MIRA
INFORM REPORT
|
Report Date : |
22.12.2008 |
IDENTIFICATION
DETAILS
|
Name : |
UNITED SPIRITS LIMITED |
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Formerly Known As : |
MCDOWELL AND COMPANY LIMITED |
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Registered Office : |
UB Tower Level 9, UB City # 24, Vittal Mallya Road, Bangalore 560 001,
Karnataka. |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
31.03.1999 |
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Com. Reg. No.: |
24991 |
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CIN No.: [Company
Identification No.] |
LO1551KA1999PLC024991 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BLRU01403D / BLRM01795C |
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PAN No.: [Permanent
Account No.] |
AACCM8043J |
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Legal Form : |
Public Limited Liability Company. The Company’s shares are listed on
the Stock Exchanges. |
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Line of Business : |
Manufacture, Purchase and Sale of Beverage Alcohol (Spirits and
Wines). |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD 67000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Mr. Ashok Padnad, Accountant Manager, denied business and financial
details Subject is a UB Group Company having fine track. Available information
indicates high financial responsibility of the company and its managements.
Trade relations are fair. Business is active. General financial position is
good. Payments are reported as usually made as per commitments. The company can be considered good for normal business dealings. |
LOCATIONS
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Registered Office : |
UB Tower Level 9, UB City # 24, Vittal Mallya Road, Bangalore 560 001,
Karnataka, India |
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Tel. No.: |
91-80-39856500/ 22210705/ 0278/ 39856000 |
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Fax No.: |
91-80-39856862/ 39856959 |
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E-Mail : |
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Website : |
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Head Office : |
51, Richmond Road, Bangalore 560 025, Karnataka, India |
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Factory : |
Located at:
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DIRECTORS
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Name : |
Mr. Vijay Mallya (Dr.) |
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Designation : |
Chairman and Director |
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Date of Birth/Age : |
52 Years |
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Name : |
Mr. S R Gupte |
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Designation : |
Vice Chairman and Director |
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Name : |
Mr. Vijay K Rekhi |
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Designation : |
Managing Director |
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Name : |
Mr. M R Doraiswamy Iyengar |
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Designation : |
Director |
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Name : |
Mr. B M Labroo |
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Designation : |
Director |
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Name : |
Mr. Sreedhara Mernon |
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Designation : |
Director |
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Date of Birth/Age : |
70 Years |
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Profile : |
Chairman of the Board and Strategic Advisor of VITEOS
Capital Market Services Limited. |
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Name : |
Mr. Sudhindar Krishan Khanna |
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Designation : |
Director |
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Date of Birth/Age : |
54 Years |
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Profile : |
Qualified Chartered Accountant. He ranked 3rd in the UK in
the Intermediate Examination of the Institute of Chartered Accountants in
England. |
KEY EXECUTIVES
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Name : |
Mr. Ravi Nedungadi |
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Designation : |
President and Chief Financial Officer – The UB Group |
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Name : |
Mr. P A Murali |
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Designation : |
Deputy President and Chief Financial Officer |
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Name : |
Mr. V S Venkataraman |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
AS ON 31.03.2007
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoter Group |
36628260 |
38.77 |
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Resident Body Corporate |
14790713 |
15.65 |
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Banks/ Fl/ Fll/ MF/ Trust |
29871341 |
31.62 |
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NRI/ OCB/ FFI |
3587805 |
3.80 |
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G D S |
189452 |
0.20 |
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Resident Individuals |
9414359 |
9.96 |
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Total |
94481930 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacture, Purchase and Sale of Beverage Alcohol (Spirits and
Wines). |
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Products with ITC Code : |
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Brand Names : |
Dalmore, Jura, Whyte & Mackay, Black Dog, Antiquity, Signature,
Royal Challenge, McDowell’s No. 1, Celebration Rum, Bouvet Ladubay, Pinky,
Romanov, White Mischief, etc. |
PRODUCTION STATUS
|
Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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Beverage Alcohol |
Liters |
164560592 |
192150600 |
161374408 |
GENERAL
INFORMATION
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Suppliers : |
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No. of Employees : |
Around 7000 |
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Bankers : |
Not Available |
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Facilities : |
Secured Loan (Rs.
in millions)
Unsecured Loan (Rs.
in millions)
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Price Waterhouse Chartered Accountants |
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Address : |
Bangalore, Karnataka, India |
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Subsidiaries : |
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CAPITAL STRUCTURE
AS ON
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
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|
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|
110,000,0000 |
Equity Shares |
Rs. 10/- Each |
Rs. 1100.000
millions |
|
10,000,000 |
Preference Shares |
Rs. 10/- Each |
Rs. 100.000
millions |
|
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Total |
|
Rs.
1200.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
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|
|
|
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|
94,481,930 |
Equity Shares |
Rs. 10/- Each |
Rs. 944.819 millions |
|
7,750,000 |
9% Non Cumulative Non Convertible Redeemable
Preference Shares |
Rs. 10/- Each |
Rs. 77.500 millions |
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Total |
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Rs. 1022.319 millions |
Notes :
Of the above,
1. 51,719,968 (2006: 51,719,968) Equity Shares were allotted as fully
paid up on July 9, 2001 to the shareholders of the erstwhile McDowell & Co,
Limited., pursuant to the schemes of Amalgamation for consideration other than
cash.
2. 34,010,521 (2006: Nil) Equity Shares were alloted as fully paid on
November 6, 2006 to Equity Shareholders of erstwhile Herbertsons Limited,
Triumph Distillers & Vintners Private Limited, Baramati Grape Industries
Limited, United .Distillers India Limited and Shaw Wallace Distilleries Limited
pursuant :to a Scheme of Amalgamation for consideration other than cash.
3. 8,751,381 (2006: 8,751,381) Equity shares of Rs.10/- each fully paid
up represent 17,502,762 (2006:17,502,762) Global Depository Shares issued by
the Company on March 29, 2006.
4. 7,750,000 (2006: Nil) 9% Non-Cumulative Non-Convertible Redeemable
Preference Shares of Rs 10/- each were issued as fully paid up on November 6,
2006 to 9 % Non-Cumulative Non-Convertible Redeemable Preference-'Shareholders
of erstwhile Shaw Wallace Distilleries Limited pursuant to-a Scheme,of
Amalgamation for consideration other than cash.
The above 7,750,000 (2006: Nil) 9% Non-Cumulative
Non-Convertible-Redeemable Preference Shares of Rs 107- each have, been redeemed
at patdn July 11, 2007
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
SHAREHOLDERS FUNDS |
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|
|
|
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1] Share Capital |
1022.319 |
604.714 |
517.200 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Share Capital Suspense |
0.000 |
417.605 |
0.000 |
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3] Reserves & Surplus |
12397.905 |
7938.654 |
2357.600 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
13420.224 |
8960.973 |
2874.800 |
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|
LOAN FUNDS |
|
|
|
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1] Secured Loans |
9485.226 |
10047.313 |
5056.600 |
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2] Unsecured Loans |
5192.566 |
5274.693 |
682.700 |
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TOTAL BORROWING |
14677.792 |
15322.006 |
5739.300 |
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DEFERRED TAX LIABILITIES |
7.935 |
70.569 |
0.000 |
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TOTAL |
28105.951 |
24353.548 |
8614.100 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
4538.698 |
4598.732 |
2151.600 |
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Capital work-in-progress |
106.102 |
26.021 |
42.900 |
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INVESTMENT |
6624.619 |
7022.648 |
3803.200 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
2936.496
|
2818.605 |
1406.200 |
|
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Sundry Debtors |
3552.463
|
3003.733 |
1792.600 |
|
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Cash & Bank Balances |
3735.750
|
2234.415 |
424.900 |
|
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Other Current Assets |
1112.095 |
637.783 |
0.000 |
|
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Loans & Advances |
11294.735
|
11193.139 |
1900.900 |
|
Total
Current Assets |
22631.539
|
19887.675 |
5524.600 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
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Current Liabilities |
5330.672
|
6796.459 |
2670.400 |
|
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Provisions |
464.335
|
385.069 |
237.800 |
|
Total
Current Liabilities |
5795.007
|
7181.528 |
2908.200 |
|
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Net Current Assets |
16836.532
|
12706.147 |
2616.400 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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|
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TOTAL |
28105.951 |
24353.548 |
8614.100 |
|
PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
27205.230 |
20479.515 |
17839.800 |
|
|
Other Income |
703.547 |
488.771 |
572.200 |
|
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Total Income |
27908.777 |
20968.286 |
18412.000 |
|
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|
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|
|
|
Profit/(Loss) Before Tax |
6216.260 |
512.190 |
322.400 |
|
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Provision for Taxation |
1276.066 |
91.992 |
55.200 |
|
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Profit/(Loss) After Tax |
4940.194 |
420.198 |
267.200 |
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Earnings in Foreign Currency : |
|
|
|
|
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Export Earnings |
0.000 |
94.058 |
NA |
|
|
Other Earnings |
47.009 |
42.717 |
NA |
|
Total Earnings |
47.009 |
136.775 |
NA |
|
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Imports : |
|
|
|
|
|
|
Raw Materials |
248.637 |
238.237 |
NA |
|
|
Stores & Spares |
2.972 |
1.716 |
NA |
|
|
Others |
0.000 |
3.377 |
NA |
|
Total Imports |
251.609 |
243.330 |
NA
|
|
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Expenditures : |
|
|
|
|
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Cost of Goods Sold |
|
|
|
|
|
Manufacturing Expenses |
8679.742 |
7875.937 |
0.000 |
|
|
Raw Material Consumed |
14263.215 |
10504.868 |
4978.300 |
|
|
Excise
Duty |
0.000 |
0.000 |
6287.600 |
|
|
Employee
Cost |
0.000 |
0.000 |
821.500 |
|
|
Selling
and Administration Expenses |
0.000 |
0.000 |
2465.400 |
|
|
Interest |
1067.634 |
1666.289 |
369.400 |
|
|
Miscellaneous Expenses |
0.000 |
0.000 |
463.000 |
|
|
Power & Fuel |
0.000 |
0.000 |
64.300 |
|
|
Depreciation & Amortization |
309.350 |
409.002 |
156.300 |
|
|
Other Expenditure |
0.000 |
0.000 |
2483.800 |
|
Total Expenditure |
24319.941 |
20456.096 |
18089.600 |
|
SUMMARISED RESULTS
|
PARTICULARS |
|
|
31.03.2008 |
|
Type |
|
|
Full
Year |
|
Sales Turnover |
|
|
31731.200 |
|
Other Income |
|
|
369.100 |
|
Total Income |
|
|
32100.300 |
|
Total Expenditure |
|
|
25639.400 |
|
Operating Profit |
|
|
6460.900 |
|
Interest |
|
|
1285.100 |
|
Gross Profit |
|
|
5175.800 |
|
Depreciation |
|
|
326.100 |
|
Tax |
|
|
1750.000 |
|
Reported PAT |
|
|
3112.800 |
|
Dividend (%) |
|
|
150.000 |
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2008 |
30.09.2008 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
|
Sales Turnover |
|
10133.900 |
9113.600 |
|
Other Income |
|
71.800 |
13.200 |
|
Total Income |
|
10205.700 |
9126.800 |
|
Total Expenditure |
|
7981.500 |
7211.700 |
|
Operating Profit |
|
2224.200 |
1915.100 |
|
Interest |
|
341.300 |
394.700 |
|
Gross Profit |
|
1882.900 |
1520.400 |
|
Depreciation |
|
81.900 |
87.400 |
|
Tax |
|
642.000 |
527.000 |
|
Reported PAT |
|
1171.300 |
938.900 |
200806 Quarter 1 ---------------
Notes Status of Investor Complaints for the quarter ended June 30, 2008
Complaints Pending at the beginning of the quarter Nil Complaints Received during
the quarter 42 Complaints disposed off during the quarter 42 Complaints
unresolved at the end of the quarter Nil 1. The Company is engaged in the
business of manufacture, purchase and sale of Beverage Alcohol (Spirit and
Wines) including through Tie-up Manufacturing / brand franchise, which
constitutes a single business segment. The Company's operations outside India
did not exceed the quantitative threshold for disclosure envisaged in AS 17 on
Segment Reporting issued by the Institute of Chartered Accountants of India. In
view of the above, primary and secondary reporting disclosures for
business/geographical segment as envisaged in AS-17 are not applicable to the
Company. 2. The entire Foreign Currency Convertible Bonds (the Bonds)
aggregating to US$ 100 mn had been converted into equity shares in the Company
and there are no outstanding Bonds as on March 31, 2008. During the quarter the
Company has received listing and trading permission from National Stock
Exchange of India Limited, Bombay Stock Exchange Limited and Bangalore Stock
Exchange Limited in respect of the entire equity shares allotted on conversion
of Bonds. Approval from Delhi Stock Exchange Association Limited in respect of
227,550 equity shares allotted on March 31, 2008 on conversion of Bonds is
awaited. 3. With regard to the Company's applications seeking voluntary
delisting of Equity Shares of the Company from the Stock Exchanges situated at
Ahmedabad, Chennai, Kolkata and New Delhi, all Stock Exchanges except Delhi
Stock Exchange Association Limited have informed de-listing of the Company's
equity shares from their Exchanges. 4. During the quarter, United Spirits
(Shanghai) Trading Company Limited became a wholly owned subsidiary of the
Company. 5. (a). At the separate Court Convened Meetings held on April 11,
2008, the Equity Shareholders, Secured Creditors and Unsecured Creditors of the
Company have approved: (i) the Scheme of Amalgamation of Shaw Wallace &
Company Limited (SWC) and Primo Distributors Private Limited (Primo) with the
Company and (ii) the Scheme of Amalgamation of Zelinka Limited (Zelinka) with
the Company The Schemes mentioned in (i) and (ii) above have been sanctioned by
the Hon'ble High Court of Karnataka on May 29, 2008. (b) The Scheme mentioned
in 6(a) (i) above in respect of Primo has been sanctioned by the Hon'ble High
Court of Judicature at Bombay on July 18, 2008. (c) At the Court Convened
Meeting held on April 25, 2008, the Equity Shareholders of SWC have approved
the Scheme of Amalgamation mentioned in 5(a)(i) above in respect of SWC.
Petition has been filed by SWC for sanction of the aforesaid Scheme before the
Hon'ble High Court at Calcutta and the sanction of the Court is awaited. (d)
Zelinka will take necessary steps for implementing the Scheme of Amalgamation
mentioned in 5(a)(ii) above. Pending completion of amalgamation as above, the
results published are that of United Spirits Limited only. 7. The Limited
Review of the above results as required under Clause 41 of Listing Agreement
has been completed by the Statutory Auditors. The above unaudited results were
taken on record at the meeting of Board of Directors held on July 21, 2008. 8.
Previous period/year's figures have been regrouped, wherever necessary, to
conform to the current period/year's classifications.
200809 Quarter 2 ---------------
Notes Status of Investor Complaints for the quarter ended September 30, 2008
Complaints Pending at the beginning of the quarter Nil Complaints Received
during the quarter 42 Complaints disposed off during the quarter 42 Complaints
unresolved at the end of the quarter Nil 1. The Company is engaged in the
business of manufacture, purchase and sale of Beverage Alcohol (Spirit and
Wines) including through Tie-up Manufacturing / brand franchise, which
constitutes a single business segment. The Companys operations outside India
did not exceed the quantitative threshold for disclosure envisaged in AS 17 on
'Segment Reporting' issued by the Institute of Chartered Accountants of India.
In view of the above, primary and secondary reporting disclosures for
business/geographical segment as envisaged in AS-17 are not applicable to the
Company. 2. With regard to the Companys applications seeking voluntary
delisting of Equity Shares of the Company from the Stock Exchanges situated at
Ahmedabad, Chennai, Kolkata and New Delhi, all Stock Exchanges except Delhi
Stock Exchange Association Limited have informed de-listing of the Companys
equity shares from their Exchanges. 3. With regard to: (a) the Scheme of
Amalgamation of Shaw Wallace & Company Limited (SWC) and Primo Distributors
Private Limited (Primo) with the company, while the scheme has been sanctioned
by the Honble High Court of Karnataka and the Honble High Court of Judicature
at Bombay, similar sanction by the Honble High Court at Calcutta is awaited.
(b) the Scheme of Amalgamation of Zelinka Limited (Zelinka) with the Company
the Honble High Court of Karnataka has sanctioned the Scheme and Zelinka is
taking necessary steps for implementing the same. Pending completion of the amalgamation
as mentioned in 3(a) and (b) above, the results published are that of United
Spirits Limited only 4. The Company has been granted time to hold the Annual
General Meeting upto December 31, 2008 by the Registrar of Companies -
Karnataka, Bangalore. 5. The Limited Review of the above results as required
under Clause 41 of Listing Agreement has been completed by the Statutory
Auditors. The above unaudited results were taken on record at the meeting of
Board of Directors held on October 21, 2008. 6. Previous period/years figures
have been regrouped, wherever necessary, to conform to the current period/years
classifications.
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity
Ratio |
1.34 |
1.78 |
1.60 |
|
Long
Term Debt-Equity Ratio |
1.07 |
1.40 |
0.97 |
|
Current
Ratio |
2.14 |
1.65 |
1.20 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
8.12 |
8.49 |
6.47 |
|
Inventory |
16.23 |
17.01 |
13.25 |
|
Debtors |
14.24 |
14.99 |
9.42 |
|
Interest
Cover Ratio |
3.94 |
1.23 |
2.14 |
|
Operating
Profit Margin(%) |
10.95 |
7.08 |
5.31 |
|
Profit
Before Interest And Tax Margin(%) |
10.29 |
5.94 |
4.43 |
|
Cash
Profit Margin(%) |
6.80 |
2.03 |
2.68 |
|
Adjusted
Net Profit Margin(%) |
6.14 |
0.89 |
1.81 |
|
Return
On Capital Employed(%) |
18.34 |
12.98 |
10.86 |
|
Return
On Net Worth(%) |
26.12 |
5.50 |
11.52 |
LOCAL AGENCY
FURTHER INFORMATION
Biodata
United Spirits Limited (USL) began its story
in the year 1999 as McDowell Sprits Limited. It is the company engaging in
manufacturing of beverages. The Company operates primarily in the Indian Made
Foreign Liquor (IMFL) space with clearly chalked out plans for the Wine and
Bottled In Origin (BIO) sectors. USL is to manufacture, purchase and sell
Indian made foreign liquor including brand franchise. The Group's products
include beer, wine, country liquor, Indian made foreign liquor and spirits. Its
plants are located at Kerala, Andhra Pradesh, Goa, Bihar, Karnataka, Uttar
Pradesh, Rajasthan, West Bengal, Madhya Pradesh, Maharashtra and Pondicherry.
Some of the brand names include Romanov, Signature, Bagpiper, Red Riband Vodka,
Blue Riband Gin, Black Dog Whisky, Single Malt Whisky, Caesar Brandy, Old Cask
Rum, Celebration XXX Rum and Bosca Wine.
As at 1st April 2000, the company name was changed from McDowell Sprits Limited
to McDowell & Company Limited. During the year 2002, the McDowell Alcobev
becomes the wholly owned subsidiary of the company. In the same period, the
company made alliances with US, Australia and French Cos. for bulk wine import.
Phipson Distilley becomes a wholly owned subsidiary of the company and also the
company acquired 85% equity stake in Truimph Distilleries & Vinters Private
Limited, subsequently, the Truimph Distilleries & Vinters becomes a
subsidiary of USL during the year 2002 itself. The Company acquired the Indian
and Middle East businesses of Gilbeys from UDV through its ultimate subsidiary
Triumph Distillers & Vintners Private Limited in December of the year 2002.
Gilbey's Green Label is a popular brand of whisky in the regular segment with
sales of over 2 million cases. It was seen as a useful addition to The
Company's portfolio brands as it enjoyed certain price advantages in the whisky
category. During year, McDowell International Brands Limited became a wholly
owned subsidiary consequent upon the transfer of beneficial interests in the
balance 60 Equity Shares of Rs.10/- each held by the other shareholders to the
company. USL had rolled out its new Whisky brand, 'Derby Special Whisky' in
Andhra Pradesh Market in the period of 2003. Company has gone live with SAP R/3
at all locations in South India during the year 2003 along with the
reorganisation.
The company forged alliance with Newzealand Company called Independent Liquor
to pursue an aggressive growth strategy in the ready-to-drink segment. During
the year 2003, McDowell Alcobev, a subsidiary of the company made open offer to
acquire 25% stake in Intertia Industries. The Company unleashed new Vodka as
part of its product portfolio. USL launched the Old Cask Rum, in the Karnataka
market during the period of 2004. In the same year of 2004, the company had
unveils the Signature, a new and costly item in product line at Tamil Nadu
market.
During the year 2004-05, the McDowell India Spirits Limited became a wholly
owned subsidiary of the Company consequent upon the purchase of 50,000 Equity
Shares of Rs.10/- each, from the existing shareholders of the Company. Also,
the Herbertsons Limited became an ultimate subsidiary of the Company consequent
upon it becoming a subsidiary of Phipson Distillery Limited, USL's wholly owned
subsidiary.
USL made an open offer to the shareholders of Shaw Wallace & Company
Limited pursuant to the Regulations 10 & 12 of the Securities and Exchange
Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,
1997 at Rs. 260/- per share. Pursuant to the open offer, United Spirits Limited
acquired 12,001,518 Equity Shares constituting 25% of the paid up equity share
capital of Shaw Wallace & Company Limited. McDowell's No.1 Reserve Whisky
Smart Pouch bagged the Silver Award for Packaging Excellence 2005. The
Investment business of the Company was demerged into McDowell India Spirits
Limited (since renamed as McDowell Holdings Limited), the Demerger taking
effect from the April 1st, 2005.
Phipson Distillery Limited, United Spirits Limited, Herbertsons Limited,
Triumph Distillers & Vintners Private Limited, Baramati Grape Industries
Limited, United Distillers India Limited, McDowell International Brands Limited
and Shaw Wallace Distilleries Limited (transferor companies) were amalgamated
with the Company, the amalgamation taking effect from April 1st 2005. In order
to expand its Scotch whisky to a larger consumer segment and the middle-income
group in particular, the company launched a low-priced variant of its Black Dog
Scotch during the year of 2005-06. And also in the same year, the company had
introduced McDowell's No.1 Celebration Rum and Antiquity Blue. Primo
Distributors Private Limited, a wholly owned subsidiary of United Distillers
India Limited, (which ceased to be a subsidiary of the Company earlier) became
a wholly owned subsidiary of the Company as on March 31, 2006.
Name of the Company has been changed from McDowell & Company Limited to the
present name United Spirits Limited, with effect from October 17th of the year
2006. The Company had issued 17,502,762 Global Depositary Shares (GDSs) during
the year 2006-07 representing 8,751,381 Equity Shares ranking pari-passu in all
respects with the existing paid up equity shares, 2 GDSs representing 1 equity
share of par value of Rs.10/- each at US$7.4274 per GDS aggregating to US$ 130
million. These GDSs are listed on the Luxembourg Stock Exchange. And in the
same year the company also had issued US$ 100,000,000 2% Convertible Bonds Due
2011 (Bonds) convertible into equity shares or GDSs (2 GDSs representing 1
equity share). The Company launched its international operations with the
acquisition of M/s. Bouvet-Ladubay S.A., a 3.2 million-bottle winery in the
Saumur Valley in the Loire region of France during the year of 2006-07. In May
of the year 2007, the company had acquired 100% stake in Whyte & Mackay,
Whyte & Mackay is leading distiller of Scotch whisky. Equity shareholders
& creditors of the company approved the Scheme of Amalgamation ('the
Scheme') of Zelinka with the Company as on April 11, 2008.
The Directors have pleasure in presenting the Annual Report of The
Company and the audited accounts for the year ended March 31, 2007.
At the outset, The Directors are pleased to report the strategically important
acquisition on May 16, 2007 of Whyte and Mackay Limited, the 4th largest Scotch
Distillers in the World. The acquisition of this Glasgow (UK) based Company for
an enterprise value of GBP 595 Million was done through a wholly owned
subsidiary, United Spirits (Great Britain) Limited.
Consequent to the consolidation of the spirits business by amalgamation, inter
alia, of Herbertsons Limited, Shaw Wallace Distilleries Limited, Baramati Grape
Industries Limited and Triumph Distillers & Vintners Private Limited with
the Company, The Company. has registered milestone sale of more than 66 Million
case a during the financial year 2006-07.
PERFORMANCE OF THE
COMPANY:
The integration of the Shaw Wallace operations, the active efforts at
capitalising on the uptrend of consumer preferences, and relentless cost
control, have all helped The company to turn in a sterling performance during
the year under review.
Operating Profits were consequently up by about 4000 from Rs. 921 Million to
Rs. 3,898 Million.
Adding to the results for the year were profits from sale of part of the
Treasury Stocks which resulted in Non-Recurring profits of Rs. 2,627
Million.
PROSPECTS:
Barring unforseen circumstances, The Directors expect continuing increase
in the profitable conduct of the company's business. The recent acquisitions of
the Scotch distiller, Whyte and Mackay Limited. and Liquidity Inc. in the
current year and Bouvet Ladubay, a wine manufacturing Company in France in the
year under review, are expected to provide sustained opportunities in the
future.
Profits for the first six months of the current year are 51 higher than the
corresponding period of the year under review.
SUBSIDIARIES:
During the year under review, the following Companies became subsidiaries of
The Company:
Four Seasons Wines Limited; United Alcobev Limited; United Vintners Limited;
McDowell Beverages Limited; USL Holdings Limited; Spring Valley Investments
Holdings Inc.; USL Holdings (UK) Limited, United Sprits (UK) Limited; United
Spirits (Great Britain) Limited and Herbertsons Limited.
Subsequent to the Balance Sheet date, following Companies have become
subsidiaries of The Company.
McDowell & Company Limited; Liquidity Inc.; Whyte and Mackay Group Limited;
Whyte and Mackay Limited; Whyte and Mackay Warehousing Limited; Bruce &
Company Limited; Charles Mackinlay & Company Limited, Dalmore Distillers
Limited; Dalmore Whyte & Mackay Limited; Edinburgh Scotch Whisky Company
Limited; Ewen & Company Limited; Fettercairn Distillery Limited; Findlater
Scotch Whisky Limited; Glayva Liqueur Limited; Glentalla Limited; GPS
Realisations Limited; Grey Rogers & Company Limited; Hay & MacLeod
Limited; Invergordon Distillers (Holdings) Limited; Inverodgordon Limited; Isle
of Jura Distillery Company Limited; Jarvis Halliday & Company Limited; John
E McPherson & Sons Limited; KI Trustees Limited; Kensington Distillers
Limited; Kyndal Spirits Limited; Leith Distillers Limited; Loch Glass
Distilling Company Limited; Longman Distillers Limited; Lycidas (437) Limited;
Pentland Bonding Company Limited; Ronald Morrison & Company Limited; St.
Vincent Street (437) Limited; Tamnavulin-Glenlivet Distillery Company Limited;
TDL Realisations Limited; The Invergordon Distillers Group Limited;The
Invergordon Distillers Limited; The Sheep Dip Whisky Company Limited; W & S
Strong Limited; Watson & Middleton Limited; Wauchope Moodie & Company
Limited; Whyte and Mackay de Venezuela CA;
Whyte & Mackay Distillers Limited; Whyte and Mackay Holdings Limited; Whyte
and Mackay Property Limited; William Muir Limited and WMB Realisations
Limited;
Consequent to the dissolution without winding up of Shaw Wallace Financial
Services Limited upon its amalgamation with Shaw Wallace Breweries Limited, in
terms of the Orders of the Hon'ble High Courts of Calcutta and Bombay, Shaw
Wallace Financial Services Limited ceased to be a subsidiary of The Company in
the current year.
In terms of the approval received from the Government of India pursuant to
Section 212(8) of the Companies Act, 1956, the Balance Sheet, Profit & Loss
Account, Directors' Report, Auditors' Report and other particulars of the
subsidiary companies as on March 31, 2007 have not been attached with the
accounts of the Company. The documents/details will be made available to any
Member of the Company upon request to the Company. The annual accounts of the,
subsidiary Companies as on March 31, 2007 will also be kept for inspection by
any member at Registered Office of the Company and that of the subsidiary
Companies concerned.
The Accounting year of McDowell Nepal Limited (MNL) (which has been converted
into a Private Limited Company and renamed as United Spirits Nepal Private
Limited, in the current year), The Company's Subsidiary in Nepal is from
mid-July to mid-July every year. Accordingly, Accounting year of 2005-06 of MNL
ended on July 16, and the Accounting Year 2006-07 ended on July 16, 2007, i.e.,
after the end of the close of the financial year of The Company which ended on
March 31, 2007. For the purpose of compliance under Accounting Standard - 21,
relating to "Consolidated Financial Statement," the Accounts of MNL
has keen drawn up to March 31, 2007.
For the purpose of compliance under Accounting Standard 21-"Consolidated
Financial Statement" presented by the Company includes the financial
information of its subsidiaries.
DEPOSITORY SYSTEM:
The trading in the equity shares of The Company is under compulsory
dematerialisation mode. As of date, equity shares representing 94.01% of the
equity share capital are in dematerialised form. As the depository system
offers numerous advantages, members are requested to take advantage of the same
and avail of the facility of dematerialisation of the Company's shares.
MANAGEMENT
DISCUSSION & ANALYSIS REPORT:
INDUSTRY OVERVIEW:
The India Growth Story is one of a trillion dollar economy growing @ about 9%
p.a. Currently the 4th largest economy in the world in terms of Purchasing
Power Parity (PPP), its economic growth rate is expected to continue, driven by
booming consumer demand and investments in infrastructure. A young economy,
India is entering the demographic window with over half the country's
population of 1.1 billion under 25 years of age. This is in contrast to most
developed nations which are faced with greying populations and low or negative
birth rates. The middle class is already in excess of 300 million and rapid
urbanization, changing life styles, higher disposable income and shifts in
expenditure patterns, particularly of the youth, are all contributing to
growing demand for all manner of products including alcoholic beverages.
The alcoholic beverages industry in India comprises 5 key segments, viz. Beer,
Wine, Indian Made Liquor (IMFL), Bottled Orgin (NIO) Alcoholic Products and
Country Liquor. The Company, primarily in the IMFL space with clearly chalked
out plans for the Wine and BIO sectors. In 2006-07, the IMFL industry grew over
16% to register sales of over 157 million cases of 9 Bulk Litres (BL) each. The
industry was particularly buoyant with the opening up of the key Northern
markets of Punjab, Haryana and Chandigarh. Changes in the alcohol policy in
these States opened up the industry from one controlled by a few large
syndicates to wide-spread ownership, thereby paving the way for reasonable
prides and free play of market forces.
The country liquor segment is. an unorganized business area and at best
`guesstimates' of the market size alone are available. These `guessestimates'
place the size of the industry at between 200 and 225 million cases of 9 BL
each. However, post the year under review, Karnataka, a large and the only
remaining bastion of country liquor in South India, decided to close down the
country liquor market effective July 2007. This is expected to translate to a
spurt in demand for IMFL, albeit at the bottom end of that market.
Despite an impressive 21% growth in White Spirits led by a phenomenal 44%
growth in the Vodka segment, White Spirits, comprising Gins, White Rums and
Vodkas continue to remain a mere: 5% of the industry. In sharp contract to
global trends, brown spirits continue to dominate the Indian IMFL space -
Whisky at 57%, Brandy at 16% and Rum at 22% - together aggregating 95% of this
157 million cases market.
For the very same reasons that are shaping the Indian growth story, the demand
for alcoholic beverages is expected to continue to be buoyant with a large
population base and a growing number of new entrants into the legal drinking
age category. The progressive prohibition of country liquor in many markets is
only expected to further propel the growth of the IMFL industry.
REGULATORY ENVIRONMENT:
"The Constitution of India has placed the regulation and taxation of the
alcoholic beverages industry within the purview of the State Governments and
not of the Federal Government. The Central Government continues to licence
green-field manufacturing units and impose customs duties on import. Every
other activity dealing with production, movement, distribution, sale and
taxation are controlled by the states. The multiplicity of regulation
legislated by different Governments and indeed by different arms of the same
Government, make it a highly complex and challenging regulatory environment
which undergoes changes virtually every year.
The dual control on the industry often creates a position of failing between
two stools with both, Governments' unwillingness to give up their stated
positions due to the revenue implications of any decision. Progressive
legislations of the recent past like VAT often do not include the alcoholic
beverages industry within their-ambit; a similar case is that of CENVAT credit
not being available to the industry despite the large contributions made by it
towards Excise Duty and other taxes.
BUSINESS ANALYSIS:
Though raw material (molasses) prices have come off their highs of the previous
year, the average price during the year remained higher than average. However,
there are signs of continuing softening which will benefit operations of the
current year. Counterbalancing this is the pressure of increased diversion of
spirit towards ethanol spiking of fuel as mandated from time to time.
Fuel prices during the year though have been steady although with the rise in
crude prices they have seen a quantum upward shift vis-a-vis previous
years.
When prices of the primary raw materials had escalated, The Company had
consciously decided to de-emphasize both production and sale of the low-end
brands whose profitability was under strain due to the rise in input costs. In
FY'07 too, this position continued to be the guiding principle for the
business, with the result that the business took a drop of 2.95 million cases
in sales of the low-end products. Despite this, overall volumes rose by 6.99
million-cases to a level of 66.4 million cases.
The Company's Key Premium Brands grew by 19%; deliberate de-emphasis of the
low-end range however, pulled down the average growth to 12%.
MARKETING:
McDowell's No.1 is arguably the largest umbrella brand in the alcoholic
beverages business. Offered in the flavours of Whisky, Brandy, Rum and White
Rum, the brand sold over 22 million cases during FY '07, a 32% growth over the
previous fiscal. Bagpiper Whisky continued to remain the world's largest
selling non Scotch whisky - with a 25% growth, its volumes were nearly 14
million cases.
Continuous revamping of the key packaging elements to make the brands trendy
and contemporary has been one of the main reasons why the Company's products
are viewed as `best of breed'. During the fiscal year, new packaging
innovations like substitution of the Nip glass bottle by international class
Tetra pack packaging caught the fancy of the customer in the states of
Maharashtra and Karnataka where there were introduced.
As part of the brand-building exercise, the Company continues to promote key
music and sporting events like the sponsorship of international singing events
like Shakira, Deep Purple, Iron Maiden, etc.
The brands are also continuing their association with upmarket sports like
Golf.
OUTLOOK:
In a market where over 50% of the volume is sold to Government agencies who
administer the prices of The Company's products, price increases, even to cover
normal inflation, are difficult to come about. This has a bearing on the
Company's profits. The Company has, through a judicious mix of strategy and
cost control / cost cutting, been able to ensure a rise in overall
profitability.
INTERNATIONAL
OPERATIONS:
During the current year, the Company launched its international operations with
the acquisition of M/s. Bouvet-Ladubay S.A., a 3.2 mn bottle winery in the Saumur
Valley in the Loire region of France. This Company is now a subsidiary of The
Company. The Company's products are well received in France, Germany and other
European markets as also in the U.S. Plans are underway to expand the reach of
its products including into the Indian market in BIO form. The expertise of
M/s. Bouvet-Ladubay is also being obtained by the Company to set up a
state-of-the-art winery in Western India.
Subsequent to the close of the year, United Spirits Limited acquired the entire
capital of Whyte and Mackay Limited, Glasgow, the 4th largest producer of
Scotch in the World. The Indian consumer, for whom Whisky comprises the most
popular and widespread flavour, Scotch is seen as the most aspirational
product. As The Company pursues "up trading"; increasing numbers of
consumers demand Scotch. Increasing disposable income also makes this segment
more affordable. To cater to this emerging opportunity as also to have a
perennial source of Scotch to use as blending material for the IMFL products,
this acquisition is seen as a strategically vital one.
FORWARD LOOKING
STATEMENTS:
This Report contains forward-looking statements that involve risks and
uncertainties. The Company undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events, or otherwise. Actual results, performances or achievements could
differ materially from those expressed or implied in such forward-looking
statements. Readers are cautioned not to place undue reliance on these forward
looking statements that speak only as of their dates. This Report should be
read in conjunction with the financial statements included herein and the notes
thereto.
Fixed Assets
- Land –
Freehold and Leasehold
- Buildings
- Plant and
Machinery
- Furniture and
Fixtures
- Office
Equipments
- Vehicles
Contingent
Liabilities
(Rs.
in millions)
|
|
31.03.2007 |
31.03.2006 |
|
a) (i) Guarantee given on behalf of other bodies corporate (including performance guarantees) (ii) Guarantees given by the Company's bankers for which Counter
Guarantees have been given by the Company |
31.250 98.012 |
250.000 75.778 |
|
b) Disputed claims against the Company not acknowledged as debts,
currently under appeal / sub judice:
|
214.841 217.549 79.499 438.350 |
181.650 232.904 44.407 387.331 |
|
c) Bills Receivables discounted - since .fully settled |
-- |
120.899 |
|
d) Co-accepted bills of Tie-up Units -.since fully settled |
71.651 |
67.940 |
|
e) Claims from suppliers not acknowledged as debts |
58.583 |
45.865 |
The Management is hopeful of succeeding in the above appeals / disputes
based on legal opinions / legal
presidents.
2. (a) Under a Scheme of Arrangement sanctioned by the Hon'ble High
Courts of Karnataka and Bombay ("the Scheme"), amalgamation of eight
companies into erstwhile McDowell & Company Limited and demerger of
investment business into a resulting company (McDowell Holdings Limited) became
effective from October 5, 2006 with the appointed date as April 1, 2005,and the
name of the company was changed from McDowell & Company Limited to United
Spirits Limited.
Pursuant to "the Scheme", the Company at their meeting held on
November 6, 2006, allotted 34,010,521 Equity Shares of Rs.10/- each fully paid
up and 7J50,000 9% Non Cumulative Non Convertible Redeemable Preference Shares
of Rs.10/- each fully paid up to the shareholders of the transferor companies.
The Company has also received the listing and trading permission for the equity
shares from the National Stock Exchange of India Limited7Bombay Stock Exchange
Limited, Bangalore Stock Exchange Limited, Ahmedabad Stock Exchange Limited and
Madras Stock Exchange Limited, The Delhi Stock Exchange Association Limited and
the Calcutta Stock Exchange Association Limited.
Subsequent to the end of the financial year, the Non-Cumulative
Non-Convertible Redeemable Preference Shares have been fully redeemed1. - :
(b) Board of Directors of the erstwhile Central Distilleries &
Breweries Limited (CDBL) (amalgamated with SWDL in an earlier year) on April
29, 1986 decided to issue 134,700 Equity Shares of Rs.10 each, the allotment
whereof was stayed by the Hon'ble High Court of Delhi on September 13,19.88.
The Hon'ble High Court of Delhi has vacated its order and has ordered to keep
in abeyance the allotment on 72,556 shares and the matter is subjudice. The
holders, in exchange of these shares will be entitled to 17,776 equity shares
of Rs.10 each of the Company pursuant to the Scheme. Necessary adjustments in
this respect will be carried out on disposal of the matter pending before the
aforesaid Court.
(c) Pursuant to the Scheme, the bank accounts, agreements, licences,
Investments and certain immovable properties are in the process of being
transferred in the name of the Company.
(d) The Company has also distributed the proceeds towards the sale of
fractional shares entitlement to the eligible shareholders.
3. a) The Company had issued, during 2006, 100,000, 2% Convertible Bonds
in Foreign Currency (FCCB) denominated in Bond certificates of US$1,000 each
aggregating US$ 100 Million. The FCCBs are, at the option of FCCB holders,
convertible into fully paid Equity Shares of Rs.10/- of the Company (Equity
Share) or Global Depository Shares (GDS), with two GDS representing one Equity
Share, at any time on or after May 9, 2006 upto the close of business on March
15, 2011 at an initial conversion price of Rs.858 per share with a fixed rate
of exchange on conversion of Rs.44.43 equal to US$ 1.00, subject to adjustments
in the manner specified in the Offering Circular (OC) dated March 29, 2006 upon
occurrence of certain events. The Company, subject to fulfilment of certain
conditions, has an option to mandatorily convert these FCCBs into Equity
Shares, in whole but not in part, at any time on or after September 29, 2007
but not less than seven business days prior to the Maturity Date (March 30,
2011), at a conversion price to be determined in the manner specified in the
OC. The Company, subject to fulfilment of certain conditions and obtaining
requisite approvals, has an option/,to redeem these FCCBs, in whole but not in
part, at an Early Redemption Amount, to be determined in the manner specified
in the OC so that together with any interest and unpaid interest it represent a
gross yield of 6.50 percent to the FCCB holders, on a semi annual basis,
together with accrued or unpaid interest.The outstanding FCCBs on the Maturity
Date (March 30, 2011) will be redeemed at 127.07 percent of the principal
amounts of the FCCBs.
The initial conversion price of Rs.858 per share has been adjusted in
the manner specified in the OC and new conversion price of Rs.781 per share is
effective from June 8, 2007.
b) Subsequent to the year end, 78,960 Bonds aggregating to US$,78.960
Million have been converted into 4,484,397 Equity shares. Consequently, the
paid up equity share capital increased from 94,481,930 equity shares of Rs.10/-
each to 98,966,327 equity shares of Rs.10/- each as of date.
c) Since the market price of the Company's Equity Shares is less than
the initial conversion price of FCCB, the option embedded in the said FCCB to
subscribe to Equity Shares is, at the year-end, anti-dilutive
4. a) Subsequent to the year end, the Company acquired through its
wholly owned subsidiary, United Spirits (Great Britain) Limited, the entire
share capital of Whyte and Mackay Group Limited, which in turn holds the entire
share capital of Whyte and Mackay Limited, a Scotland based Spirits
manufacturing company. The Company has provided security / guarantee on behalf .of,the
above wholly owned subsidiary for a sum of US $ 618.915 Million in favour of
the lenders.
b) Consequent upon the above acquisition, the following companies became
wholly owned subsidiaries of the Company. Whyte and Mackay Group Limited, Whyte
and Mackay Limited, Whyte and Mackay Warehousing Limited, Bruce & Company
(Leith) Limited, Charles Mackinlay & Company Limited, Dalmore Distillers
Limited, Dalmore Whyte & Mackay Limited, Edinburgh Scotch Whisky Company
Limited, Ewen & Company Limited, Fettercairn Distillery
"Limited,Tindlater"'Scotch Whisky Limited, Glayva Liqueur Limited,
Glentalla Limited, GPS Realisations Limited, Grey Rogers & Company Limited,
Hay & MacLeod Limited, Invergordon Distillers (Holdings) Limited,
Invergordon Distillers Group Limited, Invergordon Distillers Limited,
Invergordon Gin Limited,Isle of Jura Distillery Company Limited, Jarvis
Halliday & Company Limited, John E McPherson & Sons Limited, Kensington
Distillers Limited, Kyndal Spirits Limited, Leith Distillers Limited, Loch
Glass Distilling Company Limited, Longman Distillers Limited, Lycidas (437)
Limited, Pentland Bonding Company Limited, Ronald Morrison & Company
Limited, St The Sheep Dip Whisky Company Limited, Vincent Street (437) Limited,
Tamnavulin-Glenlivet Distillery Company Limited, TDL Realisations Limited, W
& S Strong Limited, Watson & Middleton Limited, Wauchope Moodie &
Company Limited, Whyte & Mackay Distillers Limited, William Muir Limited,
WMB Realisations Limited, Whyte and Mackay Property Limited, Whyte and Mackay
de Venezuela CA and Kl Trustees Limited.
5. The Company, in earlier year, granted interest free loans in foreign
currency aggregating to Rs.7,356.189 Million to Zelinka Limited (Zelinka),
Cyprus, a subsidiary of the Company, fo.r acquisition of long term strategic
investment in Shaw Wallace & Company Limited. Management is of the view
that these loans, from the inception of the grant of loan, in substance, form
part of the Company's net investment in Zelinka as the settlement of these
loans is neither planned nor likely to occur in the foreseeable future and
management intends to convert this loan into investment in share capital of
Zelinka in near future. Accordingly, in accordance with AS 11 – The Effects of
Changes in Foreign Exchange Rates (AS 11), exchange difference aggregating to
Rs. 144.912 Million [including exchange difference aggregating to Rs.36.478
Million recognised in the Profit and Loss Account in the previous year reversed
during the year and disclosed as Prior Period Item in Note 11 (a) below]
arising on such loans has been accumulated in a foreign currency translation
reserve, which at the time of the disposal of the net investment in Zelinka
would be recognised as income or as expenses.
WEBSITE DETAILS
ATTACHED:
Profile
United Spirits Limited (USL) is the largest
Spirits Company in India and among the top three spirits companies in the
world.
Besides Whyte & Mackay and Bouvet Ladubay being 100% subsidiaries of USL,
the company has 17 millionaire brands (selling more than a million cases a
year) in its portfolio and enjoys a strong 59% market share for its first line
brands in India. United Spirits' brands have won the most prestigious awards
for flavors, ranging from Mondial to International Wine and Spirit Competition
(IWSC) to International Taste and Quality Institute (ITQI); more than 80 awards
and certificates. The Company is known to be an innovator in the industry and
has several firsts to its credit like the first pre-mixed gin, the first
Tetrapack in the spirits industry in India, first single malt manufactured in
Asia and the first diet versions of whisky and vodka in India.
USL has a global footprint with exports to over 59 countries. It has a sizeable
presence in India with distilleries and sales offices all across the country,
and a committed team of over 7500 people dedicated to the fulfillment of the
company's mission. It has established manufacturing and bottling plants in
every state of India. In addition, to deliver its products to customers located
anywhere in India, USL has established a robust distribution network covering
the whole country.
Press Release
United
Spirits Ltd. (USL) Secures Presence in Tamil Nadu – Balaji Distilleries Limited
to merge into USL
PRESS
RELEASE
Nov 29, 2008
Bangalore , November 29, 2008 : The Board of Directors of
USL at their meeting held today, approved the merger of Balaji Distilleries
Limited (BDL) into USL in an all stock deal. The merger will be effective from
1st April ’09, subject to the requisite approvals from the relevant Statutory
Authorities and stakeholders.
Based on the recommendation by the independent valuation firms, the Boards of
both Companies agreed that on a fully diluted basis, shareholders of BDL, will
be allotted 2 shares in USL for every 55 shares held in BDL.
Commenting on transaction, Dr. Vijay Mallya, Chairman of the UB Group said in a
communication that this merger would de-risk USL’s significant earnings in an
important market and would give UB the strategic advantage to consolidate the
Group’s leadership position in a critical, large and growing State.
BDL has been a Contract Manufacturing Unit for UB Group ever since its
inception in the year 1983. BDL has a large “state of the art” Distillery and
Brewery in Tamil Nadu. The Distillery has a capacity to produce ten million
cases per year while the Brewery has a capacity of Nine million dozens per
annum expandable to about 12 mio dozens.
The UB Group sells about 12 mio cases each of the Spirits and Beer in Tamil
Nadu, growing at about 15% annually.
Tamil Nadu is one of the largest and strategically important markets for USL,
accounting for nearly 15% of the company's national volumes. The state
ranks 5th in terms of contributions to USL's bottomline. Currently USL has a
market share of about 51% in first line brands in the State.
The Tamil Nadu market accounts for almost 18% of UB Group’s brewing business
and about 19% of its national contribution. BDL accounts for 60% of UB’s beer
volumes in the state. UB enjoys 59% market share in the State’s beer market
with 73% share in mild segment and 54% share in strong segment.
Tamil Nadu is the only key State where USL does not own a production facility,
primarily due to regulatory constraints that prevented setting up of new units,
and also transfer of existing licences. The State also does not permit import
of products from outside Tamil Nadu. The company's ability to realise full
potential in the state has been held back mainly on this account. This
acquisition would give it the required leeway to meet the ever increasing
demand for its brands in the State.
The valuation was carried out by Grant Thornton and Lodha & Company.
PricewaterhouseCoopers Pvt. Ltd. and Ambit Corporate Finance Pte Limited,
advised the Company on the transaction.
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 records 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.47.08 |
|
UK Pound |
1 |
Rs.71.17 |
|
Euro |
1 |
Rs.66.98 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
7 |
|
--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 |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
70 |
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. |
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 |
|