About
United Spirits Ltd
United Spirits Limited (USL) is the largest alco beverage Company in India and is also among the largest consumer goods companies. The Company is involved in the manufacture, sale and distribution of beverage alcohol. It has a comprehensive brand portfolio with over about 80 brands of Scotch whisky, IMFL whisky, brandy, rum, vodka and gin. 8 of these brands sell more than a million cases annually.
The Company produces and sells around 72 million cases. McDowell's No.1, Royal Challenge, Royal Challenge American Pride, Signature, Antiquity, Black Dog, Director's Special Black, McDowell's Rum & McDowell's Brandy are some of the marquee brands owned by your Company. In addition, your Company also imports, manufactures, distributes, and sells various iconic Diageo brands such as Haig Gold Label, Captain Morgan, Johnnie Walker, J&B, Baileys, Lagavulin, Talisker, VAT 69, Black & White, Smirnoff and Ciroc in India under different licensing agreements.
The Company is engaged in the business of manufacture, purchase and sale of beverage alcohol (spirits and wines), including through tie-up manufacturing units and strategic brand franchises. In addition, the Company holds the perpetual right to the Bangalore Franchise of Board of Control for Cricket in India - Indian Premier League (BCCI-IPL).
They operate in two geographic segments: India and outside India. The Company's portfolio includes brands such as McDowell's No.1, Royal Challenge, Signature, and Antiquity, among others. It also imports, manufactures and sells Diageo's iconic brands such as Johnnie Walker, VAT 69, Black & White, Smirno and Ciroc in India. It has brands spanning across price points operating in all segments of Popular, Prestige, Premium and Luxury.
United Spirits Ltd was incorporated in the year 1999 as McDowell Sprits Ltd. In April 1, 2000, the company name was changed from McDowell Sprits Ltd to McDowell & Company Ltd. In the year 2002, McDowell Alcobev became the wholly owned subsidiary of the company. Also, the company made alliances with US, Australia and French Cos. for bulk wine import. Phipson Distilley became a wholly owned subsidiary of the company. Also, the company acquired 85% equity stake in Truimph Distilleries & Vinters Pvt Ltd, subsequently, the Truimph Distilleries & Vinters became a subsidiary company. In December 2002, the company acquired the Indian and Middle East businesses of Gilbeys from UDV through their ultimate subsidiary Triumph Distillers & Vintners Pvt Ltd.
During the year, McDowell International Brands Ltd became a wholly owned subsidiary consequent upon the transfer of beneficial interests in the balance 60 equity shares of Rs 10 each held by the other shareholders to the company. In the year 2003, the company rolled out their new Whisky brand, 'Derby Special Whisky' in Andhra Pradesh Market. They forged alliance with Newzealand Company called Independent Liquor to pursue an aggressive growth strategy in the ready-to-drink segment. 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 their product portfolio. In the year 2004, the company launched the Old Cask Rum, in the Karnataka market. Also, they unveiled the 'Signature', a new and costly item in product line at Tamil Nadu market.
During the year 2004-05, the McDowell India Spirits Ltd 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. The company made an open offer to the shareholders of Shaw Wallace & Company Ltd. Pursuant to the open offer, the company acquired 12,001,518 equity shares constituting 25% of the paid up equity share capital of Shaw Wallace & Company Ltd. Also, the investment business of the company was demerged and transferred to McDowell India Spirits Ltd (now know as McDowell Holdings Ltd) with effect from the April 1, 2005.
During the year 2005-06, Phipson Distillery Ltd, United Spirits Ltd, Herbertsons Ltd, Triumph Distillers & Vintners Pvt Ltd, Baramati Grape Industries Ltd, United Distillers India Ltd, McDowell International Brands Ltd and Shaw Wallace Distilleries Ltd were amalgamated with the company with effect from April 1, 2005. In order to expand their Scotch whisky to a larger consumer segment and the middle-income group in particular, the company launched a low-priced variant of their Black Dog Scotch. Also, they introduced McDowell's No.1 Celebration Rum and Antiquity Blue. In March 2006, Primo Distributors Pvt Ltd, a wholly owned subsidiary of United Distillers India Ltd, became a wholly owned subsidiary of the company.
During the year 2006-07, the company changed their name from McDowell & Company Ltd to United Spirits Ltd, with effect from October 17, 2006. The company launched their international operations with the acquisition of Bouvet-Ladubay S.A., a 3.2 million-bottle winery in the Saumur Valley in the Loire region of France. In May 2007, the company acquired 100% stake in Whyte & Mackay, a leading distiller of Scotch whisky.
During the year 2007-08, Liquidity Inc, Whyte and Mackay Group Ltd, Whyte and Mackay Ltd, Whyte and Mackay Warehousing Ltd, Bruce & Company (Leith) Ltd, Charles Mackinlay & Company Ltd, Dalmore Distillers Ltd, Dalmore Whyte & Mackay Ltd, Edinburgh Scotch Whisky Company Ltd, Ewen & Company Ltd; Fettercairn Distillery Ltd, Findlater Scotch Whisky Ltd, Glayva Liqueur Ltd, Glentalla Ltd, GPS Realisations Ltd, Grey Rogers & Company Ltd, Hay & MacLeod Ltd, Invergordon Distillers (Holdings) Ltd, Invergordon Gin Ltd, Isle of Jura Distillery Company Ltd, Jarvis Halliday & Company Ltd, John E McPherson & Sons Ltd, KI Trustees Ltd, Kensington Distillers Ltd, Kyndal Spirits Ltd, Leith Distillers Ltd, Loch Glass Distilling Company Ltd, Longman Distillers Ltd, Lycidas (437) Ltd, Pentland Bonding Company Ltd, Ronald Morrison & Company Ltd, St. Vincent Street (437) Ltd, Tamnavulin-Glenlivet Distillery Company Ltd, TDL Realisations Ltd, Invergordon Distillers Group Ltd, Invergordon Distillers Ltd, The Sheep Dip Whisky Company Ltd, W & S Strong Ltd, Watson & Middleton Ltd, Wauchope Moodie & Company Ltd, Whyte and Mackay de Venezuela CA, Whyte & Mackay Distillers Ltd, Whyte and Mackay Holdings Ltd, Whyte and Mackay Property Ltd, William Muir Ltd, WMB Realisations Ltd, McDowell & Company Ltd, Jasmine Flavours & Fragrances Pvt Ltd and Royal Challengers Sports Pvt Ltd became the subsidiaries of the company.
During the year 2008-09, United Spirits (Shangai) Trading Company Ltd became a wholly owned subsidiary of the company. In March 2009, as per the scheme of amalgamation, Zelinka Ltd was amalgamated with the company with effect from April 1, 2007. Consequent upon the amalgamation of Zelinka Ltd with the company, Palmer Investment Group Ltd and Montrose International S.A. became direct wholly owned subsidiaries of the company and Liquidity Inc. became a direct subsidiary of the company.
In June 2009, as per the scheme of amalgamation, Shaw Wallace & Company Ltd and Primo Distributors Pvt Ltd were amalgamated with the company with effect from April 1, 2007. Consequent upon the amalgamation of Shaw Wallace & Company Ltd, Shaw Wallace Breweries Ltd became a direct subsidiary of the company.
During the year 2009-10, Tern Distilleries Pvt Ltd 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 their entire paid-up share capital by the company. Consequent to allotment of equity shares to another investor and to the company, Four Seasons Wines Ltd ceased to be a wholly owned subsidiary but continues to be a subsidiary of the company.
During the year 2010-11, as per the scheme of arrangement, all the assets and liabilities of Balaji Distilleries Ltd, other than Brewery Division Undertaking, as a going concern stood transferred to and vested in the Company with effect from April 1, 2009. The company acquired 61.53% of the paid up capital of Sovereign Distilleries Ltd (SDL). Consequently, SDL became a subsidiary of the company. Also, the company proposes to acquire 100% of the paid up capital of SDL.
During the year, the company acquired 7,322,280 equity shares constituting 54.69% of the paid up capital of Pioneer Distilleries Ltd (PDL). Further, 977,212 Equity shares, constituting 7.30% and 2,677,640 equity shares, constituting 20.00% of the paid up capital of PDL were acquired from the open market, thereby acquiring a total of 10,977,132 equity shares, aggregating to 81.99% of the paid up capital of PDL. Consequently, PDL became a subsidiary of the company.
During the year, Herbertsons Ltd and Spring Valley Investments Holding Inc, ceased to be subsidiaries of the company consequent to the sale of shares and liquidation respectively. Chennai Breweries Pvt Ltd (CBPL), a wholly owned subsidiary of Balaji Distilleries Ltd (BDL) became a wholly owned subsidiary of the company consequent to amalgamation of BDL with the company. In November 2011, Chennai Breweries Private Litd was amalgamated with United Breweries Ltd with effect from November 12, 2012.
During the year under review, the company had acquisition of 41.54 % Equity stake in Sovereign Distilleries Ltd
In 2012, the company acquired 100% ownership in Sovereign Distilleries Ltd and also confirmed stake sale talks with Diago plc.
On 27 May 2013, Diageo acquired a 10% stake in United Spirits at a cost of Rs 20,927,196,000. It also separately acquired an additional 58,668 shares for Rs 85,778,082. On 4 July 2013, Diageo bought an additional 14.98% of the company for Rs 31.35 billion. Diageo acquired an additional 21.77 million shares at a cost of Rs 1,440 per share in an off-market-deal from United Spirits' promoters, raising its holdings to 25.02 per cent of the company. Following that purchase, Diageo held 36.3 million shares in USL, acquired at a cost of Rs 52,358.5 million, making it the largest shareholder. Under pressure from Diageo, some substantial changes to the management structure of the firm began to take place in 2013.
The issued, subscribed and paid-up equity share capital of the Company stood increased from Rs.1,307,949,680/- divided into 130,794,968 equity shares of Rs.10/- each to Rs.1,453,277,430/- divided into 145,327,743 equity shares of Rs.10/- each consequent upon the issue and allotment of 14,532,775 equity shares of Rs.10/- each at a price of Rs.1,440/- per equity share on preferential basis to Relay B.V., an indirect wholly owned subsidiary of Diageo plc in FY 2014.
During the year 2014, the Company has entered into an Asset Purchase Agreement with JP Impex Incorp, a partnership firm having its principal place of business at No.219/11, J P Corp, Bellary Road, Sadashivanagar, Bangalore - 560 080 and factory at Plot No.82/3 and 82/2 in Survey No.95 in the Nandur Kesaratagi Industrial Area, Nandur Hobli, Kesaba Teluka, Gulbarga District, Gulbarga, Karnataka (Factory), inter alia, for purchasing from the firm, the building, plant and machinery, licences, transfer of lease hold rights on the land, all relating to the Factory. The purchase of the above assets would facilitate an increase in the Company's licensed Indian Made Foreign Liquor production capacity in the State of Karnataka, which the Company proposes to use for Tetra Pak production and availing logistical advantage. The closing of the transaction is subject to the fulfillment of certain conditions precedents by the Firm.
Further to the approval of Board of Directors of the Company and final clearance of the individual directors authorized by the Board to monitor the process, on July 7, 2015, the Company placed an order for sale by way of a block trade on National Stock Exchange of India Limited (NSE) of 85,00,000 equity shares held by the Company in United Breweries Limited (UBL) (constituting 3.21% of the paid up equity share capital of UBL) to Heineken International B.V. at a price of Rs 1,030 per share. The sale consideration, net of brokerage, was Rs 872 Crores (against book value of Rs 15 Crores) resulting in profit on this transaction (which is to be determined after taking into account other transaction costs and taxes). Following the completion of this sale on July 9, 2015, the Company holds no shares in UBL and has ceased to be a promoter in UBL. This divestment was a part of the process of magnetizing certain non-core assets of the Company (as previously disclosed to the stock exchanges on October 20, 2014), in the ordinary course of the Company's business.
During FY 2015, the Company's manufacturing unit situated at Poonamalle, Chennai was hived-off to Enrica Enterprises Private Limited in terms of Section 391 to 394 of the Companies Act, 1956 pursuant to the approval of the Hon'ble High Courts of Karnataka and Madras. In addition, the Company's entire holding in its wholly owned subsidiary Whyte and Mackay Group Limited along with its subsidiaries were transferred during the year to Emperador Inc. Subsequent to the financial year 2014-15, SW Finance Co. Limited, a wholly owned subsidiary of the Company, was amalgamated with the Company pursuant to the orders of the Hon'ble High Courts being filed with the Registrar of Companies.
The Company had 22 subsidiary companies in the financial year ended on March 31, 2015.
The Company had 19 subsidiary companies in the financial year ended on March 31, 2016. Consequent to sale, Bouvet Ladubay S.A.S. and Chapin Landias S.A.S., the two wholly owned subsidiaries of the Company ceased to be subsidiaries of the Company and SW Finance Co. Limited ceased to be subsidiary of the Company upon its merger with the Company.
During the year 2019, two biggest Prestige segment brands, Royal Challenge and McDowell's No. 1 - were re-launched. Hipster', a portable Scotch whisky was launched.
During the year 2020-21, 3 companies ceased to be subsidiary viz., (i) UB Sports Management Overseas Limited, a wholly owned overseas subsidiary consequent upon its merger with Palmer Investment Group Limited, another wholly owned overseas subsidiary; (ii) Liquidity Inc, an overseas subsidiary, consequent upon the sale of entire stake held by the Company and (iii) Tern Distilleries Private Limited, a wholly owned subsidiary, consequent upon sale of entire stake held by the Company. Montrose International (S.A.), Panama, a wholly owned overseas subsidiary ceased to be a subsidiary.
During 2021-22, the Company launched Royal Challenge American Pride, a smooth, accessible, and inclusive whisky. Hip Bar Private Limited ceased to be an associate company of Company effective on 3rd August 2021. It launched two limited-editions, the first being a single grain, 100% rice whisky of 2,000 bottles; the second, a peated Indian single malt, 3,600 bottles only. Godawan, a first artisanal single malt with sustainability credentials was launched in 2022.
During 2022-23, Pioneer Distilleries Limited (PDL), a listed subsidiary of the Company got merged with the Company through the Scheme of Amalgamation and was made effective from December 30, 2022. Pursuant to the scheme on January 13, 2023, the Company allotted 7,12,138 number of fully paid up equity shares to PDL shareholders in the ratio of 10 fully paid-up equity shares of Face Value of Rs 2/- each of the Transferee Company, for every 47 fully paid-up equity shares of face value Rs 10/- i.e., 10:47, which consequently got listed on National Stock Exchange of India Ltd.(NSE) and BSE Ltd effective from 21st February 2023.
During 2022-23, the Company made an investment of Rs 32 Crores in Nao Spirits & Beverages Private Limited and NAO was made an associate Company of the Company. Sovereign Distilleries Limited (SDL) ceased to be subsidiary of the Company as the Company sold all equity shares held in SDL for consideration of Rs 32 Crores.
During the year 2022-23, the Company launched a limited-Edition Pack on Black Dog in partnership with Keira Knightley; launched Johnnie Walker Blonde, launched Walkers & Co and launched Royal Challenge Whiskey.
United Spirits Ltd
Company History
United Spirits Limited (USL) is the largest alco beverage Company in India and is also among the largest consumer goods companies. The Company is involved in the manufacture, sale and distribution of beverage alcohol. It has a comprehensive brand portfolio with over about 80 brands of Scotch whisky, IMFL whisky, brandy, rum, vodka and gin. 8 of these brands sell more than a million cases annually.
The Company produces and sells around 72 million cases. McDowell's No.1, Royal Challenge, Royal Challenge American Pride, Signature, Antiquity, Black Dog, Director's Special Black, McDowell's Rum & McDowell's Brandy are some of the marquee brands owned by your Company. In addition, your Company also imports, manufactures, distributes, and sells various iconic Diageo brands such as Haig Gold Label, Captain Morgan, Johnnie Walker, J&B, Baileys, Lagavulin, Talisker, VAT 69, Black & White, Smirnoff and Ciroc in India under different licensing agreements.
The Company is engaged in the business of manufacture, purchase and sale of beverage alcohol (spirits and wines), including through tie-up manufacturing units and strategic brand franchises. In addition, the Company holds the perpetual right to the Bangalore Franchise of Board of Control for Cricket in India - Indian Premier League (BCCI-IPL).
They operate in two geographic segments: India and outside India. The Company's portfolio includes brands such as McDowell's No.1, Royal Challenge, Signature, and Antiquity, among others. It also imports, manufactures and sells Diageo's iconic brands such as Johnnie Walker, VAT 69, Black & White, Smirno and Ciroc in India. It has brands spanning across price points operating in all segments of Popular, Prestige, Premium and Luxury.
United Spirits Ltd was incorporated in the year 1999 as McDowell Sprits Ltd. In April 1, 2000, the company name was changed from McDowell Sprits Ltd to McDowell & Company Ltd. In the year 2002, McDowell Alcobev became the wholly owned subsidiary of the company. Also, the company made alliances with US, Australia and French Cos. for bulk wine import. Phipson Distilley became a wholly owned subsidiary of the company. Also, the company acquired 85% equity stake in Truimph Distilleries & Vinters Pvt Ltd, subsequently, the Truimph Distilleries & Vinters became a subsidiary company. In December 2002, the company acquired the Indian and Middle East businesses of Gilbeys from UDV through their ultimate subsidiary Triumph Distillers & Vintners Pvt Ltd.
During the year, McDowell International Brands Ltd became a wholly owned subsidiary consequent upon the transfer of beneficial interests in the balance 60 equity shares of Rs 10 each held by the other shareholders to the company. In the year 2003, the company rolled out their new Whisky brand, 'Derby Special Whisky' in Andhra Pradesh Market. They forged alliance with Newzealand Company called Independent Liquor to pursue an aggressive growth strategy in the ready-to-drink segment. 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 their product portfolio. In the year 2004, the company launched the Old Cask Rum, in the Karnataka market. Also, they unveiled the 'Signature', a new and costly item in product line at Tamil Nadu market.
During the year 2004-05, the McDowell India Spirits Ltd 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. The company made an open offer to the shareholders of Shaw Wallace & Company Ltd. Pursuant to the open offer, the company acquired 12,001,518 equity shares constituting 25% of the paid up equity share capital of Shaw Wallace & Company Ltd. Also, the investment business of the company was demerged and transferred to McDowell India Spirits Ltd (now know as McDowell Holdings Ltd) with effect from the April 1, 2005.
During the year 2005-06, Phipson Distillery Ltd, United Spirits Ltd, Herbertsons Ltd, Triumph Distillers & Vintners Pvt Ltd, Baramati Grape Industries Ltd, United Distillers India Ltd, McDowell International Brands Ltd and Shaw Wallace Distilleries Ltd were amalgamated with the company with effect from April 1, 2005. In order to expand their Scotch whisky to a larger consumer segment and the middle-income group in particular, the company launched a low-priced variant of their Black Dog Scotch. Also, they introduced McDowell's No.1 Celebration Rum and Antiquity Blue. In March 2006, Primo Distributors Pvt Ltd, a wholly owned subsidiary of United Distillers India Ltd, became a wholly owned subsidiary of the company.
During the year 2006-07, the company changed their name from McDowell & Company Ltd to United Spirits Ltd, with effect from October 17, 2006. The company launched their international operations with the acquisition of Bouvet-Ladubay S.A., a 3.2 million-bottle winery in the Saumur Valley in the Loire region of France. In May 2007, the company acquired 100% stake in Whyte & Mackay, a leading distiller of Scotch whisky.
During the year 2007-08, Liquidity Inc, Whyte and Mackay Group Ltd, Whyte and Mackay Ltd, Whyte and Mackay Warehousing Ltd, Bruce & Company (Leith) Ltd, Charles Mackinlay & Company Ltd, Dalmore Distillers Ltd, Dalmore Whyte & Mackay Ltd, Edinburgh Scotch Whisky Company Ltd, Ewen & Company Ltd; Fettercairn Distillery Ltd, Findlater Scotch Whisky Ltd, Glayva Liqueur Ltd, Glentalla Ltd, GPS Realisations Ltd, Grey Rogers & Company Ltd, Hay & MacLeod Ltd, Invergordon Distillers (Holdings) Ltd, Invergordon Gin Ltd, Isle of Jura Distillery Company Ltd, Jarvis Halliday & Company Ltd, John E McPherson & Sons Ltd, KI Trustees Ltd, Kensington Distillers Ltd, Kyndal Spirits Ltd, Leith Distillers Ltd, Loch Glass Distilling Company Ltd, Longman Distillers Ltd, Lycidas (437) Ltd, Pentland Bonding Company Ltd, Ronald Morrison & Company Ltd, St. Vincent Street (437) Ltd, Tamnavulin-Glenlivet Distillery Company Ltd, TDL Realisations Ltd, Invergordon Distillers Group Ltd, Invergordon Distillers Ltd, The Sheep Dip Whisky Company Ltd, W & S Strong Ltd, Watson & Middleton Ltd, Wauchope Moodie & Company Ltd, Whyte and Mackay de Venezuela CA, Whyte & Mackay Distillers Ltd, Whyte and Mackay Holdings Ltd, Whyte and Mackay Property Ltd, William Muir Ltd, WMB Realisations Ltd, McDowell & Company Ltd, Jasmine Flavours & Fragrances Pvt Ltd and Royal Challengers Sports Pvt Ltd became the subsidiaries of the company.
During the year 2008-09, United Spirits (Shangai) Trading Company Ltd became a wholly owned subsidiary of the company. In March 2009, as per the scheme of amalgamation, Zelinka Ltd was amalgamated with the company with effect from April 1, 2007. Consequent upon the amalgamation of Zelinka Ltd with the company, Palmer Investment Group Ltd and Montrose International S.A. became direct wholly owned subsidiaries of the company and Liquidity Inc. became a direct subsidiary of the company.
In June 2009, as per the scheme of amalgamation, Shaw Wallace & Company Ltd and Primo Distributors Pvt Ltd were amalgamated with the company with effect from April 1, 2007. Consequent upon the amalgamation of Shaw Wallace & Company Ltd, Shaw Wallace Breweries Ltd became a direct subsidiary of the company.
During the year 2009-10, Tern Distilleries Pvt Ltd 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 their entire paid-up share capital by the company. Consequent to allotment of equity shares to another investor and to the company, Four Seasons Wines Ltd ceased to be a wholly owned subsidiary but continues to be a subsidiary of the company.
During the year 2010-11, as per the scheme of arrangement, all the assets and liabilities of Balaji Distilleries Ltd, other than Brewery Division Undertaking, as a going concern stood transferred to and vested in the Company with effect from April 1, 2009. The company acquired 61.53% of the paid up capital of Sovereign Distilleries Ltd (SDL). Consequently, SDL became a subsidiary of the company. Also, the company proposes to acquire 100% of the paid up capital of SDL.
During the year, the company acquired 7,322,280 equity shares constituting 54.69% of the paid up capital of Pioneer Distilleries Ltd (PDL). Further, 977,212 Equity shares, constituting 7.30% and 2,677,640 equity shares, constituting 20.00% of the paid up capital of PDL were acquired from the open market, thereby acquiring a total of 10,977,132 equity shares, aggregating to 81.99% of the paid up capital of PDL. Consequently, PDL became a subsidiary of the company.
During the year, Herbertsons Ltd and Spring Valley Investments Holding Inc, ceased to be subsidiaries of the company consequent to the sale of shares and liquidation respectively. Chennai Breweries Pvt Ltd (CBPL), a wholly owned subsidiary of Balaji Distilleries Ltd (BDL) became a wholly owned subsidiary of the company consequent to amalgamation of BDL with the company. In November 2011, Chennai Breweries Private Litd was amalgamated with United Breweries Ltd with effect from November 12, 2012.
During the year under review, the company had acquisition of 41.54 % Equity stake in Sovereign Distilleries Ltd
In 2012, the company acquired 100% ownership in Sovereign Distilleries Ltd and also confirmed stake sale talks with Diago plc.
On 27 May 2013, Diageo acquired a 10% stake in United Spirits at a cost of Rs 20,927,196,000. It also separately acquired an additional 58,668 shares for Rs 85,778,082. On 4 July 2013, Diageo bought an additional 14.98% of the company for Rs 31.35 billion. Diageo acquired an additional 21.77 million shares at a cost of Rs 1,440 per share in an off-market-deal from United Spirits' promoters, raising its holdings to 25.02 per cent of the company. Following that purchase, Diageo held 36.3 million shares in USL, acquired at a cost of Rs 52,358.5 million, making it the largest shareholder. Under pressure from Diageo, some substantial changes to the management structure of the firm began to take place in 2013.
The issued, subscribed and paid-up equity share capital of the Company stood increased from Rs.1,307,949,680/- divided into 130,794,968 equity shares of Rs.10/- each to Rs.1,453,277,430/- divided into 145,327,743 equity shares of Rs.10/- each consequent upon the issue and allotment of 14,532,775 equity shares of Rs.10/- each at a price of Rs.1,440/- per equity share on preferential basis to Relay B.V., an indirect wholly owned subsidiary of Diageo plc in FY 2014.
During the year 2014, the Company has entered into an Asset Purchase Agreement with JP Impex Incorp, a partnership firm having its principal place of business at No.219/11, J P Corp, Bellary Road, Sadashivanagar, Bangalore - 560 080 and factory at Plot No.82/3 and 82/2 in Survey No.95 in the Nandur Kesaratagi Industrial Area, Nandur Hobli, Kesaba Teluka, Gulbarga District, Gulbarga, Karnataka (Factory), inter alia, for purchasing from the firm, the building, plant and machinery, licences, transfer of lease hold rights on the land, all relating to the Factory. The purchase of the above assets would facilitate an increase in the Company's licensed Indian Made Foreign Liquor production capacity in the State of Karnataka, which the Company proposes to use for Tetra Pak production and availing logistical advantage. The closing of the transaction is subject to the fulfillment of certain conditions precedents by the Firm.
Further to the approval of Board of Directors of the Company and final clearance of the individual directors authorized by the Board to monitor the process, on July 7, 2015, the Company placed an order for sale by way of a block trade on National Stock Exchange of India Limited (NSE) of 85,00,000 equity shares held by the Company in United Breweries Limited (UBL) (constituting 3.21% of the paid up equity share capital of UBL) to Heineken International B.V. at a price of Rs 1,030 per share. The sale consideration, net of brokerage, was Rs 872 Crores (against book value of Rs 15 Crores) resulting in profit on this transaction (which is to be determined after taking into account other transaction costs and taxes). Following the completion of this sale on July 9, 2015, the Company holds no shares in UBL and has ceased to be a promoter in UBL. This divestment was a part of the process of magnetizing certain non-core assets of the Company (as previously disclosed to the stock exchanges on October 20, 2014), in the ordinary course of the Company's business.
During FY 2015, the Company's manufacturing unit situated at Poonamalle, Chennai was hived-off to Enrica Enterprises Private Limited in terms of Section 391 to 394 of the Companies Act, 1956 pursuant to the approval of the Hon'ble High Courts of Karnataka and Madras. In addition, the Company's entire holding in its wholly owned subsidiary Whyte and Mackay Group Limited along with its subsidiaries were transferred during the year to Emperador Inc. Subsequent to the financial year 2014-15, SW Finance Co. Limited, a wholly owned subsidiary of the Company, was amalgamated with the Company pursuant to the orders of the Hon'ble High Courts being filed with the Registrar of Companies.
The Company had 22 subsidiary companies in the financial year ended on March 31, 2015.
The Company had 19 subsidiary companies in the financial year ended on March 31, 2016. Consequent to sale, Bouvet Ladubay S.A.S. and Chapin Landias S.A.S., the two wholly owned subsidiaries of the Company ceased to be subsidiaries of the Company and SW Finance Co. Limited ceased to be subsidiary of the Company upon its merger with the Company.
During the year 2019, two biggest Prestige segment brands, Royal Challenge and McDowell's No. 1 - were re-launched. Hipster', a portable Scotch whisky was launched.
During the year 2020-21, 3 companies ceased to be subsidiary viz., (i) UB Sports Management Overseas Limited, a wholly owned overseas subsidiary consequent upon its merger with Palmer Investment Group Limited, another wholly owned overseas subsidiary; (ii) Liquidity Inc, an overseas subsidiary, consequent upon the sale of entire stake held by the Company and (iii) Tern Distilleries Private Limited, a wholly owned subsidiary, consequent upon sale of entire stake held by the Company. Montrose International (S.A.), Panama, a wholly owned overseas subsidiary ceased to be a subsidiary.
During 2021-22, the Company launched Royal Challenge American Pride, a smooth, accessible, and inclusive whisky. Hip Bar Private Limited ceased to be an associate company of Company effective on 3rd August 2021. It launched two limited-editions, the first being a single grain, 100% rice whisky of 2,000 bottles; the second, a peated Indian single malt, 3,600 bottles only. Godawan, a first artisanal single malt with sustainability credentials was launched in 2022.
During 2022-23, Pioneer Distilleries Limited (PDL), a listed subsidiary of the Company got merged with the Company through the Scheme of Amalgamation and was made effective from December 30, 2022. Pursuant to the scheme on January 13, 2023, the Company allotted 7,12,138 number of fully paid up equity shares to PDL shareholders in the ratio of 10 fully paid-up equity shares of Face Value of Rs 2/- each of the Transferee Company, for every 47 fully paid-up equity shares of face value Rs 10/- i.e., 10:47, which consequently got listed on National Stock Exchange of India Ltd.(NSE) and BSE Ltd effective from 21st February 2023.
During 2022-23, the Company made an investment of Rs 32 Crores in Nao Spirits & Beverages Private Limited and NAO was made an associate Company of the Company. Sovereign Distilleries Limited (SDL) ceased to be subsidiary of the Company as the Company sold all equity shares held in SDL for consideration of Rs 32 Crores.
During the year 2022-23, the Company launched a limited-Edition Pack on Black Dog in partnership with Keira Knightley; launched Johnnie Walker Blonde, launched Walkers & Co and launched Royal Challenge Whiskey.
United Spirits Ltd
Directors Reports
Dear Members,
Your directors are pleased to present the 24th Report of
Directors of your Company and the audited financial statements for the year ended March
31, 2023.
Rs in million
| Particulars |
Standalone Consolidated |
|
2022-23 |
2021-22 |
2022-23 |
2021-22 |
| The working of your Company for the year under review
resulted in |
|
|
|
|
| Revenue from operations |
2,75,775 |
3,07,731 |
2,78,154 |
3,10,618 |
| Other income |
742 |
337 |
731 |
355 |
| Total Income |
2,76,517 |
3,08,068 |
2,78,885 |
3,10,973 |
| Total expenses |
2,65,333 |
2,96,393 |
2,67,849 |
2,98,455 |
| Share of net loss in associate |
|
|
14 |
|
| Profit before exceptional items and tax |
11,184 |
11,675 |
11,022 |
12,518 |
| Exceptional items, net |
1,709 |
(1,560) |
1,764 |
(1,652) |
| Profit before tax |
12,893 |
10,115 |
12,786 |
10,866 |
| Total tax expenses |
2,376 |
1,606 |
1,528 |
2,760 |
| Profit for the year |
10,517 |
8,509 |
11,258 |
8,106 |
| Other Comprehensive Income: |
|
|
|
|
| Exchange differences on translation of foreign operations |
|
|
(17) |
1 |
| Remeasurements of post-employment benefit plans |
(6) |
165 |
(6) |
164 |
| Income tax credit / (charge) relating to these items |
1 |
(41) |
1 |
(41) |
| Total other comprehensive income for the year, net of tax |
(5) |
124 |
(22) |
124 |
| Total comprehensive income for the year |
10,512 |
8,633 |
11,236 |
8,230 |
| Total comprehensive income is attributable to: |
|
|
|
|
| Owners |
|
|
11,341 |
8,410 |
| Non-controlling interests |
|
|
(105) |
(180) |
| Profit/(loss) available for appropriation |
(510) |
(11,022) |
(3,080) |
(13,544) |
| EPS-Basic & Diluted (') |
14.46 |
11.70 |
16.01 |
11.68 |
During the current year revenue from operations decreased by 10.4% on
standalone basis and by 10.5% on consolidated basis. Profit after tax has increased by
23.6 % on standalone basis and by 38.9% on consolidated basis. The challenges which United
Spirits Limited ('USL' / 'Company') faced during the year and the environment in which the
Company operates have been detailed is Management Discussion and Analysis Report which is
forming part of this Annual Report ('Report').
1. Performance of the Company
During the year under review, your Company's sales volume was 72.5
million cases resulting in a drop of 8.4% compared to previous year. This is largely on
account of the slump sale of the business undertaking associated with 32 brands and
franchising of 11 Popular brands to an unrelated party. The transaction was a conclusion
of the strategic review of the select popular segment brands and was approved by the Board
on 27 May 2022. Net sales/income from operations (net of duties and taxes) of your Company
increased by 10.1% in the financial year ended March 31, 2023 which stood at Rs103,737
million (previous year Rs94,237 million).
With continuous focus on premiumization, overall Prestige & Above
segment represented 66% of total volumes (Vs 54% in the previous year) and 81% of total
net sales (Vs 72% in the previous year) during the financial year ended March 31, 2023.
The Prestige and Above segment's net sales were up 22.8% with strong double-digit growth
across the higher value sub-segments. The Popular segment represented 34% (Vs 46% in the
previous year) of total volumes and 18% (Vs 26% in the previous year) of total net sales
during the financial year ended March 31, 2023. The Popular segment's net sales declined
by 25% during the financial year ended March 31, 2023. The decline this year was on
account of the slump sale and franchising transaction mentioned above.
2. Material changes and commitments / events subsequent to the date of
the financial statements
There are no material changes and commitments, affecting the financial
position of the Company which has occurred between the close of the Financial Year as on
March 31, 2023, to which the Financial Statement relate and the date of this Report.
3. Change in nature of business, if any
The details of change in nature of business, if any, are provided under
Management Discussion and Analysis Report and the Report on Risk Management forming part
of this Report.
4. Dividend
In view of the accumulated losses of the preceding years, your
directors could not recommend any dividend.
5. Transfer to reserve
During the year under review, there was no amount transferred to
reserves of the Company.
6. Capital
At the beginning of the year, the authorised capital was Rs7,19,20,00,000
(2,74,00,00,000 Equity shares of Rs2 each and 17,12,00,000 Preference Shares of Rs10
each). The National Company Law Tribunal, Bengaluru Bench ("NCLT") approved
Scheme of Amalgamation and Arrangement of United Spirits Limited ("USL") with
Pioneer Distilleries Limited ("PDL") and their respective shareholders and
creditors vide order dated 4th November 2022. Pursuant to the NCLT order, the
authorized share capital of PDL is added to the authorized share capital of USL and USL
allotted 7,12,138 equity shares of Rs2/- each aggerating Rs14,24,276 to
public shareholders of PDL in the ratio as per the Scheme.
The revised Share Capital is as below:
| Particulars |
' |
| Authorized Capital |
|
| 2,82,75,00,000 Equity Shares of Rs2 /- each |
5,65,50,00,000 |
| 17,37,00,000 Preference Shares of Rs10 /- each |
1,73,70,00,000 |
| Total |
7,39,20,00,000 |
| Issued, Subscribed and Paid-up Capital |
|
| 72,73,50,853 equity shares of Rs2/- each |
1,45,47,01,706 |
7. Details of subsidiary companies and associate companies and their
financial position
The performance of subsidiaries and associate Companies and their
contribution to the overall performance of the Company is covered as part of the
consolidated financial statement and form AOC-1 annexed as part of this Report as
Annexure-1. Out of 9 subsidiary companies, 8 subsidiary companies are non-operative.
i. As mentioned in the Annual Report of 2021-22, the Board of Directors
("Board") of Pioneer Distilleries Limited, a listed subsidiary of the Company
("PDL") and of the Company at their meetings held on December 2, 2019 considered
and approved a scheme of amalgamation and arrangement in relation to the proposed merger
of PDL with the Company under Sections 230 - 232 and other applicable provisions of the
Companies Act, 2013 and the rules thereunder. The National Company Law Tribunal, Bengaluru
Bench ("NCLT"), vide Order dated November 4, 2022 approved the Scheme of
Amalgamation and Arrangement and certified copy of the order was
received on November 17, 2022. The merger was effective from December 30, 2022.
Pursuant to the scheme on January 13, 2023, the Company allotted
7,12,138 number of fully paid up equity shares to PDL shareholders as on record date
(January 06, 2023) in the ratio of 10 (ten) fully paid-up equity shares of face value Rs2
(Rupees two only) each of the Transferee Company, for every 47 (forty-seven) fully paid-
up equity shares of face value Rs10 (Rupees ten only). These shares were listed
with National Stock Exchange of India Ltd.("NSE") & BSE Limited
("BSE") effective 21st February 2023. The shareholding of Diageo
Relay BV (the holding Company, a subsidiary of Diageo PLC) in the Company has changed from
55.94% to 55.88%.
ii. During the year, Your Company made an investment of Rs315
million in Nao Spirits & Beverages Private Limited ("NAO"). Your Company has
acquired 8,094 Compulsory Convertible Preference Shares and 4670 equity shares of NAO
aggregating to 22.5% of shareholding. Subsequent to this investment, NAO is associate
company of your Company. Further, on January 24, 2023, Board of Directors have approved
further investment of Rs150 million. This investment will be made upon satisfaction
of condition precedents.
Company has complied with the FEMA Regulations with respect to the
downstream investment made in NAO Spirits & Beverages Private Limited.
iii. During the year, Sovereign Distilleries Limited (SDL) ceased to be
subsidiary of your Company. Your Company has sold all equity shares held in SDL for
consideration of Rs320 million, pursuant to approval of board of directors of the
Company at their meeting held on 24th January 2023. SDL was a non-operative,
wholly owned subsidiary company and consequently did not have any turnover or revenue or
income. It had a net worth of approximately Rs174 million representing 0.3% of the
Company's consolidated net-worth as on the aforesaid date.
iv. During the year, United Spirits (Shanghai) Trade Company Limited
("USSTCL"), wholly owned subsidiary of Company in China stands closed. USSTCL
was a non-operative company and consequently did not have any turnover or revenue or
operating income. It had a negative net worth of approximately RMB 1.81 million million.
Since USSTCL was a non-operative company, its de-registration will not have any impact on
the Company's business.
v. During the year, United Spirits Singapore Pte. Ltd.
("USSPL"), wholly owned subsidiary of Asian Opportunities and Investments
Limited [Company's wholly owned subsidiary], in Singapore stands dissolved. USSPL was a
non-operative company and consequently did not have any turnover or revenue or operating
income. Since USSPL was a non-operative company, its voluntary winding up will not have
any impact on the Company's business.
vi. Royal Challengers Sports Private Limited (RCSPL), a wholly owned
subsidiary of your Company, reported a revenue from operations of Rs2442 million
during the year which has degrew by 16.3%, primarily on account of reduction in central
rights income from BCCI (change in IPL standing position and reduced number of matches
played in current year). During the current year, RCSPL reported a loss of ' (116) million
against the profit of ' 893 million in previous year, primarily on account of loss from
Women's Premier League.
RCSPL participated in the tender conducted by the BCCI and won the bid
for the Bangalore team for the Women's Premier League ("WPL") for Rs9010
million. This was one of the 5 successful bids for a WPL franchise and Team RCB finished 4th
in the inaugural 2023 season.
The Company's policy for determining material subsidiaries is available
at the Company's website at https://media.diageo.
com/diageo-corporate-media/media/fcap5yuo/policy-on- material-subsidiary.pdf
In accordance with the third proviso to Section 136(1) of the Companies
Act, 2013 the annual report and financial statements of each of the subsidiary companies
have also been placed on the website of the Company https://www.
diageoindia.com/en/investors/subsidiaries-financial
8. Prospects/Outlook
The details about prospects/outlook of your Company are provided under
the Management Discussion and Analysis Report, forming part of this Report.
9. Board meetings, board of directors, key managerial personnel &
committees of directors:
A. i) Resignation of Mr. Randall Ingber
Mr. Randall Ingber, Director of the Company, resigned as a
non-executive director of the Company effective from end of the day January 31, 2023.
ii) Appointment of Mr. Pradeep Jain
Mr. Pradeep Jain, Chief Financial Officer was appointed as Whole Time
Director designated as an "Executive Director and Chief Financial Officer" of
the Company with effect from February 01, 2023. He continues to be Chief Financial Officer
and Key Managerial Personnel of the Company.
iii) Appointment of Ms. Mamta Sundara
Ms. Mamta Sundara was appointed as a nonexecutive non-independent
director of the Company with effect from February 01, 2023.
iv) Re-appointment of Mr. Mark Sandys
As per the provisions of the Companies Act, 2013, Mr. Mark Sandys
retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible,
offered himself for re-appointment.
Members may please note that Mr. Mark Sandys, was appointed as a
director on April 01, 2022. Mr. Mark Sandys is not debarred from holding the directorship
under any statutory regulations. Details about Mr. Mark Sandys is provided in the Notice
of the 24th annual general meeting of the Company.
B. Independent Directors
Your Company did not appoint any new Independent Director in the
financial year 2022-23. Criteria for selection/ appointment or re-appointment of
Independent Directors include skills, expertise of the Director, qualifications,
experience, and domain knowledge. The required skills of Independent Directors are
leadership, managerial experience, diversity, risk management and corporate governance.
All our Independent Directors viz., Mr. Mahendra Kumar Sharma, Mr. V K Viswanathan, Mr. D
Sivanandhan, Mr. Rajeev Gupta and Dr. (Mrs.) Indu Shahani possess the aforesaid skills.
C. Declaration by Independent Directors
Independent Directors have given a declaration pursuant to sub-section
(6) of Section 149 of the Companies Act, 2013. In the opinion of the Board, Independent
Directors fulfill the conditions specified in Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI (LODR)
Regulations) and are independent of the management.
D. Number of meetings of the Board
The details of the Board Meetings and other Committee Meetings held
during the financial year 2022-23 are stated in the Corporate Governance Report which is
forming part of this Report.
E. Board Committees
The Company has the following committees of the Board:
• Audit Committee
• Risk Management Committee
• Nomination and Remuneration Committee
• Stakeholders Relationship and General Committee
• Corporate Social Responsibility and Environmental, Social and
Governance Committee
The composition of each of the above Committees, their respective roles
and responsibilities are provided in the Corporate Governance Report which forms part of
this Report.
F. Policies
The Company has adopted all policies as required under the provisions
of the Companies Act, 2013 and SEBI (LODR) Regulations. The same are uploaded on the
website of the Company. Policy on directors and senior appointments and Remuneration and
rewards policy were merged and renamed as Nomination and Remuneration Policy.
Further, certain changes were made to the policy to align with the
Company's guidelines and practices as required under section 178 of the Companies Act,
2013.
The revised policy was recommended by the Nomination and Remuneration
Committee and was approved by the Board. The policy is uploaded on the website at https://
media.diaqeo.com/diaqeo-corporate-media/media/ chwfdoiQ/nomination-remuneration-policy.pdf
The salient features of the revised policy are:
• The Scope of the policy is appointment and remuneration of the
Directors, Key Managerial Personnel ("KMP"), Senior Management Personnel
("SMP") and other employees.
• The policy lays down the appointment criteria, qualifications,
relevant expertise etc. and that the appointment of directors including managing
directors, whole time directors, non-executive directors and independent directors shall
be in accordance with the provisions of the Companies Act, including schedule IV and V of
the Act and the rules made thereunder and the provisions of the SEBI Listing Regulations.
• The appointment of Directors, KMP and SMP shall be recommended
by the NRC to the Board and appointment of directors is subject to approval of
shareholders. Additionally, approval of the audit committee is required for the
appointment of the Chief Financial Officer.
• The remuneration philosophy of the Company is designed on
following principles:
i. the level and composition of remuneration is reasonable and
sufficient to attract, retain and motivate directors of the quality required to run the
Company successfully
ii. relationship of remuneration to performance is clear and meets
appropriate performance benchmarks; and
iii. remuneration to directors, SMP and KMP involves a balance between
fixed and incentive pay reflecting short and long-term performance objectives appropriate
to the working of the company and its goals.
iv. the Company will benchmark the ratio of remuneration of senior
leaders to the median remuneration of all employees with its peer group companies on a
periodic basis.
v. the benchmark compensation positioning will be the market median
based on a periodic market benchmarking study undertaken by an external firm. For specific
niche functions, skills and roles, a higher benchmark positioning may be targeted to
attract and retain talent.
• The policy details the approval process for the remuneration
payable to:
a) Managing Director/Chief Executive Officer/Whole time director;
b) Remuneration to independent directors
c) KMPs, SMPs and other employees
• The Non-executive Non-Independent Director shall not be entitled
to receive any sitting fees and commission.
• The policy provides a brief note on familiarisation of the
independent directors and succession policy for orderly succession for appointments of
members of the Board and for appointments of senior management personnel.
G. Recommendations of the audit committee and other committees
All the recommendations of the Audit Committee and of the other
Committees were accepted by the Board.
H. Details of remuneration to directors
As required under section 197(12) of the Companies Act, 2013
information relating to remuneration paid to Directors during the financial year 2022-23
is provided in the Corporate Governance Report.
As stated in the Corporate Governance Report, sitting fees is paid to
Independent Directors for attending Board/Committee meetings. They are also entitled to
reimbursement of actual travel expenses, boarding and lodging, conveyance and incidental
expenses incurred in attending such meetings. In addition, the Independent Directors are
also eligible for commission every year as may be recommended by the Nomination and
Remuneration Committee and approved by the Board within the overall limit of Rs4
Crore or 1% of the net profits of the Company calculated in accordance with section 198 of
the Companies Act, 2013, whichever is higher, as approved by the shareholders in twenty
third Annual General Meeting held on August 09, 2022. Criteria for payment of remuneration
to Independent Directors are as given below:
i. Membership of Committees
ii. Chairmanship of the Committees/Board
iii. Benchmarking with other companies
The Board of Directors have approved payment of commission of Rs20
million to five independent directors after applying the criteria stated above for the
financial year 2022-23.
The criteria for payment of remuneration to executive directors is
determined by the Nomination and Remuneration Committee based on various criteria
including performance criteria. Nomination and Remuneration Policy is available on the
Company's website https://media.diageo.com/diageo-corporate-
media/media/chwfdoiQ/nomination-remuneration- policy.pdf
I. Board evaluation criteria
Pursuant to the provisions of the Companies Act, 2013 and regulation 17
of the SEBI (LODR) Regulations, the Board has carried out an annual performance
evaluation, based on parameters which, inter alia, include performance of the Board on
deciding strategy, rating the composition & mix of Board members, discharging of their
duties, handling critical issues etc. The parameters for the performance evaluation of the
Directors include contribution made at the Board meeting, attendance, instances of sharing
information on best practices applied in other industries, domain knowledge, vision,
strategy and engagement with senior management, etc.
The Independent Directors at their separate meetings, review the
performance of non-independent directors and the Board as a whole. Chairperson of the
Company after taking into account the views of executive directors and non-executive
directors, reviews the quality, quantity and timeliness of flow of information between the
management and the Board for the Board to effectively and reasonably perform their duties.
Based on the outcome of the performance evaluation exercise, areas have been identified
for the Board to engage itself with and the same would be acted upon.
The details of the evaluation process are set out in the Corporate
Governance Report which forms part of this Report.
J. Meeting amongst Independent Directors
Schedule IV of the Companies Act, 2013, SEBI (LODR) Regulations and
Secretarial Standard - 1 on Meetings of the Board of Directors mandates that the
Independent Directors of the Company hold at least one meeting in a year, without the
attendance of Non-Independent Directors.
The Independent Directors met amongst themselves without the presence
of any other persons on May 27, 2022, July 25, 2022, October 20, 2022, January 23, 2023.
10. Vigil Mechanism
Your Company has established whistle-blower mechanism known as SpeakUp,
which is being independently operated by a third-party agency. We encourage our employees
or representatives acting on behalf of the Company, to raise their compliance concerns
through this mechanism, apart from other internal reporting channels viz. Line Manager, HR
Business Partner, Legal Business Partner and Business Integrity partner.
The SpeakUp channel is available on the Company's website at
https://www.diageoindia.com/en/about-us/corporate- governance/speak-up, with services
available in English and 5 other regional languages, and compliance concerns can be raised
by any aggrieved person through web page or toll-free number.
The quality of investigation reports and remedial actions are reviewed
and monitored by the Global Business Integrity team and Diageo India Business Integrity
team. The decision on sanctions on the reported breaches are determined and monitored by a
Compliance Committee for significant breaches and the Grievance Committee for other
breaches, ensuring there is a collective, transparent and an unbiased decisionmaking
process and that consistent action is undertaken in a timely manner to resolve the
identified breaches.
A structured Breach Management Standard is in place which is in line
with the Global Standard, for timely and conclusive resolution of compliance concerns
raised through the whistle blower mechanism.
This vigil mechanism has been established to provide adequate
safeguards against the victimization of employees, who avail this mechanism for reporting
complaints and grievances in good faith and without fear of being punished for doing so.
Access to the Chairman of the Audit Committee is provided as required under the Companies
Act, 2013 and the SEBI (LODR) Regulations.
11. Related party transactions
The Company's policy on dealing with related party transactions was
adopted by the Board on June 15, 2015 and further amended from time to time. This policy
is available on the Company's website at https://www.diageoindia.com/en/
investors/shareholder-centre/policies.
Form AOC-2 pursuant to Section 134(3)(h) of the Companies Act, 2013
read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out in the Annexure-2
to this Report.
All related party transactions that were entered into during the
financial year, were at arm's length basis and were in the ordinary course of business.
There are no material significant
related party transactions entered into by the Company with promoters,
directors, key managerial personnel or other designated persons which may have a conflict
of interest with the Company at large.
12. Auditors
i) Financial audit
M/s. Price Waterhouse & Co. Chartered Accountants LLP (FRN 304026E
/ E-300009) Statutory Auditors of your Company, were appointed as Auditors of your Company
from the conclusion of the 22nd AGM for a period of 5 years. Since the
appointment is not subject to ratification of the appointment by the members at every AGM,
no resolution is proposed at this AGM pursuant to the provisions of Companies (Amendment)
Act, 2017.
The statutory auditors have given unqualified opinion on the financial
for the financial year ended March 31, 2023.
ii) Secretarial Audit and Board's responses to observations,
qualifications and adverse remarks in auditor's report
Pursuant to section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit
has been carried out by Mr. Sudhir V Hulyalkar, Practicing Company Secretary (FCS: 6040
and CP No. 6137) and his report is annexed as Annexure-3.
In the Secretarial Audit report, the Secretarial Auditor has reported
that the gap between two consecutive meetings of the Risk Management Committee in terms of
Regulation 21 (3C) of the Listing Regulations was exceeded on account of delay of 8 days.
It is clarified that inadvertently the gap between two Risk Committee meetings exceeded by
8 days. The Company has taken note of this and the future meetings have been rescheduled
to ensure compliance. Further the Company and the Board of Directors are serious about
ensuring compliances and Company has a robust Risk Management framework including
functional risk committees and national risk committee at an executive level which meets
on a quarterly basis . The detailed report on Risk Management is enclosed in Annexure-5.
The secretarial auditor has also mentioned in his report that the
Company needs to strengthen the process with regard to obtaining the prior approval of
Audit Committee in all cases of related party transactions, whether it relates to renewal
or modification of limits although such related party transactions have been subsequently
ratified by the Audit Committee. It is clarified that the Company has taken note of the
suggestion and the process has been strengthened.
In addition, Pursuant to Regulation 24A of the SEBI (LODR) Regulation,
the Secretarial Compliance Report for the financial year ended March 31, 2023, in relation
to compliance of all applicable SEBI Regulations/ circulars/guidelines issued thereunder,
is annexed as Annexure-3A. The Secretarial Compliance Report has been voluntarily
disclosed as part of this Report as good disclosure practice. The said report has been
submitted to the stock exchanges and is also available on the Company's website at
https://media.diageo. com/diaqeo-corporate-media/media/qvqhqpqt/se_ ascr_2023sd.pdf
iii) Cost audit
Consequent to the merger of Pioneer Distilleries Limited, the Company
is required to make and maintain cost records for extra neutral alcohol (ENA) product as
specified by the Central Government under sub-section (1) of section 148 of the Act.
Accordingly, the Company has been making and maintaining the records as required.
13. Reporting of fraud by Auditors
During the year under review, neither the statutory auditors nor the
secretarial auditor have reported to the Audit Committee or the Board, under section
143(12) of the Companies Act, 2013, any instances of fraud committed against the Company
by its officers or employees, the details of which would need to be mentioned in this
Report.
14. Corporate governance
A Corporate Governance Report for the year under review is annexed
separately which forms part of this annual report. Board confirms compliance with
Secretarial Standards.
15. Management discussion and analysis report
The Management Discussion and Analysis Report for the year under review
is annexed separately which forms part of this annual report.
16. Fixed deposits
As reported in the earlier annual reports, your Company discontinued
accepting fixed deposits from the public and shareholders effective January 1, 2014. In
addition, pursuant to section 74(1)(b) of the Companies Act, 2013, the Board of Directors
at their meeting held on August 1, 2014, decided to repay all fixed deposits maturing on
or after March 31, 2015, by March 31, 2015, by paying additional interest of 1% per annum
on those fixed deposits repaid before the maturity date pursuant to the contract entered
into with the Fixed Deposit holders. During the year the Company
has transferred the unclaimed deposits of Rs2,942,789 to
Investor Education and Protection Fund (IEPF) and the balance as on March 31, 2023 was
NIL.
17. Annual return
In accordance with section 92(3) of the Companies Act, 2013 read with
the Companies (Management and Administration) Rules, 2014, a draft annual return in e-form
MGT-7 for financial year 2022-23 uploaded on Company's website https://www.
diageoindia.com/en/investors/financials/results-reports-and- presentations. Members may
also note that the annual return uploaded on the website is a draft and the final annual
return will be uploaded after the same is filed with the Ministry of Corporate Affairs
('MCA').
18. Transfer to Investor Education and Protection Fund (IEPF)
The details of unclaimed/unpaid dividends and fixed deposits which have
not been transferred to the IEPF account as the period of seven years have not been
completed is given below pursuant to the provisions of the Companies Act, 2013 and the
applicable rules there under.
i) Dividend:
The Company has not declared any dividend from financial year 2013-14
onwards.
No unclaimed dividend, shares were required to be transferred to IEPF
during the year ended March 31, 2023 to Investor Education and Protection Fund pursuant to
section 124(6) of the Companies Act, 2013.
ii) Fixed Deposits:
| 1. |
Accepted during the year |
NIL |
| 2. |
Remained unpaid or unclaimed as at the end of the year |
NIL |
| 3. |
Whether there has been any default in repayment of deposits
or payment of interest thereon during the year and if so, number of such cases and the
total amount involved |
NIL |
| 4. |
The details of deposits which |
Not |
|
are not in compliance with the requirements of Chapter V of
the Companies Act, 2013 |
Applicable |
Necessary compliance under rule 3 of the Investor Education and
Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying
with companies) Rules, 2012, has been ensured.
19. Human resources
Employee relations remained cordial at all the locations of the
Company. Particulars of employees drawing an aggregate remuneration of Rs1,02,00,000/-
or above per annum or Rs8,50,000/- or above per month, as well as additional
information on employee remuneration as required under the provisions of rule 5(1), 5(2)
and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 is annexed as part of this Report in Annexure-4 hereto.
20. Employees stock option scheme
Your Company has not offered any stock options to its employees during
the year 2022-23 within the meaning of SEBI (Share Based Employee Benefits and Sweat
Equity) Regulations, 2021.
21. Particulars of loans, guarantees and investments
Loans, guarantees and investments covered under section 186 of the
Companies Act, 2013 are detailed in Notes to the financial statements under Note 4,
relating to investments and Note 5 relating to loans given as per the standalone financial
statements for the year ended March 31, 2023.
22. Risk management
Details on Risk Management is annexed as Annexure-5 to this Report.
23. Internal financial controls
During the year under review, Governance Risks and Controls (GRC) team
has conducted detailed review of policies as per the direction of the management of the
Company, to simplify the process and ensuring adherence. The GRC team also undertook
comprehensive review of existing controls (SOX & non-SOX controls) and added
attributes wherever required to ensure that controls are in alignment with the laid down
policies and practices and meeting the global benchmark. It has been shared with the
statutory auditors who have confirmed their alignment. The controls with additional
attributes have been tested both by Management tester and by the Statutory auditors for
its effectiveness. The Board after considering the materials placed before it reviewed the
confirmation received from external parties and reviewed the effectiveness of the policies
and procedures adopted by the Company for ensuring orderly and efficient conduct of its
business, including adherence to Company's policy, safeguarding its assets, prevention and
detection of frauds and errors and completeness of accounting records and timely
preparation of financial statements. The Board has satisfied itself that the Company has
laid down internal financial controls which are commensurate with the size of the Company
and that such internal financial controls are broadly adequate and are operating
effectively. The certification by the statutory auditors on internal financial control
forms part of the audit report. A statement to this effect is also appearing in the
Directors' Responsibility Statement.
24. Corporate social responsibility
Information on the composition of the Corporate Social Responsibility
and Environmental, Social and Governance Committee (CSR & ESG) is provided in the
Corporate Governance Report that forms part of this Report. Furthermore, as required by
Section 135 of the Companies Act, 2013 and the rules made thereunder, additional
information on the policy and implementation of CSR activities by your Company during the
year are provided in Annexure-6 to this Report.
25. Conservation of energy, technology absorption, foreign exchange
earnings and outgo
The particulars prescribed under section 134(3)(m) of the Companies
Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, are set out in
Annexure-7 to this Report.
26. Details of significant and material orders passed by the regulators
or courts impacting the going concern status and Company's operations in future pursuant
to Rule 8(5)(vii) of Companies (Accounts) Rules, 2014
The Company has not received any significant or material order passed
by regulators or courts or tribunals impacting the Company's going concern status or the
Company's operations in future. The details of notices received from regulatory
authorities and related matters have been disclosed as part of note no. 40 to the audited
standalone financial statements for the year ended March 31, 2023 and as note no. 42 of
the consolidated financial statements for the year ended March 31, 2023.
27. Disclosure as required under section 22 of Sexual Harassment of
Women at Workplace (prevention, prohibition and redressal) Act, 2013
As per requirements of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 (SHWWA), the Company has designed and
implemented a comprehensive policy and framework to promote a safe and secure work
environment, where every person at the workplace is treated with dignity and respect.
Moreover, the Company's policy is inclusive and gender neutral. Further, the complaint
redressal mechanism detailed in the policy ensures complete anonymity and confidentiality
to the parties.
Internal Committees (IC) have been constituted and each Internal
Committee has appointed members who are employees of the Company and an independent
external member, having extensive experience in the field. The Internal Committees meet on
a half yearly basis to discuss matters on policy awareness, best practices, judicial
trends, etc. During the year, Internal Committees have also been trained on nuances of the
Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The Internal Committees' role is to consider and resolve the complaints
reported on sexual harassment at workplace. Investigation is conducted and decisions are
made by the Internal Committees at the respective location, and a senior woman employee is
the presiding officer on every case.
i) Number of complaints filed during the financial year: 2 (Two)
complaints received
ii) Number of complaints disposed off during the financial year: 1
(One)
iii) Number of complaints pending as on end of the financial year: 1
(One) under progress
To build awareness in this area, the Company has been publishing
newsletters, emailers, posters, conducting online training modules and monthly induction
training for newly joined employees. Besides the refresher, virtual training programmes
are conducted in the organization on a continuous basis for employees (including blue
collared employees), consultants, contractual employees and permanent/contractual workers
in regional languages. The Internal Committee has also conducted informal sessions to
check the pulse at the grassroot levels.
28. Business Responsibility and Sustainability Report (BRSR)
In accordance with the SEBI (LODR) Regulations, 2015, the BRSR for the
year under review is annexed separately which forms part of this annual report.
29. Other Disclosures
a. The Company has not issued equity shares with differential rights as
to dividend, voting or otherwise.
b. The Company has not issued any sweat equity shares to its directors
or employees.
c. No application has been made under the Insolvency and Bankruptcy
Code; hence the requirement to disclose the details of application made or any proceeding
pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along
with their status as at the end of the financial year is not applicable.
d. The requirement to disclose the details of difference between amount
of the valuation done at the time of onetime settlement and the valuation done while
taking loan from the Banks or Financial Institutions along with the reasons thereof, is
not applicable.
30. Directors' responsibility report
Pursuant to section 134 (5) of the Companies Act, 2013 in relation to
financial statements (together with the notes to such financial statements) for the
financial year 2022-23, the Board of Directors report that:
(i) in the preparation of the annual accounts for the financial year
ended March 31, 2023, the applicable accounting standards have been followed and there are
no material departures;
(ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company as at March 31, 2023
and of the profit of the Company for year ended on that date;
(iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
(iv) the Directors have prepared the financial statements on a going
concern basis;
(v) the Directors have laid down internal financial controls to be
followed by the Company commensurate with the size and nature of its business and the
complexity of its operations and that such internal financial controls are adequate and
are operating effectively.
(vi) Proper systems have been devised to ensure compliance with the
provisions of all applicable laws by implementing an automated process having
comprehensive systems and securing reports of statutory compliances periodically from the
functional units and that such systems are adequate and are operating effectively.
The Board of Directors place on record sincere gratitude and
appreciation for all the employees at all levels for their hard work, solidarity,
cooperation and dedication during the year.
The Board conveys its appreciation for its customers, shareholders,
suppliers as well as vendors, bankers, business associates, regulatory and government
authorities for their continued support.
|
By Order of the Board Mahendra Kumar Sharma |
| Place : Mumbai |
Chairman |
| Date : May 18, 2023 |
DIN: 00327684 |
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