and are independent of the management.

11. Evaluation

The evaluation of all the directors, committees, Chairperson of the Board, and the Board as a whole was conducted based on the criteria and framework adopted by the Committee.

The Board sought the feedback of Directors on various parameters including:

i. Degree of fulfillment of key responsibilities towards stakeholders (by way of monitoring corporate governance practices, participation in the long-term strategic planning, etc.);

ii. Structure, composition and role clarity of the Board and Committees;

iii. Extent of co-ordination and cohesiveness between the Board and its Committees;

iv. Effectiveness of the deliberations and process management;

v. Board/Committee culture and dynamics; and

vi. Quality of relationship between Board Members and the Management.

The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.

In a separate meeting of the IDs, the performance of the Non-Independent Directors, the Board as a whole and Chairman of the Company were evaluated taking into account the views of Executive Directors and other Non- Executive Directors.

The Nomination and Remuneration Committee reviewed the performance of the individual directors and the Board as a whole.

In the Board meeting that followed the meeting of the Independent Directors and the meeting of Nomination and Remuneration Committee, the performance of the Board, its committees, and individual Directors were discussed.

12. Committees of the Board of Directors

(i) Audit Committee:

In terms of Section 177 of the Companies Act, 2013, the Board of Directors has constituted an Audit Committee comprising of 3 Directors as below.

Sr. No.	Name of the Directors
1.	Mr. Chetan Desai, Chairperson
2.	Mr. Alok Vajpeyi, Member
3.	Mr. Arjun Anand, Member

All the recommendations of the Audit Committee were accepted by the Board.

During the year i.e. from April 1, 2023 to March 31, 2024, Audit Committee met 4 times on May 3, 2023; August 9, 2023; November 9, 2023 and February 13, 2024.

(ii) Nomination and Remuneration Committee:

In terms of Section 178 of the Companies Act, 2013, the Board of Directors had constituted Nomination & Remuneration Committee comprising of 3 Directors as below:

Sr. No.	Name of the Directors
1.	Mr. Alok Vajpeyi, Chairperson
2.	Mrs. Sangeeta Pendurkar, Member
3.	Mr. Arjun Anand, Member

The Board of Directors at the meeting held on April 19, 2023 re-constituted Nomination & Remuneration Committee comprising of 5 Directors as below:

Sr. No.	Name of the Directors
1.	Mr. Alok Vajpeyi, Chairperson
2.	Mrs. Sangeeta Pendurkar, Member
3.	Mr. Arjun Anand, Member
4.	Mr. Chetan Desai, Member
5.	Mr. Riyaaz Amlani, Member

The Board of Directors at the meeting held on February 13, 2024 re-constituted Nomination & Remuneration Committee comprising of 5 Directors as below:

Sr. No.	Name of the Directors
1.	Mr. Alok Vajpeyi, Chairperson
2.	Mrs. Sangeeta Pendurkar, Member
3.	Mr. Chetan Desai, Member
4.	Mr. Riyaaz Amlani, Member
5.	Mr. Nicholas Cator, Member

During the year i.e. from 01st April 2023 to March 31, 2024, Nomination and Remuneration committee met 3 times on April 19, 2023, August 9, 2023 and November 9, 2023.

(iii) Stakeholders Relationship Committee:

The Board of Directors had constituted Stakeholders Relationship Committee comprising of 3 Directors as below:

Sr. No.	Name of the Directors
1.	Mr. Alok Vajpeyi, Chairperson
2.	Mr. Rajeev Samant, Member
3.	Mr. Arjun Anand, Member

The Board of Directors at the meeting held on February 13, 2024 re-constituted Stakeholders Relationship Committee comprising of 3 Directors as below:

Sr. No.	Name of the Directors
1.	Mr. Alok Vajpeyi, Chairperson
2.	Mrs. Sangeeta Pendurkar, Member
3.	Mr. Nicholas Cator, Member

During the year i.e. from April 1, 2023 to March 31, 2024, Stakeholders Relationship Committee met once on February 13, 2024.

(iv) Risk Management Committee:

The Board of Directors had constituted Risk Management Committee comprising of three Directors and one Member as below:

Sr. No.	Name of the Directors
1.	Mrs. Sangeeta Pendurkar, Chairperson
2.	Mr. Arjun Anand, Member
3.	Mr. Rajeev Samant, Member
4.	Mr. Chaitanya Rathi, Member*

The Board of Directors at the meeting held on August 9, 2023 re-constituted Risk Management Committee comprising of three Directors and one Member with effect from October 1, 2023 as below:

Sr. No.	Name of the Directors
1.	Mrs. Sangeeta Pendurkar, Chairperson
2.	Mr. Rajeev Samant, Member
3.	Mr. Arjun Anand, Member
4.	Mr. Karan Vasani, Member

The Board of Directors at the meeting held on February 13, 2024 re-constituted Risk Management Committee comprising of three Directors and one Member as below:

Sr. No.	Name of the Directors
1.	Mrs. Sangeeta Pendurkar, Chairperson
2.	Mr. Riyaaz Amlani, Member
3.	Mr. Nicholas Cator, Member
4.	Mr. Karan Vasani, Member

During the year i.e. from April 01, 2023 to March 31, 2024 Risk Management Committee met four times on May 3, 2023; August 9, 2023; November 9, 2023 and February 13, 2024.

(v) Corporate Social Responsibility (CSR)

In terms of Section 135 of the Companies Act, 2013 the Board of Directors had constituted Corporate Social Responsibility Committee comprising of 3 Directors as below:

Sr. No.	Name of the Directors
1.	Mr. Rajeev Samant, Chairperson
2.	Mr. Chetan Desai, Member
3.	Mrs. Sangeeta Pendurkar, Member

The Board of Directors at the meeting held on February 13, 2024 re-constituted Corporate

Social Responsibility Committee comprising of 4 Directors as below:

Sr. No.	Name of the Directors
1.	Mr. Rajeev Samant, Chairperson
2.	Mr. Chetan Desai, Member
3.	Mrs. Sangeeta Pendurkar, Member
4.	Mr. Riyaaz Amlani, Member

During the year i.e. from April 01, 2023 to March 2024, Corporate Social Responsibility Committee met once on May 3, 2023.

13. Share Capital

Authorized Share Capital

The Authorized Share Capital of the Company as on March 31, 2024, is H 20,20,60,000 (Rupees Twenty Crores Twenty Lakhs Sixty Thousand Only) divided into H 10,10,30,000 (Rupees Ten Crores Ten Lakhs Thirty Thousand only) equity shares having face value of H 2/- (Rupees Two) each.

Paid up and Subscribed Share Capital

The paid up and subscribed share capital of the Company as on March 31, 2024 is H 16,87,99,258 (Rupees Sixteen Crores Eighty-Seven Lakhs Ninety Nine Thousand and Two Hundred Fifty Eight Only) comprising of 8,43,99,629 (Eight Crores Forty Three Lakhs Ninety Nine Thousand and Six Hundred Twenty Nine only) equity shares having face value of H 2/- (Rupees Two) each.

Issue and Allotment of Equity Shares

I. Sula Vineyards Employees Stock Option Scheme 2020*

The Company has allocated equity shares in multiple tranches, as detailed below:

Date	Number of Equity Shares Allotted
June 22, 2023	16,665
August 9, 2023	16,670

* The entire pool under the said scheme being exhausted, the said scheme is considered extinguished.

II. Sula Vineyards Employees Stock Option Scheme 2021

The Company has allocated equity shares in multiple tranches, as detailed below:

Date	Number of Equity Shares Allotted
April 13, 2023	19,271
April 28, 2023	6,250
May 24, 2023	9,550
June 22, 2023	68,375
August 9, 2023	5,050

III. Sula Vineyards Employees Stock Option Scheme 2023

In December 2023, the Company introduced the Sula Employee Stock Options Scheme 2023, comprising of 6,85,000 options convertible into equity shares with a face value of H 2 each. Each option is priced at H 470. Shareholder approval for this scheme, including the provision to grant stock options to subsidiary

company employees, was obtained via postal ballot on December 18, 2023.

The Company approved the grant of 6,05,000 stock options to eligible employees in accordance with the terms and conditions outlined in the Sula Employee Stock Option Scheme 2023 (ESOS 2023).

14. Remuneration of Directors and Employees

Disclosure comprising particulars with respect to the remuneration of directors and employees, as required to be disclosed in terms of the provisions of Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure - I to this Report.

The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure - I to this Report.

15. Auditors Statutory Auditors

M/s Walker Chandiok & Co. LLP, Chartered Accountants, (Firm Registration No. 001076N/ N500013), have been appointed as Statutory Auditors of the Company at the 19^th Annual General Meeting held on May 27, 2022, for a period of 5 years from conclusion of 19^th Annual General Meeting till the conclusion of the Annual 24, General Meeting of the Company to be held in the year 2027 at such remuneration as may be decided by the Board of Directors of the Company. Pursuant to the amendments of Section 139 of the Companies Act, 2013 by the Companies Amendment Act, 2017 notified on May 7, 2018, the requirement of ratification of their appointment by the Members has been withdrawn.

The Report given by the Statutory Auditors on the financial statements of the Company is part of this Integrated Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report. During the year under review, the Auditors have not reported any fraud under Section 143(12) of the Act.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Sunil Agarwal & Co., a firm of Company Secretaries in Practice, to undertake the secretarial Audit of the Company for FY24.The Report of the Secretarial Audit is annexed herewith as Annexure- II. The Report does not contain any observation or qualification requiring explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.The Board, at its meeting held on May 8, 2023, has re-appointed M/s.

Sunil Agarwal & Co., as Secretarial Auditor, for conducting Secretarial Audit of the Company for FY25.

Details of adequacy of internal financial controls

The Company has established a robust system of internal controls to ensure that assets are safeguarded, and transactions are appropriately authorised, recorded and reported. The framework within the Company ensures the orderly and efficient conduct of business, which includes adherence to policies, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information.

The internal financial control framework is commensurate with the size and operations of the Companys business. The controls have been documented, digitized, and embedded in the business process. Assurance on the effectiveness is obtained through management reviews, controls self-assessment and periodic reporting of the in- house team that evaluates and provides assurance of its adequacy and effectiveness. The controls are also tested by the internal and statutory auditors during their audits. The Statutory Auditors of the Company have audited the financial statements included in this Annual Report and issued their report on internal control over financial reporting (as defined under section 143 of the Companies Act, 2013).

Internal Control evaluates adequacy of segregation of duties, transparency in authorization of transactions, adequacy of records and documents, accountability & safeguarding of assets and reliability of the management information system. The systems, SOPs and controls are reviewed and audited by Internal Auditors, M/s. Ernst & Young LLP, periodically for identification of control deficiencies and opportunities, whose findings and recommendations are reviewed by the Audit Committee and tracked through till implementation.

Management team has assessed the effectiveness of the Companys internal control over financial reporting as at March 31, 2024 and believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.

16. Directors Responsibility Statement

Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, Directors of your Company confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) the Directors had selected appropriate 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 at the end of the financial year and out of the profit and loss of the company for that period;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis;

e) the Directors had laid down proper internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively; and

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

17. Business Responsibility and Sustainability Report

The Securities and Exchange Board of India (SEBI), in May 2021, introduced new sustainability related reporting requirements to be reported in the specific format of Business Responsibility and Sustainability Report (BRSR). BRSR is a notable departure from the existing Business Responsibility Report (BRR) and a significant step towards giving platform to the companies to report the initiatives taken by them in areas of environment, social and governance. Further, SEBI has mandated top 1,000 listed companies, based on market capitalization, to transition to BRSR from FY23 onwards.

BRSR report is attached as Annexure - VI.

18. Subsidiaries/ Joint Venture/ Associate Companies:

The Company had 1 (one) wholly owned subsidiary as on March 31, 2024. There are no associate companies or joint venture companies within the meaning of section 2(6) of the Companies Act, 2013 ("Act").

A statement in Form AOC-1 as required under Section 129 (3) of the Companies Act, 2013 containing salient features of the financial statements of the subsidiary companies is forming part of this Annual Report in Annexure - III.

19. Issue of employee stock options

Your Company regards employee stock options as instruments that would enable the employees to share the value they create for the Company in the years to come. Accordingly, in terms of the provisions of applicable laws and pursuant to the approval of the Board and the members of the Company, the Nomination and Remuneration Committee ("NRC") has duly implemented the:

a) Sula Vineyards Employees Stock Option Scheme 2020*

b) Sula Vineyards Employees Stock Option Scheme 2021

c) Sula Employees Stock Option Scheme 2023

* The entire pool under the said scheme being exhausted, the said scheme is considered extinguished.

Scheme 2021 and Scheme 2023 are governed by the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI SBEB & SE Regulations") and in terms of the approvals granted by the shareholders of the Company, the NRC inter alia administers, implements and monitors the aforesaid schemes.

In terms of the provisions of Regulation 14 and Part F of Schedule I of the SEBI SBEB & SE Regulations, details of the aforesaid schemes can be accessed at: https:// sulavineyards.com/files/0523/ESOP%20Details.pdf

A certificate from the Secretarial Auditor of the Company, confirming that the aforesaid schemes have been implemented in accordance with the SEBI SBEB & SE Regulations, will be open for inspection at the 21^st Annual General Meeting

20. Vigil Mechanism

Your Company has established Vigil Mechanism (Whistleblower policy) in accordance with the provisions of Section 177(9) & (10) of the Companies Act, 2013 to report instances of unethical behavior, actual or suspected fraud or violation of the code of conduct or any policy of the Company. The Vigil Mechanism Policy has been uploaded on the website of the Company at: https:// sulavineyards.com/files/11 23/Vigil%20Mechanism%20 and%20Whistleblower%20Policy.pdf

The mechanism adopted by the Company encourages the Whistle blower to report genuine concerns or grievances and provides for adequate safeguards against victimization of Whistle Blower to those who avail such mechanism and also provides for direct access to the Chairman of the Audit Committee, in exceptional cases.

21. Risk Management

Sula Vineyards business is exposed to a variety of risks which are inherent to alco beverage manufacturing companies in India. We believe that risk management starts with the right conversations to drive better business decisions, protect our assets, supports a growing, resilient, and sustainable business. Our focus is to identify and embed mitigation actions for material risks that could impact our current or future performance, and/or our reputation. Our approach is holistic and integrated, bringing together risk management, internal controls, and business integrity, ensuring that our activities across this agenda focus on the risks that could have the greatest impact.

A robust governance structure has been developed across the organization. The nature of business is such that it is subject to certain risks at different points of time. Some of these include escalation in the cost of raw materials and other inputs, increasing competitive intensity from other players, changes in regulation from central and state governments, cyber security, data management and migration risks, data privacy risk, environmental and climate risk. To enhance this focus, Board of Directors has constituted a Committee of the Board called the

Risk Management Committee to frame, implement and monitor risk management plan.

Focus for the future: The Risk Management Committee and Board shall consider the entity level principal risks and review the Companys risk appetite, setting the level of risk tolerance we have for risks that could impact delivery of our strategic objectives and develop appropriate responsive action and mitigation strategies to limit the impact on risk tolerance.

Our process:

Conscious that no entrepreneurial activity can be undertaken without assumption of risks and associated profit opportunities, the Company operates on a risk management process /framework aimed at minimization of identifiable risks after evaluation to enable management to take informed decisions.

• Risk Identification: Management identifies areas that may positively or negatively affect the Companys ability to implement its strategy and achieve its objectives and performance goals.

• All aspects of internal risk such as Strategic Risk, Business Risk, Finance Risk, Environment Risk, Personnel Risk, Operational Risk, Reputation Risk, Regulatory Risk, Technology Risk and Information and Cyber Security Risk and external risk such as Sectoral Risk, Sustainability Risk and Political Risk are covered as part of the Risk Management Committee meeting. ^•

• Root Cause Analysis: Root cause analysis enables tracing the reasons / drivers for existence of a risk element and helps developing appropriate mitigation action.

• Risk Scoring: An analysis of all internal processes and support functions is done to determine the likelihood and impact of risk elements.

• Risk Categorisation: The identified risks are further grouped in to (a)Controlled; (b)Serious; (c)Disruptive; (d)Severe and (e)Critical.

• Risk Mitigation: Management is developing appropriate responsive action on review of various alternatives, costs and benefits, with a view to manage identified risks and limit the impact to tolerance level. Risk mitigation plan drives policy development as regards risk ownership, control environment timelines, standard operating procedure, etc.

• Risk Monitoring & Reporting: It is designed to assess on an ongoing basis, the functioning of risk management components and the quality of performance over time. Staff members are encouraged to carry out self-assessments throughout the year. Periodically, key risks are reported to the Board or risk management committee with causes and mitigation actions undertaken/ proposed to be undertaken.

22. Nomination and Remuneration Policy

This Nomination and Remuneration Policy (the "Policy") has been formulated by the Company in compliance with Section 178 of the Companies Act, 2013.

The broad objectives of the Nomination and Remuneration policy are:

i. to guide the Board in relation to appointment and removal of Directors, Key Managerial Personnel and Senior Management;

ii. evaluate the performance of Board, its committees and individual Directors to be carried out either by the Board, by the Nomination and Remuneration Committee or by an independent external agency and review its implementation and compliance and provide necessary report to the Board for further evaluation of the Board;

iii. to recommend to the Board on Remuneration payable to the Directors, Key Managerial Personnel and Senior Management.

The guiding principles of the policy are to ensure that:

i. The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors, KMP and senior management of the quality required to run the Company successfully.

ii. Relationship of remuneration to performance is clear and meets appropriate performance benchmarks and

iii. Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

In accordance with the Nomination and Remuneration Policy, the Nomination and Remuneration Committee formulates the criteria for appointment as a Director, Key Managerial Personnel and Senior Management, identifies persons who are qualified to be Directors and nominates candidates for Directorships subject to the approval of Board, evaluates the performance of the individual directors, recommends to the Board, remuneration to Managing Director / Whole- time Directors, ensures that the remuneration to Key Managerial Personnel, Senior Management and other employees is based on Companys overall philosophy and guidelines and is based on industry standards, linked to performance of the self and the Company and is a balance of fixed pay and variable pay and recommends to the Board, sitting fees/ commission to the Non-Executive Directors.

The Companys Nomination and Remuneration Policy for Directors, Key Managerial Personnel and senior management is available on the website of the Company at: https://sulavineyards.com/files/0423/Nomination%20

and%20Remuneration%20Policy.pdf

23. Particulars of Deposits

The Company has not accepted any deposit (under Rule 2[c] of the Companies [Acceptance of Deposits] Rules, 2014) within the meaning of Sections 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re- enactment(s) for the time being in force).

24. Loans, Guarantees and investments.

Pursuant to Section 186 of the Companies Act, 2013 and Schedule V of the SEBI Listing Regulations, disclosure on particulars relating to Loans, Advances, Guarantees and Investments are provided as part of the financial statements.

25. Explanation to Remarks: In the Statutory Auditors Report

(a) The statutory audit report for the year 2023-24 does not contain any qualification, reservation or adverse remark or disclaimer made by Statutory Auditors; and

(b) The secretarial audit report for the year 2023-24 does not contain any qualification, reservation or adverse remark or disclaimer made by the secretarial auditor appointed by the Company.

26. Maintenance of Cost Records

The provisions pertaining to maintenance of Cost Records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013, are not applicable to the Company.

27. Corporate Social Responsibility (CSR)

Your Company believes in being socially accountable to all its stakeholders and enhancing its positive impact on Society. Details of CSR activities undertaken during the year are annexed to this report as Annexure - IV in the format as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is available on the website of the Company at: https://sulavinevards.com/ files/0423/Corporate%20Social%20Responsibilit.v.prtf

28. Related Party Transactions

In line with the requirements of the Act and the SEBI Listing Regulations, the Company has formulated a Policy on Related Party Transactions. During the year under review, the Policy has been amended on August 9, 2023 to incorporate the regulatory amendments in the SEBI Listing Regulations. The Policy can be accessed on the Companys website at: https://sulavineyards. com/files/0823/Policv%20on%20Related%20Partv%20 Transactions.pdf

During the year under review, all related party transactions entered into by the Company, were approved by the Audit Committee and were at arms length and in the ordinary course of business. Prior omnibus approval is obtained for related party transactions, which are of repetitive nature and entered in the ordinary course of business and on an arms length basis. During the year under review there were no material related party contracts entered into by the Company requiring shareholders approval.

Accordingly, the disclosure of related party transactions as required under Section 134 (3) (h) of the Act in Form AOC- 2 is not applicable to the Company for FY 24 and hence does not form part of this report. Details of related party transactions entered into by the Company, in terms of Ind AS-24 have been disclosed in the notes to the standalone/ consolidated financial statements forming part of this Integrated Report & Annual Accounts 2023-24.

29. Dematerialization of Shares

The Company encourages its member to hold shares in electronic form and the Company has established connectivity with depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited. 99.64 % of the Companys paid- up Equity Share Capital is in dematerialized form as on March 31, 2024. The Companys Registrars are Kfin Technologies Limited having its office at Selenium, Tower B, Plot No - 31 and 32, Financial District, Nanakramguda, Hyderabad, Rangareedi 500 032 Telangana, India.

30. Details of significant and material orders passed by the regulators or courts

Apart from the one below mentioned order there are no significant and material orders passed by the Regulators, Courts or Tribunals which would impact the going concern status and Companys operations in future.

The Minister of State Excise has passed an order in the Blending Matter, allowing the revision filed by our Company. Consequently, the demand notice dated February 17, 2018, totaling H 115,89,44,793, issued by the Collector (State Excise Duty Department), Nashik, and the order dated August 26, 2019 passed by the Commissioner of State Excise, Maharashtra, have been set aside.

31. Disclosure as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance towards sexual harassment at the workplace. The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder.

The Company has complied with the provisions relating to the constitution of the Internal Complaints Committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year under review, the Company did not receive any sexual harassment complaints.

32. Dividend Distribution Policy

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations"), your Company has formulated a Dividend Distribution Policy, with an objective to provide the dividend distribution framework to the Stakeholders of the Company. The policy sets out various internal and external factors, which shall be considered by the Board in determining the dividend payout.

The policy is available on the website of the Company at: https://sulavineyards.com/files/0823/Dividend%20

Distribution%20Policy.pdf

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

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

a) Conservation of energy

(i) the steps taken or impact on conservation of energy	The companys commitment to reducing its environmental footprint was recognized with a prestigious Gold-level certification from the International Wineries for Climate Action (IWCA). The solar energy accounts to 59% of energy requirements of our wineries and we aim to achieve 70% solar energy contribution in FY25. In FY24 we reduced water usage per case by 8% and power usage by 9% The company is aiming to increase its total electric vehicle fleet from 33% to 40% in FY25, with long-term vision of achieving 100% electric fleet by 2030
(ii) the steps taken by the company for utilizing alternate sources of energy	• Installation of Alternate source to conserve energy as below:
	• Heat pump for water heating and utilising is by product i.e. cool air in offices.
	• Electrical vehicle.
	• Electrical induction instead of LPG burner
	• Solar Roof top PV System
	• Solar water Pumping system
	• Solar Water heating system
	• Biogas Plant,
	• Rainwater harvesting,
(iii) the capital investment on energy conservation equipments	H 5.59 crores

b) Technology absorption

(i) The efforts made towards technology absorption:	a. Fully integrated counter pressure filler bottling line installed at Karnataka
(ii) the benefits derived like product improvement, cost reduction, product development or import substitution:	b. Additional solar installations of 1,275 kw
	a. Bottling line: The enhanced automation will ensure smooth and consistent operations.
	b. Additional solar: CO2 emissions reduced by 1800MT and solar contributes to 59% of our energy requirements.
(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-
(a) the details of technology imported	-
(b) the year of import;	-
(C) I whether the technology been fully absorbed	-
(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof	-
(iv) the expenditure incurred on Research and Development	-

c) Foreign exchange earnings and Outgo

Foreign exchange	Year ended March 31, 2024	Year ended March 31, 2023
(i) Earnings	7.33	8.63
(ii) Outgo	14.70	18.45

34. Secretarial Standards

The Company has generally complied with all the applicable provisions of Secretarial Standard on Meetings of Board of Directors (SS-1) and Secretarial Standard on General Meetings (SS-2), respectively issued by Institute of Company Secretaries of India.

35. Other Disclosures

a. There are no proceedings made or pending under the Insolvency and Bankruptcy Code, 2016 and there are no instances of one-time settlement with any Bank or Financial Institution, during the year under review.

b. Your Company has not issued shares with differential voting rights and sweat equity shares during the year under review.

36. Acknowledgements

The Board places on record its deep appreciation to all employees for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain an industry leader.

The Board places on record its appreciation for the support and co-operation the Company has been receiving from its suppliers, distributors, retailers, business partners and others associated with it as its trading partners. The Company looks upon them as partners in its progress and has shared with them the rewards of growth. It will be our endeavor to build and nurture strong links with the trade based on mutual benefits, respect for and co-operation with each other, consistent with consumer interests.

The Board also take this opportunity to thank all Shareholders, Business Partners, Government and Regulatory Authorities and Stock Exchanges, for their continued support.

	For and on behalf of the Board
Place: Mumbai	Rajeev Samant Managing Director and CEO	Chetan Desai Chairperson and Independent Director
Date: May 8, 2024	DIN:00020675	DIN:03595319