VST Industries : Business Responsibility & Sustainability Report (BRSR)

ANNUAL REPORT 2021-22

INNOVATIVE. RESPONSIBLE. FOCUSED.

Contents

CORPORATE OVERVIEW
VST at a Glance	2
Board of Directors	4
Management Team	5
Chairman's Statement	8
Managing Director & CEO's Message	10
PERFORMANCE OVERVIEW
Distinctive Brand Portfolio	12
Key Performance Indicators	14
HOW WE CREATE VALUE
Value Creation Model	16
Strategic Priorities and Progress	18
ESG APPROACH
Reducing our Environmental Footprint	21
Committed to an Inclusive Workplace	24
COVID-19 Response	28
Promoting Community Well-being and Prosperity	30
Ensuring ESG Compliant Governance	34
STATUTORY REPORTS
Corporate Information	35
Notice of Meeting	37
Report of the Board of Directors &
Management Discussion and Analysis	44
Report on Corporate Governance	56
Annexure to the Directors' Report	76
Business Responsibility &
Sustainability Reporting (BRSR)	88
FINANCIAL STATEMENTS	119

FY 2021-22 Highlights

FINANCIAL HIGHLIGHTS

• 1,56,067 Lakhs

Revenue

• 32,023 Lakhs

Net profit

• 207.4

Earnings per share

24.5%

EBIT margin

• 1,07,430 Lakhs

Net Assets employed

• 140

Dividend per share

40.7%

RoCE

NON-FINANCIAL HIGHLIGHTS

~25%

Of energy requirements generated from renewable energy

• 775 Lakhs*

CSR expenditure

400

Solar streetlights

10

Classrooms and a drinking water facility

1,685 Smart Toilets

INNOVATIVE.

RESPONSIBLE.

FOCUSED.

At VST Industries, our strategic approach is driven by consumer choice and product relevance. In the past six years, innovation has become a strategic lever to achieve our goals and objectives while creating a distinct brand positioning.

In line with this innovation focus, we continue to introduce new concepts that provide a unique experience to variety-seeking adult consumers. We also expanded into new markets, strengthened brand salience, and invested in developing an integrated digital ecosystem.

At the same time, we made significant progress in our commitment towards society and the environment. We have set bold targets under various sustainability objectives, including energy management, emission control, water management, employee recognition and farmer livelihood.

Looking ahead, our focus will continue to be on driving innovation while elevating our ESG performance by upholding recognised standards on people practices, community interventions, environmental initiatives, and corporate governance.

• Excludes spent on ongoing project - `230 lakhs from unspent CSR amount of preceding financial year.

VST INDUSTRIES LIMITED  CORPORATE OVERVIEW

VST at a Glance

VST Industries Limited is an established cigarette company in India manufacturing and distributing cigarettes, and trading in unmanufactured tobacco. We are an associate undertaking of British American Tobacco Plc., a leading global player in combustibles.

DISTINCTIVE BRAND

PORTFOLIO

VST INDUSTRIES LIMITED  CORPORATE OVERVIEW

We have made continued investments in increasing geographic footprint across regions. We have been able to achieve operational coverage of more than 80% of the country, from 60% in FY 2014-15. We have also increased our outlet coverage from 7 to more than 11 lakhs in the same period. This expansion has been driven by our new brand portfolio, therefore transforming our retail presence from 1-2 SKUs per region to more than 3-4 SKUs per region currently.

We have created a vibrant brand portfolio catering to the evolving needs of adult consumers. The strength of the portfolio is reflected in the business and financial growth we have achieved in the

last seven years.

INNOVATION		NATIONAL DISTRIBUTION
We have a dedicated product
CORE	We have significantly expanded our
innovation hub that enables us to
footprint and are now present in
continuosuly develop innovation
our vibrrant brand portfolio.	STRENGTHS	almost all states across the country.
Our distribution channel
concepts that are brought to life by
		comprising large wholesale and retail
		network enables us to serve adult
		consumers across the length and
		breadth of the country.

DRIVEN BY AMBITION

The long term success and growth of an organisation requires effective management of resources, desire to win and good governance. Our passionate and skilled workforce is driven by a clear vision to deliver superior performance.

Mumbai

OFFICES AND MANUFACTURING FACILITIES

Market presence (states)

Regional offices

Corporate office Manufacturing facilities

New Delhi

Hyderabad

Toopran

Chennai

Guwahati

Kolkata

2

Manufacturing facilities in Hyderabad and Toopran

6

Regional offices in Hyderabad, Mumbai, Delhi, Kolkata, Chennai, and Guwahati

850

Wholesalers

11 Lakh+

Retail outlets

2  ANNUAL REPORT 2021-22

3  ANNUAL REPORT 2021-22

VST INDUSTRIES LIMITED  CORPORATE OVERVIEW

VST INDUSTRIES LIMITED  CORPORATE OVERVIEW

Board of Directors

Management Team

MR. ADITYA DEB GOOPTU	MR. KALYAN BASU	DR. T. LAKSHMI NARASAIAH
Managing Director & CEO	President-Marketing	Vice President-Leaf

MR. S. SRIRAM	MR. ANISH GUPTA	MR. AJAY CHAUDHARY
Vice President - Technical	Chief Financial Officer	Vice President-Digital
		Transformation

Left to Right

MR. S. THIRUMALAI	MR. ADITYA DEB GOOPTU	MS. RAMA BIJAPURKAR
Non-Executive Director	Managing Director & CEO	Independent Non-Executive Director
MR. NARESH KUMAR SETHI	MR. SUDIP BANDYOPADHYAY	MR. RAJIV GULATI
Non Executive Director &	Independent Non-Executive Director	Independent Non-Executive Director
Chairman of the Board

MS. ISHITA BARDHAN	MR. PHANI MANGIPUDI
Chief Human Resource Officer	Company Secretary and Head -
	Legal & Secretarial

4  ANNUAL REPORT 2021-22

5  ANNUAL REPORT 2021-22