RED HERRING PROSPECTUS Dated August 24 ... - Globus Spirits

hence the Company would be marketing and selling its own products in the states mentioned
on its own.
• The Company has entered into a Lease Agreement dated January 30, 2009 with Jagatjit
Industries Ltd. (JIL), having its registered office at Post Office : Jagatjit Nagar (Hameera),
Dist. : Kapurthala, Punjab – 144802 and corporate office at 4 th Floor, Bhandari House, 91
Nehru Place, New Delhi – 110019 for lease of a part of the Company’s factory to JIL for the
purpose of manufacture of IMFL. The Lease shall be for a period of 5 (Five) years and shall
commence on the date the D-2 license is granted by the Excise Commissioner of State of
Haryana to JIL. The Lease Agreement will become operative only after JIL received the D-2
License, duly issued by the Excise Commissioner, State of Haryana as approval for the
partial subleasing of the Company’s facilities for IMFL bottling to JIL for manufacture of JIL’s
Indian Made Foreign Liquor (IMFL) brands. JIL will operate and manage the Bottling Plant
and manufacture and sell the IMFL under its own trade name and/or brand name. JIL would
be paying a monthly lease rental of Rs. 150000/- (Rupees One Lac Fifty Thousand only) per
month to the Company.
EXPORT OBLIGATIONS:
The Company has no export obligations pending as of now.
SWOT ANALYSIS – As envisaged by the Company’s management.
STRENGTHS
• Geographical presence in 6 States: Haryana, Rajasthan, Kerala, Andhra Pradesh,
Karnataka & Uttar Pradesh
• Multifeed Stock (Grain and Molasses)
• Low Term Loan outstanding of Rs.169.81 lakhs as on June 30, 2009
• Knowledge of Industry - Commercial & Technical
• Country Liquor Volumes: 4.14 lakhs cases / month - 5 Million cases per annum
• Low Overhead cost
• Bottling high quality IMFL products
• Developed and launched own IMFL Brands
OPPORTUNITIES
• Potential to add capacity in both locations.
• Fuel Ethanol (world wide phenomenon)
• Further products possible – Animal Feed, CO2, Bio-fertilizers and Power
• Medium sized Distilleries in both locations.
• Acquiring/Developing IMFL Brands
• Country Liquor Branding
WEAKNESSES
• No Brand presence in IMFL segment.
• Lack of nation-wide presence.
• Limited distribution network of IMFL
THREATS
• Effluent Related Issues as the Central Pollution Control Board have strict pollution control
norms and as per the norms set by the Central Pollution Control Board all the distilleries
have to follow zero discharge of water. Though at present both the distilleries of the
Company have installed the necessary equipments for zero discharge facility, but there
may be stricter norms in future and the distilleries may need to further strengthen the
effluent issues of water and air
• Low Cost Manufacturing units outselling Company’s produce in the market
• More Distilleries coming up attached to Sugar Mills
• New Plants with better efficiencies
• Market Perception and sustainability
BUSINESS STRATEGY
The Company is engaged in the business of manufacture, marketing and sale of Industrial
Alcohol, Country Liquor, and Indian Made Foreign Liquor (IMFL). The Company has established
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