Karnataka State Beverages Corporation Limited

Public Sector Undertaking Under Finance Dept GOK



The Government of Karnataka had initiated a set of reforms relating to the implementation of the Excise Policy in the year 2003 which broadly consists of reduction and rationalization of excise duty structure, simplification of procedures and establishment of a Government owned distribution Company for channelization of IML, Beer and Spirit in the State. One of the major offshoots of the above reforms was establishment of a Corporate Entity for achieving an efficient and transparent procurement & distribution mechanism and streamlining of collection of Excise duties/Fee/Taxes and thus enhancing the Revenue to the Government. Under the circumstances, the Government of Karnataka, vide, G.O.No FD PES 2003 Bangalore dated:22 nd May' 2003, issued Orders for establishment of Karnataka State Beverages Corporation to serve as a Sole channelizing Agency for IML, Beer and Spirit in the State of Karnataka and to ensure transparency and accountability and efficient management of Resources in the whole process.

KARNATAKA STATE BEVERAGES CORPORATION LIMITED (KSBCL) was incorporated as a Private Limited Company on 02.06.2003 under the Companies Act, 1956. The Authorized Share Capital of the Corporation as on date is Rs. 12,00,00,000 consisting of 1,20,000 Equity Shares of Rs. 1,000 each. Entire Paid up Capital of the Corporation is held by the Government of Karnataka. The Corporation comes under the Administrative control of the Finance Department of the Government of Karnataka and the business operations of the Corporation, viz., Procurement of IML, Beer from Distilleries/Suppliers and Distribution among the Retail Licensees are carried out as per the CL-11 Licence issued by the State Excise Department on year on year basis.

The Main Objectives and other objectives ancillary to the attainment of the main objectives, inter-alia, pursued by the Corporation are:

•  To Provide an equitable, efficient and transparent system of channelizing and distribution of duty paid liquor in the State of Karnataka which enhances the Government Revenue on the one hand and prevents evasion of excise duties and fees on the other hand;

•  To Provide genuine products to the end consumer;

•  To Provide Escort facility for Spirit for portable purposes as KSBCL is the sole canalizing agency for portable Spirit for portable purpose.

•  To Provide timely and seamless quality service with least cost to the suppliers, retailers and other stakeholders;

•  To Provide transparency in the working of the Corporation;

•  Providing congenial and healthy working environment to the employees of the Corporation;

•  To join hands with the Government to discharge the Corporate Social Responsibility by providing financial assistance to the deserving Institutions for certain noble causes including healthcare, education and other allied areas;

•  To have a sound financial management system so as to profitably utilize the funds and maximize revenue earning opportunities taking in to consideration of liquidity, profitability, safety and transparency.

The Government of Karnataka appoints the Chairman, the Managing Director and other Directors on the Board of the Corporation as per the powers conferred by Articles of Association of the Corporation. The Managing Director is the Chief Executive Officer of the Corporation and he is vested with all executive powers, functions and responsibilities subject to the overall superintendence and control of the Board. The Managing Director is assisted by Executive Director (F&A), Executive Director (Operations), Executive Director (MI & Infra), General Managers and Company Secretary in running the affairs of the Corporation smoothly in compliance with the provisions of various laws/statutes, Government Rules and Regulations applicable to the Corporation.

As a channelizing route, the manufacturers, both within and outside the state were keeping their stocks in the Corporation's go-downs across the State of Karnataka for distribution among retail licensees since 01.07.2006. Prior to this, KSBCL was canalizing liquor to wholesale licensee only between 01.07.2003 to 20.06.2006. To self sustain its business activities the Corporation is collecting a margin on the transactions made by it as prescribed by the Government of Karnataka.

Corporation operates its activity through 71 liquor Depots located in all the Districts. 2 Depots have been established in Primary Distilleries manufacturing Spirit for portable purpose only. Spirit Operations are carried out through virtual Depots at Head Office and Remote virtual Depots at IML Depots. All depots are equipped with suitable IT infrastructure which enables data transfer between depots and Head Office through electronic mode and all critical activities are automated. The activities of the Corporation are managed by 411 employees drawn from several State PSU's on deputation & a few professionals on contract basis. The services of Data Entry Operators, support staff, Housekeeping staff, Security guards etc., are procured from the outsourcing Agencies.