Skol breweries ltdannualreports


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I extend my warm greetings to all of you and have the pleasure of presenting the Annual Report for the year 2007-08.

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Skol breweries ltdannualreports

  1. 1. SKOL Breweries Limited Tel +91(0)22 - 67103890-931, Mahal Industrial Estate, Fax +91(0)22 - 67103894Mahakali Caves Road,Andheri East, Mumbai - 400 093Maharashtra, India SKOL Breweries Limited Annual Report 2008 Printed by Print House design:
  2. 2. Managing Director Speaks prospects of the Industry and the Group. This time the conference was held in Our core brands are... India keeping in mind the growth Hayward’s 5000 potential of the Indian beer market and Launched in 1983, Hayward’s 5000 is the way the Indian economy has been synonymous with strong beer and is one performing. The holding of the of the largest selling beers in India. Conference in India shows the The hallmark of an original and authentic commitment and confidence that the strong beer, it perfectly combines strength SABMiller Group has in India, in the and quality to meet the high expectations management team here and in India’s of today’s demanding consumers. growth story. Hayward’s 5000 has recorded a growth I am happy to report that the year of 13%. The growth could have been 2007-2008 has been a good year for much higher but for our inability to the Company. The Company has made participate fully in Tamil Nadu. a profit of Rs 34.4 Crores. The net During the year under review the Brand turnover of the Company has increased has signed up Bollywood superstars from Rs. 897.59 crores to Rs. 1086.67 Mr. Sanjay Dutt and Mr. Sunil Shetty as crores resulting in a growth of 25%. brand ambassadors. The macho image We are happy to say that the net of the stars goes well with the strong turnover has crossed Rs.1000 crores. image of the Brand. This association will take the Brand to new heights. Royal Challenge Sales in Rs. Crores 1200 Launched in the year 1983, Royal Challenge Premium Lager is theDear Shareholders, 1086 second largest selling mild beer in India. The brand positioning is that this is theI extend my warm greetings to all of you 1000 beer for the discerning consumer who hasand have the pleasure of presenting the the confidence to make a choice based 897Annual Report for the year 2007-08. on superior taste and knowledge andThe Indian economy is generally on a 800 stand apart rather than be part of aroll and the GDP growth rate has been 8.7% for the year ended March 2008. 611 It offers a difference with an edge.This is commendable as the last three 600 Besides its international class packaging,years growth rate has been around 9%. 501 premium image and path breakingThe only concern now is the slow rate advertising, what sets the brand apartof agricultural growth, a marginal slow 400 is a distinctly smooth and easydown in manufacturing sector flowing taste.and the biggest challenge being controlof inflation primarily led by galloping 200 Royal Challenge has grown by 12.8%.oil prices. In Andhra Pradesh, the largest beer market in the Country, the brand is theThe consumer confidence and raising market leader with a mild beer segment 0income levels help in accelerating 2005 2006 2007 2008 share of 52.8% and has grown by 20.9%.the momentum in the beer industry. YearsIncreasing urbanization and development Knockoutof a large middle class is bringing in new Launched in 1984, Knock Out has clearly The industry has grown at 14.3% and carved for itself a distinctive segment –consumers, with new attitudes and our growth is 15.8%, which is well abovebehaviors towards beer. “The Strongest Beer” and is the 3rd largest the Industry’s average. This growth has, selling strong beer brand in the country.With the Indian economy doing so well however, been limited by production It has continued to perform well and haseveryone is looking at India, SABMiller capacity which is being addressed. grown at 20.5% over the pervious no exception. Every three years the Your Company is taking steps to The brand has strong presence inSABMiller group has a global leadership increase its manufacturing capacity not most southern and central states in India.conference in which the top 300 only to meet the present demand but The brand has Kannada action heroexecutives meet to discuss the future also the future demand. Mr. Darshan as its ambassador. SKOL Breweries Limited 1
  3. 3. Foster’s more responsive and in tune with market putting up will have the latest technologyCompleted one year after coming into the conditions. for conserving water and we willSABMiller stable. The Brand had not been On the manufacturing front there has benchmark our water usage to globalperforming up to its potential before it was been an all round improvement in the standards. Even in our Saanjhi Unnatitaken over by us on account of production Company. Water usage per HL is down programme we are looking at ways toand distribution constraints. We are happy 14%, Power Consumption is down 6%. grow barley using less state that the decline which the brand This is in addition to the saving of 14% In terms of our Corporate Socialwas facing has not only been stemmed in water and 13% in power last year. Responsibility, an agreement has beenbut the brand has grown over 45%. These actions continue to enhance our signed with the ILO for promotingThe Brand is now available all over India. competitiveness in the market. HIV/AIDS awareness. The Company’sFosters is a clear leader in the premium Saanjhi Unnati Programme forsegment both in volume and image terms. De-regulation of the market remains the biggest challenge for the Industry. There development of Barley cultivation inIt leads the development of what we call India has been progressing very well andthe worthmore segment in India. has been some progress but a lot needs to be done. Tamil Nadu opening its a large number of farmers particularly inFor the year ended March 08 we had market for imports from other states is Rajasthan have been all India market share of 34.8%. good news, considering that it is the We believe that the Saanjhi UnnatiThe Company is in the forefront of new Second biggest beer market in India. programme will in the long run help us toproduct development and firmly believes But the import duty fees being charged be self sufficient in Barley and at thethat in order to grow the market it has to by Tamil Nadu are on the higher side. same time will have a positive impact oncontinuously innovate. As a part of this Your Company along with AIBA is in the the lives of the farmers, thereby being ainnovation the Company proposes to forefront of lobbying with the various win-win situation for both.launch Indus Pride in the Mild segment state governments for the rationalizationwhich will be Indias first 100% malt- As India is one of the fastest growing in policies across states in this Industry. markets, your Company will continue tobased Beer alongwith a 100% malt-basedbeverage. The beer has been specially Your Company believes in sustainable receive strong regional and globaldeveloped in accordance with research growth. Water is very important to backing from SABMiller, and access tofindings to suit the Indian tastes. sustaining of life and a critical raw its intellectual, technology, brands and material for our industry. Your Company human capital.Your Company has introduced its global believes in saving water and has adoptedbrand Peroni in Mumbai last year and the I wish to thank each one of you for your the 5R philosophy at its manufacturing support. We look forward to an excitingsame has also been launched in New locations. Namely, Replenish, Reduce,Delhi and Bangalore. Peroni Nastro year ahead of us. Recycle, Re-use and Redistribute. YourAzzurro is an intensely crisp, dry and Company has tied up with CII and otherrefreshing lager, with a clean character & stakeholders to identify opportunities toclarity. It is expertly brewed in Italy to the Cheers manage watersheds and harvesting oforiginal recipe since 1963 and has an rain water to augment the reserves that Jean - Marc Delpon de Vauxunmistakable touch of Italian style. we have. All the new plants we areThis premium beer uses the finest varietyof spring-planted barley and the highestquality maize, malts and hops. It has beenvery well received in the market.In Mumbai it already has 35% marketshare of the imported beer market.The Company is evaluating the market tosee which other international brands it canlaunch in India.During the last couple of years five majorinternational brewers have entered into theIndian Beer market. With Heineken likelyto partner UB the market dynamics isgoing to undergo a sea change. Withincreased competition the market is onlyexpected to grow.Your Company in order to take thebusiness to the next level of growth hasrestructured itself as an organization inorder to drive profitable growth.The new structure will make the Company
  4. 4. SKOL Breweries LimitedSKOL currently manages nine breweries continuous improvement at all breweries. Central Distilleries & Breweriesacross India. These breweries share a The MEP “tree” symbol is displayed at (CDB),Uttar Pradeshcommon basic function; to brew beer to all breweries and reminds everyone what Brewery capacity was enhanced by thebe sold to our customers. Beer is a we are trying to achieve. commissioning of a new warehouse andbeverage produced by the fermentationof cereal sugars by yeast. The brewingprocess is very similar at all of our THE BREWERY PROCESSbreweries to ensure that are brands are Barley Maltproduced consistently across the country.Throughout the year our breweriesfocused on making sure our processeswere consistent across the country.In addition, much effort has been made MILLING MASHING LAUTERING BOILINGto increase our capability by enhancing WHIRLPOOLINGthe competence levels of our workers,installing new plant and equipment andensuring that all our breweries runsmoothly and according to their design.All this has been done to ensure that our FILTERING MATURING FERMENTING COOLINGcustomers have ready access to ourbrands, at the right price and in perfectcondition.During the year our breweries faced somecommon issues which were dealt with PACKAGING DISTRIBUTIONeffectively. These include variable qualityof raw materials (especially malt and glassbottles), easing environmental stress by Here are some highlights from upgradation of brewing and packagingreducing power and water usage rates our breweries: plants. In January 2008 Fosters Lager wasand improving the quality of our brewing brewed here for the first time. Rochees Breweries (RB), Rajasthanand packaging processes to provide our Management also focused on workplace The brewery motto, “Solid 10 in 10”,customers with the best beer possible. safety and crisis management. A training reflects the team’s commitment toIn addition to brewing beer and achieving the best tasting beer. Developing plan was implemented to improveconsistently meeting market demand, staff capability was a priority in 2007/8. workplace competence even and staff at all our breweries RBL is the “Campus Brewery” focusing on A major clean up operation and a medicaldemonstrated commitment to serving hygiene and cleanliness. camp were held to help improve quality oftheir local communities, protecting the life in the local community. Significant investment has been madeenvironment and assuring the safety and enabling the successful commissioning Pals (PB), Maharashtragood health of everybody working in or of a new can packaging line, effluent and The major effort was to improve quality asvisiting our facilities. water treatment plants, filtration plant the “Campus Brewery” focusing on bestDuring the year SKOL introduced the and yeast drier. Thus the overall capacity practice in bright beer production.concept of “Campus Breweries”. of the brewery was significantly enhanced.This concept is an effective method of A competition was held for brewery staff In the community the team facilitated to design the brewery motto. The winnerdeveloping and communicating learnings plantation of 900 trees, organized blood was “SONERI SOMRAS SONERI SANDHI”.from one brewery to others. This enables donation camp, HIV awarenessother breweries in the group to learn from A training session was held to certify 27 workshops, health camps and polioeach other and develop faster. Campus advanced tasters into the SABMiller Global vaccinations drives.breweries have been set up at our larger (Beer) Tasting System. Delegates werebreweries to perform specific projects, Haryana Breweries (HB), Haryana from all over India.which are of benefit to all the other Construction of a new 1 million hl pa East Coast Breweries (ECB), Orissabreweries in the group. The driving force brewery on the current site commenced. The brewery stepped forward in terms offor this is a manufacturing excellence The existing brewery maintained very high quality and safety management.programme (MEP), which is the tool for quality standards. 2 SKOL Breweries Limited 3
  5. 5. 4 Environment and safety awareness All employees were given basic fire-fighting SICA Breweries (SB), Puducherry sessions were held in the local community. and first aid training. Several workers with A major expansion took place to increase The ECB team also drove HIV awareness more than 25 years service each had their capacity above 300,000 hl pa. Extensive and set up a health camp for the people achievement recognized at a ceremony upgrades took place in Brewing, of Cuttack. in February. Packaging and Utilities supply areas. Employees were encouraged to enjoy Malabar Breweries (MB), Kerala Management focused on workplace themselves at work (“puja, picnics & Brewery capacity has been increased safety and environmental management prizes”). An employee competition was by upgrading cellars tanks and raw improvement. held to decide on the brewery safety materials storage facilities. In August the management statement. brewery was awarded the SABMiller India ECB was nominated by the labour “Best Brewery” award. commissioner to receive the award for the best factory with the “Employer – Employee Relationship” Charminar Breweries (CB), Andhra Pradesh Managed by SKOL since 2003, CBL is our largest brewery. Work also commenced to increase that capacity a further 50% (including a new 21,000 bottles per hour packaging line, draft beer unit, effluent/water treatment plants, solid fuel boiler). The brewery motto is “winning & working in teams”. There has been emphasis on team- building and skills enhancement. Major strides in 2007/8 include implementation of a new maintenance management system and a major reduction in power and water usage ratios (the best in SABMiller India). CBL was runner up in the SABMiller Africa and Asia “Best Brewery” competition. CBL is the “Campus Brewery” for both yeast management and bottle washing. The team has been very active in the community; health care programmes, disease awareness programmes (AIDS, TB, Polio), providing drinking water and street lighting in Shivampet village and helping to develop the local school. Mysore Breweries (MB), Karnataka A new 15,000 units per hour canning line was commissioned. MBL is the “Campus Brewery” for the improvement of bottle labelling and outer packaging appearance. There has been much focus on environment and safety management, both in the brewery and the local community. During the annual “Safety Awareness Week” employees were given training on managing safety in the home. Families were involved and industrial theatre was used as a communication tool.
  6. 6. SKOL Breweries LimitedBoard of Directors Registered OfficeMr. Ari Mervis - Chairman No.1, Mahal Industrial Estate,Mr. Jonathan Andrew Kirby Mahakali Road,Ms. Sue Clark Andheri (East),Mr. Richard (Pete) L Lloyd Mumbai – 400 093Ms. Maya Makanjee - up to 23.06.2008Mr. T.S.R. Subramanian - from 23.06.2008 Corporate OfficeMr. Jean-Marc Delpon de Vaux - Managing Director Jalahalli Camp Road, Yeshwanthpur,Statutory Auditors Bangalore-560 022BSR & Co.,Chartered Accountants Audit CommitteeMaruthi Info-Tech Centre, Mr. Jonathan Andrew Kirby - Chairman11-12/1, Inner Ring Road, Mr. Ari MervisKoramangala, Bangalore – 560 071 Ms. Maya Makanjee - up to 23.06.2008 Mr. Richard (Pete) L Lloyd - from 23.06.2008BankersStandard Chartered BankABN Amro BankThe Hongkong & Shanghai Banking CorporationSociete GeneraleICICI Bank LimitedRegistrar & Share Transfer Agent Share TransferSharepro Services (India) Pvt LtdSatam Estate, 3rd Floor,Above Bank of Baroda, HaryanaCardinal Gracious Road, CDB HBChakala, Andheri (E), Mumbai – 400 099 RB Uttar Pradesh Rajasthan Orissa PALS ECB Maharashtra Andhra Pradesh CB Karnataka MBHB: Haryana BreweriesCDB: Central Distilleries & Breweries MalabarRB: Rochees BreweriesPALS: PALS PondicherryECB: East Coast Breweries Kerala SICACB: Charminar BreweriesMB: Mysore BreweriesMalabar: Malabar BreweriesSICA: SICA Breweries 4 SKOL Breweries Limited 5
  7. 7. NoticeNOTICE is hereby given that the 19th RESOLVED THAT Mr. T.S.R. RESOLVED THAT All other terms and conditions asAnnual General Meeting of the members Subramanian, who in terms of approved by the Centralof the Company will be held at M.C. Ghia Section 260 of the Companies Act, Government and members willHall, Bhogilal Hargovindas Building, 2nd 1956 holds office till the date of this remain same.floor, 18/20, K. Dubash Marg, Behind Annual General Meeting, and in RESOLVED FURTHER THAT in the RESOLVED FURTHER THATPrince of Wales Museum, Kala Ghoda, respect of whom a notice has been event of loss or absence orMumbai – 400 001 on Wednesday, the received from a Member under inadequacy of profits during any10th September, 2008 at 3.00 p.m. to Section 257 of the said Act, be and financial year, the abovetransact the following business: is hereby appointed a Director of the remuneration shall be treated as Company liable to retire by rotation.Ordinary Business: minimum remuneration payable to 06. To consider revision of remuneration Mr. Jean-Marc Delpon de Vaux.01. To receive, consider and adopt the of Mr. Jean-Marc Delpon de Vaux, Audited Balance Sheet as at 31st 07. To consider increase in Borrowing Managing Director of the Company. March, 2008 and the Profit & Loss Powers. Account for the year ended on that To consider and if thought fit, to To consider and if thought fit, to date and the Report of the Directors pass, with or without modification/s, pass, with or without modification/s, and Auditors thereon. the following Resolution as a Special the following Resolution as a Special Resolution:02. To appoint a Director in place of Resolution: Mr. Jonathan Andrew Kirby, who RESOLVED THAT pursuant to the RESOLVED THAT RESOLVED THAT pursuant to RESOLVED THAT retires by rotation at this meeting provisions of Sections 198, 269, Section 293(1)(d) of the Companies and being eligible, offers himself for 309 and 310 and other applicable Act, 1956 and other enabling re-appointment. provisions, if any, of the Companies provisions, if any, of the said Act, Act, 1956 (hereinafter called the03. RESOLVED THAT M/s. BSR & Co., RESOLVED THAT consent be and is hereby accorded “Act”) read with Schedule XIII to the Chartered Accountants, who retire to the Board of Directors of the said Act as amended up to date or at the conclusion of this Annual Company for borrowing any sum or any statutory modification or re- General Meeting be and are hereby sums of money from time to time enactment thereof and subject to appointed as Statutory Auditors of from one or more body corporate, the approval of shareholders and the Company till the next Annual banks or financial institutions or the Central Government, the General Meeting at a remuneration public by way of cash, credit remuneration payable to Mr. Jean- to be fixed by the Board of Directors advances, deposits or other loans Marc Delpon de Vaux is being and billed progressively. whether secured or unsecured by increased as set out below with mortgage, charge, hypothecation orSpecial Business: liberty to the Directors to alter and pledge of the Company’s assets and vary the terms and conditions of the04. To consider appointment of Mr. Ari properties whether movables and/or remuneration as the case may be as Mervis as Director of the Company. immovables or stock-in-trade suggested by the shareholders/ (including book debts, bills, raw To consider and if thought fit, to Central Government and agreed to materials, stores and spare parts pass with or without modification, between the Directors and Mr. Jean- and components in stock or in the following Resolution as an Marc Delpon de Vaux or as may be transit) work-in-progress and debts Ordinary Resolution: varied in the General Meeting. and advances notwithstanding that RESOLVED THAT Mr. Ari Mervis, RESOLVED THAT I. (a) Salary : Up to Rs. 25,00,000/- per the sum or sums so borrowed who in terms of Section 260 of the month together with the money’s, if any, Companies Act, 1956 holds office till already borrowed by the Company The annual increments will be the date of this Annual General (apart from the temporary loans decided by the Board of Directors Meeting, and in respect of whom a obtained from the Company’s depending upon the profitability of notice has been received from a the Company and other relevant Member under Section 257 of the factors. said Act, be and is hereby appointed a Director of the Company liable to retire by rotation.05. To consider appointment of Mr. T.S.R. Subramanian as Director of the Company. To consider and if thought fit, to pass with or without modification, the following Resolution as an Ordinary Resolution:
  8. 8. bankers in the ordinary course of V. The Authorised Share Capital of the SABMiller Asia B.V. 50,000,000 business) may exceed in the Company is Rs. 3,000,000,000 Equity shares of the Company of the aggregate paid-up capital of the (Rupees Three hundred crores only) face value of Rs.10/- each at a Company and its free reserves divided into 300,000,000 Equity premium of Rs. 46/- per share. which have not been set part for any shares of Rs.10/- each. The RESOLVED FURTHER THAT such RESOLVED FURTHER THAT specific purpose but so that the Company has power, from time to new equity shares shall rank pari total amount up to which the time, to increase or reduce its passu with the existing equity shares moneys may be so borrowed shall capital and divide the shares in the of the Company, except that they not at any one time exceed capital for the time being into several shall not rank for dividend, if any, Rs.1500 crores. classes and to attach thereto declared or paid in respect of any respectively such preferential,08. To consider an increase in the financial year of the Company prior deferred, qualified or other special Authorized Share Capital of the to the financial year in which they are rights, privileges conditions or Company: allotted and shall rank for dividend restrictions as may be determined pari passu from the date of their To consider and if thought fit, to by or in accordance with the Articles allotment in respect of the financial pass, with or without modification/s, of Association of the Company and year in which they are allotted. the following Resolution as a Special to vary, modify or abrogate any Resolution. such right, privilege or condition or RESOLVED FURTHER THAT Mr. RESOLVED FURTHER THAT restrictions in such manner as may Jean-Marc Delpon de Vaux and Mr. RESOLVED THAT in accordance RESOLVED THAT for the time being be permitted by Kevin Heydenrych be and are hereby with the provisions of Section 94 the Articles of Association of the jointly and/or severally authorized to and other applicable provisions of Company or the legislative negotiate, execute and deliver any the Companies Act, 1956 (including provisions for the time being in force agreement, letter, deed or document any statutory modification(s) or re- in that behalf. or any amendments or modifications enactment thereof, for the time thereto in connection with the being in force) the existing 09. To consider a preferential issue of aforesaid preferential issue of shares Authorised Share Capital of the shares. in favour of SABMiller Asia B.V. and Company be and is hereby To consider and if thought fit, to to sign, execute, deliver and/or file all increased from Rs. 2,500,000,000 pass, with or without modification/s, relevant forms, filings, reports, (Rupees Two hundred fifty crores the following Resolution as a Special documents, etc., required by any only) divided into 250,000,000 Resolution. applicable regulations including with Equity shares of Rs.10/- (Rupees any regulatory authorities or an ten only) each to Rs. 3,000,000,000 RESOLVED THAT , pursuant to the RESOLVED THAT authorized dealer in terms of Indian (Rupees Three hundred crores only) provisions of Section 81(1A) and exchange control regulations. divided into 300,000,000 Equity other applicable provisions (if any) of shares of Rs.10/- (Rupees Ten only) the Companies Act, 1956, the BY ORDER OF THE BOARD each and the Memorandum of Unlisted Public Companies Pramod S M Association of the Company be (Preferential Allotment) Rules, 2003 Company Secretary altered accordingly. and the relevant provisions of the Memorandum and Articles of Date : 23rd June, 2008 RESOLVED FURTHER THAT the RESOLVED FURTHER THAT Association of the Company, the Place : Bangalore existing Clause V of the consent of the Company be and is Memorandum of Association be and hereby accorded to offer, issue and/ is hereby substituted by the or allot on preferential basis to following Clause V: 6 SKOL Breweries Limited 7
  9. 9. NOTES: unclaimed and unpaid for a period of 5. Mr. T.S.R. Subramanian is a Diploma 7 years and transferred to the Fund in Mathematics from Imperial01. A member entitled to attend and and no payment shall be made in College, London and has done his vote at the meeting is entitled to respect of any such claim. Masters in Public Administration appoint a proxy to attend and vote from Harvard University. He is an on a poll in his/her stead. A proxy Explanatory Statement pursuant to Ex IAS officer who held various need not be a member of the Section 173(2) of the Companies senior positions in the Government Company. Proxies in order to be Act, 1956. including the post of Cabinet effective must be deposited at the Secretary to the Government Item Nos. 2, 4, 5, 6, 7, 8 and 9 registered office of the Company not of India. less than forty-eight hours before A brief resume of the Directors the meeting. A blank proxy form is offering themselves for re-election is Except for Mr. T.S.R. Subramanian, enclosed. given below: no other Director is interested in the aforesaid Resolution.02. The Register of Members and the 2. Mr. Jonathan Andrew Kirby is a Share Transfer Books of the B. Accounting (University of the 6. Mr. Jean-Marc Delpon de Vaux was Company will remain closed from Witwatersrand), CA (SA) and has 21 appointed as Managing Director of 1st September, 2008 to 10th years of rich experience. He is the the Company w.e.f. 1st August, 2006 September, 2008 [both days CFO of SABMiller Africa. at the Board Meeting held on 17th inclusive]. July, 2006. His appointment and Except for Mr. Jonathan Andrew remuneration payable has been03. For convenience of members an Kirby, no other Director is interested approved by the members and the attendance slip is also annexed. in the aforesaid Resolution. Central Government vide its letter Members are requested to affix their dated 18th June, 2007. The 4. Mr. Ari Mervis is a B.Com with major signature at the space provided Remuneration Committee, subject therefore and handover the same at in Economics, Marketing and Commercial Law. He is the Managing to the approval of the Members and the place of meeting. The proxy of a the Central Government has member should mark on the Director of SABMiller Asia. He has held a number of senior positions in approved the increase in attendance slip as Proxy. Members remuneration of Mr. Jean-Marc are also requested to bring their the SABMiller Group. Delpon de Vaux. Accordingly copies of the Annual Report to the Except for Mr. Ari Mervis, no other resolution for increase in venue of the meeting. Director is interested in the aforesaid remuneration of Mr. Jean-Marc Resolution. Delpon de Vaux as Managing04. All queries relating to non-receipt of share certificates after transfer/ Director is placed before you for transmission/ dematerialization/ your approval. The information as rematerialisation, mandates, change required under Schedule XIII Part II, of address, nomination, etc., may be Section II 1 (C) is given below: sent to the Registrar & Share Transfer Agents, M/s. Sharepro I. General Information: Services (India) Pvt. Ltd, Satam Estate, 3rd Floor, Above Bank of 1. Nature of Industry The Company is engaged in Baroda, Cardinal Gracious Road, manufacture and sale of Beer Chakala, Andheri (East), Mumbai 2. Date or expected date of The Company is an existing Company 400 099, Tel: (022) 67720334 / commencement of commercial 67720300, Fax: (022) 28375646, production Email 3. In case of new companies, N.A.05. Pursuant to Section 205C of the expected date of Companies Act, 1956 all unclaimed commencement of activities dividends up to the Financial Year as per project approved by 1999-2000 have been transferred financial institutions appearing to the Investor Education and in the prospectus. Protection Fund. Members of the erstwhile Mysore Breweries Limited, 4. Financial performance based on 31-3-09 31-3-10 31-3-11 Pals Distilleries Limited, Charminar given indicators Rs.Crores Breweries Limited and SICA Turnover 2732 3127 3700 Breweries Limited who have not yet claimed their dividend for the Profit before tax (41) 20 29 financial year 2000-2001 and thereafter, may claim from the 5. Export performance and net 31-3-06 31-3-07 31-3-08 Company before the same is foreign exchange collaborations Rs.Crores transferred to the Fund. It may be 0.06 Nil 7 noted that no claims shall lie against 6. Foreign investments or Nil the Company or the Fund in respect collaborators, if any of individual amounts which were
  10. 10. NoticeII. Information about the appointee: IV. IV. Disclosures: As the Company is not a listed1. Background details company, disclosure on Corporate Mr. Jean-Marc Delpon de Vaux worked for Unilever for 25 years where he held Governance is not mandatory and numerous senior marketing and general management positions, including hence not given. Chairman and CEO of the Maghreb region. None of the Directors are interested in the said resolution except Mr. Jean-Marc Delpon de Vaux 2. Past remuneration 2006-07 2007-08 to the extent of remuneration Rs.1,49,74,236 2,24,34,669 proposed. 7. At the Annual General Meeting of 3. Recognition or awards NA the Company held on 29th November 2005, the Members 4. Job profile and his suitability With the vast and rich experience empowered the Board of Directors Mr. Jean-Marc Delpon de Vaux is a under Section 293(1)(d) of the suitable candidate to look after the entire Companies Act, 1956 to borrow Indian beer operations. Under his tenure monies for the business purposes as Managing Director the Turnover of the of the Company up to a limit of Company has increased by 28%. Rs.1000 Crores. Keeping in view the Company’s business requirements and its investment and 5. Remuneration proposed As set out in the resolution growth plans, it is considered desirable to increase the said 6. Comparative remuneration Mr. Jean-Marc Delpon de Vaux represents borrowing limits to Rs.1500 Crores profile with respect to industry SABMiller which is among the leading as outlined in the resolution. size of the Company, profile of breweries of the world and his the position and person (in compensation is determined in In terms of the provisions of Section case of expatriates the accordance with the prevalent system in 293 (1) (d) of the Companies Act, relevant details would be w.r.t. the SABMiller Group and in keeping with 1956, approval of the members is the country of his origin) persons of his qualification, experience. being accordingly sought through resolution under item no.7 for such 7. Pecuniary relationship directly No pecuniary relationship increase in limits. or indirectly with the Company, Directly or Indirectly with the Company or 8. The Company requires to be or relationship with the any managerial personnel capitalized to enable it to pay down managerial personnel, if any. some of its debts and for other corporate purposes. The Company proposes to issue and allot, onIII. Other information: preferential basis 50000000 equity shares of face value Rs. 10/- each to SABMiller Asia B.V. at a premium 1. Reasons of loss or The cost of Malt and fuel the main raw of Rs. 46/- per share. inadequate profits material has gone up during the year by This will require the Company to more than 100%. Higher Depreciation raise its Authorized Share Capital. and interest costs The Special Resolution set out at item no. 8 in the notice is intended 2. Steps taken or proposed to The Company has started building long to obtain such approval and the be taken for improvement term collaborative relationships with Board recommends the resolution farming communities through for your approval. programmes such as Saanjhi Unnati. To bring down the interest cost equity None of the Directors of the infusion is being considered. Company are deemed to be interested in the said resolution. The 3. Expected increase in Board recommends the adoption of productivity and profits in the resolution. measurable terms. 31-3-09 31-3-10 31-3-11 9. As stated above, the Company Rs.Crores proposes to issue and allot, on a preferential basis 50000000 equity Turnover 2732 3127 3700 shares of face value Rs. 10/- each Profit before tax (41) 20 29 to SABMiller Asia B.V. at a premium of Rs. 46/- per share (based on the valuation report) which requires 8 SKOL Breweries Limited 9
  11. 11. Notice shareholders’ approval under Shares of the Company to section 81 (1A) of the Companies SABMiller Asia B.V. for cash and to Act, 1956. utilize the money received hereunder for the purpose of paying down Information as required under some of its debts and for other Unlisted Public Companies corporate purposes. (Preferential Allotment) Rules, 2003 is given below. d. The class or classes of persons to whom the allotment is proposed to a. The price of price band at which be made: The allotment will be made allotment is proposed: The Equity to SABMiller Asia B.V. Shares of Rs.10/- each will be allotted at a premium of Rs.46/- per e. Intention of promoters/directors/key Share. management persons to subscribe to the offer: SABMiller Asia B.V. has b. The relevant date on the basis of signified its intention of subscribing which price has been arrived at: 31st to the issue. March, 2008 f. Shareholding pattern of promoters c. The objects of the issue through and others classes of shares before preferential offer: To issue Equity and after the offer: The shareholding Category Pre Issue Post Issue No of Shares % No of Shares % A Promoter’s holding Promoter omoter’ 229384473 99.22 279384473 99.38 Sub total 229384473 99.22 279384473 99.38 B Non-Promoters Holding Institutional Investors a Mutual Funds and UTI 2240 0.00 2240 0.00 b Banks, Insurance co, FI 4008 0.00 4008 0.00 c FII - - - - Sub total 6248 0.00 6248 0.00 Others a Private Corporate Bodies 73168 0.03 73168 0.02 b Indian public 1616291 0.70 1616291 0.57 c NRI 103565 0.04 103565 0.02 d Any other - - - - Sub total 1793024 0.78 1739533 0.62 Total 231183745 100.00 281130254 100.00 pattern of the Company before and None of the Directors of the after the issue is set out below Company are deemed to be interested in the said resolution. g. Proposed time within which the allotment shall be completed: within The Board recommends the one year from the date of the AGM adoption of the resolution h. Whether a change in control is BY ORDER OF THE BOARD intended or expected: There will be Pramod S M no change in control of the Company Secretary Company after the preferential issue. Date : 23rd June, 2008 Place : Bangalore
  12. 12. 10SKOL Breweries Limited 11
  13. 13. Directors’ Report Dear Members, Your Directors have pleasure in submitting their report and the Statement of accounts for the year ended 31st March 2008. RESULTS FINANCIAL RESULTS (Rupees in Crores) Financial Year Financial Year 2007-2008 2006-2007 Gross Revenue 1741.69 1348.54 Profit before taxation 40.85 45.33 Less: Provision for taxation 6.37 5.13 Profit after taxation 34.48 40.19 Surplus/(deficit) brought forward from previous year 129.69 169.89 Balance carried to Balance Sheet 95.21 129.69 OPERATIONS OPERATIONS Corporation Limited that they would look into this issue and provide resolution. The performance of your Company during the year 2007-08 has During the previous year your Company considerably improved. The turnover acquired the Foster’s brand and trade increased by 28% over the previous year mark in India for a consideration. An to Rs.1741 Crores from Rs.1348 application for an advance tax ruling has Crores. The net profit of the Company is been made by Foster’s Australia seeking lower on account of deferred taxes. clarification on the taxability of this The focus areas of your Company on the transaction in India. The advance ruling way forward are sustainability and long authorities have held that the transaction term growth. is taxable as the asset is situated in India. Your Company is sufficiently covered by A sum of Rs.281 Crores has been Indemnity for any liability that may arise invested in upgrading existing plant and to your Company on account of any tax machinery and in developing capacity. claim on this account. Your Company is putting up a state-of- the-art one million hecto-litre capacity Your Board enjoys the unqualified brown field project in the State of support of all its financiers whose Haryana, which will be operational by the confidence in the future of your Company end of this year. There has also been is evidenced by the fact that all continuous upgradation and borrowings have been executed without implementation of best practices at all the bankers taking any charges over any units to increase productivity and bring of your Company’s assets. As such the down the cost of production. New can borrowings are short term and renewed lines have been put in place in Mysore from year to year. Breweries and Rochees Breweries and this has enabled the Company to meet Your Board considers that bottles used the growing demand for cans. to deliver the Company’s products to the market are in substance returnable Your Company has been requesting for a containers and that this economic reality price increase from the Andhra Pradesh should be reflected in the way the Beverages Corporation Limited to partly Company accounts for its containers. For offset the increase in the cost of raw this reason bottles are accounted for on materials and other inputs. However, a returnable basis, in accordance with even after protracted requests and previous years and Indian accounting negotiations your Company has been practices. unable to obtain such an increase and DIVIDEND this led to a stand off which resulted in temporary suspension of operations at In order to conserve cash for expansion Charminar Breweries for 38 days during and modernisation the Directors do not the peak season. The plant has since recommend any dividend on the equity been re-opened on the assurance from capital. the Andhra Pradesh Beverages
  14. 14. VALUES computation for determining the quantum of ex-gratia payment madeThe five core values of the Company are at the end of the year in accordanceas follows: with its Performance Management1. Our people are our enduring System. Moreover, the achievement advantage: of these goals consistently creates a growth path for executives in your This value has been at the core of organization. the Companies approach towards its employees. 3. We work and win in teams: The Indian growth story has all the This is not a corollary to the above ingredients to drive the SKOL value, but in fact a supporting value growth story. 28% of India lives in which highlights the importance of urban areas and this is equivalent to ‘handshake zones’ where the size of the US population. The employees need to combine to help rural population is taking on more others to achieve goals. and more urban characteristics The overlapping areas are clearly everyday. Today the youth drives identified to ensure there are no India and will continue to do so in conflicts between goals of team the foreseeable future. Even in 2015, members and overall objectives 50% of the Indian population will be of the Company. under 30 years. According to a 4. We understand and respect our survey on GDP Growth conducted consumers: customers and consumers by Global Insight, Lead Indicators of Inflection are visible in India. This Your Company adopts best presents a tremendous opportunity practices in dealing with consumers for SKOL, especially in light of the and customers. A dedicated fact that per capita beer Customer Complaint Cell has been consumption in India is only one litre set up and all communications are compared to the global average of monitored and relevant action is 22 litres. But this growth also means initiated. The Company has a huge tussle for the right human developed software to bring focus resources, both in terms of hiring into feedback from customers with a and retaining talent. This has view to betterment of product become a make or break factor for quality and service. This focus on many organizations. We at SKOL the customer is intended to be used are using various tools like Market as a major differentiator and a Surveys, Exit Interview Analysis, competitive advantage for the Focus Group Discussions to get Company. Moreover, your Company insights into the Indian Talent Market believes in conducting extensive and Data from prospective hires and market research both for monitoring have in place strategies to address existing products as well as for both hard and soft issues. introduction of new products in the market with a view to satisfying the2. Accountability is clear and needs of the customers and personal: personal consumers. There are clear defined Your Company has introduced new accountability and goals laid down products to meet the customers’ for all Directors and employees. The aspirational values by launching goals are clear, quantifiable and Haywards Black and Peroni. measurable. The performance of every employee is closely monitored 5. Our reputation is indivisible: and measured in accordance with Towards the end the Company not their goals and it is their only internally but also externally responsibility to accomplish them. focuses on large number of areas of On account of this value, there is a Corporate Social Responsibility desire in each and every employee for betterment of the work force as to achieve and exceed goals. well as communities that we Your Company has introduced interact with some of the examples various positive measures to drive are as follows: growth through clear accountability by introducing STI method of 12 SKOL Breweries Limited 13
  15. 15. CORPORATE SOCIALCORPORATE improve quality, enhance productivity,RESPONSIBILITY increase acreage and channelize barleySKOL has been focusing on the following for our malting use, but also to workareas of Corporate Social Responsibility towards the welfare of the farmersfor the betterment of its work force as through social programs.well as the communities in which it The project adds value at all stages ofoperates. . the value chain with eventual benefits toYour Company recognises that HIV/AIDS trickle to the farmer. The farmers getis a major threat to the world of work certified quality seeds and otherwhere it affects the most productive agricultural inputs from the SU centerssegment of the labor force and imposes besides the free but valuable agronomicalhuge costs on enterprises through advice from our experts. They have andeclining productivity and loss of skills assured market, transparent dealings, fairand experience. pricing, incur no hidden costs and get spot payment which they do not receiveIn order to curb the menace of HIV/AIDS when they market their produce tothe need of the hour is to have a traditional channels.proactive approach. Your Companyacknowledges the seriousness of the The program has gained significantissue and the future impact this may have momentum, from a beginning at abouton the broader communities, if left 4000 acres during 2005-06; theunchecked. program is extended to about 13,000 acres during 2007-08 and a memberYour Company has signed a MOU with farmer base of 6020 across 4 districts inInternational Labour Organisation (ILO) Rajasthan. During the year under reviewfor its work place programme in India. the Company has procured 7000 tonnesThe aim of this partnership is to help of Barely through this programme.prevent the transmission of HIV amongworkers and to mitigate the impact of the ANALYSIS COMPANY SWOT ANALYSIS OF THE COMPANYepidemic on work place productivity. Strengths:Your Company has donated Medical Van Access to SABMiller group’sin Orissa to NGO Sadhana to provide technology and brandshealth care facilities to rural communitiesof Orissa. The van would work like a Well established brands in themobile doctor going around villages to marketconduct routine check ups and provide Well diversified brand portfolioon time primary health services. covering all segments of the marketYour Company also conducted various Nine plants spread across Indiaother activities such as blood donation covering all major beer marketscamps, health camps, polio drives etcacross its units. High quality productsSaanjhi Unnati On-going product innovation to attract new consumersThe beer industry is expected to continuegrowing rapidly as the Indian economy Ability to set up new plants atgrows. Malted food industry is also minimal cost and in record time.growing rapidly. Barley is the key Strong management teamingredient for both. Traditionally barleyhas been grown in India by small and Weakness:marginal farmers on rain-fed land. Inability to raise prices of theThe acreage, yield and production had product as mainly the price is fixedbeen shrinking over the years and the by governmentquality was poor. Each state has its own excise laws,Considering our future demand for high whereby movement of goods fromquality malting grade barley, we designed one state to another is timeand implemented an initiative in 2005 consuming and costlycalled “Saanjhi Unnati” (Progressthrough Partnership) in Rajasthan.The programme is aimed at not only to
  16. 16. Directors’ Report No plant in Tamil Nadu, thereby Mr.Jean-Marc Delpon de Vaux was Particulars in the Report of Board of inability to participate in the second appointed as Managing Director Directors) Rules, 1988 to the extent biggest beer market in India w.e.f. 1st August 2006 and the Central applicable are set in the annexure hereto. Government has approved hisOpportunities: DIRECTORS’ RESPONSIBILITY appointment and remuneration payable STA STATEMENT U/S 217 (2AA) OF THE Per capita consumption of Beer is to the Managing Director vide its letter COMPANIES ACT, COMPANIES ACT, 1956 one litre, way below world average dated 18.6.2007. His remuneration is being proposed to increase from Your Directors state that: Growing per capita incomes raising Rs.18,00,000/- to Rs. 25,00,000/- people’s aspirations can impact beer per month, subject to Members and 1. The financial statements have been sales positively Central Government Approval. prepared in conformity with the generally accepted accounting India has the highest number of Ms. Maya Makanjee has resigned as a principles and applicable accounting young people who are the potential Director of the Company w.e.f. 23rd June standards in India. consumers for the Company 2008. The Board places on record the meritorious services rendered by Ms. 2. The Directors have selected such Easing of the regulatory environment Maya Makanjee during her tenure as accounting policies as are applicable can lead to tremendous market Director on the Board. and have applied them consistently growth and made reasonable and prudentThreats: AUDIT COMMITTEE judgment and estimates so as to give a true and fair view of the state Rising cost of raw materials Pursuant to the provisions of Section of affairs of the Company at the end 292A of the Companies Act, 1956 an Talent attraction and retention of the financial year and of the profit Audit Committee has been constituted. for the year. Increasingly competitive The present members of the Committee environment with all major global are, Mr. Jonathan Andrew Kirby, Mr. Ari 3. The Directors have taken proper and players entering the Indian market Mervis & Mr. Richard (Pete) L Lloyd. sufficient care for the maintenance of Mr. Jonathan Andrew Kirby Chairman of adequate accounting records in Heineken partnering UB gives it a the Audit Committee was present at the accordance with the provisions of national reach for an aggressive roll last Annual General Meeting. the Companies Act for safeguarding out of the Brand the assets of the Company and for AUDITORSDIRECTORS preventing and detecting fraud and M/s BSR & Co., Chartered Accountants, other irregularities.In accordance with the Articles of retiring Auditors, have signified theirAssociation, Mr. Jonathan Andrew Kirby, 4. The financial statements have been willingness to be reappointed asDirector of the Company retires by prepared on the basis of “Going Statutory Auditors of the Company. Theyrotation at this meeting and being Concern” considering the ability of have confirmed that their reappointmenteligible, offer himself for re-appointment. the Company to carry on its if made will be within the limits prescribed business in the foreseeable future.During the year Mr. Ari Mervis was under Section 224(1B) of the Companiesappointed as an additional Director of the Act, 1956. Your Directors recommend ACKNOWLEDGEMENTCompany, whose term of office expires their appointment at the ensuing Annual General Meeting. Your Directors wish to place on recordat this Annual General Meeting and is their appreciation to employees at alleligible for re-appointment. PUBLIC DEPOSIT levels for their co-operation. TheDuring the year Mr. T.S.R. Subramanian Directors would also like to acknowledge During the year, the Company has notwas appointed as an additional Director the continued support of the Company’s accepted any public deposits as definedof the Company, whose term of office Bankers, Distributors, Shareholders, in the Companies (Acceptance ofexpires at this Annual General Meeting Customers and Suppliers. Deposits) Rules, 1975.and is eligible for re-appointment. PARTICULARS OF EMPLOYEES ARTICULARSMr. Andre Charles Parker, Chairman ofthe Board retired from the services of The details of employees covered underSABMiller Group. The Board places on the provisions of Section 217 (2A) of therecord its appreciation for the valuable Companies Act, 1956 and the rules FOR AND ON BEHALF OF THE BOARDservices rendered by Mr. Andre Charles framed thereunder, as amended to dateParker during his tenure as Chairman of is attached herewith. Jonathan Andrew Kirbythe Board. It is on account of his vision CONSERVATION OF ENERGY AND CONSERV Directorand foresight that the Beer business of TECHNOLOGY ABSORPTIONSABMiller group was set up and Jean-Marc Delpon de Vauxexpanded in India. The statement pursuant to Section 217 Managing Director (1) (e) of the Companies Act, 1956 read Place: Bangalore with the Companies (Disclosure of Dated: June 23, 2008 14 SKOL Breweries Limited 15
  17. 17. Directors’ Report COMPANIES PAR ARTICULARS DISCLOSURE AS PER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF DIRECTORS) RULES, 1988. A. CONSERVATION OF ENERGY CONSERV The output performance for boiler fuel consumption and electricity of the Company is as under: Boiler energy consumption MJ/HL Electricity consumption in kWh/HL 18 250 16 200 14 12 150 10 8 100 6 4 50 2 0 0 F’05 F’06 F’07 F’08 F’05 F’06 F’07 F’08The measures taken by the Company at b) Technology absorption,its various units are as under- adaptation and innovation1. Extensive benchmarking including international and target setting. Efforts in brief made towards It has always been our endeavour to technology absorption, adaptation adopt the latest developments in Brewing2. Use of methane generated from and innovation. Technology in order to minimize our waste water treatment as boiler fuel. environmental impact. Trying various new3. Fuel switch from fossil fuel to types of brewing aids to improve our biomass in selected breweries to quality is an ongoing and continuous reduce the carbon footprint. process.4. Focussed initiatives on Water Benefits derived as a result of the The Company strives for continuous conservation and recycling in above efforts are product improvement in quality, cost and breweries. improvement, cost reduction, availability.5. Use of treated effluent for gardening product development, import of the factory campus by drain substitution. system. Use of UF & RO technology to recycle treated effluent water at In case of imported technology Keg cleaning and filling technology. Flash strategic sites. (imported during the last 5 years pasteurization technology. Special bottle reckoned from the beginning of the filling and labelling technology. Brewhouse6. Identification of refrigeration as a financial year) technologies. major energy user and preparation of a health check to minimize power consumption in the coming years. C. FOREIGN EXCHANGE EARNINGS AND OUTGO7. New capacity with new technology and economy of scale. During the year, the Company has earned Rs.7 Crores in foreign8. Rationalizing the Brewing operations exchange earnings. An amount of in line with packing production plan Rs.47.4 Crores was incurred in (especially during the low volume foreign exchange. and non season periods)B. TECHNOLOGY ABSORPTION FOR AND ON BEHALF OF THE BOARDa) Research & Development Jonathan Andrew Kirby Jean-Marc Delpon de Vaux Shared learning transferred from Director Managing Director global company community. Close co-operation with supply chain partners to improve quality and Place: Bangalore reduce waste. Dated: June 23, 2008
  18. 18. 16SKOL Breweries Limited 17