BIGGER. BETTER Getting Future-Ready

BIGGER. BETTER Getting future-ready ASSOCIATED ALCOHOLS & BREWERIES LIMITED ̪̱THaaZ'g;¯̨̪̩̯΅̩̰ ;g©#΅ZggWHa<'`'a HĢ őĂĆŉ ĢĢŖÁě äłĩŅő ūä ĂÁŪä àĆŉÚěĩŉäà ùĩŅūÁŅàͿěĩĩėĆĢú ĆĢùĩŅġÁőĆĩĢőĩäĢÁÙěäĆĢŪäŉőĩŅŉőĩÚĩġłŅäĂäĢàĩŖŅłŅĩŉłäÚőŉ ÁĢàőÁėäĆĢùĩŅġäàĆĢŪäŉőġäĢőàäÚĆŉĆĩĢŉ͠ĂĆŉŅäłĩŅőÁĢàĩőĂäŅ ŉőÁőäġäĢőŉ Ϳ ūŅĆőőäĢ ÁĢà ĩŅÁě Ϳ őĂÁő ūä łäŅĆĩàĆÚÁěěű ġÁėä ÚĩĢőÁĆĢ ùĩŅūÁŅàͿěĩĩėĆĢú ŉőÁőäġäĢőŉ őĂÁő ŉäő ĩŖő ÁĢőĆÚĆłÁőäà ŅäŉŖěőŉ ÙÁŉäà ĩĢ őĂä ġÁĢÁúäġäĢőΎŉ łěÁĢŉ ÁĢà ÁŉŉŖġłőĆĩĢŉ͠ ©ä ĂÁŪä őŅĆäà ūĂäŅäŪäŅ łĩŉŉĆÙěä őĩ ĆàäĢőĆùű ŉŖÚĂ ŉőÁőäġäĢőŉ Ùű ŖŉĆĢú ūĩŅàŉ ŉŖÚĂ Áŉ ΍ÁĢőĆÚĆłÁőäŉΎ͡ ΍äŉőĆġÁőäŉΎ͡ ΍äŰłäÚőŉΎ͡ ΍łŅĩĔäÚőŉΎ͡ ΍ĆĢőäĢàŉΎ͡ ΍łěÁĢŉΎ͡ ΍ÙäěĆäŪäŉΎ͡ ÁĢà ūĩŅàŉ ĩù ŉĆġĆěÁŅ ŉŖÙŉőÁĢÚä ĆĢ ÚĩĢĢäÚőĆĩĢ ūĆőĂ ÁĢű àĆŉÚŖŉŉĆĩĢ ĩù ùŖőŖŅä łäŅùĩŅġÁĢÚä͠©äÚÁĢĢĩőúŖÁŅÁĢőääőĂÁőőĂäŉäùĩŅūÁŅàěĩĩėĆĢú ŉőÁőäġäĢőŉūĆěěÙäŅäÁěĆŹäà͡ÁěőĂĩŖúĂūäÙäěĆäŪäūäĂÁŪäÙääĢ łŅŖàäĢőĆĢÁŉŉŖġłőĆĩĢŉ͠ĂäÁÚĂĆäŪäġäĢőĩùŅäŉŖěőŉĆŉŉŖÙĔäÚő őĩŅĆŉėŉ͡ŖĢÚäŅőÁĆĢőĆäŉÁĢàäŪäĢĆĢÁÚÚŖŅÁőäÁŉŉŖġłőĆĩĢŉ͠ĂĩŖěà ėĢĩūĢĩŅŖĢėĢĩūĢŅĆŉėŉĩŅŖĢÚäŅőÁĆĢőĆäŉġÁőäŅĆÁěĆŉä͡ĩŅŉĂĩŖěà ŖĢàäŅěűĆĢúÁŉŉŖġłőĆĩĢŉłŅĩŪäĆĢÁÚÚŖŅÁőä͡ÁÚőŖÁěŅäŉŖěőŉÚĩŖěà ŪÁŅűġÁőäŅĆÁěěűùŅĩġőĂĩŉäÁĢőĆÚĆłÁőäà͡äŉőĆġÁőäàĩŅłŅĩĔäÚőäà͠ äÁàäŅŉŉĂĩŖěàÙäÁŅőĂĆŉĆĢġĆĢà͠©äŖĢàäŅőÁėäĢĩĩÙěĆúÁőĆĩĢ őĩłŖÙěĆÚěűŖłàÁőäÁĢűùĩŅūÁŅàͿěĩĩėĆĢúŉőÁőäġäĢőŉ͡ūĂäőĂäŅÁŉ ÁŅäŉŖěőĩùĢäūĆĢùĩŅġÁőĆĩĢ͡ùŖőŖŅääŪäĢőŉĩŅĩőĂäŅūĆŉä͠ CONTENTS ÙĩŖőŉŉĩÚĆÁőäàěÚĩĂĩěŉϞŅäūäŅĆäŉZĆġĆőäà ̨̪ ZÁĢàŅŖŉő ̨̬ DĩūūäĂÁŪääĢĂÁĢÚäàŪÁěŖäÁÚŅĩŉŉőĂäűäÁŅŉ ̨̮ ZäőőäŅőĩĂÁŅäĂĩěàäŅŉ ̨̱ ©ĂÁőūäÁÚĂĆäŪäàĆĢ̠̞̟̥Ϳ̟̦ÁĢàūĂäŅäūääŰłäÚőőĩúĩ ̩̪ ̬©ÁűŉÙűūĂĆÚĂūääŰłäÚőőĩőŅÁĢŉùĩŅġZ ̩̫ ©ĂÁőġÁėäŉĩŖŅÙŖŉĆĢäŉŉġĩàäěàĆƅäŅäĢő ̪̪ gŖŅłäŅùĩŅġÁĢÚäÁġÙĆőĆĩĢ ̪̬ ̤ĂĆĢúŉőĂÁőäĢĂÁĢÚäàÁÁÙěΎŉÚĩġłäőĆőĆŪäĢäŉŉ ̪̮ 'ĢĂÁĢÚĆĢúŪÁěŖäùĩŅŉőÁėäĂĩěàäŅŉ ̪̰ `ÁĢÁúäġäĢő#ĆŉÚŖŉŉĆĩĢÁĢàĢÁěűŉĆŉ ̨̫ aĩőĆÚä ̬̫ #ĆŅäÚőĩŅŉΎŅäłĩŅő ̨̭ ĩŅłĩŅÁőä<ĩŪäŅĢÁĢÚä ̮̰ ;ĆĢÁĢÚĆÁěŉőÁőäġäĢőŉ ̯̰ ūūū͠ÁŉŉĩÚĆÁőäàÁěÚĩĂĩěŉ͠Úĩġ BIGGER. BETTER The Indian alco-beverages market is at the cusp of an attractive opportunity. A strategic shift by the some of the largest organised players in India’s alco-beverage sector is creating an unprecedented long-term opportunity for mid-sized players with strong Vision: To become an industry leader in liquor managements and credible manufacturing, distillation Balance Sheets. and bottling in India and to establish a foothold in At Associated Alcohols & the liquor industry as one Breweries Limited, we are of the most reputed liquor company responding to this reality with speed and sensitivity. By enlarging our core manufacturing capacity. By extending into value-added products. By strengthening our value chain. By widening our geographic footprint. By entering into complementary alliances. With the objective to emerge bigger and better prepared for the future. 2 Promoters’ background Mr. Anand Kumar Kedia and Mr. THINGS Prasann Kumar Kedia are the key promoters of the Company. Mr. Anand Kumar Kedia, Chairman – YOU NEED Business Promotion & Development, possesses a rich sectoral experience across almost three decades. He TO KNOW spearheads the strategic initiatives of the Company. Mr. Prasann Kumar Kedia, Vice ABOUT Chairman – Operation & Business Development, has been involved with the Company for more than two ASSOCIATED decades and oversees day-to-day operations. Presence ALCOHOLS & Associated Alcohols & Breweries Limited is one of the largest distilleries in India enjoying a wide presence across BREWERIES the country and a growing presence across the sectoral value chain. • Premium extra neutral alcohol / LIMITED grain spirit • äÚőĆƈäàŉłĆŅĆő • Indian made foreign liquor (IMFL) • Indian made Indian liquor (IMIL) Corporate background • Contract manufacturing partner ŉŉĩÚĆÁőäàěÚĩĂĩěŉϞŅäūäŅĆäŉZĆġĆőäàĆŉőĂäƉÁúŉĂĆł (Diageo-USL) company of the Associated Kedia Group – a H10,000 million business conglomerate with interests in liquor manufacturing Facilities and bottling. The Company was incorporated in 1989 by Late ĂäĩġłÁĢűΎŉÚĩŅłĩŅÁőäĩƆÚäĆŉ Shri Bhagwati Prasad Kedia. Associated Alcohols & Breweries situated in Indore; its state-of-the-art Limited took over the existing distillery of the promoter group plant is at Khodigram (Barwaha, district in 1990 and extended into the manufacture of premium Khargone, Madhya Pradesh). This plant liquor products. accounts for bottling facilities, alcohol production and packaging capacity. 3 Associated Alcohols & Breweries Limited // Annual Report 2017-18 Expansion Contract manufacturing brands Installed capacity The Company embarked on a large • Black Dog Scotch Whisky across two sections úŅääĢƈäěàäŰłÁĢŉĆĩĢőĩÁààŅäŉŉőĂä • VAT 69 Scotch Whisky growing domestic and international • ġĆŅĢĩƅ¨ĩàėÁ demand. This initiative comprises the • Black & White Scotch Whisky commissioning of modern alcohol plants, increasing the production Ethical pedigree capacity from 31 million liters to 90 Vision: To become an industry leader million litres per annum by 2021 – in liquor manufacturing, distillation ÁŅĩŖĢàĂĆúĂäŅĩłäŅÁőĆĢúäƆÚĆäĢÚű͠ and bottling in India and to establish a foothold in the liquor industry as one ̪̭ Clientele of the most reputed manufacturing and Bottling lines facility • Diageo/ United Spirits Limited marketing company • Allied Blender & Distillers Mission: Associated Alcohols & • Government-regulated retail Breweries Limited undertakes to contractors/agencies (for IMFL & IMIL) dedicate itself and all its resources Proprietary products to achieving global excellence in the • Titanium Triple Distilled Vodka with present sectors of operations and Orange and Green Apple Flavour seeking growth. • Central Province Whisky Values • James McGill Whisky • To cultivate the highest standards • Jamaican Magic Rum ̫̩ of professionalism, fairness and • Bombay Special Series Alcohol production total customer satisfaction in all our • Super Man Series capacity (million transactions and dealings. litres per annum) Licensed brands / • To create a profound and everlasting franchised brands impact on our customers through • Bagpiper Deluxe Whisky commitment and sincerity. • Directors Special Whisky • To continue the ongoing journey • White Mischief Flavoured towards honesty, sincerity and integrity • Director’s Special Gold Whisky with all our stakeholders. • DSP Black Special Whisky • To spread our wings all across the • McDowell’s No.1 XXX Rum country and play a dominant role in the liquor industry in India. ̮̭͠ Packaging capacity (million cases per annum) 4 THIS ANNUAL REPORT IS ESSENTIALLY gga'g¨'΅ ARCHING AABL ATTRIBUTE. TRUST. Trust in AABL makes it possible for arguably the world’s largest alco-beverage brand to outsource the production of its most critical and quality-de- manding brands to our company. 5 Associated Alcohols & Breweries Limited // Annual Report 2017-18 MILESTONES Trust makes it possible for vendors to provide our company with a sustainable ̩̱̰̱ Incorporated as public resource supply across market cycles. limited company ̨̩̱̱ Started manufacturing and marketing potable alcohol Trust makes it possible for ̩̱̱̭ customers to invest in their growth on Modernised and expanded the assurance that a trusted vendor like the distillery AABL will engage in corresponding and timely capacity expansion. ̨̨̪̫ Captive power plant with ̤̞όŉäěùͿŉŖƆÚĆäĢÚűĆĢłĩūäŅ ̨̪̩̪ Revamped manufacturing facilities and processes as per sectoral requirements Trust makes it possible for our trade partners and intermediaries to work ̨̪̩̭ with us across the long-term. Implemented SAP-ERP across all functional areas ̨̪̩̮ Issued bonus shares in the ratio of 1:1 Trust makes proximate communities ̨̪̩̰ believe that the Company’s manufacturing Embarked on an ENA capacity expansion from 31.4 million practices will be completely responsible. litres per annum to 45 million litres per annum 6 HOW WE HAVE ENHANCED VALUE ACROSS THE YEARS Revenues (H lac) EBIDTA (H lac) aäőłŅĩƈőͳH lac) EBIDTA margin (%) ̩̩̯̭͠ ̩̬̬̩͠ ̩̮̯̰͠ ̩̫̬̬͠ ̩̬̪̱̩̭͡͠ ̩̮̱̩̪̬͡͠ ̪̭̩̰̱̪͡͠ ̩̪̫̫̮̬͡͠ ̬̪̯̪̬̫͡͠ ̭̬̭̮̱̱͡͠ ̨̫̭̮̮̭͡͠ ̨̫̰̮̭̬͡͠ ̨̪̰̰̩̩̱͡͠ ̨̪̱̩̮̯̬͡͠ ̨̨̫̩̬̪̰͡͠ ̫̪̭̪̫̱̱͡͠ ;¯̩̯ ;¯̩̯ ;¯̩̯ ;¯̩̯ ;¯̩̭ ;¯̩̭ ;¯̩̭ ;¯̩̭ ;¯̩̮ ;¯̩̮ ;¯̩̮ ;¯̩̮ ;¯̩̰ ;¯̩̰ ;¯̩̰ ;¯̩̰ #äƈĢĆőĆĩĢ #äƈĢĆőĆĩĢ #äƈĢĆőĆĩĢ #äƈĢĆőĆĩĢ Growth in sales net of taxes Earnings before the deduction ŅĩƈőäÁŅĢäààŖŅĆĢúőĂäűäÁŅ 'H#ġÁŅúĆĢĆŉÁłŅĩƈőÁ- and excise duties ĩùƈŰäàäŰłäĢŉäŉͳĆĢőäŅäŉő͡ after deducting all expenses bility ratio used to measure a depreciation, extraordinary and provisions company’s pricing strategy and Why this is measured items and tax) ĩłäŅÁőĆĢúäƆÚĆäĢÚű͠DĆúĂäŅőĂä It highlights the service Why this is measured operating margin, the better for acceptance and reach of the Why this is measured It highlights the strength the Company. Company in the market. It is an index that showcases in the business model the Company’s ability to in generating value for Why this is measured Performance optimise business operating shareholders. The EBIDTA margin indicates Aggregate sales increased 12% ÚĩŉőŉàäŉłĆőäĆĢƉÁőĆĩĢÁŅű how much a company earns to H32523.99 lakhs in FY2017- Performance pressures and can be easily (before accounting for interest 18 on the back of a growing ĂäĩġłÁĢűΎŉĢäőłŅĩƈő compared with retrospective and taxes) on each rupee of sale. demand for the Company’s has grown every single year averages of sectoral peers. products. during the last three years. Performance Performance The Company reported a 50% The Company reported a 237 Value impact The Company’s EBIDTA ĆĢÚŅäÁŉäĆĢaäőŅĩƈőĆĢ̠̞̟̥Ϳ bps increase in EBIDTA margin Improved revenues helped has grown consistently. The ̟̦ÁĢààĩŖÙěäàłŅĩƈőŉĆĢőĂä in 2017-18, its highest ever, the the Company service the Company reported a 29% last four years, outperforming result of a stronger product growing needs of customers increase in its EBIDTA in 2017- the sectoral growth average. basket

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