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Empee Distilleries Ltd. Company History and Annual Growth Details

Our Company is part of Empee Group promoted by Mr. M P Purushothaman
and his family members engaged in the manufacture of Indian Made Foreign
Liquor (IMFL) which is our core business. We, Empee Distilleries Limited,
entered into the Beverages and Distillery Industry in the year 1984 by
starting manufacture of IMFL products by means of setting up of our first
distillery unit at Mevaloorkuppam, Tamil Nadu with an installed capacity of
2000 cases/day with initial production running off on 2 semi auto lines. We
are one of the major suppliers of IMFL products to the Tamil Nadu State
Marketing Corporation Limited (TASMAC) and one of the top ten selling
brands of IMFL 180 ML Pack (Source: http://tasmac.tn.gov.in). We are
presently engaged into manufacturing of Indian Made Foreign Liquor (IMFL)
products under our own brand portfolio as well as under tieup arrangements
with other companies. The brands under our portfolio are Old Secret XXX Rum,
Power XXX Rum, Power Brandy, Mc Lene Ordinary Brandy, Mclene XXX Ordinary
Rum, Power Whisky, Empee Napoleon Premium Brandy, Empee Fine Brandy,
Commando XXX Rum, Club Polo Dry Gin, Club Royal Whisky, Elcanso Dark XXX Rum
and Old Secret Brandy. The brands under tie up arrangement are Brihans Napoleon
Premium Brandy, Brihans Premium Whisky.

Our Company was originally incorporated on September 15, 1983 as a Private Limited
Company and was converted into a Public Limited Company with effect from December
1, 1983. The Registered Office of our Company is situated at 693, Mount Road,
Chennai, Tamil Nadu since incorporation. We, Empee Distilleries Limited entered into
the Beverages and Distillery Industry in the year 1984 by starting manufacture of IMFL
products by means of setting up of our first distillery unit at Mevaloorkuppam, Tamil
Nadu with an installed capacity of 2000 cases/day with initial production running off
on 2 semi auto lines. The first brands launched by us were Marcopolo and Victoria
(Marcopolo in 4 flavours of Brandy, Rum, Whisky and Gin & Victoria in 2 flavours of
Rum and Brandy). These were immediately followed by Golden Bell Brandy, McLene
Brandy, etc. All these products were developed at our in-house facility and with
production in the beginning running off on two semi automatic lines.

In the year 1985-86 we entered into a strategic tie up with Brihans Maharashtra Sugar
Syndicate Limited, Pune, for bottling their premium brands namely Brihans Napoleon
Brandy and Brihans Premium Whisky, besides Golden Bell Brandy, Whisky, Gin and
Rum in the other segments.

In the year 1986-87 the production facility at Mevaloorkuppam was augmented by
additional four semi automatic lines which resulted in production touching 4,000
cases per day in January 1987 and 6,000 cases in the following year. With a view
to enhance the quality of the spirit that goes into production, we decided to set up
our own distillation columns and commenced work. These distillation columns were
commissioned during March 1988 with a capacity of 9KLPD.

During the year 1991-93 we acquired a brewery unit from the Government of Tamil
Nadu at Kutumbakkam Village, near Chennai and began production and sales under
the labels Marcopolo Strong and Lager Beer and during the year 1993-94, we further
expanded our brand portfolio along with expanding capacity of our distillery unit.

In 1994-95 our Company's brewery capacity was doubled, while on the IMFL front
we entered into bottling tieups with various Companies in Kerala for marketing our

In the year 1995-96 the production capacity of our IMFL Unit was further expanded
to 10,080 cases per day / 2,52,000 cases per month. Concurrently the capacity of
the secondary distillation was also increased to 20 KLPD by setting up a modern
Re-Distillation Unit to meet the in house ENA requirements. We also entered into
tie-up arrangements in Pondicherry, Kerala and New Delhi for manufacture and
sale of our brands.

Considering the high energy needs of the brewery and distillery units of our Company
we drew up plans for captive generation of power by Wind Energy Generators (WEGs).
Eight WEGs with a capacity of 2 MW each were commissioned during the year
1996-97. We entered into a Power Purchase Agreement (PPA) on March 29, 1997
with the Tamil Nadu Electricity Board (TNEB), under which the Board granted
permission to install 8 Wind Mills of 250 KW capacity each, for power generation
and to export Power to the grid with remaining power being adjusted with our
liquor divisions. We also have executed an Operation and Maintenance
Agreement on December 25, 2002 with M/s. Sastha Engineers & Consultants,
Coimbatore for operation and maintenance of Windmills, which has been renewed
from time to time and is presently renewed till March 31, 2008.

In the year 1997-98 we received Licence from the Government of Kerala for our
setting up of IMFL Unit at Palakkad with an initial capacity of 50,000 cases per month.
In the year 1999-2000, in order to achieve economies of scale and full capacity
utilization, in respect of our Brewery Division, we entered into a tie up with Shaw
Wallace & Co. Limited for bottling its Haywards 5000 Beer. Further we also entered
into a manufacturing agreement with Jagatjit Industries Limited for bottling Aristocrat
White Rum at our Palakkad unit in Kerala.

In the year 2001-2002 with a view to concentrate mainly on IMFL, we hived off our
Brewery Division to Empee Breweries Limited. We also entered into a non-compete
agreement with McDowell Alcobhev Limited, which acquired Empee Breweries
Limited under which we agreed not to manufacture and sell beer products in the
territory of Tamil Nadu and Kerala for a period of seven years i.e. upto March, 2009.

In the year 2002-03, we entered into tie-ups in the nature of manufacturing, licensing,
marketing, technical & marketing, registered user agreements etc to expand our brands
and operations, particularly in Andhra Pradesh. We were also accredited as an
ISO:9001:2000 in this year.

In the year 2003-04, we launched our brand namely Old Secret Rum in Tamil Nadu.
During the year 2005-06 we sold approx. one million Old Secret Rum cases since its
launch in Tamil Nadu.

In order to diversify and expand our business activities by means of both backward
and horizontal integration and to achieve economies of scale in our existing business
activities, we have now decided to expand our existing distillery unit at Tamil Nadu by
augmenting the capacity of our Extra Neutral Alcohol Plant from 20KLPD to 70KLPD
and augmenting the capacity of the distillery to handle 5.00 Lakh cases per month
from the present 3.20 Lakh cases per month, set up a 60 KLPD Grain Based Distillery
Unit at Nellore District, Naidupet Sub- District, Pellakuru Mandal, Pellakuru Village,
Andhra Pradesh, set up Blending & Bottling IMFL Plant at Village Pellakuru Mitta,
Panchayat, Pellakuru, Mandal-Pellakuru, District Nellore with a installed capacity of
0.70 Lakh cases per month, Andhra Pradesh and set up a 7.5 MW Bio-mass based
power plant at Aranthangi Taluk, Pudukottai District, Tamil Nadu along with diversifying
into the real estate sector by development of 2.00 Lakhs sq.ft. of residential space in
Mevaloorkuppam, Sriperumbudur Taluk, Kancheepuram, District Tamil Nadu.
We have also acquired from Appollo Alchobev Limited, one of our Promoter Group
Companies engaged in the business of manufacture and sale of IMFL at White field,
Bangalore and having an operating IMFL manufacturing Unit, Operating Assets
together with the benefits and obligations of all current and valid licenses, permits and
sanctions pertaining to the said assets and the manufacture of IMFL and sale thereof
and the benefits of all pending contracts related thereto for the purchase of any materials
and sales of IMFL for a consideration of Rs. 800.00 Lakhs vide Asset Purchase Agreement
dated March 22, 2007 (For details of the terms and conditions of the Asset Purchase
Agreement, refer page no. 125 of this Red Herring Prospectus). Accordingly we propose to
relocate Plant & Machinery as purchased from Appollo Alchobev Limited to Village
Arabikothanur, Panchayat- Vokkaleri Hobli, District Kolar, Karnataka along with expanding
the existing capacity from 0.50 Lakh cases per month to 1.00 Lakh cases per month.


- Empee Distilleries Limited has informed regarding the appointment of Compliance Officer of the Company :- Name: Mr. S. Kalyanaraman; Designation: Sr. General Manager (F & A) & Company Secretary; w.e.f. February 18, 2009.
Oct 21, 12:00 am
Oct 21, 4:14 pm
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