FY 2020-21 was a milestone year, as we made visible progress across our strategic objectives. The Company delivered a strong performance by growing revenues in a declining volume environment, reflecting business resilience and future potential for growth on the strength of a diversified brand portfolio.
I write this to you with the hope that you and your extended communities have stayed safe through one of the most challenging periods in the recent past. On our 90th year since inception, we have optimism for the future and I am deeply grateful to our stakeholders, who have supported us throughout this journey.
The COVID impact continued to have an adverse impact on the world economy, leading to a global GDP contraction of 3.3%. Correspondingly, India’s GDP is expected to have declined by 7.3% during FY 2020-21. Given the concerted efforts of the government and the RBI, there is reason for optimism in the medium term.
Financial and Operational Performance
FY 2020-21 was a milestone year, as we made visible progress across our strategic objectives. The Company delivered a strong performance by growing revenues in a declining volume environment, reflecting business resilience and future potential for growth on the strength of a diversified brand portfolio. Our cigarette revenues at `1,272 Crores was up by 13%, compared to last year at `1,130 Crores. We grew our net comprehensive income by 4.2% to ` 312 Crores, which is the highest ever in the history of our Company. This performance is especially commendable given 16% decline in volumes mainly due to pandemic driven shutdowns in various parts of the country during the year.
Mr. Aditya Deb Gooptu took charge as the Managing Director & CEO of the Company in December 2020. We are pleased to have him lead the organisation and add value with his rich experience in the tobacco and consumer goods category. We look forward to his leadership to position VST for future growth and success.
Trends Dominating the Industry
The legal cigarette industry witnessed pandemic led volume impact. Taxation challenges remain with non-duty paid cigarettes continuing to benefit from large price distortion. The illicit cigarette market has witnessed an upward movement over the years and continues to be among the top 5 items illegally traded in the country, with India being among the largest illegal cigarette markets in the world. To battle such illicit trade, we are partnering with the industry to identify inter-governmental efforts and public-private alliances in adopting appropriate measures like sensible taxation leading to a holistic strategy. We also engage with key stakeholders for evidence based, non-discriminatory taxation and regulations that safeguard farmer livelihoods and legal industry, while balancing economic interests and tobacco control measures.
We prioritised the health and safety of our people above everything else this year, and complied with government guidelines and regulations to ensure that safety is never compromised. The transition to work from home mode and providing continuous support for our people stood testimony to our agility and dedication to safety and business continuity. A special programme - VST Cares was implemented, which included doctor’s consultation, additional medical policy coverage and carrying out vaccination programmes for employees and their families. We contributed `100 Lakhs to Telangana State Disaster Management authority for supporting COVID-19 relief activities. Our organisation also supported the setting up of a medical oxygen generation and storage facility through a charitable trust for distribution and supply of oxygen.
Contribution to Telangana State Disaster Management authority for supporting COVID-19 relief initiatives.
Our commitment to society is strengthened by the implementation of the sixth phase of Gramalaya-VST Industries programme. Under this, we undertook installation of 400 solar streetlights and building 775 smart toilets around Jogulamba-Gadwal district of Telangana.
In recognition to our sustainability efforts, we received a ‘Commendation Certificate’ for Safety Innovation from the Institute of Engineers, New Delhi, in addition to the IGBC ‘Gold Rating’ for our Toopran facility from CII, Hyderabad. As part of our commitment to EHS, we are certified by some of the best industry bodies, such as ISO 14001:2015, ISO 45001:2018. We have built a strong record on the environmental, social and governance (ESG) performance and will continue to strengthen it in the coming years.
As an organisation, we continue to remain committed to employee welfare and career progression with development, engagement and recognition initiatives.
As we move into a new fiscal year in challenging conditions, I would like to thank my fellow Board members and the management team for leading the organisation through these unprecedented times. I am grateful to our stakeholders, including our employees, business and supply chain partners, farmers and above all, to you, our valuable shareholders, for reposing your continued faith in our vision and being a constant part of this exciting journey of winning consistently.
The transition to work from home mode and providing continuous support for our people stood testimony to our agility and dedication to safety and business continuity.