MIRA
INFORM REPORT
|
Report Date : |
28.02.2011 |
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 |
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Country : |
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Financials (as on) : |
31.03.2010 |
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Date of Incorporation : |
31.03.1999 |
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Com. Reg. No.: |
8-24991 |
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CIN No.: [Company
Identification No.] |
L01551KA1999PLC024991 |
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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 |
RATING & COMMENTS
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MIRA’s Rating : |
A (65) |
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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 190000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and a reputed company having fine track.
Financial position of the company appears to be sound. Directors are reported
to be experienced and respectable businessmen. Trade relations are reported
as fair. Business is active. Payments are reported to be regular and as per
commitments. The Company can be considered good for normal business dealings at
usual trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – April 1, 2010
|
Country Name |
Previous Rating (31.12.2009) |
Current Rating (01.04.2010) |
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|
A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
|
Registered Office : |
UB Tower Level 9, UB City # 24, Vittal |
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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, |
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Factory : |
Located at:
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DIRECTORS
As on 31.03.2010
|
Name : |
Mr. Vijay Mallya |
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Designation : |
Chairman |
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Name : |
Mr. S R Gupte |
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Designation : |
Vice Chairman |
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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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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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Profile : |
Qualified Chartered Accountant. He ranked 3rd in the |
KEY EXECUTIVES
|
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 31.12.2010
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding of Promoter and Promoter Group |
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|
10 |
- |
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36,628,250 |
29.16 |
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36,628,260 |
29.16 |
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Total shareholding of Promoter and Promoter Group (A) |
36,628,260 |
29.16 |
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(B) Public Shareholding |
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4,617,198 |
3.68 |
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35,237 |
0.03 |
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7,521 |
0.01 |
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114,328 |
0.09 |
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62,907,057 |
50.09 |
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67,681,341 |
53.89 |
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2,317,429 |
1.85 |
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6,907,477 |
5.50 |
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4,384,393 |
3.49 |
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6,254,961 |
4.98 |
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65,353 |
0.05 |
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173,952 |
0.14 |
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5,091,777 |
4.05 |
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|
6,259 |
- |
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15,454 |
0.01 |
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902,166 |
0.72 |
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19,864,260 |
15.82 |
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Total Public shareholding (B) |
87,545,601 |
69.71 |
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Total (A)+(B) |
124,173,861 |
98.87 |
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(C) Shares held by Custodians and against which Depository Receipts
have been issued |
- |
- |
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- |
- |
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1,420,468 |
1.13 |
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1,420,468 |
1.13 |
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Total (A)+(B)+(C) |
125,594,329 |
100.00 |
(1) Indian
Individuals / Hindu Undivided Family
Individual shareholders holding nominal
share capital up to Rs.0.100 MillionBUSINESS DETAILS
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Line of Business : |
Manufacture, Purchase and |
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Products: |
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Brand Names : |
Dalmore, Jura, Whyte and Mackay, Black Dog, Antiquity, Signature,
Royal Challenge, McDowell’s No. 1, Celebration Rum, Bouvet Ladubay, Pinky, Romanov,
White Mischief, etc. |
PRODUCTION STATUS (AS ON 31.03.2010):-
|
Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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Beverage Alcohol |
Liters |
169660000 |
134172000 |
252065462 |
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Notes:
i. Includes alcohol produced and bottled out of purchase
ii. The Company's applications for the Carry on Business licenses for
certain Units are still pending with the authority.
iii. The Licensed and Installed Capacity has been certified by the
Company's management an
iv. Includes production at manufacturing facilities taken on lease.
GENERAL INFORMATION
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Suppliers : |
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No. of Employees : |
Above 7000 (Approximately) |
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Bankers : |
Not Available |
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Facilities : |
Notes: Out of the above
loans: (a) Secured by a
charge on certain fixed assets of the Company including Land and Building. (b) Secured by a
charge on certain fixed assets of the Company including Land and Buildings
and also by pledge of certain investments held by other companies. (c) Secured by a
second charge on certain fixed assets of the Company including Land and
Building. (d) Foreign Currency
External Commercial Borrowings secured by: (i) charge on certain fixed assets
of the Company including Land and Building, a Trademark and a fixed deposit
with bank. (ii) charge on
specific fixed deposit with bank. (e) Secured by a
hypothecation of specific fixed assets acquired under respective agreements. – (f) Secured by a
hypothecation of maturing stock held in overseas branch and charge on certain
fixed assets including Land and Building and pledge of certain investments
held by the other companies. (g) Secured by a
charge on certain fixed assets of the Company including Land and Building,
pledge of shares held by the USL Benefit Trust and hypothecation of certain
Trademarks of the Company. (ii) Secured by
a hypothecation of inventories (except those held outside (iii) Secured against assets acquired under lease agreements. |
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Banking
Relations : |
- |
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Auditors : |
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Name : |
Price Waterhouse Chartered Accountants |
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Address : |
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Associates/Subsidiaries : |
1) United
Spirits Nepal Private Limited (USNPL) 2) Asian
Opportunities and Investment Limited (AOIL) 3) Bouvet
-Ladubay S.A.S (BL)^ 4) Chapin
Landais S.A.S (CL)^ 5) Palmer Investment
Group Limited(PIG) 6) Montrose
International SA (MI)^ 7) JIHL Nominees
Limited (JIHL) 8) RG Shaw and
Company Limited (RGSC) 9) Shaw Darby
and Company Limited (SDC) 10) Shaw Scott
and Company Limited (SSC 11) Thames Rice
Milling Company Limited (TRMCL) 12) Shaw Wallace
Overseas Limited (SWOL)^ 13) McDowell ( 14) USL Holdings
Limited (USLHL) 15) Royal
Challengers Sports Private Limited (RCSPL) 16) Spring
Valley Investment Holdings Inc (SVIHI)^ 17) USL Holdings
( 18) United
Spirits ( 19) United
Spirits ( 20) Shaw Wallace
Breweries Limited (SWBL) 21) Ramanretti
Investment and Trading Limited (RITL)^ 22) Daffodils
Fragrance and Flavours Private Limited (DFFPL) 23) Four Seasons
Wines Limited (FSWL) 24)Herbertsons
Limited (HL) 25) United
Vintners Limited (UVL) 26) United
Alcobev Limited (UAL) 27) McDowell
Beverages Limited (MBL) 28) McDowell and
Company Limited 29) Jasmine
Flavours and Fragrances Limited 30) Liquidity Inc 31) Whyte and
Mackay Group Limited^ 32) Whyte and
Mackay Holdings Limited^ 33) Whyte and
Mackay Limited (WandM) 34) Whyte and
Mackay Warehousing Limited^ 35) Bruce and
Company ( 36) Charles
Mackinlay and Company Limited^ 37) Dalmore Distillers
Limited^ 38) Dalmore
Whyte and Mackay Limited^ 39) Edinburgh
Scotch Whisky Company Limited^ 40) Ewen and
Company Limited^ 41) Fettercairn
Distillery Limited^ 42) Findlater
Scotch Whisky Limited^ 43) Glayva
Liqueur Limited^ 44) Glentalla
Limited^ 45) GPS
Realisations Limited^ 46) Grey Rogers
and Company Limited^ 47) Hay and
MacLeod Limited^ 48) Invergordon
Distillers (Holdings) Limited^ 49) Invergordon
Distillers Group Limited^ 50) Invergordon
Distillers Limited^ 51) Invergordon
Gin Limited^ 52) Isle of Jura
Distillery Company Limited^ 53) Jarvis
Halliday and Company Limited^ 54) John E
McPherson and Sons Limited^ 55) Kensington Distillers Limited^ 56) Kyndal
Spirits Limited^ 57) Leith
Distillers Limited^ 58) 59) Longman
Distillers Limited^ 60) Lycidas
(437) Limited^ 61) Pentland
Bonding Company Limited^ 62) Ronald
Morrison and Company Limited^ 63) St The Sheep
Dip Whisky Company Limited^ 65)
Tamnavulin-Glenlivet Distillery Company Limited^ 66) TDL
Realisations Limited^ 67) W and S
Strong Limited^ 68) Watson and
Middleton Limited^ 69) Wauchope
Moodie and Company Limited^ 70) Whyte and
Mackay Distillers Limited^ 71) William Muir
Limited^ 72) WMB
Realisations Limited^ 73) Whyte and
Mackay Property Limited^ 74) Whyte and
Mackay de Venezuela CA^ 75) KI Trustees
Limited^ 76) USL 77) Tern Distillery Private Limited(Tern)* * Became a subsidiary during the year ^ No transactions during the year. |
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Associates: |
Wine Soc. of
India Private Limited^ ^ No
transactions during the year. |
CAPITAL STRUCTURE
As on 31.03.2010
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
245000000 |
Equity Shares |
Rs. 10/- Each |
Rs.2450.000 millions |
|
84200000 |
Preference Shares |
Rs. 10/- Each |
Rs.842.000 millions |
|
|
Total |
|
Rs.3292.000
millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
125594329 |
Equity Shares |
Rs. 10/- Each |
Rs.1255.943
Millions |
Of the above,
1. 51,719,968
(2009: 51,719,968) Equity Shares were allotted as fully paid up on July 9, 2001
to the shareholders of the erstwhile McDowell and Company Limited, pursuant to
the schemes of Amalgamation for consideration other than cash.
2. 34,010,521
(2009: 34,010,521) Equity Shares were allotted as fully paid on November 6,
2006 to Equity Shareholders of erstwhile Herbertsons Limited, Triumph
Distillers and 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
(2009: 8,751,381) Equity shares of Rs.10/- each fully paid up represent
17,502,762 (2009: 17,502,762) Global Depository Shares issued by the Company on
March 29, 2006.
4. 5,681,326
(2009: 5,681,326) Equity shares of Rs.10/- each fully paid up were allotted
consequent to conversion of 100,000, 2% Convertible Bonds in Foreign Currency
during 2008.
5. 7,749,121
(2009: Nil) Equity Shares were allotted as fully paid up on July 24, 2009 to
the shareholders of the erstwhile Shaw Wallace and Company Limited, pursuant to
the scheme of Amalgamation for consideration other than cash
6. 17,681,952
(2009: Nil) Equity shares of Rs.10/- each fully paid up were allotted to
eligible Qualified Institutional Buyers through a Qualified Institutions Placement
on October 23, 2009
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
1255.943 |
1001.633 |
1001.633 |
|
|
2] Share Capital Suspense |
0.000 |
77.491 |
0.000 |
|
|
3] Reserves & Surplus |
46601.859 |
29708.037 |
19091.596 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
47857.802 |
30787.161 |
20093.229 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
25892.537 |
13064.790 |
11067.394 |
|
|
2] Unsecured Loans |
9268.220 |
6362.590 |
553.385 |
|
|
TOTAL BORROWING |
35160.757 |
19427.380 |
11620.779 |
|
|
DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
|
|
Foreign Currency Monetary Items Translation Difference |
0.000 |
311.347 |
0.000 |
|
|
|
|
|
|
|
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TOTAL |
83018.559 |
50525.888 |
31714.008 |
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APPLICATION OF FUNDS |
|
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|
|
|
|
|
|
|
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FIXED ASSETS [Net Block] |
7066.519 |
5926.335 |
4928.344 |
|
|
Capital work-in-progress |
395.842 |
282.632 |
361.223 |
|
|
|
|
|
|
|
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INVESTMENT |
12539.973 |
20514.765 |
6571.557 |
|
|
DEFERREX TAX ASSETS |
64.874 |
216.403 |
5.162 |
|
|
Foreign Currency Monetary Items Translation Difference |
323.641 |
0.000 |
0.000 |
|
|
|
|
|
|
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|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
8291.882
|
6539.691
|
3843.829 |
|
|
Sundry Debtors |
9461.639
|
6650.397
|
4134.998 |
|
|
Cash & Bank Balances |
2464.670
|
848.628
|
280.013 |
|
|
Other Current Assets |
3268.493
|
2103.003 |
1187.662 |
|
|
Loans & Advances |
50471.227
|
16709.818
|
18158.071 |
|
Total
Current Assets |
73957.911
|
32851.537
|
27604.573 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
7568.762
|
5820.107 |
|
|
|
Other Current Liabilities |
2943.689
|
2762.546
|
7298.083 |
|
|
Provisions |
817.750
|
683.131
|
458.768 |
|
Total
Current Liabilities |
11330.201
|
9464.644
|
7756.851 |
|
|
Net Current Assets |
62627.710
|
23386.893
|
19847.722 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
83018.559 |
50327.028 |
31714.008 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
45241.276 |
37476.623 |
28441.815 |
|
|
|
Income arising from sale of manufactures under Tie up |
3460.158 |
2958.308 |
2916.525 |
|
|
|
Other Income |
1151.584 |
1094.840 |
859.920 |
|
|
|
TOTAL (A) |
49853.018 |
41529.771 |
32218.260 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Material |
27468.827 |
23118.263 |
15843.843 |
|
|
|
Manufacturing and other Expenses |
14080.812 |
11500.545 |
9913.530 |
|
|
|
Exchange Loss (net) |
84.090 |
0.000 |
0.000 |
|
|
|
Exceptional and Other Non Recurring Items |
(699.953) |
0.000 |
0.000 |
|
|
|
TOTAL (B) |
40933.776 |
34618.808 |
25757.373 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
8919.242 |
6910.963 |
6786.999 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
3096.196 |
1957.794 |
1285.113 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
5823.046 |
4953.169 |
5501.886 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
386.302 |
361.565 |
326.112 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
5436.744 |
4591.604 |
5175.774 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
1676.529 |
1624.980 |
2063.015 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
3760.215 |
2966.624 |
3112.759 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
9486.445 |
7018.342 |
NA |
|
|
|
|
|
|
|
|
|
|
Profit
Transferred on Amalgamation |
0.000 |
103.983 |
NA |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Proposed Dividend on Equity Shares |
313.986 |
215.825 |
NA |
|
|
|
Corporate tax on Proposed Dividend |
52.149 |
36.679 |
NA |
|
|
|
Transfer to General Reserve |
500.000 |
350.000 |
NA |
|
|
BALANCE CARRIED
TO THE B/S |
12380.525 |
9486.445 |
7018.342 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
57.135 |
42.142 |
19.597 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
2083.146 |
1470.157 |
538.831 |
|
|
|
Stores & Spares |
3.416 |
2.691 |
0.794 |
|
|
|
Others |
191.992 |
25.131 |
28.153 |
|
|
TOTAL IMPORTS |
2278.554 |
1497.979 |
567.778 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
32.51 |
27.49 |
- |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2010 (1st
Quarter) |
30.09.2010 (2nd
Quarter) |
31.12.2010 (3rd
Quarter) |
|
Net Sales |
14706.100 |
13655.300 |
19694.000 |
|
Total Expenditure |
11826.800 |
11435.600 |
16970.300 |
|
PBIDT (Excl OI) |
2879.300 |
2219.700 |
2723.700 |
|
Other Income |
0.000 |
0.100 |
21.300 |
|
Operating Profit |
2879.300 |
2219.800 |
2745.000 |
|
Interest |
965.100 |
982.900 |
1038.200 |
|
Exceptional Items |
0.000 |
0.000 |
368.400 |
|
PBDT |
1914.200 |
1236.900 |
2075.200 |
|
Depreciation |
91.200 |
104.400 |
125.800 |
|
Profit Before Tax |
1823.000 |
1132.500 |
1949.400 |
|
Tax |
612.500 |
386.500 |
649.800 |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
1210.500 |
746.000 |
1299.600 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
|
Net Profit |
1210.500 |
746.000 |
1299.600 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
PAT / Total Income |
(%) |
7.54
|
7.14 |
16.06 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
12.02
|
12.25 |
18.20 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
6.71
|
11.84 |
15.91 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.11
|
0.15 |
0.26 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
0.97
|
1.70 |
0.96 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
6.53
|
0.30 |
2.27 |
LOCAL AGENCY FURTHER INFORMATION
Histroy:
Subject 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
As at 1st April 2000, the company name was changed from McDowell Sprits Limited
to McDowell and 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,
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 and Company Limited
pursuant to the Regulations 10 and 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 and 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 and 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 and 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
FINANCIAL RESULTS:
The Directors
propose a Dividend on the Equity Shares of the Company at the rate of Rs. 2.50
per share, including on 17,681,952 Equity Shares of Rs.10/- each fully paid up
allotted during the year to the Qualified Institutional Buyers under a
Qualified Institutions Placement.
CAPITAL
Consequent to
amalgamation of Shaw Wallace and Company Limited and Primo Distributors Private
Limited, the Authorised Capital of the Company stood increased from
Rs.1,200,000,000/- divided into 110,000,000 Equity Shares of Rs.10/- each and
10,000,000 Preference Shares of Rs.10/- each to Rs.3,292,000,000/- divided into
245,000,000 Equity Shares of Rs.10/- each and 84,200,000 Preference Shares of
Rs.10/- each.
During the year ,
the Issued, Subscribed and Paid-up Equity Share Capital of the Company stood
increased from Rs.1,001,632,560/- divided into 100,163,256 Equity Shares of
Rs.10/- each to Rs.1,255,943,290/- divided into 125,594,329 Equity Shares of
Rs.10/- each by issue and allotment of 7,749,121 Equity Shares of Rs.10/- each,
fully paid-up, to the shareholders of Shaw Wallace and Company Limited
consequent to its amalgamation with the Company and issue and allotment of
17,681,952 Equity Shares of Rs.10/- each, fully paid-up, to certain Qualified
Institutional Buyers under a Qualified Institutions Placement.
PERFORMANCE OF THE
COMPANY
The Company has
turned in a stellar performance despite a challenging operating environment.
Achieving sales of over 100 Million cases is a major milestone, confirming the
Company's place as the No. 2 Spirits Marketeer in the World.
A difficult cost
regime has been substantially mitigated by a combination of up-selling, cost
control and efficiency increases.
AMALGAMATION OF
BALAJI DISTRILLERIES LIMITED WITH THE COMPANY
At the Extraordinary
General Meeting held on April 21, 2010, the shareholders have approved, by way
of a Special Resolution, the Scheme of Arrangement between Balaji Distilleries
Limited (‘BDL’), Chennai Breweries Private Limited (‘CBPL’) and the Company
(‘the Scheme’) and the Draft Rehabilitation Scheme (‘DRS’) of BDL as circulated
by the Hon’ble Board for Industrial and Financial Reconstruction (‘the BIFR’)
vide Order dated February 19, 2010. The Scheme envisages transfer of the
Brewery Division Undertaking of BDL to CBPL and merger of BDL other than the
Brewery Division Undertaking into the Company with effect from April 1, 2009.
The Scheme and the
DRS are pending with the Hon’ble BIFR formed under the provisions of Sick
Industrial Companies (Special Provisions) Act, 1985, for approval and the
Scheme shall become effective on receipt
of such approval.
SUBSIDIARIES
During the year ,
Tern Distilleries Private Limited having a unit for manufacture of Extra
Neutral Alcohol in Andhra Pradesh, became a wholly owned subsidiary of the
Company consequent upon the acquisition of its entire paidup share capital by
the Company.
Consequent to
allotment of equity shares to another investor and to the Company, Four Seasons
Wines Limited ceased to be a wholly owned subsidiary but continues to be a
subsidiary of the Company.
Shaw Wallace and
Company Limited, which was a subsidiary of the Company and had merged with the
Company during the year , was subsequently dissolved without winding up by the
order of the Hon’ble High Court at
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 and Loss Account, Directors’ Report, Auditors’ Report and other
particulars of the Subsidiary Companies as on March 31, 2010 have not been
attached with the Accounts of the Company. The Annual Accounts of the
Subsidiaries and the related detailed information will be made available to any
shareholder of the Company seeking such information at any point in time.The
Annual Accounts of the Subsidiary Companies will also be kept for inspection by
any shareholder of the Company at its Registered Office and that of the
Subsidiary Companies concerned, during the business hours on any working day.
The Accounting
year of United Spirits Nepal Private Limited (USNPL), the Company’s Subsidiary
in
For the purpose of
compliance under Accounting Standard - 21, “Consolidated Financial Statement”
presented by the Company includes the financial information of its
subsidiaries.
Management Discussion and Analysis Report:
INDUSTRY OVERVIEW:
Alcoholic
Beverages have been a part of Indian folklore, with ‘Somras’ being the nectar
to the Gods in ancient
The industry today
is a combination of branded liquors across multiple price points and a
commodity space operating at the lowest price point in the market. Locally
produced products like Indian Made Foreign Liquor (IMFL), Beer and Wine operate
in the branded space, apart from imported Bottled In Origin (BIO) products.
The global spirits
industry is estimated at over 2 billion cases - with the Indian industry
accounting for about 12% at 236 mio cases.
The Company is by
far, the lead player in
The Indian spirits
industry is predominantly a ‘browns’ market with Whisky, Rum and Brandy being
the prominent flavours and White Spirits (Gin and Vodka) having only 5% share.
This is contrary to International trends, where ‘Whites’ have a predominant
presence.
With a large and
growing number of youth coming into the legal drinking age category, the
outlook for the industry is buoyant. In sharp contrast to countries like the
USA and China which have an ageing population, and have passed the ‘demographic
window’, India is still comparatively ‘young’ with over half the 1.2 billion
population under 25 years of age. The increasing trend of urbanization and
exposure to global life styles will further accelerate growth.
B. REGULATORY
ENVIRONMENT:
The Constitution
of India places the regulation and taxation of alcoholic beverages in the
domain of the State rather than of the Federal Government. Even though the
Federal Government is entrusted with the authority to licence
The proposed GST
regime could have played a part in smoothening Inter-State trade and commerce
but with the States reluctant to give up their financial autonomy, particularly
their control on the alcoholic beverages industry, a common alcoholic beverage
market for
C. BUSINESS
ANALYSIS:
During fiscal
2010, costs of Extra Neutral Alcohol (ENA), the company’s primary ingredient,
saw a step-up from the average price of the previous fiscal. However, on the
positive side, prices during the year remained by and large flat and the Company did not experience
the spikes witnessed during the previous fiscal. Concious initiatives like
long-term contracts, switching between alternative feedstock like grain and
molasses and capitalizing on the increased availability of molasses during the
2009- 10 crushing season helped the Company to reduce the impact of high
molasses/ENA prices.
The reduction in
Central excise duties introduced as a fiscal relief measure by the Govt. during
2009-10 has brought about some savings in the cost of packaging materials.
A constant review
of brand-wise profitability helped to ensure that sales of low-end brands were
undertaken only on a very selective basis and on sound economic justification.
Consequently, while main-line products added on 10.2 mio cases during fiscal
2010, the low-end products added on only 1.7 mio cases in sales. However, with
the sales of the main line brands at 91% of the total sales, it will be
imperative for the Company to focus on profitable growth even if it is at the
lower end of the market.
Sales of the
Company’s brands grew to 100.2 Million cases, an increase of 14% over the 88.3
mio cases of the previous fiscal. Together with the brands of the international
subsidiaries, the sales volume crossed 102 Million cases.
MARKETING:
The McDowell’s
No.1 range of alcoholic beverages, comprising whisky, brandy and rum, ended
fiscal 2010 with sales of 35.7 mio cases, up 13% from the 31.5 mio cases of the
previous fiscal, thereby retaining its pride of place as the largest umbrella
brand in alcoholic beverages.
No.1 McDowell’s
Whisky occupies the 3rd spot internationally in the whisky rankings. McDowell’s
No.1 Brandy continues to be the largest selling brandy in the world with sales
of 9.8 mio cases. McDowell’s No.1 Celebration Rum has far out sold its
competition in
Bagpiper Whisky
ended the year in the numerouno position as the largest whisky in the world,
with sales of over 16 mio cases.
During the year
the Company added on its 20th Millionaire (a brand that sells more
than a million cases in a fiscal year) in Bagpiper Rum. The Company has now 3
brands that sell over 10 mio cases each in addition to two that sell between 5
and 10 mio cases each and every fiscal year.
The company
believes in giving the consumer a better experience and to this end, has
constantly upgraded both the packaging and the blends of its brands. During the
year the company introduced the Black Dog 18-Year Old
Whisky – the
packaging and blend have both received outstanding reviews from consumers.
The Company’s
leading brands and key markets have contributed significantly to the sales growth.
In order to economically source the ever-growing volumes, the company has tied
up additional capacities through new contract manufacturing arrangements
wherever its own capacities have been insufficient to meet the demand.
Sales of the
company’s overseas subsidiaries viz., Whyte and Mackay, Bouvet Ladubay and
Liquidity Inc. have registered good growth in international markets as also in
the Indian market where they have been launched through the USL network. Whyte
and Mackay Special, a mid-range Scotch, was launched in the Indian market as a
Bottled in
OUTLOOK:
A substantial
portion of the Company’s sales are to monopoly distribution agencies owned by
State Governments. Consequently price increases, even to negate inflation, are
difficult to come by. During fiscal
2010, the buying agency in the state of Andhra Pradesh granted a price increase
after a long gap of 7 years. This has improved profitability in this large market.
USL's leadership status across all States helps in securing price increases in
some or other states.
The Company
continues its efforts to shore up profitability through a judicious blend of
price increases, premiumisation in sales and cost control.
FIXED ASSETS
- Land – Freehold
and Leasehold
- Buildings
- Plant and
Machinery
- Furniture and
Fixtures
- Office
Equipments
- Finance Lease
- Vehicles
- Aircraft
- Trade Mark,
Formulae and License
WEBSITE DETAILS
ATTACHED:
Profile
Subject is the largest spirits company in
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
Premium brands like Whyte and Mackay and Bouvet Ladubay are 100%
subsidiaries of USL.
United Spirits' brands have won the most prestigious awards for flavors
including Mondial, International Wine and Spirit Competition (IWSC) and
International Taste and Quality Institute (ITQI). The Company has been
recognized in the industry as an innovator with several firsts to its credit
like the first pre-mixed gin, the first Tetrapack in the spirits industry in
Subject has a well-established global network with exports to over 59
countries. It has a sizeable presence in
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
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.45.37 |
|
|
1 |
Rs.73.25 |
|
Euro |
1 |
Rs.62.68 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
7 |
|
--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 |
|
65 |
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 |
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 |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or
its officials.