MIRA
INFORM REPORT
|
Report Date : |
30th
January, 2007 |
IDENTIFICATION
DETAILS
|
New Name : |
SKOL
BREWERIES LIMITED (change
before 5 months) |
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Formerly Known As : |
PALS
BREWERIES LIMITED |
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Registered Office : |
No. 1,
Mahal Industrial Estate, Mahakali Road, Andheri (West), Mumbai
– 400 093, Maharashtra, India |
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Country : |
India |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
25.09.1969 |
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Com. Reg. No.: |
11-49687 |
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CIN No.: [Company
Identification No.] |
U15510MH1969PLC014397
/ U65990MH1988PLC049687 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BLRS14145F |
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Legal Form : |
A
Closely Held Public Limited Liability Company. Now it is a subsidiary of SAB Miller PLC. |
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Line of Business : |
Manufacturer
of Beer. |
RATING & COMMENTS
|
MIRA’s Rating : |
B |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
26-40 |
B |
Unfavourable & favourable factors carry
similar weight in credit consideration. Capability to overcome financial
difficulties seems comparatively below average/normal. |
Small |
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Maximum Credit Limit : |
-- |
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Status : |
Moderate
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Payment Behaviour : |
Usually
Correct |
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Litigation : |
Clear |
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Comments : |
The
company has substantial accumulated losses. Financial position is moderate.
However payments are correct. The company can be considered normal for business
dealings at usual trade terms and conditions. |
LOCATIONS
|
Registered Office : |
No. 1,
Mahal Industrial Estate, Mahakali Road, Andheri (West), Mumbai
– 400 093, Maharashtra, India |
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Head
Office : |
132-A,
Dr. Annie Besent Road, Worli, Mumbai – 400 018, Maharashtra, India |
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Factory
: |
MIDC,
Waluj, Aurangabad, Maharashtra, India
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Tel.
No.: |
91-240-2555296/
2555236 |
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Email
: |
DIRECTORS
|
Name : |
Mr.
Andre Charles Parker |
|
Designation : |
Chairman
|
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Name : |
Mr.
Jean – Marc Delpon De Vaux |
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Designation : |
Managing
director |
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Name : |
Mr.
Richard Mark Rushton |
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Designation : |
Director
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Name : |
Ms.
Sue Clark |
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Designation : |
Director
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Name : |
Mr.
Richard (Pete) L Lloyd |
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Designation : |
Director
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Name : |
Mr.
Craig McDougall |
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Designation : |
Director
|
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Name : |
Mr. Jonathan
Andrew Kirby |
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Designation : |
Director
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AUDIT COMMITTEE : |
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Name : |
Mr.
Jonathan Andrew Kirby |
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Designation : |
Chairman
|
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Name : |
Mr.
Andre Charles Parker |
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Designation : |
Director
|
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Name : |
Mr.
Craig McDougall |
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Designation : |
Director
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KEY EXECUTIVES
|
Name
: |
Mr.
Pramod S M |
|
Designation
: |
Company
Secretary |
BUSINESS DETAILS
|
Line of Business : |
Manufacturer
of Beer. |
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Products : |
n
Beer n
Scrap
Sales n
Others |
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Brand Names : |
"HAYWARDS" |
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PRODUCTION
STATUS
|
Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
Actual Production |
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|
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Beer |
Cases |
33101253 |
40706719 |
29258934 |
GENERAL
INFORMATION
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No. of Employees : |
About
900 |
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Bankers and Financial Institutions : |
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Facilities : |
Unsecured
Loans (Rs.
in millions)
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Banking Relations : |
-- |
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Statutory Auditors : |
BSR
and Company Chartered
Accountants |
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Address : |
Maruthi
Info-Tech Centre, 11-12/1, Inner Ring Road, Koramangala, Bangalore – 560 071,
Karnataka, India |
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Subsidiaries : |
n
MBL
Property Developers Limited |
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|
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Ultimate Holding Companies : |
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Joint Ventures : |
·
Shaw
Wallace Distilleries Limited ·
Shaw
Wallace Executive Welfare Benefit Company ·
Narmada
Gelatines Limited ·
Primo
Distributors Private Limited ·
Hindustan
Dorr Oliver Limited ·
Jerom
Investments and Trading Company Private Limited ·
MBL
Property Developers Limited |
CAPITAL STRUCTURE
Authorised
Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
200000000 |
Equity
Shares |
Rs. 10/- |
Rs. 2000.000 millions |
Issued,
Subscribed & Paid-up Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
173835548 |
Equity
Shares |
Rs. 10/- |
Rs. 1738.355 millions |
FINANCIAL DATA
[all figures are in Rupees
Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
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1] Share Capital |
1738.300 |
718.400 |
716.000 |
|
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2] Reserves & Surplus |
1578.600 |
(828.000) |
1283.800 |
|
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NETWORTH |
3316.900 |
(109.600) |
1999.800 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
0.000 |
0.000 |
0.000 |
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2] Unsecured Loans |
3140.400 |
3926.300 |
935.900 |
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TOTAL BORROWING |
3140.400 |
3926.300 |
935.900 |
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TOTAL |
6457.300 |
3816.700 |
2935.700 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
4932.400 |
2579.800 |
1178.000 |
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Capital work-in-progress |
253.800 |
337.100 |
288.100 |
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INVESTMENT |
2.200 |
2.700 |
1532.900 |
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
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Inventories |
539.300
|
263.900 |
131.900 |
|
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Sundry Debtors |
1479.500
|
1403.100 |
667.600 |
|
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Cash & Bank Balances |
257.200
|
169.200 |
58.000 |
|
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Loans & Advances |
2402.700
|
1969.800 |
298.200 |
|
Total Current Assets |
4678.700
|
3806.000 |
1155.700 |
|
|
Less : CURRENT LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
2981.700
|
2487.300 |
849.400 |
|
|
Provisions |
428.100
|
421.600 |
369.600 |
|
Total Current Liabilities |
3409.800
|
2908.900 |
1219.000 |
|
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Net Current Assets |
1268.900
|
897.100 |
(63.300) |
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|
|
|
|
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TOTAL |
6457.300 |
3816.700 |
2935.700 |
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PROFIT
& LOSS ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Sales Turnover [including other
income] |
9933.400 |
7301.800 |
3301.700 |
|
|
|
|
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|
Profit/(Loss)
Before Tax |
(43.300) |
(638.500) |
(364.600) |
|
Provision
for Taxation |
9.800 |
0.000 |
(54.500) |
|
Profit/(Loss)
After Tax |
(53.100) |
(638.500) |
(310.100) |
|
|
|
|
|
|
Total
Expenditure |
9976.700 |
7940.300 |
3666.300 |
KEY
RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt
Equity Ratio |
2.20 |
2.57 |
0.42 |
|
Long
Term Debt Equity Ratio |
0.66 |
0.72 |
0.10 |
|
Current
Ratio |
0.75 |
0.65 |
0.70 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
1.97 |
2.90 |
2.72 |
|
Inventory
|
24.03 |
36.33 |
22.73 |
|
Debtors |
6.70 |
6.94 |
5.10 |
|
Interest
Cover Ratio |
0.98 |
(0.82) |
(6.43) |
|
Operating
Profit Margin (%) |
8.18 |
1.85 |
(7.75) |
|
Profit
Before Interest and Tax Margin (%) |
3.15 |
(2.04) |
(9.66) |
|
Cash
Profit Margin (%) |
4.87 |
(0.63) |
(7.59) |
|
Adjusted
Net Profit Margin (%) |
(0.16) |
(4.51) |
(9.49) |
|
Return
on Capital Employed (%) |
0.00 |
0.00 |
0.00 |
|
Return
on Net Worth (%) |
0.00 |
0.00 |
0.00 |
LOCAL AGENCY
FURTHER INFORMATION
History
Incorporated
in 1969 Skol Breweries Limited was formed with an object to manufacture of
beer.
This Company was promoted by Shaw Wallace and Company Limited. The promoters
also obtained licence free of cost from SKOL in the Company's title.
Commercial production of beer commenced in early February 1974 and the beer was
marketed under the brand name "HAYWARDS".
In 1983-84 (18 months), there was all-round improvement in production, sales
and profits. In spite of increase in the cost of inputs, the Company was able
to improve its profitability by better product-mix. The summer of 1984 was
unusually severe in Maharashtra and most other parts of the country which
resulted in a spurt in demand. Industrial unrest at the brewery from early
August 1984 adversely affected production and sales during 1984-85. A lock-out
was declared from the end of September 1984 and it lasted 95 days. Normal
operations were resumed on 29th December, 1984. During 1989-90, though
production and sales registered an increase, the profit margins remained under
pressure due to steep increase in the cost of raw materials, packing materials
and utlities. During the year, the Company launched Drought Beer in Bombay city
on trial basis which was well received in the market.
In March 1991, commercial production commenced in the Brewery Plant. In
1991-92, sales were adversely affected because of high rate of excise duty and
extended winter season in Maharashtra, which was the major market for the
Company's beer. Profits also came under pressure mainly on account of increased
interest and depreciation. The wide spread riots during December 1992 and
January 1993 and consequent depressed market condition particularly in Bombay
and the subsequent transporters' strike in July 1992, all affected both production
and sales. Profits continued to remain under pressure due to increased finance
and depreciation charges.
In 1995-96 company decided to modernise by upgrading the quality of beer on par
with international standards by installing latest technology combi tanks, high
speed labelling machines and automatic packers. Company went further with the
plans to manufacture Can Beer by importing automatic canning line of 200 CPM
capacity.
During the year 1999-2000, the company has been conferred with the ISO 9002
Accreditation by Bureau Veritas Quality International.
During the year 2000-01, the company has issued 36,11,000 Equity Shares of
Rs.10/- each at the price of Rs.11/- per share allotted to Shaw Wallace
Breweries Limited on preferential basis.
As a part of the restructuring exercise, Shaw Wallace and Company Limited, the
holding company contemplated a composite scheme of merger of Haryana breweries
Limited,Sica Breweries Limited,East Coast Distilleries and Breweries
Limited,Techno Pulp and Paper Board Products Limited and New Millennium Health
Care Products and Equipments Limited with SKOL Breweries Limited. Accordingly,
all the five companies were amalgamated with the company during 2002.
Operations
During the year under review the Company's turnover increased by 30.97%
over the previous year's turnover. This growth is not only a reflection of the
growth in the beer markets that company serves, but also of company's ongoing
investment in its people, markets and plant and equipment. During the year an
amount of Rs. 1360.000 millions was invested in capacity and the upgrading of
plant and equipment.
As a consequence of company becoming a subsidiary of SAB Miller PIC (a
company listed on the London Stock Exchange) during the year, certain one time
adjustments have been made in the books of accounts to align reporting in
accordance with International accounting standards and that of the group. Cash
flows are however positive and underpin a positive operating environment.
The Operating Margin has also been eroded by the cost of borrowing as a
consequence of the current high dependence on borrowing to finance expansion.
Board is currently exploring ways in which to reduce this dependence on
borrowings to the mutual satisfaction of all shareholders. In the meantime
Company enjoys the unqualified support of all its financiers whose confidence
in the future of company is evidenced by the fact that all borrowings have been
executed without the bankers taking any charges over any of Company's assets.
As such the borrowings are short term and renewed from year to year.
The Board considers that bottles used to deliver the Company's products
to the market are in substance returnable containers and that this economic
reality should be reflected in the way the company accounts
for its containers. For this reason bottles are accounted for on a
returnable basis, in accordance with internationally accepted accounting
principles that are consistent with previous years and Indian accounting
practices.
Future Outlook
The Beer industry continues to represent a major opportunity for growth.
However the opportunity is critically dependant upon significant regulatory
reform and continued investment in markets, people and capacity. These are all
areas in which your company is actively engaged and will, in time, bear fruit.
Joint Venters
MBL
Investments Limited and Ramanreti Investments and Trading Company Limited
collectively holding 50% of the holding company. The holding company of MBL
Investments Limited is SAB Miller India Limited.
Shaw
Wallace parties comprising Shaw Wallace and Company Limited and Shaw Wallace
Financial Services Limited collectively holding 50% of the holding
company.
The
Company’s Fixed Assets of important value includes:
n
Freehold
Land
n
Leasehold
Land
n
Buildings
n
Plant
and Machinery
n
Computer
Equipments
n
Furniture
and Fittings
n
Office
Equipments
n
Motor
Vehicles
n
Computer
Software
n
Brands
CMT REPORT [Corruption, Money
laundering & Terrorism]
The
Public Notice information has been collected from various sources including but
not limited to: The Courts, India Prisons Service, Interpol, etc.
1] INFORMATION
ON DESIGNATED PARTY
No exist designating subject or any of its beneficial owners, controlling
shareholders or senior officers as terrorist or terrorist organization or whom
notice had been received that all financial transactions involving their assets
have been blocked or convicted, found guilty or against whom a judgement or
order had been entered in a proceedings for violating money-laundering,
anti-corruption or bribery or international economic or anti-terrorism sanction
laws or whose assets were seized, blocked, frozen or ordered forfeited for
violation of money laundering or international anti-terrorism laws.
2] Court
Declaration :
No records exist to suggest that subject is or was the subject of any
formal or informal allegations, prosecutions or other official proceeding for
making any prohibited payments or other improper payments to government
officials for engaging in prohibited transactions or with designated parties.
3] Asset
Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record
on Financial Crime :
Charges or conviction registered
against subject: None
5] Records
on Violation of Anti-Corruption Laws :
Charges or investigation registered
against subject: None
6] Records
on Int’l Anti-Money Laundering Laws/Standards :
Charges or investigation registered
against subject: None
7] Criminal
Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation
with Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation
Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA
INFORM as part of its Due Diligence do provide comments on Corporate Governance
to identify management and governance. These factors often have been predictive
and in some cases have created vulnerabilities to credit deterioration.
Our Governance
Assessment focuses principally on the interactions between a company’s
management, its Board of Directors, Shareholders and other financial
stakeholders.
CONTRAVENTION
Subject
is not known to have contravened any existing local laws, regulations or
policies that prohibit, restrict or otherwise affect the terms and conditions
that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US
Dollar |
1 |
Rs.44.17 |
|
UK
Pound |
1 |
Rs.86.66 |
|
Euro |
1 |
Rs.57.25 |
SCORE &
RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
4 |
|
OPERATING SCALE |
1~10 |
3 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
3 |
|
--PROFITABILIRY |
1~10 |
-- |
|
--LIQUIDITY |
1~10 |
3 |
|
--LEVERAGE |
1~10 |
3 |
|
--RESERVES |
1~10 |
-- |
|
--CREDIT LINES |
1~10 |
4 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
26 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this report.
The assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit
history (10%) Market
trend (10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial
base with the strongest capability for timely payment of interest and
principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No
caution needed for credit transaction. It has above average (strong)
capability for payment of interest and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are
regarded healthy. General unfavourable factors will not cause fatal effect.
Satisfactory capability for payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors
carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of
interest and principal sums in default or expected to be in default upon
maturity |
Limited with full security |
|
<10 |
C |
Absolute credit risk exists. Caution
needed to be exercised |
Credit not recommended |
|
NR |
In view of the lack of information, we
have no basis upon which to recommend credit dealings |
No Rating |
|