Registered Office: “UB Tower”, Level 12,UB City, No.24 ... · PDF fileDr. Vijay Mallya Chairman CONTENTS Kaushik Majumder Corporate Vice President - Legal & Company Secretary V

Registered Office: “UB Tower”, Level 12,UB City, No.24, Vittal Mallya Road, Bangalore 560 001Tel: 080-22272808, 22275809, 39856000; Fax: 080-22274890

Corporate Identity Number: L85110KA1915PLC000740; Website:www.theubgroup.com

Dr. Vijay MallyaChairman

C O N T E N T S

Kaushik MajumderCorporate Vice President - Legal & Company Secretary

V. Shashikanth

The Team

Dr. Lalith Bhasin M.S. Kapur


N. Srinivasan Sidhartha V. Mallya

Board of Directors (as on August 13, 2014)

Ravi Nedungadi Anil PisharodySubhash R. Gupte

Report of the Directors 1

Report on Corporate Governance 11

Independent Auditors’ Report 24

Balance Sheet 30

Statement of Profit and Loss 31

Cash Flow Statement 32

Notes to the Financial Statements 34

Consolidated Financial Statements 66

UNITED BREWERIES (HOLDINGS)

LIMITED

1

UNITED BREWERIES (HOLDINGS) LIMITED

Directors

Dr. Vijay Mallya, Chairman of the Board

Mr. Sidhartha V Mallya

Mr. N Srinivasan, Non Executive Independent Director

Mr. M S Kapur, Non Executive Independent Director

Dr. Lalit Bhasin, Non Executive Independent Director

Mr. V K Rekhi [up to May 6, 2014]

Mr. V.Shashikanth, Managing Director [up to April 17, 2014]

Executive Vice Chairman

The UB Group

Mr. S R Gupte

President & Chief Financial Officer

The UB Group

Mr. Ravi Nedungadi

Company Secretary and Compliance Officer Mr. Kaushik Majumder

Auditors M/s Vishnu Ram & Co.,Chartered AccountantsNo.12, Margosa Road, Malleswaram, Bangalore – 560 003

Internal Auditors B.K. Ramadhyani & Co,Chartered Accountants68, 4th Floor,15th Cross, 8th Main,Chitrapur Bhavan, 8th Main Road,Malleswaram, Bangalore – 460 055

Registered Office UB Tower, Level 12, UB City,No.24, Vittal Mallya Road, Bangalore – 560 001

Registrars and Transfer Agents Integrated Enterprises (India) LimitedNo.30, Ramana Residency, 4th Cross,Malleswaram, Bangalore – 560 003


LIMITED

2

Report of the Directors

Your Directors present the 98th Annual Report of your Company together with the Audited Accounts for the year ended March 31, 2014.

FINANCIAL RESULTS

The Annual Report and related financial statements are presented on lines similar to last year in view of the clarifications by Ministry of Corporate Affairs, Government of India vide its circular reference no. 1/19/2013-CL-V-dated April 4, 2014.

The summary of financial results of the Company for the financial year ended March 31, 2014 is as under:

(` in million)

2013-2014 2012-2013

The working for the year resulted in(Loss) from OperationsLess:

• Provision for doubtful advances• Bad advances/debts written off

(2,807.289)

12,717.054 24,505.944

(2,400.450)

--

Add: • Exceptional Items

19,878.906 863.025

Less: • Depreciation 81.639 92.145

Loss for the year carried to the Balance Sheet (20,233.020) (1,669.570)

DIVIDEND

In view of loss for the year, your Directors are unable to recommend any dividend for the year ended March 31, 2014.

OPERATIONS OF THE COMPANY

The operations of the Company comprise primarily of investment including purchase and sale of shares and other securities, international trade including export sales, development of real estate including both sale and rental of constructed premises, licensing of Trade Marks, advancing of loans and providing guarantees.

The Company has, over the year promoted a number of businesses including the country’s leading Brewery & Spirits Companies. These businesses have, where appropriate, formed strategic associations with global leaders in their respective fields, thereby bringing about significant value accretion.

Some other ventures, notably Kingfisher Airlines (KFA), suffered due to a hostile environment,engine failure, lack of funding support from banks and incurred losses over its years in business, leading to a shut down of operations in September, 2012. The Company continued to support KFA throughout its difficult period by way of loans, guarantees

etc. It has been the practice of the Company to provide support for all businesses promoted by it. Post shut down, the Company has been in discussion with potential investors for revival of the airline and had maintained minimal financial support to KFA.

During the year, the Board performed a critical review of its investments in and advances to its various investee companies, having regard to their financial position, their future prospects etc. Consequent to this review, amounts recoverable from certain subsidiaries totaling to Rs 2450.59 crores have been written off. Certain additional amounts totaling ` 1271.71 crores due from a Subsidiary and an Associate Company has been provided for as a measure of abundant caution.

During the year under review, some of the shares pledged by the Company to lenders of KFA were invoked and sold by the lenders. This action has been contested by the Company in appropriate courts.

Following the very successful joint venture for the beer business between United Breweries Limited and Heineken, the Company had been looking to forge a strong global association with a spirits major to strengthen the long term prospects of United Spirits Limited concluding with an agreement with Diageo plc, the world’s leading spirits company.

Report of the Directors


LIMITED

3

SALE OF SHARES TO DIAGEO PLC

Pursuant to the Share Purchase Agreement entered into by the Company and its subsidiary Kingfisher Finvest India Limited (KFIL) for sale of 16,716,987 equity shares held by the Company and KFIL in United Spirits Limited to Relay B.V., an indirect wholly owned subsidiary of Diageo plc., the Company, on July 4, 2013, pursuant to the judgement and order dated May 24, 2013 passed by the Hon’ble Company Judge of the Hon’ble High Court of Karnataka (in the various winding up petitions filed against the Company), granting leave under Sec. 536(2) of the Companies Act, 1956 (“24th May Order”), sold 10,141,437 Equity shares. Appeals were thereafter filed by the petitioners in the various winding up petitions before the Division Bench of the Karnataka High Court seeking to set aside the 24th May Order of the Company Judge. The Hon’ble Division Bench of the High Court of Karnataka in OSA No. 25 of 2013 connected with OSA Nos. 26, 27, 29, 30 & 43 of 2013, vide its judgement and order dated December 20, 2013 (20th December Order”), while partly allowing the appeals, has set aside the impugned 24th May Order granting permission to sell 13,612,591 equity shares of USL held by the Company to Relay B.V and Diageo plc and others acting in concert, at a sale price of ` 1,440/- equity share. The Division Bench has further reiterated that the Company shall not in any way sell, transfer, part with possession or do any act in respect of all other assets of the Company including the shares, pending disposal of the Company Petition on merits and have also ordered the Company to handover the Fixed Deposit of ` 3,797,506,272/- with Lakshmi Vilas Bank to the Registrar General of the High Court of Karnataka. The Company has complied with the 20th December Order. Your Company and Diageo Plc have filed Special Leave Petitions in the Hon’ble Supreme Court against the 20th December Order, being SLP Nos. 967, 1016, 1331, 1344, 1433, 1362, 1501 and 1163 of 2014. The Hon’ble Supreme Court by its Order dated February 10, 2014 has ordered status quo with regard to the transaction which has not been approved by the Division Bench in the 20th December Order. Accordingly the sale of the above shares has been recognized in the accounts of this year.

COMPETING OPEN OFFER OF MCF SHARES

Pursuant to and in compliance with Regulation 20 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, as amended (“SEBI (SAST) Regulations”) read with Regulation 3(1) and other applicable regulations of the SEBI (SAST) Regulations, Zuari Fertilizers and Chemicals Limited (Acquirer) together with Zuari Agro Chemicals Limited

[together referred to as “Zuari Group”] and the Company along with its wholly owned subsidiary Kingfisher Finvest India Limited and an associate company McDowell Holdings Limited [ together referred to as “UB Group”], as persons acting in concert, made an competing offer/open offer for acquisition of up to 3,08,13,939 (Three Crore Eight Lakh Thirteen Thousand Nine Hundred and Thirty Nine) fully paid-up equity shares of face value of ` 10 each (“Equity Shares”) from all the public shareholders of Mangalore Chemicals and Fertilizers Limited (MCF) constituting 26% of the fully diluted voting equity share capital at a price of ` 68.55 per Equity Share (“Offer Price”), payable in cash (the “Competing Offer”). This Offer is a competing offer, under Regulation 20 of the SEBI (SAST) Regulations, to the open offer made by SCM Soilfert Limited along with Deepak Fertilizers and Petrochemicals Corporation Limited on April 23, 2014 (Original Offer). In view of the legal restrains presently faced by the UB Group, Zuari Group has agreed to subscribe to all the shares that would be tendered in the Competing Offer and all financial obligations, costs, charges and expenses including payment of considerations to public shareholders in terms of the Takeover Regulations will be borne by the Zuari Group alone. Your Company will continue to have management control of MCF. The salient features of the Agreement entered into by UB Group with the Zuari Group, pursuant to which the Competing Offer was made, are mentioned in detail in Clause No. 2.1.5 of the draft Letter of Offer. The Public Announcement for the Competing Offer was made on May 12, 2014, the Detailed Public Statement was published on May 20, 2014, the Draft Letter of Offer was filed with Securities and Exchange Board of India (“SEBI”) and the concerned stock exchanges on May 27, 2014. On July 15, 2014 SEBI gave it clearance to the Draft Letter of Offer.. The UB Group, the current promoters of MCF and desirous of protecting its investment, had to make this Competing Offer against the Original Offer.

EXPORT BUSINESS

In the year under review, UB Global recorded a turnover of ` 350 crores. Apparel exports performed well with a growth of 52%. For the sixth time, UB Global bagged the “EXPORT EXCELLENCE AWARD” for the year 2014 from the Federation of Karnataka Chamber of Commerce and Industry, Karnataka. The liquor export business has reduced considerably as United Spirits Limited has decided to do direct business in certain parts of the world. However, dialogue is on with United Spirits Limited for continuing the liquor export business as in the past. The Company is also exploring other export options to maintain its export turnover.

Report of the Directors (contd.)


LIMITED

4

PROPERTY DEVELOPMENT

The construction work for development of a luxury residential building “Kingfisher Towers – Residences at UB City” in the available land in UB City is progressing as per schedule and is expected to be completed in 2015. The super built up area of the building would be 7,67,870 sq. ft. The super built up area falling to the share of the Company would be 4,18,388 sq. ft.

Your Company continues to earn rentals from the retail and office spaces let out in UB City.

LITIGATION UPDATE

Your Company through itself and through its other subsidiaries holds 6.67% of the paid up capital of Kingfisher Airlines Limited [KFA].

Your Company has significant exposure on various counts in KFA by way of loans and guarantees.

The lenders of KFA have, pursuant to certain Corporate Guarantees given by the Company (the validity of which is disputed), demanded from the Company, their alleged dues from KFA amounting to ` 6203.35 crores and unapplied interest have moved the Debt Recovery Tribunal (“DRT”) for recovery of these alleged dues. The Company has taken steps to defend the proceedings before the DRT as per the advice of its lawyers.

The Goa Senior Division Court has granted an interim injunction against any coercive action by lenders of KFA in respect of the Company’s property in Goa, tenanted to United Spirits Limited. Subsequently, KFA lenders have sent a notice under the SARFAESI Act in respect of the said property. The Company has responded to the notice issued to the Company purportedly under the SARFAESI Act challenging the same.

KFA lenders have also sold certain investments belonging to the Company pursuant to invocation of the purported pledge by the Company of certain investments. The Company and others have filed a suit in the Hon’ble Bombay High Court, being Suit No. 311 of 2013 against the consortium of bankers (Bombay Suit) who have advanced loans to KFA, inter alia, seeking the following reliefs:-

(a) For a declaration that the Corporate Guarantee dated December 21, 2010 given by the Company and the Pledge Agreement dated December 21, 2010, are void ab-initio and non-est;

(b) For a permanent order and injunction restraining the consortium of bankers, their servants, agents or assigns, or any other person claiming by, through or under them or any of them, from acting upon, in furtherance

or in any manner giving effect to the impugned Notices dated March 16, 2013, or from taking any other or further steps to act upon or in furtherance of the Pledge Agreement dated December 21, 2010, save and except in accordance with the procedure set out in clause 8.1 of the Master Debt Recast Agreement (MDRA), including issuing a notice there under.

(c) For a permanent order and injunction restraining the consortium of bankers, their servants, agents or assigns, or any other person claiming by, through or under them or any of them, from acting upon, in furtherance of the Corporate Guarantee dated December 21, 2010 given by the Company and the Pledge Agreement dated December 21, 2010;

(d) That an order and decree of damages of the sum of ` 3,199.68 crores. as set out in the Particulars of Claim be awarded to the Plaintiffs.

(e) That the maximum limit under the Company’s Corporate Guarantees be ` 1601.43 crores for reasons set out in the Suit.

Your Company has also filed a Notice of Motion in the said Suit, being Notice of Motion 306 of 2014 inter alia, for a decree on admission that the extent of the liability under the Corporate Guarantee is restricted to ` 1601.43 crores based on admissions by the consortium of bankers. The said Suit and Notice of Motion are pending adjudication in the Hon’ble Bombay High Court.

The Company (UBHL) and Kingfisher Finvest India Limited (KFIL, a wholly owned subsidiary of the Company) have filed a suit, against IDBI Trusteeship Services Limited and SREI Venture Capital Limited in the City Civil Court at Calcutta, being T.S. No. 966 of 2013, for a declaration inter alia, that the Security Trustee Agreement dated June 30, 2008 and the Consolidated Deed of Pledge dated December 21, 2010 (in respect of 4,937,375 equity shares of United Spirits Limited held by UBHL and KFIL) are void, unenforceable and of no effect. The said suit is pending.

SBICAP Trustee and the Consortium of Banks, which have advanced loans to KFA have filed a suit, inter alia, against IDBI Trusteeship Services Limited, SREI Venture Capital Limited, UBHL and KFIL in the Court of City Civil Judge in Bangalore, being O.S. No. 25877 of 2013 to enforce their alleged rights under the Release of Residual Interest Agreement dated December 21, 2010 in respect of the 3,147,985 shares held by UBHL in USL, 59,150,000 shares held by UBHL in KFA and 1,789,410 shares held by KFIL in USL. In the suit, the Plaintiffs have called upon the Defendants to sell the pledged shares in the market, discharge their loan commitment and pass on the residue



LIMITED

5

to the consortium. By an Order dated June 14, 2013, the Hon’ble Judge granted ex-parte reliefs restraining the defendants therein from selling the pledged shares below the best available market price and at any event, at any price below ̀ 2350.68 per share (95% of the average closing market price on 07/06/2013 on the BSE/NSE), without the consent of the Plaintiffs therein, and restraining the Defendant Nos. 1 to 3 (IDBI Trusteeship Services Limited, SREI Venture Capital Limited and India Global Competitive Fund) from returning/ handing over the pledged shares to UBHL and KFIL and/or releasing the pledge over the pledged shares and/or altering the nature of the pledge in any manner, till the disposal of the suit. The Consortium of Banks also filed Writ Petition No. 28577 of 2014 in the Hon’ble Karnataka High Court in respect of the pledged shares. On June 10, 2014, IDBI Trusteeship Services Limited transferred the pledged shares to India Global Competitive Fund (managed by SREI Venture Capital Limited), who in turn sold 4,937,395 shares of and in United Spirits Limited held by UBHL and KFIL. By an order dated June 20, 2014 in Writ Petition No. 28577 of 2014, India Global Competitive Fund has been ordered to deposit the surplus/balance sales proceeds from the aforesaid sale of shares in USL after India Global Competitive Fund purportedly adjusted ` 690 crores against its alleged dues from KFA. UBHL is defending the aforesaid Writ Petition No. 28577 of 2014, O.S. No. 25877 of 2013 and the ex-parte ad-interim orders passed therein.

Guarantee Commission arising out of the corporate guarantee given and Security Commission arising out of security pledged in favour of lenders of KFA, have not been accrued in view of KFA being precluded by its Bankers from making payment of any Guarantee Commission and in view of the stand taken by the Company and the other Plaintiffs in the Bombay Suit. Similarly, interest has not been accrued on the outstanding loans relating to KFA.

Certain alleged Corporate Guarantees on behalf of KFA have been invoked and certain purported beneficiaries of Corporate Guarantees issued on behalf of KFA including the Consortium of Banks have filed petitions against the Company under Sections 433/434 of the Companies Act 1956. On November 19, 2013, the Hon’ble Karnataka High Court admitted Company Petition No. 248 of 2013 filed by BNP Paribas, one of the purported beneficiaries. Your Company filed Original Side Appeal No. 52 of 2013 before the Division Bench of the Karnataka High Court challenging the judgment and order dated November 19, 2013 which appeal was dismissed by a judgment and order dated December 16, 2013. Your Company has now filed a Special Leave Petition in the Hon’ble Supreme

Court of India, being Special Leave Petition No. 1163 of 2014 challenging the order of the Karnataka High Court dated December 16, 2013. The said Special Leave Petition is pending.

On December 13, 2013, the Hon’ble Karnataka High Court also admitted Company Petition No.185 of 2012 filed by Avions De Transport Regionale, one of the other purported beneficiaries. Your Company has filed Original Side Appeal No. 18 of 2014 before the Division Bench of the Karnataka High Court challenging the judgment and order dated December 13, 2013. The said appeal is still pending.

Punjab National Bank and Corporation Bank had sent notice of their intention to classify your Company as a “willful defaulter” under the Master Circular on Wilful Defaulters issued by the RBI dated July 1, 2013. Your Company submitted its reply and appeared before the Grievance Redressal Committee’s of the respective banks. No decision classifying your Company as a willful defaulter has been communicated by the said banks thereafter. Similarly, United Bank of India (“UBI”) has initiated steps to try and classify KFA, its Chairman & Managing Director and erstwhile directors as willful defaulters. Thereafter, UBI addressed an email dated June 16, 2014 to your Company erroneously contending that in the event of Kingfisher Airlines Limited being declared willful defaulters, as a consequence, for Company would also be declared a willful defaulter. Your Company, on legal advice, has responded to the said email stating that the email was an afterthought, and in any event in breach of the principles of natural justice, neither was an opportunity given to your Company to be informed about UBI’s basis for attempting to declare your Company a willful defaulter nor was your Company given an opportunity to refute UBI’s case and place its say in the matter on record.

The Company, ably assisted by eminent Counsel is taking all necessary steps to protect the interests of the Company.

SUBSIDIARIES

The following are the subsidiaries of the Company:

A. Indian Subsidiary Companies

1. Bangalore Beverages Limited2. Bestride Consultancy Private Limited3. City Properties Maintenance Company Bangalore

Limited4. Kingfisher Finvest India Limited [Formerly

Kingfisher Radio Limited]5. Kingfisher Training and Aviation Services Limited

[Formerly Kingfisher Airlines Limited]



LIMITED

6

6. Kingfisher Aviation Training Limited [Formerly Kingfisher Training Academy Limited]

7. Kingfisher Goodtimes Private Limited8. UB Electronic Instruments Limited9. UB Infrastructure Projects Limited10. UB International Trading Limited11. UB Sports Limited

B. Overseas Subsidiary Companies

12. Inversiones Mirabel, S.A.13. Mendocino Brewing Co. Inc, USA14. Rubic Technologies Inc15. Rigby International Corp16. Releta Brewing Company LLC17. UB Overseas Limited18. UBHL [BVI] Limited19. United Breweries of America Inc., Delaware20. United Breweries International [UK] Limited21. Kingfisher Beer Europe Limited (Formerly UBSN

Limited)

The statement pursuant to Section 212(1)(e) also forms part of this Annual Report.

Summarised financials of the Subsidiary Companies as required in terms of general exemption granted under Section 212(8) of the Companies Act, 1956, by the Government of India, Ministry of Corporate Affairs, vide General Circular No. 2/2011, dated February 8, 2011 are attached and form part of this report.

Consolidated Accounts

As per the Listing Agreement, the Consolidated Accounts conforming to the applicable Accounting Standards forms part of this Annual Report. The accounts of seven subsidiary companies, whose ability to transfer funds to your Company has been significantly impaired, have been excluded from consolidation as per AS 21 prescribed under ICAI regulations.

DIRECTORS

Mr. V Shashikanth who was appointed as Managing Director of the Company with effect from August 21, 2013 for a period of three years resigned as a Director and Managing Director of the Company with effect from close of business hours on April 17, 2014. He however continues to be an Executive of the Company. The Company is in the process of appointing a Managing Director in place of Mr. V Shashikanth.

After the resignation of Mr. V. Shashikanth as Managing Director on April 17, 2014, the Company is yet to appoint a Whole-Time Director or Managing Director. The Company

also does not have a Chief Financial Officer. The Board aided by the Chairman is looking for suitable persons to be appointed as Managing Director / Whole - Time Director and Chief Financial Officer.

Mr. V K Rekhi resigned as Director of the Company with effect from May 6, 2014.

Mr. Sidhartha V Mallya, Director, retires by rotation and, being eligible, offers himself for re-appointment, as a Director liable to retire by rotation.

The Company has, pursuant to the provisions of Clause 49 of the Listing Agreements entered into with Stock Exchanges, appointed Mr. N Srinivasan, Mr. M S Kapur and Dr. Lalit Bhasin as Independent Directors of the Company. The Company has received declarations from the said Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under the said Clause 49. In accordance with the provisions of Section 149(4) and proviso to Section 152(5) of the Companies Act, 2013, these Directors are being appointed as Independent Directors to hold office as per their tenure of appointment mentioned in the Notice of the forthcoming Annual General Meeting of the Company.

A brief resume of the Directors proposed to be appointed/re-appointed is given in the Annexure to the Notice.

AUDITORS

Messrs. Vishnu Ram & Co., Chartered Accountants, retire as Auditors of the Company at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

In terms of the provisions contained in the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 the appointment of Statutory Auditors is proposed for a period of three financial years commencing 2014-2015 to hold office from the conclusion of the Ninety Eighth Annual General Meeting till the conclusion of One Hundred and First Annual General Meeting. Their appointment during the aforesaid term of three financial years shall be subject to ratification by the Members at subsequent Annual General Meetings.

QUALIFICATIONS OF AUDITORS AND MANAGEMENT RESPONSE

With reference to observations in the Auditors Report regarding non-provision for loans and advances to certain Subsidiaries and an Associate Company and for decline in value of investment in certain Subsidiaries and an Associate Company, the relevant notes on the accounts



LIMITED

7


comprehensively explain the management’s views on such matters.

LISTING OF SHARES OF THE COMPANY

The shares of your Company are listed on Bangalore Stock Exchange Limited [Regional Exchange], BSE Limited (formerly Bombay Stock Exchange Limited) and National Stock Exchange of India Limited. The Listing Fees for the year 2014-2015 has been paid to all the above Stock Exchanges.

CORPORATE GOVERNANCE

A report on Corporate Governance is annexed separately as part of the report along with a Certificate of Compliance from the Statutory Auditor.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, Management Discussion and Analysis Report is appended and forms an integral part of the Report on Corporate Governance which is appended.

FIXED DEPOSITS

The Fixed Deposits accepted from the Public and Shareholders stood at ` 211.720 million as on March 31, 2014 (including an amount of ` 29.593 million accepted during the year under review).

A sum of ` 0.132 million from Public and Shareholders remained unclaimed as at March 31, 2014.

The Board of Directors has decided henceforth not to renew or accept fresh deposits.

There have been no defaults in the repayment of fixed deposits during the year excepting occasional short delay for which interest had been paid along with matured deposits.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUNDPursuant to the provisions of Section 205A[5] and 205C of the Companies Act, 1956, an amount of ` 0.330 million [Previous Year ` 0.237 million] being the aggregate of the Unclaimed Dividend and Deposits, remaining unclaimed and unpaid for more than 7 years, have been transferred to the Investor Education and Protection Fund.

PARTICULARS OF EMPLOYEES

The information as are required to be provided in terms of Section 217[2A] of the Companies Act, 1956 read with Rules made thereunder, in respect of employees of the Company, forms part of the this Report. In terms of Section 219(1)(b)(iv) of the Companies Act, 1956, the Reports and Accounts are being sent to the Members excluding the

aforesaid annexure. Any Member interested in obtaining a copy of the same may write to the Company Secretary.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUT GO

Particulars of Conservation of Energy, Technology Absorption

The Provisions of Section 217[1][e] of the Act relating to conservation of energy and technology absorption do not apply to this Company since it is not engaged in manufacturing activities.

Foreign Exchange Earnings and outgo

The particulars are given in the Notes to the Audited Accounts.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217[2AA] of the Companies Act, 1956 the Board of Directors hereby state that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

(ii) accounting policies have been selected and applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the loss of the Company for that period.

(iii) proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for prevention and detection of fraud and other irregularities.

(iv) the Annual Accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT

Your Directors place on record the support received from Group Companies, shareholders, depositors, banks, financial institutions and employees.

By Order of the Board

London Dr. Vijay MallyaAugust 13, 2014 Chairman


LIMITED

8

Annexure to Report of the Directors

Statement pursuant to Section 212(1)(e) of the Companies Act, 1956 as at March 31, 2014

(` in million)

Sl.No.

Name of the Subsidiary

No. of equity shares at the end of the financial year of

the Company

Percentage ofholding

Net Aggregate Profit/(Loss) of the Subsidiary so far as it concerns the Shareholders of the Company

United Breweries (Holdings)

Limited

Other Subsidiary Companies

United Breweries (Holdings)

Limited

Other Subsidiary Companies

a) Not dealt with in the Accounts of the Company

b) Dealt with in the Accounts of the Company

(i) (ii) (i) (ii)For the

subsidiary’s financial

year ended March 31,

2014

For previous year of the subsidiary

since it became a subsidiary

For the subsidiary’s

financial year ended March

31, 2014

For previous year of the subsidiary

since it became a subsidiary

1 2 3 4 5 6 7 81 City Properties Maintenance

Company Bangalore Limited 50,000 - 55.00 - 10.141 5.892 - -

2 Kingfisher Finvest India Limited [Formerly Kingfisher Radio Limited]

50,000 - 100.00 - 519.853 (435.851) - -

3 UB Electronic Instrments Limited 280,976 6,410 96.25 2.19 3.061 2.898 - -

4 UB International Trading Limited 25,050,002 - 100.00 - (0.419) (11,238) - - 5 Rigby International Corp. 15,115,488 - 100.00 - (0.114) (0.109) - - 6 UB Overseas Limited 50 950 5.00 95.00 (170.831) (160.755) - - 7 Rubic Technologies Inc. 5,500,000 - 100.00 - - (0.004) - - 8 UBHL (BVI) Limited 238,370 - 100.00 - 12.760 12.677 - - 9 United Breweries International

(UK) Limited - 100,000 - 100.00 0.084 - - -

10 Kingfisher Beer Europe Limited [Formerly UBSN Limited] - 100,000 - 100.00 55.615 - - -

11 United Breweries of America Inc., Delaware - 14,542 - 92.49 (2.353) 0.882 - -

12 Releta Brewing Company LLC - 100 - 100.00 (64.003) 2.351 - -

13 Inversiones Mirabel, S.A - 2 - 100.00 (0.172) (0.163) - - 14 Mendicino Brewing Company

Inc., USA - 8,587,818 - 68.10 (47.713) (16.834) - -

Note: The above statement does not include seven subsidiary companies which have been excluded from consolidation.

By Order of the Board

London Dr. Vijay MallyaAugust 13, 2014 Chairman


LIMITED

9

Annexure to Report of the Directors (contd.)

MANAGEMENT DISCUSSION AND ANALYSIS

1. OVERVIEW

United Breweries (Holdings) Limited is the Investment Holding Company of the UB Group which has over many decades promoted and incubated a number of businesses in the country. Over the last decade or so the Company took a conscious decision to narrow its focus on businesses of a branded consumer goods nature and identified the Beverage Alcohol Sector as the core business into which the Company would invest. A number of then existing ventures including companies engaged in Engineering, Polymers, etc. were divested as a part of this strategic focus.

Recognizing the Company’s strength in building mega consumer brands, as well as operating in highly regulated environments, the Company organized its investment activities into different verticals, with United Breweries Limited being demerged from the then existing company, to become the apex of the beer business. A similar vertical was formed for the spirits business with United Spirits Limited as its apex in 2006. A third vertical, namely civil aviation was identified later and Kingfisher Airlines Limited was promoted in year 2004.

In each of these identified core business areas, the Company provides substantial financial support to the principal operating entity to facilitate investments and growth. As a consequence of this, United Breweries Limited, which had an approximate 25% market share in 1990, through a series of acquisitions between 2000 and 2002 grew to control over 50% of the existing brewing capacity in the country, making it the unquestionable leader in the Indian brewing industry. This helped your Company to facilitate a strategic investment by Scottish & Newcastle plc of the United Kingdom, subsequently Heineken, which is arguably the world’s best well-known beer brand. All brewing operations of the Group were consolidated into United Breweries Limited - the listed entity which has, today, achieved a sales volume of 139 mio cases and a market capitalization of ` 1900 crores.

Similarly, your Company propelled McDowell & Company Limited (as it then was) to substantially grow through a number of mergers and acquisitions, including the acquisition and merger of Herbertsons Limited, Carew Phipson Limited, Shaw Wallace & Co. Limited, etc. The rechristened United Spirits Limited, in the process, achieved multiple records, growing to be the world’s largest manufacturers of distilled spirits by volume. To further grow the value of the business and ensure sustainability in the long term, the Company supported USL to acquire Whyte & Mackay Limited, Glasgow, UK, the then 4th largest manufacturer of scotch whiskies in the world. This billion plus dollar acquisition would not have been possible without the financial support extended by your Company.

The Company has, last year, entered into a strategic agreement with Diageo PLC, the world’s largest spirits company by value who have made investments into USL totaling GBP 1.84 billion equivalent to ` 18,000 crores approximately, ascribing a market capitalization for the Company of about ` 34,367 crores (August 22, 2014).

The opening up of the Indian economy, requiring improved connectivity along with the gradual liberalization of civil aviation norms, encouraged your Company to promote Kingfisher Airlines as a path breaking venture committed to the highest possible levels of customer satisfaction. In a very short time Kingfisher Airlines not only became the nation’s favorite as measured by satisfaction of air travellers, but also through the processes of organic growth and acquisition of the erstwhile Deccan Aviation Limited grew to be possibly the largest carrier in the country. As with any startup business, Kingfisher Airlines required substantial support. In keeping with the Company’s track record with other businesses, your Company extended financial support to the airline.

While Kingfisher Airlines was an unquestionable success in terms of consumer satisfaction, the still restrictive regulatory environment and prohibitory cost of operations resulted in the entire sector incurring huge losses. As one of the largest players in the industry, Kingfisher Airlines incurred very significant losses. The global financial environment, during this period, triggered by the collapse of Lehman Brothers in 2008 meant that the Company could not raise equity in a timely fashion, thus increasing its dependence on borrowings, some of which necessitated underlying support from the Company.

Kingfisher Airlines ceased operations in October 2012 primarily on account of suspension of license by the Civil Aviation Regulator in response to constant disruption by crew and staff. Your Company has continued its efforts to find a suitable investor who could capitalize on the still strong reputation and license. With this intent, your Company continues to fund Kingfisher Airlines.

Certain lenders and other creditors have approached the Hon. High Court of Karnataka seeking winding up of Kingfisher Airlines and consequently also of the Company, relying upon purported guarantees issued in their favour by your Company. The validity of the guarantees had been challenged by your Company in a suit filed in the Hon’ble

Bombay High Court well before the commencement of legal action by lenders and creditors.


LIMITED

10

Annexure to Report of the Directors (contd.)

2. RISKS, CONCERNS AND MITIGATIONS

(a) (i) Risks & Concerns

The Company is exposed to risks due to various legal cases arising out of recovery actions taken against Kingfisher Airlines Limited, the details of which have been mentioned in the Report of the Directors. The Company assisted by eminent Counsels are taking all necessary steps to protect the interests of the Company.

(ii) Other risks

The Company is exposed to the following other risks and concerns:

i) Dividend distribution by Subsidiaries and Associate Companies would largely depend upon their dividend policy and developments plans. The profitability of UB Global is subject to world economic scenario, volatility of various currencies including Indian rupees and loss of business consequent to some strategic decisions by United Spirits Limited to do direct business in some international destinations. Property values could reflect overall consumer sentiment. All these factors would have some bearing on the Company’s future profitability.

ii) Certain Subsidiaries for reasons beyond their control have incurred financial losses impairing the carrying value of their equity. These investments are strategic in nature and close continuous monitoring is required to improve their performance which would also ensure that the advances given to them together with interest thereon are adequately protected and recoverable over time.

iii) Part of Company’s investments in Subsidiary and Associate Companies are under pledge with lending institutions as collateral security and may be invoked by these Lenders to recover their dues in the event of default.

iv) The Company presently does not have a Whole-Time Director or Managing Director or a Manager and a Chief Financial Officer as required under the Companies Act and Listing requirements and continued non compliance could lead to proceedings against the Company.

v) Certain leading banks are proceeding to classify the Promoter Chairman of the Company as ‘Wilful Defaulter” due to exposure in an Associate Company, which however is being resisted. In the event that such classification is upheld, could jeopardise the entire relationship with the banking sector.

vi) The Company has significant exposure on account of guarantees given to lenders and creditors of an Associate Company which if invoked could expose the Company to potential pecuniary loss.

All the above issues of concerns are but common in holding-subsidiary relationships. The Company has in place adequate mechanism of checks and balances supported by effective internal control and audit.

(b) Risk Identification process

The Company has put in place a risk identification and mitigation process involving the following steps:

• Identifying risks inherent in the Group strategy• Selecting the appropriate risk management plans• Implementing controls to manage the risks• Monitoring the effectiveness of risk management processes and controls• Periodically reviewing the Internal control effectiveness and effecting improvements to give reassurance

to the Audit Committee.

(c) Risk Mitigation

The Chairman, Managing Director (till the time he was in office), the Audit Committee and Internal Audit keep constant vigil over the functioning and performance of individual companies in the Group.

Pursuant to the requirements of the Listing Agreement, a Risk Management Committee is proposed to be formed to assist the Audit Committee to improve the internal control systems and processes to mitigate risks.

3. INTERNAL CONTROL SYSTEM The adequacy of the internal control system is reviewed by the Audit Committee of the Board of Directors. The Internal Audit of the Company, carried out by external firm of Chartered Accountants, evaluates the functioning and quality of internal controls and provides assurance of its adequacy and effectiveness. Your Board believes that appropriate procedures, controls and monitoring assessment procedures are in place and considered adequate.


LIMITED

11

Report on Corporate Governance

Pursuant to Clause 49 of the Listing Agreement, a Report on Corporate Governance is given below.

1. COMPANY’S POLICY ON CORPORATE GOVERNANCE

The Company has always followed the principles of good Corporate Governance both in their true letter and spirit.

2. BOARD OF DIRECTORS

Composition and Category of Directors

In compliance of Clause 49 of the Listing Agreements with the Stock Exchanges, the Board consists of 3 Independent Directors and 2 Non-Independent Directors (including a Non Executive Chairman).

The Company held 7 Board Meetings during 2013-14 and the gap between two meetings did not exceed four months. The Board Meetings were held on May 30, 2013, July 4, 2013, August 14, 2013, September 12, 2013, October 16, 2013, November 8, 2013, and February 11, 2014.

The details of attendance of Directors at the Board Meetings during the financial year 2013-14 and at the last Annual General Meeting (AGM) held on September 12, 2013, and also the number of outside Directorships and Committee positions held by each of the Directors as on date are given below:

Name CategoryNo. of Board

Meetings Attended

Attendance at the last AGM held

on 12.9.2013

Directorship in Other

Public Limited Companies

No. of Committees(other than the

Company) in which Member/Chairman

Dr. Vijay Mallya Non-Executive Chairman 5 Yes 9 Nil

Mr. Sidhartha V Mallya Non-Executive Director 1 No 1 Nil

Mr. V K Rekhi4 Non-Executive Director 4 Yes 3 1

Mr. N Srinivasan Independent Director 7 Yes 148

(Chairman of 3)

Mr. B S Patil1 Independent Director 1 No - -

Mr. M S Kapur Independent Director 7 Yes 64

(Chairman of 2)

Dr. Lalit Bhasin Independent Director 4 No 1010

(Chairman of 2)

Mr. A Harish Bhat2 Executive/ Managing Director

2 No - -

Mr. V. Shashikanth3 Executive/ Managing Director 5 Yes 4 Nil1resigned w.e.f. June 1, 2013; 2resigned w.e.f August 20, 2013; 3resigned w.e.f. April 17, 2014; 4resigned w.e.f. May 6, 2014;

Notes:

1. Except Dr. Vijay Mallya and Mr. Sidhartha V Mallya none of the other Directors are inter-related. 2. None of the Directors has any business relationships with the Company. 3. The above numbers exclude Directorships in Private Limited Companies, Companies incorporated under Section

25 of the Act, Chamber and Committee.4. Consequent to the resignation of Mr. V Shashikanth, the Board aided by its Chairman is looking for a suitable

person to be appointed as Managing Director/Whole-time Director of the Company. Directors seeking Appointment / Re-Appointment

The brief particulars of the Directors of the Company, seeking appointment / re-appointment at the ensuing Annual General Meeting are given in the Annexure to the Notice.


LIMITED

12

Report on Corporate Governance (contd.)

3. COMMITTEES OF THE BOARD

The Board of Directors has constituted Mandatory Committees viz., Audit Committee, and Shareholders’ and Investors’ Grievance Committee and Non-Mandatory Committees i.e. Remuneration Committee of Directors. The functions of these Committees are summarized below.

AUDIT COMMITTEE

The powers and role of the Audit Committee are as mentioned in Clause 49(II) [C] and [D] of the Listing Agreement respectively and Section 292A of the Companies Act, 1956. The terms of reference of this Committee are wide enough covering the matters specified for Audit Committee under the Listing Agreement. The Committee acts as a link between the Management, the Statutory and the Internal Auditors on one side and the Board of Directors of the Company on the other side and oversees the financial reporting process.

The Executive Vice Chairman- The UB Group, The Chief Financial Officer-The UB Group, the Managing Director and the Internal Auditors are permanent invitees of the Audit Committee. The Statutory Auditors are also invited to attend the meetings. The Company Secretary acts as the Secretary to the Committee.

Four Meetings of the Audit Committee were held during 2013-14 i.e., on May 29, 2013, August 5, 2013, November 8, 2013, and February 11, 2014. The composition and attendance of Members at the Meetings of the Audit Committee held during 2013-14 are as follows:

Name Designation CategoryMeetings held during

2013-14Meetings attended

Mr. N Srinivasan Chairman Independent Director 4 4Mr. M S Kapur Member Independent Director 4 4Mr. B S Patil 1 Member Independent Director 4 1Dr. Lalit Bhasin Member Independent Director 4 1

1ceased to be a member w.e.f. June 1, 2013

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Board of Directors at their meeting held on May 8, 2014 renamed the existing Shareholders’/Investors’ Grievance Committee as the Stakeholders Relationship Committee in order to align with the requirements of the Companies Act, 2013.

The Committee oversees the transfer of shares lodged for transfer, transmission, dematerialization / rematerialization, split and stock option allotments and complaints received from shareholders and other statutory bodies. The Company’s Registrars and Share Transfer Agents viz., Integrated Enterprises (India) Limited, Bangalore, have adequate infrastructure to process the above mentioned activities.

Majority of the complaints from shareholders are received directly by the Registrars & Share Transfer Agents, and those received by the Company are forwarded to them for immediate redressal.

8 Meetings of the Committee were held during 2013-14 i.e., on April 3, 2013, May 2, 2013, May 30, 2013, August 14, 2013, September 24, 2013, November 8, 2013, December 23, 2013 and February 11, 2014.The composition and attendance of Members at the Meetings of the Shareholders’/ Investors’ Grievance Committee held during 2013-14 are as follows:

Name Designation CategoryMeetings held during 2013-14

Meetings attended

Mr. V K Rekhi 4 Chairman Non-Executive Director 8 4Mr. B S Patil 1 Member Independent Director 8 3Mr. M S Kapur Member Independent Director 8 4Mr. A Harish Bhat 2 Member Executive/ Managing

Director8 3

Mr. V. Shashikanth 3

Member Executive/ Managing Director

8 4

1ceased to be a Member w.e.f. June 1, 2013; 2ceased to be a Member w.e.f August 20, 2013; 3ceased to be a Member w.e.f. April 17,2014; 4ceased to be a Member w.e.f. May 6, 2014;


LIMITED

13


Consequent to the resignation of Mr. A Harish Bhat, the Committee was reconstituted w.e.f August 21, 2013 and Mr. V Shashikanth was appointed as a Member of the Committee.

The Committee was again reconstituted on May 8, 2014 and Mr. N Srinivasan and Dr. Lalit Bhasin were appointed as Members of this Committee consequent to the resignations of Mr. V K Rekhi and Mr. V Shashikanth. Mr. N Srinivasan, a Non Executive Independent Director is the Chairman of the Committee.

Mr. Kaushik Majumder, Corporate Vice President-Legal & Company Secretary is the Compliance Officer.

Details of complaints resolved during the financial year 2013-14 are as follows:

No. of Complaints Received during 2013-14 Resolved during 2013-14 Closing

As per SEBI Category 14 14 Nil

Other Correspondences 287 287 Nil

None of the complaints were kept pending for more than one month. As on March 31, 2014, no share transfer requests or complaints were pending at our end.

NOMINATION AND REMUNERATION COMMITTEE

The Board of Directors at their meeting held on August 13, 2014 re-designated the existing Remuneration Committee as Nomination and Remuneration Committee in order to align with the requirements of the Companies Act, 2013.

The Remuneration Committee recommends to the Board, from time to time, compensation package for Whole-Time Directors.

The Remuneration Committee was reconstituted on May 30, 2013 and Dr. Lalit Bhasin, an Independent Director was appointed as a Member of this Committee.

One Meeting of the Remuneration Committee was held during 2013-14 i.e. on August 14, 2013. The composition and attendance of Members at the Meetings of the Remuneration Committee held during 2013-14 are as follows:

Name Designation CategoryMeetings held during 2013-14

Meetings attended

Mr. M S Kapur Chairman Independent Director 1 1

Mr. N Srinivasan Member Independent Director 1 1

Mr. B.S. Patil1 Member Independent Director 1 Nil

Mr. V K Rekhi2 Member Non-Independent Director 1 Nil

Dr. Lalit Bhasin Member Independent Director 1 1

1ceased to be a Member w.e.f. May 30, 2013; 2ceased to be a Member w.e.f. May 6, 2014 Remuneration to Managing Director

Mr. V. Shashikanth who was appointed as Managing Director of the Company w.e.f August 21, 2013 was paid a remuneration of ̀ 19.715 million as approved by the Members at the Annual General Meeting held on September 12, 2013.


LIMITED

14


Remuneration to Non-Executive Directors

Non-Executive Directors are being paid sitting fees of ` 20,000 per meeting of the Board and Audit Committee and ` 10,000 per meeting of the other Committees attended by them.

The details of sitting fees paid to the Directors of the Company for attending the Board and Committee Meetings for the year 2013-14 are as follows:

Name Fees Paid (`)Dr. Vijay Mallya 1,00,000Mr. Sidhartha V Mallya 20,000Mr. N Srinivasan 2,30,000Mr. B S Patil* 70,000Mr. M S Kapur 2,70,000Mr. V .K. Rekhi 1,20,000Dr. Lalit Bhasin 1,10,000Total 9,20,000

*paid up to June 1, 2013

The particulars of Equity Shares of the Company currently held by the Directors are furnished below:

NameNumber of Shares held

As on March 31, 2014 As on March 31, 2013Dr. Vijay Mallya 5,284,978 5,284,978Mr. Sidhartha V Mallya Nil NilMr. V. Shashikanth Nil NilMr. N Srinivasan 120 120Mr. M S Kapur Nil NilMr. V K Rekhi Nil NilDr. Lalit Bhasin Nil Nil

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Board of Directors at their meeting held on August 13, 2014 constituted the Corporate Social Responsibility Committee in compliance with the provisions of Section 135 of the Companies Act, 2013 with following Directors:

Name Designation Category

Mr. N Srinivasan Chairman Independent Director

Mr. M S Kapur Member Independent Director

Dr. Lalit Bhasin Member Independent Director

The Company Secretary acts as the Secretary to the Committee.

4. SECRETARIAL AUDIT

As required under Listing Agreement, Secretarial Audit was carried out by a qualified Practicing Company Secretary for reconciling the total admitted capital with National Securities Depository Limited [NSDL] and Central Depository Services (India) Limited [CDSL] and the total issued and listed capital. The audit confirms that the total issued/paid up capital is in agreement with the total number of shares held in physical form and the total number of dematerialized shares held with NSDL and CDSL.

This audit is carried out every quarter and the report thereon is submitted to the Stock Exchanges, NSDL and CDSL and is also placed before the Board of Directors.


LIMITED

15


5. COMPLIANCE OFFICER

Mr. Kaushik Majumder, the Company Secretary is the Compliance Officer for the purpose of complying with various provisions of Securities and Exchange Board of India Regulations, Listing Agreements with Stock Exchanges, Registrar of Companies and for monitoring the share transfer process etc. His email address is [email protected].

6. GENERAL BODY MEETINGS

The details of the last three Annual General Meetings (AGMs) of the Company held are furnished as under:

Financial Year Date Time Venue Special Resolutions passed95th Annual General Meeting April 2010 – March 2011

Wednesday, September 28, 2011

2.30.p.m. Good Shepherd Auditorium, Opp. St. Joseph’s Pre-University College, Residency Road,

Nil

96th Annual General MeetingApril 2011 – March 2012

Thursday, September 27, 2012

11.30.a.m. Good Shepherd Auditorium, Opp. St. Joseph’s Pre-University College, Residency Road,

Nil

97th Annual General Meeting April 2012 – March 2013

Thursday, September 12, 2013

3.15.p.m. Good Shepherd Auditorium, Opp. St. Joseph’s Pre-University College, Residency Road, Bangalore 560 025

Appointment of Mr. V Shashikanth as Managing Director

Postal Ballot

Pursuant to Section 192A of the Companies Act, 1956, read with the Companies (Passing of Resolution by Postal Ballot) Rules, 2011, the Company had conducted a Postal Ballot exercise following the provisions and rules framed under the Companies Act, 1956 for conducting Postal Ballot.

The details/results of the Postal Ballot exercises so conducted are as under:

Date of Notice of Postal Ballot

Date of Passing Description Result

May 30, 2013 July 29,2013 Ordinary Resolution :Under Section 293 (1) (d) of the Companies Act, 1956 for increasing the borrowing powers up to an aggregate limit of ` 5000 crores; and under Section 293 (1) (a) of the Companies Act, 1956 for creation of mortgage(s) and /or charges in favour of Banker(s), Financial Institution(s), Mutual Fund(s) or other Lenders to secure the borrowings up to an aggregate limit of ` 5000 crores.

Carried with requisite majority.

The Postal Ballot exercise, under Section 192A of the Companies Act, 1956, was conducted by Mr. M R Gopinath, a Company Secretary in practice, Scrutinizer appointed for the purpose.

None of the businesses proposed to be transacted in the ensuing Annual General Meeting require passing of resolution through Postal Ballot.


LIMITED

16


E-voting

In terms of Section 108 of the Companies Act, 2013, Rules framed thereunder and Clause 35B of the Listing Agreement, the Company is providing e-voting facility to its Members in respect of all Members’ resolutions proposed to be passed at this Annual General Meeting.

7. DISCLOSURES

Materially significant related party transactions

All details relating to financial and commercial transactions where Directors may have a pecuniary interest are provided to the Board, and the interested Directors neither participate in the discussion, nor do they vote on such matters.

Transactions with related parties as per the requirements of Accounting Standards 18 issued by The Institute of Chartered Accountants of India are disclosed in the relevant Schedule of Notes to Annual Accounts.

Details of non-compliance

There were no instances of non-compliance by the Company with any legal requirements nor have there been any strictures passed by Stock Exchanges or Securities and Exchange Board of India, on any matters relating to the capital market during the last three years.

CEO/CFO Certification

The certificate from CEO/CFO to the Board pursuant to Clause 49[V] of the Listing Agreements with the Stock Exchanges has been obtained from the Chairman of the Board, since presently the Company has neither a Managing Director or a Manager nor a Chief Financial Officer.

Code of Conduct

The Company has adopted a Code of Ethics for Board Members and Senior Management Personnel. This code is in addition to the Company’s Code of Business Conduct, applicable to all the designated employees of the Company.

A copy of the said Code of Ethics for Board Members and Senior Management Personnel is available at the Company’s website, www.theubgroup.com.

All the members of the Board and Senior Management Personnel have affirmed compliance with the Code of Ethics for Board Members and Senior Management Personnel and the Code of Business Conduct, as on March 31, 2014.

Pursuant to the requirements of SEBI (Prohibition of Insider Trading) Regulations, 1992, the Company adopted a “Code of Conduct for Dealing in Securities” at the meeting of the Board of Directors held on September 30, 2002.

The Company has updated the Code as per the requirements of SEBI and has made it applicable to all Directors and designated employees. The Code ensures prevention of dealing in shares by persons having access to unpublished price sensitive information.

Details of compliance with mandatory requirements and adoption of the non mandatory requirements of this clause

The Company has complied with all the mandatory requirements of Clause 49 of the Listing Agreement except to the extent of CEO/CFO certification as mentioned above. The details of these compliances have been given in the relevant sections of this Report. The status of compliance with the Non mandatory requirements is given at the end of the Report.

8. MEANS OF COMMUNICATION Website

The Company has its own website and all vital information relating to the Company and its performance, including quarterly results, official press releases and presentation to analysts are posted on the web-site. The Company’s website address is “www.theubgroup.com”.


LIMITED

17


Other means of communication

Quarterly Results The Company’s quarterly results are published in English and Kannada newspapers. Press Releases are also issued which are carried by other newspapers. Hence, same are not sent to the residence of Shareholders.

Newspapers in which Results are normally published in i) The Financial Express ii) Kannada Prabha (Kannada) [a regional daily published from Bangalore]

Any website where displayed www.theubgroup.comWhether it also displays official news releases and the presentations made to Institutional Investors or to the analysts:

Yes

Whether Management Discussion and Analysis is a part of the Annual Report

Yes

Designated e-mail Address for Investor Services

In terms of Clause 47(f) of the Listing Agreement, the designated e-mail address for investor complaints is “[email protected]”.

9. GENERAL SHAREHOLDER INFORMATION

The particulars of the Annual General Meeting for the year ended March 31, 2014 is as under:

Date of 98th Annual General Meeting

Venue Time

Tuesday, September 30, 2014 Conference Hall, 1st Floor, UB Tower, UB City , No. 24 Vittal Mallya Road, Bangalore – 560 001

12.00 noon

Book Closure From September 29 , 2014 To September 30, 2014

The Company’s financial year begins on April 1 and ends on March 31 of the following year:

Financial Calendar Declaration of Unaudited/Audited Results

1st Quarter April 1 to June 30 By August 14th

2nd Quarter July 1 to September 30 By November 14th

3rd Quarter October 1 to December 31 By February 14th

Audited Financial Results April 1 to March 31 By May 30th

Unclaimed Dividend

Section 205A of the Companies Act, 1956, mandates that companies to transfer dividend that has been unclaimed for a period of seven years from the unpaid dividend account to the Investor Education and Protection Fund (IEPF). In accordance with the following schedule, the dividend for the years mentioned below, if unclaimed within a period of seven years, will be transferred to IEPF.

FinancialYear

Type of dividend Dividend perShare (`)

Date of declaration Due date for transfer

2006-07 Final ` 1.00 per share November 28, 2007 December 26, 2014

2007-08 Final ` 1.00 per share December 26, 2008 January 24, 2015

2008-09 No Dividend Declared


LIMITED

18


2009-10 Final ` 1.00 per share September 30, 2010 October 29, 2017

2010-11 Final ` 1.00 per share September 28, 2011 October 27, 2018



The Company has sent communications to the concerned shareholders, advising them to lodge their claims with respect to unclaimed dividend. Shareholders are advised that once unclaimed dividend is transferred to IEPF, no claim shall lie in respect thereof, either against the Company or against IEPF.

Listing on Stock Exchanges and Stock Codes

The Company’s shares are currently listed and traded on the following Stock Exchanges:

Sl.No.

Name of the Stock Exchanges AddressScrip Name, Scrip Code &

Scrip ID

1 Bangalore Stock Exchange Limited[Regional Exchange

Stock Exchange Towers, No. 51, J C Road, Ist Cross, Bangalore 560 027

UNITEDBRED

2 BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001

United Brewr / 507458/ UBHOLDING

3 National Stock Exchange of India Limited

Exchange Plaza, Bandra Kurla Complex, Bandra (East), Mumbai 400 051

UBHOLDINGS

The Listing Fees for the year 2014-2015 has been paid to all the above Stock Exchanges.

Market Price Data

The details of market price of the shares of the Company at BSE Limited and National Stock Exchange of India Limited during the period from April 1, 2013 to March 31, 2014 are provided in the table hereunder.

MonthsBSE NSE

High LowVolume

High LowVolume

` ` ` `

April, 2013 43.80 35.80 23260 43.90 35.85 356029

May, 2013 42.70 35.10 23775 42.90 35.50 274632

June, 2013 37.90 21.05 14015 37.85 20.80 193634

July, 2013 36.60 20.90 27116 36.60 20.95 248767August, 2013 22.25 17.85 6468 22.50 18.00 82151September, 2013 30.35 18.55 33912 30.40 19.00 415343October, 2013 29.25 24.00 22917 29.20 23.95 268941

November, 2013 32.45 26.65 32446 32.45 26.50 431075

December, 2013 31.10 22.50 26631 31.20 22.50 412959

January, 2014 41.00 28.15 61202 41.00 28.20 1029690

February, 2014 29.70 22.10 10372 29.70 22.00 223336

March, 2014 27.30 22.20 16476 27.30 22.05 309227


LIMITED

19


The stock performance in comparison to BSE Sensex and NSE Nifty are provided in the chart below.

Registrars and Share Transfer Agents

All matters pertaining to Share Transfers / Transmissions are being handled by Integrated Enterprises (India) Limited, the Registrars and Share Transfer Agents. The Share Transfer requests are processed by them and a Memorandum of Transfer along with relevant documents is sent to the Company for approval. Time taken for processing Share Transfer requests including dispatch of Share Certificates is 21 days, while it takes a minimum of 10-12 days for processing dematerialisation requests. The Company regularly monitors and supervises the functioning of the system so as to ensure that there are no delays or lapses in the system.


LIMITED

20


Share Transfer System

The power of approving transfers up to 5000 shares has been delegated to the Company Secretary and two Directors. Transfers are approved every fortnight. Share transfers above 5000 shares are approved by the Board of Directors

Dematerialization of shares and liquidity

United Breweries (Holdings) Limited shares are tradable compulsorily in electronic form and through Integrated Enterprises (India) Limited, Registrars and Share Transfer Agents of the Company. The Company has established connectivity with both the depositories i.e., NSDL and CDSL. The International Securities Identification Number (ISIN) allotted to the Company’s Shares under the Depository System is INE696A01025.

Percentage of Shares held in Physical & Electronic form as on March 31, 2014

Sl. No. Particulars No. of Share Holders No. of Shares %

1 Demat Mode

NSDL 28389 50274436 75.24

CDSL 12847 15036651 22.50

Total 41236 65311087 97.74

2 Physical Mode 15421 1507434 2.26

Grand Total 56657 66818521 100.00

ECS (Electronic Clearing Service) / Mandates / Bank Details

Members may please note that ECS details contained in the BENPOS downloaded from the Depositories would be reckoned for payment of dividend when the same is declared by the Company. In order to avoid fraudulent encashment of dividend, they are requested to register either ECS mandate or Bank details for payment of dividend.

Distribution of Shareholding as on March 31, 2014

Category No. of Shareholders % No. of Shares %

Up to 5,000 56002 98.84 13789186 20.64

5,001 - 10,000 349 0.62 2576218 3.86

10,001 - 20,000 157 0.28 2237402 3.35

20,001 - 30,000 48 0.08 1181145 1.77

30,001 - 40,000 22 0.04 754681 1.13

40,001 - 50,000 13 0.02 607982 0.91

50,001 - 1,00,000 32 0.06 2359669 3.53

1,00,001 and above 34 0.06 43312238 64.82

Total 56657 100.00 66818521 100.00

Total Foreign Share Holding of the Company as on March 31, 2014 is 19,359,076 Equity Shares i.e. 28.97%. (Foreign Direct Investment comprising of 19,271,466 Equity Shares representing 28.84%) of total paid up capital of the Company.

Outstanding Global Depository Receipts (GDRs) / American Depository Receipts (ADRs) / Warrants or Convertible Bonds - Not Applicable -


LIMITED

21

Shareholding Pattern as on March 31, 2014

Categories of Shareholding %

Indian Promoters

Dr. Vijay Mallya and his relatives 7.91

Kamsco Industries Private Limited 3.62

Mallya Private Limited 3.62

Gem Investments and Trading Company Private Limited 1.60

Pharma Trading Company Private Limited 0.78

Vittal Investments Private Limited 0.15

Devi Investments Private Limited 0.69

McDowell Holdings Limited 7.87

Ganapathy Mallya Investments Private Limited -

Rossi & Associates Private Limited 0.69

VJM Investments Private Limited -

Foreign Promoters

Watson Limited 21.19

FirStart Inc 4.22

Total Promoters’ Holdings 52.34

Foreign Institutional Investors 2.82

Mutual Funds /UTI 2.93

Financial Institutions / Banks 0.30

Insurance Companies 1.17

Other Bodies Corporate 9.74

Individuals holding up to ` 1 lakh in nominal capital 21.93

Individuals holding more than ` 1 lakh in nominal capital 6.56

Others 1.47

NRIs 0.74

Total Non-Promoter’s Holdings 47.66

Grand Total 100.00



LIMITED

22

Plant Location

The Company has no plants.

Address for CorrespondenceFor any assistance regarding Share Transfers, Transmissions, change of address, non- receipt of dividends, duplicate / misplaced Share Certificates and other relevant matters, Shareholders may write to:

Address for correspondence with Registrars and Share Transfer Agents

Integrated Enterprises (India) Limited 30, Ramana Residency, 4th Cross, Sampige Road, Malleswaram, Bangalore – 560 003Tel.No. : 080 – 23460815 – 18Fax No. : 080 – 23460819

Contact Persons Mr. S Vijayagopal / Mr. S. Giridhar /Mr. Ramesh Chandra

e-mail address [email protected]; [email protected]; [email protected]; [email protected]

Address for correspondence with the Company The Company SecretaryUnited Breweries (Holdings) Limited“UB Tower”, Level 12, UB CityNo.24, Vittal Mallya Road, Bangalore 560 001.Tel. No.: 080 - 3985 6079 / 3985 6097 / 3985 6094Fax No.: 080 – 2227 4890

Address for correspondence for Shareholders holding shares in dematerialised form

Shareholders holding shares in dematerialized form should address all their correspondence (including change of address, nominations, ECS mandates, bank details to be incorporated on dividend warrants, powers of attorney, etc.) to their Depository Participant.

10. NON MANDATORY REQUIREMENTS

Chairman of the Board

The Chairman’s Office is maintained by the Company.

Remuneration Committee

The Company has in place a Remuneration Committee.

Shareholders Rights

The Company’s half yearly results are published in English and Kannada newspapers. Hence the same are not sent to

the shareholders.

Training of Board Members

Having regard to the seniority and expertise in their respective areas of specialization, their training is not considered

necessary for the time being.

Mechanism for evaluating non-executive Board Members

The Board of Directors may consider adopting such a requirement in the future.

Whistle Blower Policy

The Board may consider adopting a separate mechanism for Whistle Blower Policy in future.



LIMITED

23

Annexure

Report on Corporate Governance of United Breweries (Holdings) Limited

Compliance with Code of Business Conduct and Ethics

In accordance with Clause 49 of the Listing Agreements with the Stock Exchanges, the Board Members and Senior Management Personnel of the Company have confirmed compliance with the Code of Business Conduct and Ethics for the financial year ended March 31, 2014.

London Dr. Vijay Mallya August 13, 2014 Chairman

CERTIFICATE

To the Members of United Breweries (Holdings) Limited

We have examined the compliance of conditions of Corporate Governance by United Breweries (Holdings) Limited (“the Company”), for the year ended on March 31, 2014, as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management of the Company. Our examination was limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring the compliance with the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and representations made by the Directors and the management of the Company, we certify that, it has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement except the following conditions:

(i) It has not obtained a certificate required to be obtained from CEO/CFO since it does not have a CEO/CFO. However, the Company has obtained such certificate from its Chairman.

(ii) It did not have the requisite number of Independent Directors on its Board with effect from 01-06-2013. However, the condition with regard to the requisite number of Independent Director stands complied with effect from April 17, 2014.

We state that no investor grievance is pending for a period exceeding one month as on March 31, 2014 against the Company as per the records maintained by the Shareholders/Investors Grievance Committee.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For Vishnu Ram & CoChartered Accountants

London (S Vishnumurthy)August 13, 2014 Proprietor Membership No. : 22715

Firm Registration No. 004742S


24

Independent Auditors' ReportTo

The members of

UNITED BREWERIES (HOLDINGS) LIMITED.

1. Report on the Financial Statements

We have audited the accompanying financial statements of UNITED BREWERIES (HOLDINGS) LIMITED (‘the Company’) which comprise the Balance Sheet as at 31st March 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

2. Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (“the Act”) read with General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4. Basis for qualified opinion

a. The company has investments of ̀ 8,424 million in Kingfisher Airlines Limited (KFA). Due to financial difficulties, KFA has stopped its operations. Its net worth is fully eroded and some of its lenders/lessors have filed winding up petitions against it. These factors, along with others, have caused diminution in the carrying value of company’s investments in KFA (Refer note no. 34(f) to financial statements). No provision has been made in the accounts for such diminution in the carrying value of investments. Had the company made such provisions, the loss disclosed in the Statement of Profit and Loss would have been higher by such amount and carrying amount of investments would have been lower by that amount.

Further, the company has extended corporate guarantees of ` 87,072 million in favour of lenders/lessors/creditors of KFA (Refer note no. 32 to financial statements). The beneficiaries of such guarantees have invoked the guarantees and pursuing recovery actions against the company. This may result in loss to the company (Refer note no. 32 to financial statements). No provision has been made in the accounts for such probable loss. Had the company made such provisions, the loss disclosed in the Statement of Profit and Loss would have been higher by such amount and liabilities in the Balance Sheet would have been higher by such amount.

b. The company carries investments in certain subsidiaries and an associate company. The carrying value of such investments is ` 2,588 million. There are significant declines in the carrying value of these investments but the company has not quantified and provided for such declines. Had the company provided for such decline, the loss stated in Statement of Profit and Loss would have been higher by such amount and the carrying value of those investments would have been lower by an equal amount (refer note 34(e) to financial statements).

c. Certain subsidiaries and an associate company owe to the company ̀ 1,556 million. Net worth of these companies are eroded, impairing the recovery of such loans and advances. Company has not quantified and provided for the probable loss on this count. Had the company provided for such loss, the loss stated in the Statement of Profit and Loss would have been higher by such amount and the loans and advances stated in the Balance Sheet would have been lower by that amount (refer note 42 to financial statements).

25

Independent Auditors' Report (contd.)

d. Winding up petitions filed against the Company have been admitted by the Honourable High Court of Karnataka and is allowed to be proceeded with by the Honourable Supreme Court of India [Ref. note no. 47(c)]; the Honourable High Court of Karnataka has restrained the Company from disposing of any of its assets [Ref. note no. 49(d)];, the Company is a defendant in recovery suits instituted by certain creditors/lenders for recovery of their dues of ` 64,933 million; [Ref. note no. 47], some of the lenders have recovered their dues by disposing of the company’s pledged securities.[Ref. note no. 40]. Yet, the company has prepared its financial statements on going concern basis for the reasons stated in note no. 49. The appropriateness of preparation of financial statements on going concern basis is subject to the Company being able to successfully defend itself in the petitions/suits filed against it and obtaining substantial reliefs in the suits filed by it as mentioned in note no. 47.

e. The Company has not recognised in its financial statements, liabilities amounting to ` 80,208 million arising out of invocation of its corporate guarantees [Ref. note no. 32] and claims of ` 1,463 million made against it under an agreement entered into with a banker [Ref. note no. 32]. Had the company recognised the above, current liabilities in the Balance Sheet would have been higher by that amounts and guarantees under contingent liabilities and claims not acknowledged as debt would have been lower by ` 80,208 million and ` 1,463 million, respectively.

5. Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the “Basis for Qualified Opinion” paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2014;

(b) in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

6. Emphasis of Matter

Attention is invited to the following:

a. A term deposit for ` 609 million with Lakshmi Vilas Bank Limited, representing part of the sale proceeds of shares in United Spirits Limited in favour of Diageo group which had been kept deposited to comply with the direction of the Honourable High Court of Karnataka to the effect that the sale proceeds shall be kept invested in term deposits with banks, has been pre-closed by the bank by exercising its general lien and it has adjusted an amount of ` 219 million and encumbered an amount of ` 390 million against the borrowings from one of the group companies which had been guaranteed by the Company [Ref. note no. 46(c)].

b. Loans and advances include an amount of ` 200 million advanced to a vendor which is pending confirmation [Ref. note no. 50].

c. The Company has recognised the transaction of sale of 10,141,437 shares in United Spirits Limited in favour of Diageo group having regard to the direction of the Honourable Supreme Court of India to maintain status quo with regard to the said transaction [Ref. note no. 37].

d. Certain lenders have sold the Company’s securities that have been pledged with them and have appropriated the sale proceeds against their dues [Ref. note no. 40].

e. The Company has written off a total amount of ` 24,506 million due from its subsidiaries [Ref. note no. 35].

f. The Company has provided for an amount of ` 12,717 million towards the probable loss that may arise in respect of dues from Kingfisher Airlines Limited and another subsidiary [Ref. note no. 36].

g. A lender of Kingfisher Airlines Limited has initiated action to attach and dispose of the Company’s property in Goa to recover its dues [Ref. note no. 33(d)].

h. Based on a valuer’s report, the Company has revised and restated the carrying amounts of its land and buildings in UB city and upcoming Kingfisher Towers at their respective fair market values as on 31-3-2014 [Ref. note no. 33(a)].

i. The Company has considered the write-off of amounts due from its subsidiaries as tax deductible having regard to an opinion obtained by it [Ref. note no. 38].

26

Annexure to the Independent Auditors' Report

7. Report on Other Legal and Regulatory Requirements

i. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”), issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

ii. As required by section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 read with General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

e. on the basis of written representations received from the directors as on 31 March 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For Vishnu Ram & Co., Chartered Accountants

Firm Registration No.004742S

S.Vishnumurthy Proprietor

Membership No. 22715 London August 13, 2014

27

Referred to in paragraph 7(i) of our report of even dateRe: United Breweries (Holdings) Limited

(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) Most of the assets have been physically verified by the management during the year. Some of the assets have not been verified. However, there is a regular programme of physical verification whereunder, every asset gets verified atleast once every three years. In our opinion, such verification is reasonable having regard to the size of the company and the nature of its assets. Discrepancies noticed on verification during the year have been properly dealt with in the books of account.

(c) During the year, the company has not disposed off any substantial part of its fixed assets..

(ii) (a) As explained to us, the inventory has been physically verified during the year by the management. In our opinion, the frequency of such verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

(c) In our opinion and according to the information and explanations given to us, the company is maintaining proper records of its inventory. The discrepancies noticed on physical verification of inventory have been properly dealt with in the books of account.

(iii) (a) According to the information and explanations given to us, the company has granted unsecured loans to parties covered in the register maintained under section 301 of the Companies Act, 1956. Maximum amount involved during the year is ` 7,477 million. The amount of such loans outstanding as at 31-3-2014 is ` 11,052 million. The company has discontinued charging interest on such loans. The terms and conditions of advances made during the year are yet to be finalized.

(b) According to the information and explanations given to us, the company has taken unsecured loans from parties covered in the register maintained under section 301 of the Companies Act, 1956. Maximum amount involved during the year is ` 15,497 million. The amount of loans outstanding as at 31-3-2014 is ` 15,381 million. In our opinion, the rate of interest and other terms and conditions of loans taken by the company are prima facie not prejudicial to the interest of the company. The repayments of the dues are in accordance with terms and conditions stipulated.

(iv) In our opinion and according to the information and explanations given to us, there exists in the company an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system of the company.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of all contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 58A and 58AA and other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or Reserve Bank of India or any Court or any other Tribunal in relation to the deposits accepted by the company.

(vii) In our opinion and according to the information and explanations given to us, the company has an internal audit system commensurate with the size and nature of its business.

(viii) In our opinion and according to the information and explanations given to us the provisions of section 209(1)(d) of the Companies Act, 1956 with regard to maintenance of cost records are not applicable to the company.

Annexure to the Independent Auditors' Report (contd.)

28

(ix) (a) In our opinion and according to the information and explanations given to us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including dues in respect of provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax and other material statutory dues. However, there have been several cases of delays in depositing dues of service tax and tax deducted at source with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, excise duty etc., were in arrears as at 31-3-2014 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, following is the list of dues on account of taxes, which have not been deposited on account of disputes.

Name of the Statute Nature of dues Disputed amount ( ` in million)

Forum where dispute is pending.

Income Tax Act, 1961 Income tax for the A.Y. 1997-98. 31.998 Supreme Court

Income Tax Act, 1961 Income tax for the A.Y. 2001-02 0.482 High Court of Karnataka

Income Tax Act, 1961 Income tax for the A.Y. 2007-08. 69.535 CIT (Appeals)




Foreign Trade (Development & Regulation) Act, 1992

Penalty 5.000 High Court of Judicature, Madras

(x) Accumulated losses of the company are more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered by our audit and during the immediately preceding financial year.

(xi) As per the information and explanations given to us, the company has defaulted in repayment of dues to a bank. The unpaid dues to the bank as at March 31, 2014 were ` 2,292 million. Out of this ` 29 million has been paid in May 2014 and ` 17 million has been paid in June 2014. The company is in negotiation with the banker. The company has not issued any debentures.

(xii) In our opinion and according to the information and explanations given to us, the company has not granted any loans on the basis of security by way of pledge of shares, debentures and other securities. Therefore, the provisions of clause 4(xii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.

(xiii) In our opinion and according to the information and explanations given to us, the company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion and according to the information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures or other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.

(xv) According to the information and explanations given to us, during the year, the company has not given any guarantees in favour of banks and financial institutions for loans taken by others.

(xvi) In our opinion and according to the information and explanations given to us, the term loans raised during the year have been applied for the purposes for which they were raised.

(xvii) In our opinion and according to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that amount of ` 307.500 million raised on short-term basis have been used for granting long-term loans and advances.

(xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares during the year to any parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4(xviii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.


29

(xix) According to the information and explanations given to us, the company has not issued any debentures during the year. Therefore, the provisions of clause 4(xix) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.

(xx) According to the information and explanations given to us, the company has not raised any money during the year by public issue. Therefore, the provisions of clause 4(xx) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.







LIMITED

30

` in million

Note No. As at

March 31, 2014As at

March 31, 2013

Equity and LiabilitiesShareholders’ funds

Share capital 2 668.185 668.185 Reserves and surplus 3 618.281 13,490.326

Non-current liabilitiesLong term borrowings 4 19,281.924 15,871.908 Other long term liabilities 5 6,034.976 3,925.920 Long term provisions 6 72.569 68.990

Current liabilitiesShort term borrowings 7 3,989.559 13,158.366 Trade payables 8 801.067 466.530 Other current liabilities 9 7,107.616 15,028.086 Short term provisions 10 1,006.435 1,006.435

39,580.612 63,684.746

Assets

Non-current assetsFixed assets

Tangible assets 11 9,383.341 1,945.359 Capital work in progress 11 1,248.355 1,140.341

Non-current investments 12 13,091.320 16,186.320 Long term loans and advances 13 4,026.645 40,214.000 Other non-current assets 14 68.576 64.484

Current assetsCurrent investments 15 27.089 26.512 Inventories 16 345.792 261.524 Trade receivables 17 319.114 241.083 Cash and cash equivalents 18 1,375.930 1,275.812 Short term loans and advances 19 3,178.698 2,204.461 Other current assets 20 6,515.752 124.850

39,580.612 63,684.746

Significant Accounting Policies and other notes 1

The accompanying notes are an integral part of the accounts.

This is the Balance Sheet referred to in our report of even date.



Dr. Vijay Mallya N. Srinivasan M.S. Kapur S.Vishnumurthy Chairman Director Director Proprietor

Membership No. 22715 London Kaushik Majumder August 13, 2014 Company Secretary

Balance Sheet as at March 31, 2014


LIMITED

31

` in million

Note No. For the year ended

March 31, 2014 March 31, 2013

Revenues

Revenue from operations 21 4,917.648 4,472.841

Other incomes 22 681.068 1,103.082

5,598.716 5,575.923

Expenses

Purchase of traded goods 2,337.967 2,200.092

Cost of packing materials consumed 23 226.306 214.824

Change in inventories 24 (92.312) 14.193

Employee benefit expenses 25 294.512 201.295

Finance costs 26 4,496.226 4,573.180

Depreciation 11 81.639 92.145

Provision for bad and doubtful advances (refer note no. 36) 12,717.054 -

Bad advances / debts written off (refer note no. 35) 24,505.944 -

Other expenses 27 1,143.306 812.789

45,710.642 8,108.518

Loss before exceptional Items (40,111.926) (2,532.595)

Exceptional Items 28 19,878.906 863.025

Loss for the year (20,233.020) (1,669.570)

Earnings Per Share (Face value of ` 10 each)

Basic / Diluted Earnings Per Share (before exceptional items) (600.30) (37.90)

Basic / Diluted Earnings Per Share (after exceptional items) (302.80) (24.99)

Significant Accounting Policies and other notes 1


This is the Statement of Profit and Loss referred to in our report of even date.

Statement of Profit and Loss for the year ended March 31, 2014






LIMITED

32

` in million

For the year ended March 31, 2014

For the year endedMarch 31, 2013

A. Cash Flow from Operating Activities

Net loss before tax (20,233.020) (1,669.570)

Adjustments for :

Depreciation 81.639 92.145

Dividend income (68.450) (115.003)

Exceptional items (19,878.906) (863.025)

Profit on sale of old assets (0.073) -

Property development - (27.860)

Interest and finance charges 4,496.226 4,573.180

Interest income (393.901) (1,067.762)

Liabilities no longer required written back (207.198) (2.220)

Provision for bad and doubtful advances 12,717.054 -Provision for bad and doubtful debts 9.558 -Bad debts/ advances written off 24,505.944 -Unrealised exchange fluctuation loss 135.253 32.806

Loss on asset discarded / written off - 10.439

21,397.146 2,632.700

Operating profit before working capital changes 1,164.126 963.130

Adjustments for :

Increase in trade and other receivables (509.234) (576.094)

Increase in inventories (84.268) (5.707)

Increase in trade payable / other liabilities 1,348.330 260.271

754.828 (321.530)

Cash from operations 1,918.954 641.600

Direct taxes paid (615.080) (175.121)

Net cash from operating activities 1,303.874 466.479

B. Cash Flow from Investing Activities

Purchase of fixed assets (including changes in capital work in progress) (119.489) (117.920)

Sale of fixed assets/ advance for residential units 250.599 338.438

Loans and advances (net) (951.863) (16,540.276)

Purchase of investments (other than short term investments) (463.318) (69.888)

Sale of investments (other than short term invest-ments)

23,437.224 3,615.448

Dividend income 68.450 115.003

Increase in fixed deposits with bank (4,200.922) (52.913)

Deposit with court (2,535.000) -

Net cash generated from / (used in) investing activities 15,485.681 (12,712.108)

Cash Flow Statement for the year ended March 31, 2014


LIMITED

33

` in million

For the year ended March 31, 2014


C: Cash Flow from Financing ActivitiesInterest and finance charges (4,193.282) (3,821.158)

Interest received 363.561 17.885 Increase / (decrease) in short term borrowings (1,455.187) 13,380.395 Increase/ (decrease) in bank borrowings (3,728.775) 2,239.381 Increase/ (decrease) in Long term borrowings (8,078.591) 1,243.662 Net cash (used in) / generated from financing activities (17,092.275) 13,060.164

Net increase / (decrease) in cash and cash equivalents (302.721) 814.535 Cash and cash equivalents at the beginning of the year 1,169.993 355.458 Closing balance of cash and cash equivalents 867.272 1,169.993

Cash and Cash equivalents comprises of:Cash in hand (including foreign currencies) 0.754 0.323

Balance with banks in current accounts 839.429 1,143.158 Current investments 27.089 26.512

867.272 1,169.993

Reconciliation of cash and cash equivalents as per Balance Sheet and Cash Flow Statement

Cash and cash equivalents as per Balance Sheet 1375.930 1,275.812

Less: Deposits maturing beyond 3 months 535.747 132.331

Add: Current investments 27.089 26.512 867.272 1,169.993

Notes to the Cash Flow Statement

1. Short term investments represents amounts invested in mutual funds which are readily convertible into cash.

2. Balances with banks include ` 3.037 million being balances in unpaid dividend account which cannot be used by the Company except for payment of unpaid dividend / transfer to Investor Education and Protection Fund and ` 43.110 million in escrow account which can not be used by the Company except for repayment of secured loan by a lender.

This is the Cash Flow Statement referred to in our report of even date.

Cash Flow Statement for the year ended March 31, 2014 (contd.)






LIMITED

34

Notes to the Financial Statements CORPORATE INFORMATION:

United Breweries (Holdings) Limited (UBHL), headquartered in UB City, Bangalore is the holding company of the UB Group of Companies. It holds investments in the Groups alcoholic beverages business through United Spirits Limited and United Breweries Limited. UBHL also holds investments in Mangalore Chemicals & Fertilizers Limited, Kingfisher Airlines Limited and UB Engineering Limited. In addition to financing Group Companies by way of capital, loans and provision of corporate guarantees, it also exports alcoholic beverages, leather goods, garments and processed foods.

1. ACCOUNTING POLICIES

i. Basis of preparation of financial statements:

The financial statements of the Company have been prepared, unless otherwise stated, under historical cost convention, having due regard to the fundamental accounting assumptions of going concern, consistency, accrual and in compliance with the mandatory Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006.

ii. Use of estimates:

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. Although these estimates are based upon Management’s best knowledge of current events and actions, actual results could differ from these estimates.

iii. Revenue recognition:

Revenues are generally recognized on accrual basis except where there is an uncertainty of ultimate realization.

a. Sales are recognized when the properties in goods are transferred for a price and their collection is expected within the agreed time.

b. Lease incomes from non-cancellable operating leases are recognized in the Statement of Profit and Loss, on straight line basis, over the lease term. In respect of other operating leases, lease income is recognized in accordance with the terms of the lease deeds as modified based on negotiations from time to time.

c. Interest is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.

d. Dividends and royalty income are accounted for, when the right to receive the payment is established.

iv. Valuation of Inventories:

Inventories are valued at lower of weighted average cost and net realizable value. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

v. Fixed Assets:

Fixed assets are stated at cost less depreciation, wherever applicable. The land and building in Bangalore is stated at the revalued amount as adjusted in accordance with the revaluation done in March 2014 at the market value determined by approved valuers. All costs relating to the acquisition and installation of fixed assets are capitalised and such costs include borrowing cost relating to borrowed funds attributable to the acquisition of qualifying assets for the period upto the date of acquisition / installation.

vi. Borrowing Cost:

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of such assets till such time as the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognized as an expense in the period in which they are incurred.


LIMITED

35

Notes to the Financial Statements (contd.)vii. Depreciation:

Depreciation is provided under written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

viii. Effects of changes in Foreign Exchange rates :

a. Transactions in foreign currencies are translated applying the following exchange rates:

In respect of export transactions, at the average exchange rate prevailing in the month preceding month in which the transaction takes place.

In respect of all other transactions at the rate of exchange prevailing on the date of transaction.

b. Monetary assets and liabilities denominated in foreign currency are translated at the rates of exchange at the Balance Sheet date and the resultant gain or loss is recognized in the Statement of Profit & Loss except exchange differences arising on reporting of long term foreign currency monetary items which are accumulated in a Foreign Currency Monetary Item Translation Difference Account and amortised over the balance period of such long term asset/liability but not beyond March 31, 2020.

c. Non monetary items are carried at historical cost denominated in foreign currency and these are translated using the exchange rate prevailing on the date of transaction.

ix. Accounting for Export benefits :

Export benefits available to the company are considered for inclusion in the accounts where there is reasonable assurance that the Company will comply with the conditions attached to them and where such benefits have been earned by the Company and it is reasonably certain that the ultimate collection will be made. Exports benefits of revenue nature are recognised in the Statement of Profit and Loss.

x. Investments :

i) Current investments refer to the investments that are readily realizable and intended to be held for not more than a year.

ii) Trade investments refer to the investments made with the aim of enhancing the group’s business interest.

iii) Long term investments are stated at cost. All expenses relating to acquisition of investments are capitalized. Diminution in the value of investments, if considered permanent, is provided for.

iv) Current investments are stated at lower of cost and fair value on the Balance Sheet date

xi. Employee Benefits:

a) Defined-contribution plans :

These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. These comprise of contributions to the Employees’ Provident Fund, Superannuation Fund, Employees’ Pension Scheme and certain state plans like Employees’ State Insurance. The Company’s payments to the defined contribution plans are recognized as expenses during the period in which the employees perform the services that the payment covers.

b) Defined-benefit plans:

Gratuity: The Company provides for gratuity, a defined benefit plan (Gratuity Plan), to certain categories of employees. Liability with regard to gratuity plan is accrued based on actuarial valuation, based on Projected Unit Credit Method, and carried out by an independent actuary, at the Balance Sheet date. Actuarial Gains and Losses comprise experience adjustments and the effect of changes in the actuarial assumptions and are recognized immediately in the Statement of Profit and Loss as income or expense.

c) Other long term employee benefits:

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognized as a liability at the present value of the defined benefit obligation at the Balance Sheet date based on actuarial valuation carried out at each Balance Sheet date.


LIMITED

36

Notes to the Financial Statements (contd.)d) Short term employee benefits:

Undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by the employees is recognized during the period when the employee renders the services. These benefits include compensated absences such as paid annual leave and performance incentives.

xii. Segment reporting:

The operations of the Company are divided into alcoholic beverages, leather products, readymade garments, investments, guarantee services, property development and other activities. Accordingly, the primary segment reporting comprises the performance under these segments and the secondary segment reporting is based on geographical locations of customers.

xiii. Related Party disclosures:

Transactions between related parties are disclosed as per Accounting Standard 18- “Related Party Disclosures”. Accordingly, disclosures regarding the name of the transacting related party, description of the relationship between the parties, nature of transactions and the amount outstanding as at the end of the accounting year, are made.

xiv. Taxes on Income:

Provision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amount of tax payable in respect of taxable income for the period.

Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forward to the extent that there is reasonable / virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

xv. Impairment of assets:

The Company evaluates all its assets for assessing any impairment and accordingly recognises the impairment, wherever applicable, as provided in Accounting Standard 28- “Impairment of Assets”.

xvi. Provisions and Contingencies:

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an out flow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on Management estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current Management estimates.

xvii Earnings per share:

Earnings per equity shares (basic / diluted) is arrived at by dividing the Net Profit or Loss for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year.


LIMITED

37

Notes to the Financial Statements (contd.)

` in million As at

March 31, 2014 As at

March 31, 2013

2. Share capital

Authorised

100,000,000 (2013: 100,000,000 )Equity Shares of ` 10/- each

1,000.000 1,000.000

1,000.000 1,000.000

Issued, Subscribed and Paid-up

66,818,521 (2013: 66,818,521) Equity Shares of ` 10/- each fully paid up.

668.185 668.185

668.185 668.185

a. Reconciliation of equity shares outstanding at the beginning and at the end of the reporting year

2013-14 2012-13

No. of Shares Amount No. of Shares Amount

As at the beginning of the year 66,818,521 668.185 66,818,521 668.185

Issued during the year - - - -

Outstanding at the end of the year 66,818,521 668.185 66,818,521 668.185

b. Terms and rights attached to equity shares

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. The rights of shareholder is governed by the Articles of Association of the Company and the Companies Act, 2013.

c. Details of shareholders holding more than 5% shares in the Company

31-03-2014 31-03-2013

Number of shares

% holding Number of shares

% holding

Dr Vijay Mallya 5,284,978 7.91 5,284,978 7.91

McDowell Holdings Limited 5,260,002 7.87 5,260,002 7.87

Watson Limited 14,159,986 21.19 14,159,986 21.19

d. Aggregate number of shares issued for consideration other than cash during the period of five years immediately preceeding the reporting date is nil.


LIMITED

38

` in million

As at March 31, 2014


3. Reserves and surplus

Capital reserve 511.365 511.365

Securities premium account 8,331.975 8,331.975

Fixed assets revaluation reserve At the beginning of the year 1,042.113 1,044.484 Add: additions during the year (refer note 33(a)) 7,508.592 -Less: Adjustment on sale of land and building - 2.371

8,550.705 1,042.113

Foreign Currency Monetary Item Translation Difference Account ( refer note no. 48)

(361.660) (214.043)

General reserve 75.000 75.000

Surplus as per Statement of Profit and Loss :At the beginning of the year 3,743.916 5,413.486 Less: loss for the year (20,233.020) (1,669.570)

(16,489.104) 3,743.916

618.281 13,490.326

4 Long term borrowingsSecuredFrom banks 2,410.938 4,662.688 From others 8,255.387 17,950.106

UnsecuredFixed deposits 211.720 524.675 From group companies 13,394.095 270.000 From others 1,085.652 895.652

25,357.792 24,303.121 Less: Current maturitiesSecuredFrom banks 2,318.054 151.416 From others 3,423.117 7,653.636

UnsecuredFixed deposits 109.697 361.161 From group companies 20.000 250.000 From others 205.000 15.000

6,075.868 8,431.213

19,281.924 15,871.908



LIMITED

39

Nature of security Terms of repayment

a. Nature of security and terms of repayment for secured borrowings

(1) Vehicle loan from HDFC Bank amounting to ` 4.609 million (Pr. year ` 6.497 million) is secured by hypothecation of vehicle.

Repayable in 60 equated monthly instalments from the date of loan (May 2011) along with interest of 10.25% p.a. Last instalment due in April 2016.

(2) Loan from The Lakshmi Vilas Bank Limited amounting to ` 159.529 million (Pr. year ` 224.220 million ) is secured by assignment of future receivables for use of Pegasus logo by group companies.

Repayable in 84 equated monthly instalments from the date of loan (February 2009) along with interest at the rate of BPLR + 0.75% (presently @ 18% p.a.). Last instalment due in December 2016.

(3) Loan from Yes Bank Limited amounting to ` 2,246.800 million (Pr. year ` 2,196.800 million) is secured by subservient charge on all current assets and movable fixed assets of the company, both present and future, deposit in debt service reserve account equal to the total amount of scheduled interest payment due for one month and pledge of 2,726 shares in United Spirits Limited, 8,794,000 shares in United Breweries Limited held by the company, 6,300,000 shares in United Breweries Limited held by McDowell Holdings Limited besides corporate guarantee by McDowell Holdings Limited.

Moratorium of 24 months followed by 12 equal quarterly instalments from the date of each respective disbursement i.e. March 30, 2013. Interest @ 2.50% above the Yes Bank Base rate prevailing from time to time (presently 13.00% p.a.). Additional interest rate of 2% for non rating of facilities. Over due interest of ` 45.624 million is since paid. The Loan has been recalled in January 2014 and is overdue for payment as on balance sheet date. The company is negotiating for restoration of the facility.

(4) Loan from ECL Finance Limited amounting to ` 390.247 million (Pr year ` 1,560.882 million) is secured by the pledge of 1,175,000 shares in United Spirits Limited held by the company, besides corporte guarantee by a subsidiary.

Repayment due on 31st March 2014. Principal overdue for payment. Rate of interest @ 18.75% p.a.

(5) Loan from SICOM Limited amounting to ` 0.453 million (Pr year ` 1,010.000 million) is secured by pledge of 1,912,500 shares in United Spirits Limited, 9,000,000 shares in Mangalore Chemicals and Fertilizers Limited and 6,269,728 shares in UB Engineering Limited held by the company and 85,000 shares in United Spirits Limited, held by a subsidiary company.

Repayable in June 2013. Overdue principal of ` 0.453 million is since paid. Interest at the rate of 15.75% p.a. Overdue interest of ` 0.346 million is since paid.

(6) Loan from HDFC Limited (including foreign currency denominated loan of USD) amounting to ` 7,864.687 million (Pr year ` 9,161.741 million) are secured by the pledge of 1,007,000 shares in United Spirits Limited, 317,030 shares in McDowell Holdings Limited held by the company, mortgage by deposit of title deed of the company’s land in Bangalore, the superstructure thereon and assignment of the rent receivable from the property let out, securitization of future sale proceeds from the luxury residential building “Kingfisher Towers - Residences in UB City”, pledge of 3,648,000 shares in United Spirits Limited held by a subsidiary company.

Loan of ` 1,798.779 million repayable in 120 monthly instalments from February 2012. Loan of ` 582.871 million is repayable in 119 monthly instalments from February 2012. Loan of ` 924.173 million repayble in October 2013, loan of USD 75.940 million repayable in 9 instalments, last instalment due on 30th April 2016. Overdue principal of ` 924.173 million is since paid



LIMITED

40


b. Terms of repayment for Unsecured borrowings

(1) Public deposits Repayable within 1 to 3 years from the date of deposit and not on demand or notice except at the sole discretion of the company. Rate of interest is 11- 11.5%

(2) Loan from erstwhile associate

Amounting to ` 13,374.095 million

Repayable in 3 equal instalments in March 2019,March 2020 and March 2021. Interest rate is @ 9.50% p.a. Interest payment starts from January 2015.

Loan from group company Amounting to ` 20 million

Repayable in October 2014. Rate of interest @ 12% p.a.

(3) Loan from Others

a) Amounting to ` 5 million

Repayable in December 2013. Rate of interest @ 12%. Overdue principal of ` 5 million is pending for payment. Overdue interest ` 3.543 million is pending for payment.

b) Amounting to ` 200 million Repayable in May 2012. Overdue principal of ̀ 200.000 million is pending for payment. Rate of interest @ 18%. Overdue interest of ` 92.862 million is pending for payment.

c) Amounting to ` 880. 652 million Repayable as and when company sells its share of units in “Kingfisher Towers-Residences in UB City” and to the extent the sale proceeds are over and above ` 20,000/- per sft, so however, that the entire loan is repayable before the company takes possession of its full share. Rate of interest @ 12% p.a. `


` in million As at

March 31, 2014

March 31, 2013

5. Other long term liabilitiesTrademark licence security deposits 889.157 2,365.000 Lease security deposits 346.334 354.950 Interest accrued and not due 846.683 3.248 Refundable security deposit 67.500 67.500 Instalments from allottees for residential units 1,385.302 1,135.222 Pegasus advance received 2,500.000 -

6,034.976 3,925.920

6. Long term provisions

For legal cases 37.428 37.428 Leave encashment 35.141 31.562

72.569 68.990


LIMITED

41


a. Nature of security and terms of repayment for secured borrowings

(1) Working capital loan from HDFC Bank is secured by pledge of 662,103 shares of United Spirits Limited, 4,753,881 shares of Mangalore Chemicals and Fertilizers Limited held by the company, first charge on movable fixed assets i.e. plant and machinery, furniture and fixtures valued at ` 370 million.

Repayable on demand. Average rate of interest @ 13.5% p.a.

(2) Loan from HDFC Limited amounting to ` 707.822 million (Pr year ` 750 million) (for security details, refer point no (6). in note no 4)

Repayable in October 2013. Overdue principal of ` 707.822 million is since paid. Rate of interest @13% p.a.

b. Terms of repayment for unsecured borrowings

(1) Loan from group companies amounting to ` 2,516.008 million

` 508.800 million repayable in June 2014. Rate of interest @19.5% p.a., ` 2,007.208 million repayable on demand.

(2) Loan from others includes ` 250 million (Pr year ` 250 million) from LKP Finance Ltd, secured through pledge of shares held by a third party.

Repayable in November 2012, overdue for payment. Rate of interest @18 % p.a.

(3) Short term loan from LKP Finance Limited amounting to ` 358.049 million (Pr year ` 715.300 million) secured through pledge of shares held by a third party.

Repayable in June 2013, overdue for payment. Rate of interest @18 % p.a.

` in million As at

March 31, 2014 March 31, 20137. Short term borrowings v

SecuredFrom bank - 1,442.025

Working capital loan / cash credit from bank 157.680 192.680

From others 707.822 4,256.248

UnsecuredFrom a group company 2,516.008 6,717.413

From others 608.049 250.000

Intercorporate deposits - 300.000

3,989.559 13,158.366



LIMITED

42

` in million As at

March 31, 2014 March 31, 20138. Trade payables

Trade creditors 801.067 466.530 801.067 466.530

9. Other Current LiabilitiesCurrent maturities of long term borrowings 6,075.868 8,431.213 Interest accrued and not due 84.687 837.750 Interest accrued and due 242.036 288.560 Statutory dues 64.210 92.050 Employee dues 1.851 0.729 Security deposit 0.100 0.100 Advertisement and sales promotion expenses payable 338.514 201.997 Advances received from customers 67.784 126.138 Claims payable 7.921 14.906 Other liabilities 174.645 4,895.004 Provision for expenses 34.231 123.134 Creditor for capital goods 12.637 13.043 Investor Education and Protection Fund: Unclaimed public deposits/interest 0.132 0.217 Unclaimed dividends 3.000 3.245

7,107.616 15,028.086 10. Short-term provisions

Income tax 1,005.988 1,005.988 Wealth tax 0.447 0.447

1,006.435 1,006.435



LIMITED

43

Notes to the Financial Statements (contd.)11

. TA

NG

IBLE

ASS

ETS

(Ref

er n

ote

33)

` in

mill

ion

Des

crip

tio

n

CO

ST /

VA

LUA

TIO

ND

EPR

ECIA

TIO

NN

et V

alu

e o

f A

sset

s as

at

31.3

.14

Net

Val

ue

of

Ass

ets

as a

t31

.03.

13

As

at01

.04.

13R

eval

ua-

tio

n

Ad

di-

tio

ns

du

rin

g t

he

year

Del

e-ti

on

s d

uri

ng

th

e ye

ar

As

at

31.3

.14

As

at

01.0

4.13

Ded

uc-

tio

ns

du

rin

g

the

year

For

th

e ye

ar A

s at

31

.3.1

4

Lan

d

1,0

88.7

23

5,8

35.6

05

-

-

6,9

24.3

28

-

-

-

-

6,92

4.32

8 1

,088

.723

Bu

ildin

g

685

.104

1

,672

.987

2

.729

-

2

,360

.820

1

68.5

71

-

28.

115

196

.686

2

,164

.134

5

16.5

33

Plan

t &

Mac

hin

ery

411

.161

-

4

.554

0

.023

4

15.6

92

195

.299

0

.013

2

9.40

2 2

24.6

88

191

.004

2

15.8

62

Off

ice

Equ

ipm

ent

35.

213

-

1.21

6 0

.151

3

6.27

8 1

7.82

7 0

.096

3

.351

2

1.08

2 1

5.19

6 1

7.38

6 Fu

rnit

ure

an

d

Fixt

ure

2

20.6

30

-

0.5

06

0.3

57

220

.779

1

28.4

63

0.1

58

15.

944

144

.249

7

6.53

0 9

2.16

7 C

om

pu

ters

2

2.13

3 -

0

.956

0

.077

2

3.01

2 1

6.27

1 0

.054

2

.234

1

8.45

1 4

.561

5

.862

V

ehic

les

36.

294

-

1.5

14

0.8

24

36.

984

27.

468

0.6

66

2.5

93

29.

395

7.5

89

8.8

26

TOTA

L

2,4

99.2

58

7,5

08.5

92

11.

475

1.4

32

10,0

17.8

93

553

.899

0

.987

8

1.63

9 6

35.5

51

9,3

83.3

41

1,9

45.3

59

Cap

ital

wor

k in

pro

gres

s 1

,248

.355

1

,140

.341

` in

mill

ion

Des

crip

tio

n

CO

ST /

VA

LUA

TIO

ND

EPR

ECIA

TIO

NN

et V

alu

e o

f A

sset

s as

at

31.3

.13

Net

Val

ue

of

Ass

ets

as a

t31

.03.

12

As

at01

.04.

12

Ad

dit

ion

s d

uri

ng

th

e ye

ar

Del

etio

ns

du

rin

g t

he

year

As

at

31.3

.13

As

at

01.0

4.12

Ded

uc-

tio

ns

du

rin

g

the

year

For

th

e ye

ar A

s at

31

.3.1

3

Lan

d

1,0

91.1

37

-

2.4

14

1,0

88.7

23

-

--

-1,

088.

723

1,09

1.13

7

Bu

ildin

g

708

.948

-

2

3.84

4 6

85.1

04

149

.603

1

1.51

0 3

0.47

8 1

68.5

71

516

.533

55

9.34

5Pl

ant

& M

ach

iner

y 4

05.6

64

5.5

41

0.0

44

411

.161

1

61.8

67

0.0

38 3

3.47

0 1

95.2

99

215

.862

2

43.7

97

Off

ice

Equ

ipm

ent

35.4

65 0

.086

0

.338

3

5.21

3 1

5.17

9 0

.174

2

.822

1

7.82

7 1

7.54

1 2

0.28

6 Fu

rnit

ure

an

d F

ixtu

re

220

.438

1

.121

0

.929

2

20.6

30

109

.119

0

.797

2

0.14

1 1

28.4

63

92.

012

111

.319

C

om

pu

ters

1

9.30

7 3

.840

1

.014

2

2.13

3 1

5.09

2 0

.975

2

.154

1

6.27

1 5

.862

4

.215

V

ehic

les

36.

311

0.0

59

0.0

75

36.

294

24.

461

0.0

73

3.0

80

27.

468

8.8

27

11.

849

TOTA

L

2,5

17.2

69

10.

647

28.

658

2,4

99.2

58

475

.321

13.

567

92.

145

553

.899

1

,945

.359

2

,041

.948

Ca

pita

l wor

k in

pro

gres

s 1

,140

.341

1,0

33.0

68


LIMITED

44

` in million

As at March 31, 2014 As at March 31, 2013

12. Non-current investments ( Refer note 34 )

ParticularsNumber

ofShares

FaceValue

CostNumber

ofShares

FaceValue

Cost

TRADE INVESTMENTS IN FULLY PAID EQUITY SHARES:

QUOTED

United Breweries Limited 30,295,911 ` 1 1,311.462 30,295,911 ` 1 1,165.238

Mangalore Chemicals & Fertilizers Limited

17,836,068 ` 10 205.456 29,043,797 ` 10 334.569

United Spirits Limited 8,977,699 ` 10 263.862 23,020,320 ` 10 676.575

McDowell Holdings Limited 1,128,762 ` 10 37.527 3,599,887 ` 10 120.357

UB Engineering Limited 6,345,554 ` 10 424.928 6,345,554 ` 10 424.928

Kingfisher Airlines Limited 131,918,897 ` 10 6,156.712 194,633,555 ` 10 9,082.940

8,399.947 11,804.607

UN-QUOTED

In Equity Shares

In Subsidiary Companies

Kingfisher Training & Aviation Services Ltd 33,216 ` 10 0.332 33,216 ` 10 0.332

UB Infrastructure Projects Limited 50,000 ` 10 0.500 50,000 ` 10 0.500

UB Electronic Instruments Limited 280,976 ` 100 27.209 280,976 ` 100 27.209

UB International Trading Limited 25,050,002 ` 10 250.500 50,002 ` 10 0.500

Kingfisher Finvest India Limited 50,000 ` 10 0.500 50,000 ` 10 0.500

Kingfisher Aviation Training Limited 3,000,000 ` 10 30.000 3,000,000 ` 10 30.000

City Properties Maintenance Company Bangalore Limited

50,000 ` 10 0.500 50,000 ` 10 0.500

UB Overseas Limited 50 USD 1 0.002 50 USD 1 0.002

UBHL (BVI) Limited 238,370 USD 1 10.040 238,370 USD 1 10.040

Rigby International Corp. 15,115,488 USD 1 660.238 15,115,488 USD 1 660.238

Rubic Technologies Inc. 5,500,000 USD 0.01 26.558 5,500,000 USD 0.01 26.558

1,006.379 756.379

In Other Companies

United Racing & Bloodstock Breeders Limited

40,045 ` 10 0.400 40,045 ` 10 0.400

WIE Engineering Limited 306,860 ` 10 1.419 306,860 ` 10 1.419

UB Pharma (Kenya) Limited 120,000 KS 100 7.616 120,000 KS 100 7.616

9.435 9.435



LIMITED

45

` in million

As at March 31, 2014 As at March 31, 2013

PARTICULARSNUMBER

OFSHARES

FACEVALUE

COSTNUMBER

OFSHARES

FACEVALUE

COST

In Preference Shares

In Subsidiary Companies

UB Overseas Limited - 0.001% Unsecured Optionally - 25,815,605 USD 1 1,211.553 24,815,605 USD 1 1,151.893

Convertible Redeemable Preference Shares

Kingfisher Finvest India Limited 10,000,000 ` 1 2,500.000 10,000,000 ` 1 2,500.000

3,711.553 3,651.893

13,127.314 16,222.314

Less : Provision for diminution in value of certain investments

35.994 35.994

13,091.320 16,186.320

Aggregate amount of quoted investments 8,399.947 11,804.605

Aggregate amount of un quoted investments 4,691.373 4,381.715

Market value of quoted investments 50,091.610 59,802.266



LIMITED

46


` in million As at As at

March 31, 2014 March 31, 201313. Long term loans and advance

Loans and advances to subsidiaries

Considered good 2,950.647 34,328.523

Considered doubtful 139.982 20.000

3,090.629 34,348.523

Less: Provision 139.982 2,950.647 20.000 34,328.523

Loans and advances to associates

Considered good 1,073.348 5,868.110

Considered doubtful 12,597.072 -

13,670.420 5,868.110

Less: Provision 12,597.072 1,073.348 - 5,868.110

Loans and advances to others considered good 2.650 17.367

4,026.645 40,214.000

14. Other non-current assets

Other deposits - considered good 68.576 64.484

68.576 64.484

15. Current investments

Mutual funds* 27.089 26.512

27.089 26.512

*current market value as on 31.03.2014 is ` 36.666 million


LIMITED

47

Notes to the Financial Statements (contd.) ` in million

As at As at March 31, 2014 March 31, 2013

16. Inventories

Raw materials 0.981 3.403

Packing materials, stores and spares 43.627 49.249

Finished goods including goods in transit 301.184 208.872

345.792 261.524

17. Trade receivables

Unsecured

Exceeding six months:

Considered good 10.860 19.102


22.956 21.640

Less: Provision 12.096 10.860 2.538 19.102

Others: considered good 308.254 221.981

319.114 241.083

18. Cash and cash equivalents

Cash on hand 0.754 0.323

Balances with banks:

in Current accounts 836.392 1,139.919

in Unpaid dividend account 3.037 3.239

in Deposit account 535.747 132.331

1,375.930 1,275.812

19. Short term loans and advances

Advances to suppliers 854.584 840.909

Advance income tax 1,945.671 1,330.591

Prepaid expenses - 0.287

Other receivables 378.443 32.674

3,178.698 2,204.461

20. Other current assets

Deposit with court (refer note no. 37 (b)) 2,535.000 -

Bank deposit (refer note no. 37 (c)) 3,797.506 -

Duty drawback receivable 183.246 124.850

6,515.752 124.850


LIMITED

48

` in million

Year ended

March 31, 2014 March 31, 2013

21. Revenue from operations Sales 3,466.049 3,275.579

Property development - 27.860

Dividends 68.450 115.003 Guarantee commission 18.833 73.672 Lease rent 511.738 474.468 Income from property maintenance 101.188 98.261 Licence fees 552.506 162.045 Management service fees 30.000 34.200 Duty drawback 168.884 210.417 Profit on sale of investments - 1.336

4,917.648 4,472.841

22. Other income Interest income 393.901 1,067.762 Profit on sale of old assets 0.073 - Provisions / liabilities no longer required/payable written back 207.198 2.220 Exchange gain 53.440 23.453 Miscellaneous income 26.456 9.647 681.068 1,103.082

23. Cost of packing material consumedPacking materials consumed 226.306 214.824

226.306 214.824

24. Changes in inventories of finished goodsOpening stock:Finished goods 208.872 223.064

208.872 223.064

Closing stock:Finished goods 301.184 208.871

301.184 208.871

(Increase)/ decrease in stocks (92.312) 14.193



LIMITED

49

` in million

Year ended

March 31, 2014 March 31, 2013

25. Employee benefits expensesSalaries, wages and bonus 209.069 146.718Contribution to provident and other funds 57.740 29.263

Workmen and staff welfare 27.703 25.314

294.512 201.295 26. Finance costs

Interest expense 4,418.008 4,285.079Processing charges and bank charges 78.218 288.101

4,496.226 4,573.180 27. Other expenses

Rent including lease rent 31.014 30.649Rates and taxes 42.362 21.940Insurance premium 5.597 3.547Communication expenses 8.514 8.319Travel and conveyance 30.639 24.531Electricity charges 1.634 1.234Printing and stationery 3.145 2.490Repairs & maintenance i) Buildings 12.904 12.637 ii) Machinery 3.109 3.339 iii) Others 2.503 0.256Vehicle repairs and maintenance 7.108 5.784Property maintenance expenses 78.163 75.774Advertisement and sales promotion 288.481 177.225Brokerage 2.431 5.459Rebate and discount 1.324 0.093Commission paid to selling agents 47.134 26.159Freight charges 109.845 206.976Exchange loss 214.722 -Miscellaneous expenses 26.904 18.867Claims paid 0.376 0.206Professional charges 84.020 85.262Legal charges 109.084 66.548Directors' sitting fees 0.920 1.070Auditor's remuneration 3.565 2.865Provision for bad and doubtful debts 9.558 -Loss on asset discarded / written off - 10.439Other expenses 18.250 21.120

1,143.306 812.789

28. Exceptional items

Profit on sale of shares to Diageo Plc (net of expenses) 14,128.830 -

Profit on sale of pledged securities by KFA lenders (net) 2,136.259 863.025 Profit on sale of pledged securities by the company’s lenders 3,613.817 -

19,878.906 863.025



LIMITED

50


29. Financial statements have been prepared on basis similar to last year in view of the clarifications issued by Ministry of Corporate Affairs, Govt. of India, vide its Circular no. 1/19/2013-CL-V dated 4th April 2014.

30. UB City Luxury residential Project

The Company has executed a Joint Development Agreement with a Developer on 26th April, 2010 for development of a luxury residential building to be named as “Kingfisher Towers – Residences at UB City”. The development of the above project (in which the Company is entitled to 55% share of super built up area) is under progress and is expected to be completed in 2015.

The Company has issued allotment letters in respect of seven residential units in Kingfisher Towers by collecting booking amounts of ` 1,385.302 million (Pr year ` 1,135.222 million)

31. Estimated amount of contracts remaining to be executed on capital account as at 31st March 2014 and not provided for is ` 6.600 million (net of advances) (Pr year ` 2.190 million).

32. Contingent liabilities: ` in millionAs at

March 31, 2014As at

March 31, 2013

a) Guarantees given by the Company on behalf of subsidiaries to banks and financial institutions and others

Nil 1,500.000

b) Guarantees given by the Company on behalf of associates to banks and financial institutions and others(The enforceability of the Guarantees issued for Kingfisher Airlines Ltd beneficiaries are being contested in appropriate Courts of law)

88,280.760 90,852.200

c) Claim against the company not acknowledged as debt 1,462.900 -d) Demand raised by Income Tax authorities against which the Company has

preferred appeals786.774 948.793

Certain aircraft lessors and vendors of Kingfisher Airlines Limited (KFA) have invoked the corporate guarantees given by the company on behalf of KFA. The total amount invoked and outstanding as on March 31, 2014 is ` 15,275.400 million (Pr year ` 9,874.600 million) and Kingfisher Airlines Limited is under negotiation with the beneficiaries. Also, Consortium of KFA bankers have invoked Company’s corporate guarantee and demanded payment of ` 64,932.900 million due from KFA. This matter is being contested by the Company in various Courts. Accordingly, the Company continues to recognize these obligations as only ‘contingent liabilities’.

A claim has been made for ` 1,462.900 million by a Bank towards share recompense amount. The company has obtained legal advice that this claim is not enforceable and accordingly the amount is presently shown above as “claims against the Company not acknowledged as debt.”

33. Fixed Assets

a) The Company has revalued its land & buildings in Bangalore, as on March 31, 2014 at their Fair Market Value based on Valuation Report of an independent approved valuer and the carrying values of the respective assets have been adjusted accordingly. The incremental appreciation in the value of land arising out of the aforesaid valuation is ` 5,835.605 million and that of building is ` 1,672.987 million. The total incremental appreciation of ` 7,508.592 million has been credited to the Fixed Assets revaluation reserve.

b) The Company owns a valuable trademark in the form of the company logo which is carried at NIL value. This logo has been licenced to Group companies.

c) The Company’s UB City property and the land, in which residential properties are being developed, are under charge in favour of HDFC Limited, for facilities granted to the Company.

d) KFA lenders have sent a notice purportedly under the SARFAESI Act in respect of the Company’s property in Goa. The Company has responded to the notice issued to it purportedly under the SARFAESI Act challenging the same.

Pending adjudication of the suit, the Goa property continues to remain as an asset of the Company. .


LIMITED

51


34. Investments:

a) The Company has pledged 8,090,787 shares of United Spirits Limited, 13,753,881 shares of Mangalore Chemicals & Fertilizers Limited, 6,269,728 shares of UB Engineering Limited, 59,150,000 shares of Kingfisher Airlines Limited, 16,274,122 shares of United Breweries Limited and 317,030 shares of McDowell Holdings Limited to secure the borrowings of the Company along with the borrowings of subsidiary companies and an associate company. The Company has also given undertaking in favour of it’s lender and that of an associate company, for non disposal of 4,000,000 shares held in Mangalore Chemicals & Fertilizers Limited and 3,105,000 shares held in United Breweries Limited.

b) Investments as on 31st March, 2014 includes 72,368,897 shares of Kingfisher Airlines Limited, 639,280 shares of McDowell Holdings Limited and 360,000 shares of United Spirits Limited held in custody of lenders after they have invoked the pledge of the shares. Of the above, 72,368,897 shares of Kingfisher Airlines Limited, 639,280 shares of McDowell Holdings Limited and 1,125 shares of United Spirits Limited, have been sold by them, subsequent to Balance Sheet date.

c) The Company’s investment of ` 26.512 million with IDFC Mutual Fund is under a lien, to secure the borrowings of an associate company.

d) The Preference Shares held in an overseas subsidiary, UB Overseas Limited are to be redeemed anytime at the option of the Company or at the end of 10 years from the date of allotment of shares. The Company also has the option for partial / full conversion of Preference shares into equity shares of UB Overseas Limited, in the ratio of 1 equity share for one preference share held, at face value of USD 1 each to be determined and issued by the Issuer. During the year, the Company has made additional investment of USD 1 Million preference of USD 1 each.

e) Investments in subsidiaries (including step down subsidiaries) and associates are presently considered as long term and strategic in nature and diminution in their carrying cost, though significant, is considered temporary and accordingly no provision has been considered necessary.

f) The Company along with its subsidiaries has significant financial exposure on various counts to Kingfisher Airlines Limited (KFA). Although KFA’s license has expired on December 31, 2012, under civil aviation regulations, KFA has a period of 24 months to reinstate the same. As at March 31, 2014, the financial exposure includes equity investment of ` 8,424.300 million and corporate guarantees to banks/aircraft lessors, some of which have been invoked. Such invocations are being contested in court. The Company considers the diminution in the value of this investment to be temporary and as such no provision has been considered in the accounts.

35. The Company, over the years advanced significant amounts to subsidiaries aggregating to ` 27,596.573 million.

The Company has made a critical appraisal of the amount recoverable from certain subsidiaries and taking into consideration the net worth of those companies a sum of ` 24,505.944 million due from those subsidiaries have been written off.

36. The Board of Directors has reviewed the significant amounts due from KFA and in the light of KFA’s liquidity constraints and as a matter of prudence, has made a provision for the amounts due of ` 12,597.072 million. Additionally provision has also been made for a sum of ` 119.982 million due from a subsidiary.

37. Sale of shares in United Spirits Limited

a) Pursuant to the Share Purchase Agreement entered into by the Company and its subsidiary Kingfisher Finvest India Ltd (KFIL) for sale of 16,716,987 equity shares held by it in United Spirits Ltd to Relay BV, an indirect wholly owned subsidiary of Diageo plc., the Company, on July 4, 2013, with leave of the Hon’ble. High Court of Karnataka under sec. 536(2) of the Companies Act, 1956 sold 10,141,437 Equity shares. Appeals were filed by the petitioners in the Winding up petition before the Karnataka High Court seeking to set aside the above Order of the Company Judge. The Division Bench of the Hon’ble High Court of Karnataka vide its order dated 20th December 2013 has set aside the permission granted by the Hon’ble Company Judge under Section 536(2) of the Companies Act, 1956 to dispose of the shares of USL in favour of Diageo Plc / Relay BV. The Company and Diageo Plc have approached the Hon’ble Supreme Court by way of SLPs challenging the order of the Division Bench. Pending disposal of the Company’s SLP’s, the Hon’ble Supreme Court has directed that status quo be maintained in respect of the transaction of sale of shares to Diageo. Accordingly the company has accounted for the said sale of shares in its books.


LIMITED

52

The Hon’ble Supreme Court also stated that the proceedings for winding up of the Company may continue before the learned Company Judge.

b) The leave of the Court under section 536 (2), also mandated the Company to keep a sum of ` 2,500 million deposited with the Court. Accordingly, the Company has deposited Rs. 2,500 million with The Registrar General, High Court of Karnataka, Bangalore and the same is included under “Other Current Assets”.

c) Further, the order granting permission to sell the shares as above, mandated the Company to keep the net sales proceed remaining after paying off the permitted secured lenders, transaction costs and taxes, invested in bank deposits until further orders. Accordingly, the Company has kept deposited a sum of ` 3,797.506 million with a Bank, which has been shown under “ Other Current Assets”.

38. Tax provision

The Company has received tax opinion that amounts due from subsidiaries which have been written off, are tax admissible and consequently, no provision for tax has been made in the accounts.

39. Exceptional Items

Exceptional items includes :

a) Profit of ` 14,128.830 million on sale of 10,141,437 equity shares in United Spirits Limited, to Diageo Plc / Relay BV.

b) Profit (net) of ` 2,136.259 million on sale of 2,469,098 equity shares in United Spirits Limited, 11,207,729 equity shares in Mangalore Chemical and Fetrilizers Limited, 2,471,125 equity shares in McDowell Holdings Limited and 62,714,658 equity shares in Kingfisher Airlines Limited by lenders of Kingfisher Airlines Limited

c) Profit of ` 3,613.817 million on sale of 1,432,086 equity share in United Spirits Limited and 193,300 equity share in United Breweries Limited by the Company’s lenders

40. i) The Consortium of KFA Bankers, have sold certain investments belonging to the Company pursuant to the purported pledge.

ii) KFA lenders have invoked Company’s Corporate Guarantee and demanded payment of dues, due from KFA amounting to ` 64,932.900 million.

iii) The Company and others have filed a suit in the Hon’ble Bombay High Court, being Suit No. 311 of 2013 (Bombay Suit) against the consortium of bankers, who have advanced loans to Kingfisher Airlines Limited (“KFA”), inter alia, seeking the following reliefs:-

(a) For a declaration that the Corporate Guarantee dated 21st December, 2010 given by the Company and the Pledge Agreement dated 21st December, 2010, are void ab-initio and non-est;

(b) For a permanent order and injunction restraining the consortium of bankers, their servants, agents or assigns, or any other person claiming by, through or under them or any of them, from acting upon, in furtherance or in any manner giving effect to the impugned Notice dated 16th March, 2013, or from taking any other or further steps to act upon or in furtherance of the Pledge Agreement dated 21st December, 2010, save and except in accordance with the procedure set out in clause 8.1 of the MDRA, including issuing a notice there under.

(c) For a permanent order and injunction restraining the consortium of bankers, their servants, agents or assigns, or any other person claiming by, through or under them or any of them, from acting upon or in furtherance of the Corporate Guarantee dated 21st December, 2010 given by the Company and the Pledge Agreement dated 21st December, 2010.

(d) That an order and decree of damages of the sum of ` 3,199.68 Crores as set out in the Particulars of Claim be awarded to the Plaintiffs.

The Company has also filed a Notice of Motion in the said Suit, being Notice of Motion 306 of 2014 inter alia, for a decree on admission that the extent of the liability under the Corporate Guarantee is restricted to ` 1,601.43 crores based on admissions by the consortium of bankers. The said Suit and Notice of Motion are pending adjudication in the Hon’ble Bombay High Court.

The gross sale proceeds from the sale of securities by the lenders of KFA, have been adjusted by the said lenders against their dues from KFA. The Management has obtained legal advice that the company has a potential claim against lenders for recovery of the above sale proceeds. Without prejudice to the rights and contentions of the Company in the pending legal proceedings, the sale proceeds appropriated by the lenders against KFA’s dues is included under Loans and Advances recoverable from KFA.



LIMITED

53

41. Confirmation of balances from certain Sundry Debtors and Sundry Creditors are awaited. Adjustment for differences, if any, arising out of confirmation and reconciliation thereof would be made in the current year. The Management is of the opinion that the effect of adjustments, if any, is not likely to be significant.

42. The Company has advanced ̀ 1,556.049 million (Pr year ̀ 1,709.556 million) to overseas subsidiaries and an associate, which have not yet been repaid. Even though there is erosion in the net worth of these subsidiaries/ associate, the Management is of the view that all the amounts are ultimately recoverable, taking into consideration their business plans and growth strategies.

43. The Company has accrued interest of ` 88.020 million (Pr year ` 1,046.459 million) on loans to associate / overseas subsidiary, as per Loan Agreements signed with them. Considering the income stream of those companies, realisability of this interest could possibly take protracted period of time beyond those stipulated in the Loan Agreement.

44. Cash in hand includes foreign currency notes.

45. As required under Section 205C of the Companies Act, 1956, the Company has transferred Rs 0.330 million (Pr year ` 0.237 million) to the Investor Education and Protection Fund (IEPF) during the year. As on March 31, 2014, no amount was due to be transferred to the IEPF.

46 Events occurring after the date of the Balance Sheet

a) Between 17th June and 26th June 2014, HDFC Limited, a lender to the Company, has sold 482,000 shares of United Spirits Ltd, held by the Company and 1,748,000 shares of United Spirits Ltd, held by a subsidiary by invoking the pledge created in its favour to secure the Company’s borrowings.

b) On 12th May 2014, the Company (along with other constituents of the UB Group) entered into agreement with Adventz Group in respect of their respective shareholding in Mangalore Chemicals and Fertilizers Limited. Further, the Company joined Zuari Fertilisers and Chemicals Limited (a constituent of the Adventz Group) in making a competing offer under Regulation 20 of SEBI (SAST) Regulations, 2011, as amended, for acquisition of up to 30,813,939 equity shares of ` 10 each from the public shareholders of Mangalore Chemicals and Fertilizers Limited, at a price of ` 68.55 per equity share. In terms of the agreement, Zuari Fertilisers and Chemicals Limited (Zuari), has agreed to subscribe to all the shares that will be tendered in the competing offer and all financial obligations, costs, charges and expenses including payment of consideration to public shareholders in terms of the Takeover Regulations will be borne by the Zuari alone. Management control, however, will continue to be with UB Group. SEBI has issued its no objection for the Open Offer subject to receipt of approval from Competition Commission of India (CCI).

c) On June 30th and July 3rd 2014, Term Deposits of ` 609.674 million kept by the Company with a bank, pursuant to Court order, has been unilaterally pre-closed by the bank by exercising its general lien, to adjust a claim arising out of a Corporate Guarantee issued by the Company, in favour of a Group company. The Company has initiated legal action for restitution of the said deposits.

d) On 10th June 2014, IDBI Trusteeship Services Limited have transferred 4,937,395 shares of United Spirits Limited held by the Company and its subsidiary, pledged in their favour to secure the borrowings of KFA, to IGCF who in turn sold the said shares. Earlier, the Company and it’s subsidiary, Kingfisher Finvest India Limited (KFIL) had filed a suit, inter alia, against IDBI Trusteeship Services Limited (IDBI Trusteeship), Indian Global Competitive Fund (IGCF) and SREI Venture Capital Limited (SREI), in the City Civil Court at Calcutta, being T.S. No. 966 of 2013, inter alia, for declaring the Security Trustee Agreement dated 30th June, 2008 and the Consolidated Deed of Pledge dated 21st December, 2010 (in respect of shares of United Spirits Limited and KFA held by the Company and KFIL) as void, unenforceable and of no effect. The said suit is pending.

SBICAP Trustee and the Consortium of Banks, which have advanced loans to KFA had also filed a suit, inter alia, against IDBI Trusteeship Services Limited, SREI Venture Capital Limited, UBHL and KFIL in the Court of City Civil Judge in Bangalore, being O.S. No. 25877 of 2013 to enforce their alleged rights under the Release of Residual Interest Agreement dated 21st December, 2010 in respect of the aforesaid USL and KFA shares.

On 27th July 2013, the Consortium of Banks filed Writ Petition No. 28577 of 2014 in the Hon’ble Karnataka High Court praying for deposit of excess sales proceeds of the pledged shares with the court. By an order dated 20th June, 2014 the Hon’ble High Court of Karnataka ordered India Global Competitive Fund to deposit the surplus/balance sales proceeds from the aforesaid sale of shares in court. The Company is contesting the aforesaid Writ Petition No. 28577 of 2014, O.S. No. 25877 of 2013 and the ex-parte ad-interim orders passed therein.



LIMITED

54

47. Litigation

a) The lenders of Kingfisher Airlines Limited (KFA) have, pursuant to certain Corporate Guarantees given by the Company (the validity of which is disputed as set out hereinafter), demanded from the Company, their dues from KFA amounting to ̀ 6,493.29 crores with further interest and other dues from 01/06/2013 and have moved the Debt Recovery Tribunal (“DRT”) for recovery of these dues by way of Original Application (OA). The Interim Application filed by the Company before the DRT seeking to reject the said OA on the ground of jurisdiction has been dismissed by the Tribunal vide its order dated 12th November, 2013. Further, the Writ Petition against the DRT dismissal order, preferred by the Company, has also been disposed of by the Hon’ble High Court of Karnataka on 4th February, 2014, with liberty to move the Debts Recovery Appellate Tribunal for suitable reliefs by way of appeal. The Company has already preferred an Appeal before the Hon’ble DRAT challenging the DRT dismissal Order and the same is pending adjudication.

Further, 3 lenders who have extended pre delivery payment (PDP) loans to KFA and who claim to be beneficiaries of Corporate Guarantees of the Company; for purchase of aircrafts from M/s. Airbus S.A.S., have filed proceedings before the DRT for recovery of total dues amounting to ` 192.51 crores. By an ex-parte order dated February 4, 2014, in I.A. No. 543/2014, the Hon. Tribunal has passed an ad-interim order attaching pre-delivery payments made by KFA to M/s. Airbus S.A.S. up to ` 192.51 crores. This ad-interim order is continuing.

b) KFA lenders have sent a notice purportedly under the SARFAESI Act in respect of company’s property in Goa (Goa property) which was mortgaged to secure KFA borrowings. The Company has responded to the notice challenging the same.

Pending adjudication of the suit, the Goa property continues to remain as an asset of the Company.

c) Winding up Petitions

The Company is contesting nine winding up petitions filed by certain creditors of KFA under Section 433/434 of the Companies Act, 1956 before the Hon’ble High Court of Karnataka.

Certain alleged Corporate Guarantees on behalf of KFA have been invoked and certain purported beneficiaries of Corporate Guarantees issued on behalf of KFA including the Consortium of Banks have filed petitions against the Company under Sections 433/434 of the Companies Act 1956. On 19th November, 2013, the Hon’ble Karnataka High Court admitted Company Petition No. 248 of 2013 filed by BNP Paribas, one of the purported beneficiaries under the purported Corporate Guarantee. The Company filed Original Side Appeal No. 52 of 2013 before the Division Bench of the Karnataka High Court challenging the judgment and order dated 19th November, 2013 which appeal was dismissed by a judgment and order dated 16th December, 2013. The Company has now filed a Special Leave Petition in the Hon’ble Supreme Court of India, being Special Leave Petition No. 1163 of 2014 challenging the order of the Karnataka High Court dated 16th December, 2013. The said Special Leave Petition is pending.

On 13th December, 2013, the Hon’ble Karnataka High Court also admitted Company Petition No. 185 of 2012 filed by Avions De Transport Regionale, one of the other purported beneficiaries of a purported Corporate Guarantee. Company has filed Original Side Appeal No. 18 of 2014 before the Division Bench of the Karnataka High Court challenging the judgment and order dated 13th December, 2013. The said appeal is still pending.

The Company has filed a suit for damages claiming an amount of ` 13,193.000 million against some of the above Petitioners in the City Civil Court, Bangalore and the same is pending adjudication

48. The Company’s Rupee loan from HDFC Limited was converted into a “Dollar Denominated Loan’ at concessional rate of interest in 2011-12. A portion of the foreign currency translation difference has been recognized as interest in terms of AS16 – ‘Borrowing costs’, and the balance is kept in Foreign Currency Monetary Item Translation Difference Account which is amortised over the life of the loan but not beyond March 2020, as provided in Government of India Notification No. G.S.R.913 (E) (F.No. 17/133/208-CL. Vj, Dated 29.12.2011). Accordingly an amount of ̀ 188.693 million is charged to the Statement of Profit and Loss and the Balance of ` 361.660 Million is carried in Foreign Currency Monetary Item Translation Difference Account.



LIMITED

55

49. Going concern

a) The Company is defending recovery proceedings by the consortium of banks of KFA based on corporate guarantees, the validity of which is being contested. The Company has filed in Bombay High Court, a suit seeking to declare the corporate guarantee null, void ab initio and non-est. The suit is still pending adjudication.

b) The Company has filed a suit for damages against the aircraft engine manufacturers for supply of inherently defective engines, both in design and manufacture, to KFA. The suit is pending. However, the Company is pursuing without prejudice, negotiations to try and settle the dispute amicably. Similarly, the Company is pursuing without prejudice, negotiations with two of the creditors who have filed winding up petitions against the Company, to try and settle the disputes amicably. Two members of the Consortium of Bankers of KFA have assigned their debt to a Asset Reconstruction Company (ARC). The ARC is in discussion with the Company for settlement of these loans.

c) The total funds of the Company kept deposited with banks/courts pursuant to direction of Court pending resolution of various disputes amounts to ` 7,943.800 million.

d) Due to embargo by the High Court of Karnataka, rentable commercial office space of 30,606 sq feet could not be leased out resulting in a potential loss of revenue. Also, high value residential units in Kingfisher Towers, could not be sold which has impacted the cash flow. The Company is making a application to the court seeking approval for leasing vacant space in UB City and for sale of it’s share of apartment units in Kingfisher Towers.

Further, the company has substantial assets to monetize in case of necessity.

Having regard to all the above facts, the financial statements for the year ended March 31, 2014 have been presented on principles applicable to Going Concern.

50. The Company is pursuing confirmation for an amount of ` 200.000 million advanced to a vendor. The confirmation has been delayed due to the unexpected demise of the Owner of the business.

51. Remuneration to Chairman, Managing Director and Managerial Personnel

i) The Chairman of the Company has received remuneration from two subsidiaries, amounting to USD 120,000 (Pr year USD 120,000) and GBP 89,600 (Pr year GBP 89,600) during the year 2013-14.

ii) The Company has not paid any remuneration to its erstwhile Managing Director, Mr. A Harish Bhat who held office up to 20th August 2013. However, he has received remuneration of ` 1.347 million (Pr year ` 14.985 million) as executive of an associate company.

Mr. V Shashikanth was appointed as Managing Director with effect from 21st August 2013.

The Company has paid remuneration to the Managing Director, with effect from 21st August 2013. He has received remuneration of ` 19.715 million.

iii) Subsidiaries have paid sitting fees of ̀ 0.055 million (Pr year ̀ 0.090 million) to Directors including the Managing Director.

` in millionl2013-14 2012-13

52. Remuneration to Auditors:Statutory Audit 2.000 2.000Tax Audit 0.200 0.200Limited Reviews 0.300 0.300Certification fees 1.065 0.365

3.565 2.865

53. Employee benefitGratuity computations as on 31-03-2014Disclosure as per AS 15Defined benefit plansReconciliation of opening and closing balances of the present value of the defined benefit obligation:

l2013-14 2012-13

Obligations at period beginning 70.680 62.624Service cost 32.073 10.343Interest cost 6.132 3.663Benefits settled (6.900) (10.321)Actuarial (gain)/loss (0.384) 4.371Obligations at period end 101.601 70.680



LIMITED

56

Defined benefit obligation liability as at the Balance Sheet

Is wholly funded by the Company

Change in plan assets

Plan assets at period beginning, at fair value 57.153 55.264

Expected return on plan assets 5.402 4.113

Actuarial gain/(loss) 0.113 (3.824)

Contributions 48.385 11.921

Benefits settled (6.900) (10.321)

Plans assets at period end, at fair value 104.153 57.153

Reconciliation of present value of the obligation and the fair value of the plan assets:

Fair value of plan assets at the end of the year 104.153 57.153

Present value of the defined benefit obligations at the end of the period 101.601 70.680

Net asset / liability recognized in the Balance Sheet 2.552 13.527

Details of Gratuity cost

Service cost 32.073 10.343

Interest cost 6.131 3.663

Expected return on plan assets (5.402) (4.113)

Actuarial (gain) / loss (0.496) 3.544

Net gratuity cost 32.306 13.437

Description of the basis used to determine the overall expected rate of return on assets including major categories of plan assets.

The expected return is calculated on the average fund balance based on the mix of investments and the expected yield on them.

Assumptions

Interest rate 9.12% 8.50%

Discount factor 9.12% 8.50%

Estimated rate of return on plan assets 8.00% 8.00%

Salary Increase 5.00% 5.00%

Attrition rate 5.00% 5.00%

Retirement age 58 58

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.



LIMITED

57

54. Details of dues to Micro, Small and Medium Enterprises and Small Scale Industries.

Based on the response received by the Company, there are no outstanding as at March 31, 2014 to suppliers, as defined under the Micro, Small & Medium Enterprises Development Act, 2006.

Amount due to Micro and Small Enterprises is Nil to the extent of information disclosed by creditors.

55. The Company has recognized the rent from cancellable operating leases in accordance with the terms of the lease deed.In respect of the non-cancellable operating leases, the Company recognizes the rent on a straight line basis over the non- cancellable lease term.Future minimum lease payments receivable under non-cancellable operating lease ` Nil (Pr year Nil)

56. The gross carrying amount, accumulated depreciation and net carrying value of leased building are as follows:

Description 2013-14 2012-13

Gross Block at the beginning of the year 455.095 457.716

Less : Deletion - - 2.621

Add: Increase due to revaluation 1,292.856 1747.951 - 455.095

Accumulated depreciation 140.312 124.268

Less : Deletion - 140.312 0.524 123.744

Net Block at the end of the year 1,607.639 331.351

57. Deferred tax

Particulars 2013-14 2012-13Deferred Tax Asset in respect of

i) Depreciation on fixed assets 0.079 2.169ii) Allowance for carried forward losses 942.769 50.525iii) Others 12.020 14.701

Total 954.868* 67.395*Note : *Deferred tax asset is not recognized as a matter of prudence

58. Quantitative Particulars

Particulars of Purchases and Sales of Goods traded by the Company

Products Units Opening Stock Purchases Sales Closing Stock

Quantity Value Quantity Value Quantity Value Quantity Value

1. Alcoholic beverages

Cases 396,554(303,943)

144.601(121.754)

2,687,014(3,123,695)

1,187.835(1,392.872)

2,746,414(3,031,084)

2,121.111(2,330.163)

337,154(396,554)

162.346(144.601)

2. Leather products

Pairs 3,498(-)

3.461(-)

320,863(207,789)

294.407(207.975)

302,005(204,291)

371.980(252.548)

22,356(3,498)

22.178(3.461)

3. Processed Food Tons 202(582)

10.570(36.640)

1,326(1,109)

109.004(77.282)

1,482(1,489)

160.90(121.075)

46(202)

4.733(10.570)

4. Readymade garments

Pieces 135,386(151,445)

50.240(64.672)

1,923,034(1,489,065)

709.407(520.945)

1,840,788(1,505,124)

783.170(562.701)

217,632(135,386)

111.930(50.240)

5. Pharmaceuticals Boxes EA

-(-)

-(-)

-(5,860)

-(1.019)

-(5,860)

-(1.324)

-(-)

-(-)

Figures in brackets relates to previous year



LIMITED

58


59. Segment reporting:

Segment-wise business performance for the year ended March 31, 2014

Primary Segment InformationSegment Revenue Segment Result

2013-14 2012-13 2013-14 2012-13

a) Alcoholic beverages 2,200.384 2,474.635 392.470 455.444

b) Leather products 415.359 277.578 73.672 16.683

c) Readymade garments 849.483 604.336 66.917 15.151

d) Investments 68.450 116.339 (91.741) 26.542

e) Logo fees 552.506 162.045 392.315 72.248

f) Property development 511.738 502.328 310.487 391.902

g) Guarantee services 18.833 73.672 (141.358) (16.126)

h) Others 300.895 261.908 (76.532) (24.341)

Total 4,917.648 4,472.841 926.230 937.503

Other income 681.068 1,103.082

Provision for doubtful advances (12,717.054) -

Bad debts /advances written off (24,505.944) -

Finance costs (4,496.226) (4,573.180)

Exceptional items 19,878.906 863.025

Loss before tax (20,233.020) (1,669.570)

OtherInformation:

2013-14 2012-13 2013-14 2012-13

Segment Assets

Segment Liabilities

Segment Assets

Segment Liabilities

Capital Expenditure

Depreci-ation

Capital Expenditure

Depreci-ation

a) Alcoholic beverages 922.877 1,020.098 560.813 918.106 0.433 0.090 0.046 0.012

b) Leather products 325.958 27.118 215.045 35.924 2.933 9.227 0.074 10.378

c) Readymade garments 1,249.781 23.737 934.655 10.890 3.950 6.987 5.641 7.437

d) Investments 26,007.618 36,187.744 59,035.180 47,543.989 - - - -

e) Property development 419.385 - 439.009 - - 19.591 - 21.209

f) Others 158.617 29.012 127.338 10.890 4.159 45.744 4.886 53.109

Total 29,084.235 37,287.711 61,312.040 48,519.799 11.475 81.639 10.647 92.145

Notes :1 Income under the segment “investments” represents dividends received, profit on sale of investments2 Income under the segment “property development” represents lease rent and profit on sale of immovable

property.3 Segment results represents profit/(loss) before interest expenses, other income, tax and exceptional items.4 Capital expenditure represents the gross additions made to fixed assets during the year.


LIMITED

59

5 Segment assets include Non-Current Assets and Current Assets except income tax assets and increase in value of land and building due to revaluation.

6 Segment Liabilities include Non-Current Liabilities and Current Liabilities except provision for tax and dividend.

7 Exceptional items represents profit on sale of shares in United Spirits Limited in favour of Diageo Plc, profit (net) and sale of pledged shares by lenders.

Secondary segments, based on geographical locations

Particulars Segment Revenue Segment Assets

Segment 2013-14 2012-13 2013-14 2012-13

Within India 1,480.395 1,205.030 26,170.761 58,639.848

Outside India 3,437.253 3,267.811 2,913.474 2,672.192

Total 4,917.648 4,472.841 29,084.235 61,312.040

60. Related Party Transactions:

Key Management Personnel: Mr. A. Harish Bhat - Managing Director up to August 20, 2013

Mr. V. Shashikanth – Managing Director from August 21, 2013

i) Name of the Related Parties and description of relationship

Subsidiaries

Bangalore Beverages Limited, Bestride Consultancy Pvt Limited, City Properties Maintenance Company Bangalore Limited, Kingfisher Finvest India Limited, Kingfisher Training and Aviation Services Limited, Kingfisher Aviation Training Limited, Kingfisher Goodtimes Private Limited, UB Electronic Instruments Limited, UB Infrastructure Projects Limited, UB International Trading Limited, UB Sports Limited, Rigby International Corp., United Breweries of America Inc, Delaware, Inversiones Mirabel, S.A, Mendocino Brewing Co. Inc, USA, United Breweries International [UK] Limited, Kingfisher Beer Europe Limited (formerly known as UBSN Limited), Rubic Technologies, Inc, Releta Brewing Company LLC, UB Overseas Limited, UBHL (BVI) Limited.

Associates

United Spirits Limited (*), Mangalore Chemicals & Fertilizer Limited (**), UB Engineering Limited, WIE Engineering Limited (Under Liquidation), McDowell Holdings Limited (***), Pixray India Limited, UB Pharma (Kenya) Limited, Kingfisher Airlines Limited.

Subsidiary of an Associate

SW Finance Co. Limited (formerly Shaw Wallace Breweries Limited) (*), Royal Challengers Sports Private Limited(*).

* upto 4th July 2013** upto 30th April 2013*** upto 9th January 2014



LIMITED

60

Subsidiary CompaniesKingfisher Finvest

India Ltd

UB Electronic Instruments

Limited

Kingfisher Train-ing and Aviation

Services Ltd

UB Infrastructure Projects Ltd

Kingfisher Aviation Training Ltd

City Prperties Mainte-nance Company B’Lore

Ltd

UB International Trading Ltd

UB Overseas Ltd UBHL-BVI Ltd.Bangalore Beverages

LimitedUB Sports Limited

Kingfisher Beer Europe Ltd

Bestride Consultancy Pvt Ltd

Total

2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13

Purchase of goods ( finished or unfinished)

- - - - - - - - - - - 313.327 222.237 - - - - - - - - 13.711 10.783 - 327.038 233.020

Sale of goods ( finished or unfinished) *

- - - - - - - - - - - - 1.793 - - - - - - - - - - - 1.793

Purchase of fixed assets - - - - - - - - - - - - - - - - - - - - - - - - -

Receiving of services - - - - - - - - - 22.224 26.714 - - - - - - - - - - - - 22.224 26.714

Leasing arrangement - - - - - - - - - 0.630 0.630 - - - - - - - - - - - - 0.630 0.630

Investments Redeemed - - - - - - - - - - - - - - 73.628 - - - - - - - - - 73.628

Licence Agreement - - - - - - - - - - - - - - - 0.006 0.005 - - - - - - 0.006 0.005

Finance (including loans in cash or in kind) paid

818.179 899.370 0.240 0.240 - - 50.048 1,080.982 0.079 0.009 34.009 34.479 316.000 226.200 - 0.013 - - 155.074 9,249.719 0.011 0.002 13.631 9.816 226.812 3,832.855 1,614.083 15,333.685

Finance (including loans in cash or in kind) received

7,664.398 495.158 - - - 0.910 - 7.776 - - 0.404 2.496 0.121 83.596 - 2,404.355 - - 316.705 615.840 - - - 125.565 111.000 8,107.194 3,721.132

Investments made - - - - - - - - - - - 250.000 - 59.659 69.888 - - - - - - - - 309.659 69.888

Dividend received - - - - - - - - - - - - - - - - - - - - - - - - -

Guarantee Commission received

- - - - - - - - - - - - - - - - - - - - - - - - -

Deposit Received - - - - - - - - - - - - - - - - - - - - - - - - -

Interest Received - - - - - 9.098 - 75.766 - - - - - 36.597 32.566 - - - 820.159 - - - - 36.597 937.589

Interest Paid - - 2.400 2.400 - - - - - - - - - - - - - - - - - - - 2.400 2.400

Bad advances written off - - - - - - 2,171.115 - 383.577 18,121.757 6.364 3,823.130 24,505.944 -

Guarantees and col-laterals

1,500.000 - - - - - - - - - - - - - - - - - - - - - - 1,500.000

Management contracts including deputation of employees

- - - - - - - - - - - - - - - - - - - - - - - - -

Amount due from as on 31st March

2,131.840 8,978.060 - - 119.982 119.982 - 2,121.068 - 383.498 19.816 7.806 64.387 61.593 453.292 389.557 300.983 274.671 - 18,283.389 - 6.353 1.046 0.967 - 3,721.884 3,091.347 34,348.826

Amount due to as on 31 st March

- - 25.408 23.248 - - - - - - 0.413 0.734 - - - - - - - - - - - - - 25.820 23.982

Associate Companies United Spirits LimitedMangalore

Chemicals and Fertilizers Limited

UB Engineering Limited

SW Finance Co. Limited

Kingfisher Airlines LtdRoyal Challenger Sports

Pvt LtdMcDowell Hold-

ings LimitedTotal


507.273 520.181 - - - - - - - - 507.273 520.181

Sale of goods ( finished or unfinished)

- - - - - - - - - - - -

Purchase of fixed assets - - - - - - - - - - - -

Receiving of services - - - - - - - - - - - -

Rendering of Services 0.884 - - - - - - - - - 0.884 -

Sale of Assets - - - - - - - - - - - -

Licence Agreement-Pegasus

420.000 - 60.000 60.000 12.500 25.500 - - 16.540 - - 492.500 102.040

Pegasus Advance Received

2,500.000 - 2,500.000 -

Finance (including loans in cash or in kind paid)

2,584.475 8,944.155 - 150.000 162.000 387.089 6,819.075 26.941 7,476.684 2,240.514 308.390 3.875 616.151 12.794 17,966.775 11,765.368

Finance (including loans in cash or in kind received)

9,498.894 12,712.055 29.758 127.342 5.744 6.716 - 4,265.315 - 60.500 - 501.553 480.818 10,035.950 17,652.746

Investments made - - - - - - - - - - -

Dividend received 25.369 58.943 21.403 34.853 - - - - - - 46.772 93.796


5.503 6.623 - - 13.330 13.000 - - 54.048 - - - 18.833 73.672

Guarantee Commission Paid

12.568 12.568 -

Deposit Received - - - - - - - - - - - - -

Interest Received - - - - 51.423 25.114 - - 83.756 - - 51.423 108.870

Interest Paid 1,070.076 339.504 - - - - 191.825 269.410 - - 9.661 38.750 133.558 27.944 1,405.121 675.608


550.000 550.000 - - 650.000 650.000 - 87,669.500 87,669.500 - - 88,869.500 88,869.500


- - 30.000 34.200 - - - - - - - 30.000 34.200


- - 239.521 179.279 798.859 565.351 - - 12,597.828 5,120.766 - - - - 13,636.209 5,865.396


16,494.362 6,280.900 520.000 520.000 250.000 250.000 - 6,627.249 - 298.729 527.498 495.968 17,791.860 14,472.846


ii) Transactions with Related Parties during the year.


LIMITED

61

Subsidiary CompaniesKingfisher Finvest

India Ltd

UB Electronic Instruments

Limited

Kingfisher Train-ing and Aviation

Services Ltd

UB Infrastructure Projects Ltd

Kingfisher Aviation Training Ltd

City Prperties Mainte-nance Company B’Lore

Ltd

UB International Trading Ltd

UB Overseas Ltd UBHL-BVI Ltd.Bangalore Beverages

LimitedUB Sports Limited

Kingfisher Beer Europe Ltd

Bestride Consultancy Pvt Ltd

Total

2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13


- - - - - - - - - - - 313.327 222.237 - - - - - - - - 13.711 10.783 - 327.038 233.020

Sale of goods ( finished or unfinished) *

- - - - - - - - - - - - 1.793 - - - - - - - - - - - 1.793

Purchase of fixed assets - - - - - - - - - - - - - - - - - - - - - - - - -

Receiving of services - - - - - - - - - 22.224 26.714 - - - - - - - - - - - - 22.224 26.714

Leasing arrangement - - - - - - - - - 0.630 0.630 - - - - - - - - - - - - 0.630 0.630

Investments Redeemed - - - - - - - - - - - - - - 73.628 - - - - - - - - - 73.628

Licence Agreement - - - - - - - - - - - - - - - 0.006 0.005 - - - - - - 0.006 0.005

Finance (including loans in cash or in kind) paid

818.179 899.370 0.240 0.240 - - 50.048 1,080.982 0.079 0.009 34.009 34.479 316.000 226.200 - 0.013 - - 155.074 9,249.719 0.011 0.002 13.631 9.816 226.812 3,832.855 1,614.083 15,333.685

Finance (including loans in cash or in kind) received

7,664.398 495.158 - - - 0.910 - 7.776 - - 0.404 2.496 0.121 83.596 - 2,404.355 - - 316.705 615.840 - - - 125.565 111.000 8,107.194 3,721.132

Investments made - - - - - - - - - - - 250.000 - 59.659 69.888 - - - - - - - - 309.659 69.888

Dividend received - - - - - - - - - - - - - - - - - - - - - - - - -


- - - - - - - - - - - - - - - - - - - - - - - - -

Deposit Received - - - - - - - - - - - - - - - - - - - - - - - - -

Interest Received - - - - - 9.098 - 75.766 - - - - - 36.597 32.566 - - - 820.159 - - - - 36.597 937.589

Interest Paid - - 2.400 2.400 - - - - - - - - - - - - - - - - - - - 2.400 2.400

Bad advances written off - - - - - - 2,171.115 - 383.577 18,121.757 6.364 3,823.130 24,505.944 -


1,500.000 - - - - - - - - - - - - - - - - - - - - - - 1,500.000


- - - - - - - - - - - - - - - - - - - - - - - - -


2,131.840 8,978.060 - - 119.982 119.982 - 2,121.068 - 383.498 19.816 7.806 64.387 61.593 453.292 389.557 300.983 274.671 - 18,283.389 - 6.353 1.046 0.967 - 3,721.884 3,091.347 34,348.826


- - 25.408 23.248 - - - - - - 0.413 0.734 - - - - - - - - - - - - - 25.820 23.982

Associate Companies United Spirits LimitedMangalore

Chemicals and Fertilizers Limited

UB Engineering Limited

SW Finance Co. Limited

Kingfisher Airlines LtdRoyal Challenger Sports

Pvt LtdMcDowell Hold-

ings LimitedTotal


507.273 520.181 - - - - - - - - 507.273 520.181

Sale of goods ( finished or unfinished)

- - - - - - - - - - - -

Purchase of fixed assets - - - - - - - - - - - -

Receiving of services - - - - - - - - - - - -

Rendering of Services 0.884 - - - - - - - - - 0.884 -

Sale of Assets - - - - - - - - - - - -

Licence Agreement-Pegasus

420.000 - 60.000 60.000 12.500 25.500 - - 16.540 - - 492.500 102.040

Pegasus Advance Received

2,500.000 - 2,500.000 -

Finance (including loans in cash or in kind paid)

2,584.475 8,944.155 - 150.000 162.000 387.089 6,819.075 26.941 7,476.684 2,240.514 308.390 3.875 616.151 12.794 17,966.775 11,765.368

Finance (including loans in cash or in kind received)

9,498.894 12,712.055 29.758 127.342 5.744 6.716 - 4,265.315 - 60.500 - 501.553 480.818 10,035.950 17,652.746

Investments made - - - - - - - - - - -

Dividend received 25.369 58.943 21.403 34.853 - - - - - - 46.772 93.796


5.503 6.623 - - 13.330 13.000 - - 54.048 - - - 18.833 73.672

Guarantee Commission Paid

12.568 12.568 -

Deposit Received - - - - - - - - - - - - -

Interest Received - - - - 51.423 25.114 - - 83.756 - - 51.423 108.870

Interest Paid 1,070.076 339.504 - - - - 191.825 269.410 - - 9.661 38.750 133.558 27.944 1,405.121 675.608


550.000 550.000 - - 650.000 650.000 - 87,669.500 87,669.500 - - 88,869.500 88,869.500


- - 30.000 34.200 - - - - - - - 30.000 34.200


- - 239.521 179.279 798.859 565.351 - - 12,597.828 5,120.766 - - - - 13,636.209 5,865.396


16,494.362 6,280.900 520.000 520.000 250.000 250.000 - 6,627.249 - 298.729 527.498 495.968 17,791.860 14,472.846



LIMITED

62

61. Disclosures required by Accounting Standard (AS) 29-“Provisions, Contingent Liabilities and Contingent Assets”

Provisions:

Particulars of disclosure Provision for contingent claims Provision for leave encashment

1 Balance as on 1.04.13 37.428 31.562

2 Provision made during year - 6.525

3 Provision used during the year. - 2.946

4 Balance as on 31.03.14 37.428 35.141*

Year and quantum of outflow of cash in respect of the above contingent claims is not presently ascertainable. Time of outflow of cash on account of leave encashment is contingent upon the time of employee’s separation from the Company.*Based on actuarial valuation from an approved valuer.

62. Earnings per Share 2013-14 2012-13

Loss before exceptional items (40,111.926) (2,532.595)

Number of equity shares 66,818,521 66,818,521

Earnings per share (Basic)/ (Diluted) - in ` (600.30) (37.90)

Earnings per Share 2013-14 2012-13

Net loss after exceptional items and tax (20,233.020) (1,669.599)



63. Value of imports calculated on CIF basis 2013-14 2012-13


Capital Goods 4.116 0.199

Finished Goods 21.800

Total 44.534 22.014

64. Expenditure in Foreign Currency: 2013-14 2012-13

Foreign Travel expenses 9.111 2.945

Commission to Agents 8.933 0.784

Professional and Legal fees 43.901 1.280

Imports of material and capital goods 44.534 22.014

Others 166.663 59.983

Investments 59.600 69.888

Total 332.742 156.894



LIMITED

63


Firm Regn. No. 004742S



65. Earnings in Foreign Exchange 2013-14 2012-13

Export of goods calculated on FOB basis 3,406.748 3,139.495

Receivable on account of redemption of Preference Shares - 86.014

Total 3,406.748 3,225.509

66. The Company has not entered into any speculative derivative transactions. Hedging is restricted to the business needs of the Company. As at the Balance Sheet date, foreign currency receivable / payable that is not hedged by any derivative instrument or otherwise are as under:

Particulars Net Receivable / (Payable)Foreign Currency Amount

Net Receivable / (Payable)Amount in local currency

Currency 2013-14 2012-13 2013-14 2012-13

USD 3.922 12.213 235.730 664.233

GBP 0.034 - 3.349 -

Euro 0.561 - 46.329 -

Euro (0.004) (0.010) (0.330) (0.733)

USD (76.053) (105.049) (4,570.755) (5,713.541)

GBP (0.011) (0.012) (1.046) (0.967)

67. All amounts are in Rupees million, unless otherwise stated.

68. Previous year’s figures have been regrouped wherever necessary.



LIMITED

64

COMPANY’S GENERAL BUSINESS PROFILE

I Registration Details

Registration / CIN : 740 /L85110KA1915PLC000740

State Code : 08

Balance Sheet Date : 31.3.2014

II Capital Raised during the year

Public Issue : Nil

Rights Issue : Nil

Private Placement : Nil

Bonus Issue : Nil

Private Placement : Nil

III Position of Mobilisation and Deployment of Funds (` in thousands)

Total Liabilities 39,580,612 39,580,612

Sources of funds Application of Funds

Paid up Capital 668,185 Net Fixed Assets 10,631,696

Reserves & surplus 618,281 Investments 13,118,409

Secured Loans 10,666,325 Other Assets 15,830,507

Unsecured Loans 14,691,467

Other Liabilities 12,936,354

IV Performance of the Company

Turnover 25,477,622 Total Expenditure 45,710,643

Profit Before Tax (20,233,021) Profit after Tax (20,233,021)

Earning per Share (302.80) Dividend Rate Nil

V Generic Name of three Principal Products / Services of the Company

1. Trading in following goods

ITC Code Beer 220300

Liquor 220830

Leather Shoes 640320

2. Real Estate Development and Investment Holding


LIMITED

65

Disclosure under Clause 32 of the Listing Agreement in the Books of the Holding Company United Breweries (Holdings) Limited

` in million

Sl No Name of the Company

Value of Investment Amount of Outstanding as at March

31, 2014

Maximum amount

outstanding during the year

Parent Company

Subsidiaries Total

Subsidiaries

1 City Properties Maintenance Company Bangalore Limited

0.500 - 0.500 19.486 20.067

2 Kingfisher Finvest India Limited 2,500.500 - 2,500.500 2,131.840 9,025.471

3 UB Electronic Instruments Limited 27.209 0.327 27.536 - 25.408

4 UB International Trading Limited 250.500 - 250.500 64.387 64.387

5 Rigby International Corp. 660.238 - 660.238 - -

6 UB Overseas Limited 1,211.550 0.056 1,211.606 453.291 453.496

7 Rubic Technologies Inc. 26.558 - 26.558 - -

8 UBHL (BVI) Limited 10.040 - 10.040 300.983 312.927

4,687.095 0.383 4,687.478 2,969.987 9,901.756

Associates

1 United Spirits Limited 263.862 185.979 449.841 14,220.779 14,336.279

2 McDowell Holdings Limited 37.527 182.145 219.671 527.498 527.498

3 Mangalore Chemicals and Fertilizers Limited

205.456 114.966 320.421 759.521 769.403

4 United Racing & Bloodstock Breeders Limited

0.400 - 0.400 - -

5 Pixray India Limited - 0.153 0.153 - -

6 WIE Engineering Limited 1.419 - 1.419 - -

7 UB Pharma (Kenya) Limited 7.616 - 7.616 - -

8 UB Engineering Limited 424.928 - 424.928 551.774 551.774

9 Kingfisher Airlines Limited 6,156.712 3,294.947 9,451.659 12,597.072 12,597.072

7,097.919 3,778.189 10,876.108 28,656.644 28,782.026


LIMITED

66

Independent Auditors’ Report on Consolidated Financial Statements

ToThe Board of Directors,


1. Report on the Financial Statements

We have audited the accompanying consolidated financial statements of UNITED BREWERIES (HOLDINGS) LIMITED (‘the Company’), its subsidiaries and associates (hereinafter collectively referred to as the “Group”), which comprise the Consolidated Balance Sheet as at 31st March 2014, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

2. Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (“the Act”) read with General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4. Basis for qualified opinion

a. The company has investments of ̀ 8,424 million in Kingfisher Airlines Limited (KFA) which have been accounted for in the Consolidated Financial Statements under AS-13 “Accounting for Investments”. Due to financial difficulties, KFA has stopped its operations. Its net worth is fully eroded and some of its lenders/lessors have filed winding up petitions against it. These factors, along with others, have caused diminution in the carrying value of company’s investments in KFA (Refer note no. 33 to financial statements). No provision has been made in the accounts for such diminution in the carrying value of investments. Had the company made such provisions, the loss disclosed in the Consolidated Statement of Profit and Loss would have been higher by such amount and carrying amount of investments would have been lower by that amount.

Further, the company has extended corporate guarantees of ` 87,072 million in favour of lenders/lessors/creditors of KFA (Refer note no. 50 to financial statements). The beneficiaries of such guarantees have invoked the guarantees and pursuing recovery actions against the company. This may result in loss to the company. (Refer note no. 50 to financial statements). No provision has been made in the accounts for such probable loss. Had the company made such provisions, the loss disclosed in the Consolidated Statement of Profit and Loss would have been higher by such amount and liabilities in the Balance Sheet would have been higher by such amount.

Independent Auditors’ Report on Consolidated Financial Statements (contd.)


LIMITED

67

Independent Auditors’ Report on Consolidated Financial Statements (contd.)

b. The company carries investments in certain subsidiaries and an associate company which have been accounted for in the Consolidated Financial Statements under AS-13 “Accounting for Investments”. The carrying value of such investments is ` 1,117 million. There are significant declines in the carrying value of these investments but the company has not quantified and provided for such declines. Had the company provided for such decline, the loss stated in Consolidated Statement of Profit and Loss would have been higher by such amount and the carrying value of those investments would have been lower by an equal amount (refer note 32 to financial statements) .

c. An associate company owes to the company ` 812 million. Net worth of this company is eroded, impairing the recovery of such loans and advances. Company has not quantified and provided for the probable loss on this count. Had the company provided for such loss, the loss stated in the Consolidated Statement of Profit and Loss would have been higher by such amount and the loans and advances stated in the Consolidated Balance Sheet would have been lower by that amount (refer note 40 to financial statements).

d. Winding up petitions filed against the Company have been admitted by the Honourable High Court of Karnataka and is allowed to be proceeded with by the Honourable Supreme Court of India [Ref. note no. 43(c)]; the Honourable High Court of Karnataka has restrained the Company from disposing of any of its assets [Ref. note no. 44(d)];, the Company is a defendant in recovery suits instituted by certain creditors/lenders for recovery of their dues of ` 64,933 million; [Ref. note no. 43], some of the lenders have recovered their dues by disposing of the company’s pledged securities.[Ref. note no. 39]. Yet, the company has prepared its financial statements on going concern basis for the reasons stated in note no. 44. The appropriateness of preparation of financial statements on going concern basis is subject to the Company being able to successfully defend itself in the petitions/suits filed against it and obtaining substantial reliefs in the suits filed by it as mentioned in note no. 43.

e. The Company has not recognised in its consolidated financial statements, liabilities amounting to ` 80,208 million arising out of invocation of its corporate guarantees [Ref. note no. 50] and claims of ` 1,463 million made against it under an agreement entered into with a banker [Ref. note no. 50]. Had the company recognised the above, current liabilities in the Consolidated Balance Sheet would have been higher by that amounts and guarantee under contingent liabilities and claims not acknowledged as debt would have been lower by `80,208 million and ` 1,463 million, respectively.

5. Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditors on the financial statements of the subsidiaries and associates as noted in paragraph 7, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at 31 March 2014;

(b) in the case of the Consolidated Statement of Profit and Loss, of the loss for the year ended on that date; and

(c) in the case of the Consolidated Cash Flow Statement, of the cash flows for the year ended on that date.

6. Emphasis of Matter

Attention is invited to the following:

a. A term deposit for ` 609 million with Lakshmi Vilas Bank Limited, representing part of the sale proceeds of shares in United Spirits Limited in favour of Diageo group which had been kept deposited to comply with the direction of the Honourable High Court of Karnataka to the effect that the sale proceeds shall be kept invested in term deposits with banks, has been pre-closed by the bank by exercising its general lien and it has adjusted an amount of ` 219 million and encumbered an amount of ` 390 million against the borrowings from one of the group companies which had been guaranteed by the Company [Ref. note no. 42(c)].

b. Loans and advances include an amount of ` 200 million advanced to a vendor which is pending confirmation [Ref. note no. 51].

c. The Company has recognised the transaction of sale of 10,141,437 shares in United Spirits Limited in favour of Diageo group having regard to the direction of the Honourable Supreme Court of India to maintain status quo with regard to the said transaction [Ref. note no. 36].


LIMITED

68

d. Certain lenders have sold the Company’s securities that have been pledged with them and have appropriated the sale proceeds against their dues [Ref. note no. 39].

e. The Company has written off a total amount of ` 24,506 million due from certain subsidiaries in respect of whom investments have been accounted for in the Consolidated Financial Statements under AS-13 “Accounting for Investments” [Ref. note no. 35].

f. The Company has provided for an amount of ` 12,717 million towards the probable loss that may arise in respect of dues from Kingfisher Airlines Limited and another subsidiary [Ref. note no. 34].

g. A lender of Kingfisher Airlines Limited has initiated action to attach and dispose of the Company’s property in Goa to recover its dues [Ref. note no. 43(b)].

h. Based on a valuer’s report, the Company has revised and restated the carrying amounts of its land and buildings in UB city and upcoming Kingfisher Towers at their respective fair market values as on 31-3-2014 [Ref. note no. 31(i)].

i. The Company has considered the write-off of amount due from subsidiaries as tax deductible having regard to an opinion obtained by it [Ref. note no. 38].

j. For the reasons stated in note 45 to financial statements, the company has followed “AS-13 – Accounting for investments” in respect of its investments in its certain associates, instead of “AS 23- Accounting for investments in Associates in Consolidated Financial Statements”.

k. For the reasons stated in note 45 to financial statements, the company has followed “AS-13 – Accounting for investments” in respect of its investments in its certain subsidiaries, instead of “AS 21- Consolidated Financial Statements”.

7. Other Matters

We did not audit the financial statements of certain subsidiaries, whose financial statements reflect total assets of ` 9,679 million as at March 31, 2014, total revenues of ̀ 3,858 million and net cash inflows amounting to ̀ 753 million for the year then ended. These financial statements have been audited by other auditors whose reports have been furnished to us by the Management, and our opinion is based solely on the reports of the other auditors. Our opinion is not qualified in respect of this matter.





Independent Auditors’ Report on Consolidated Financial Statements


LIMITED

69

` in million

Note No. As at March 31, 2014


Equity and Liabilities

Shareholders’ fundsShare capital 2 668.185 668.185 Reserves and surplus 3 807.339 20,353.079

Minority interest 96.454 2,106.164

Non current liabilitiesLong term borrowings 4 19,341.368 19,025.382 Deferred tax liabilities (net) 3.647 2.915 Other Long-term liabilities 5 6,034.976 3,922.672 Long term provisions 6 96.102 76.118

Current liabilitiesShort-term borrowings 7 7,171.659 16,493.817 Trade Payables 8 1,226.243 944.463 Other Current Liabilties 9 7,984.413 18,895.065 Short-term provisions 10 1,176.666 1,083.645

44,607.052 83,571.505 Assets

Non current assetsFixed Assets

Tangible assets 11 9,954.658 2,567.087 Capital work in progress 11 1,248.355 1,140.341

Goodwilll on consolidation 434.464 434.537 Non current investments 12 18,017.156 38,605.191 Long term loans and advances 13 1,097.207 35,174.040 Other non current assets 14 101.425 100.370

Current assetsCurrent investments 15 33.949 26.512 Inventories 16 537.893 421.756 Trade receivables 17 689.505 579.768 Cash and cash equivalents 18 2,271.213 1,434.105 Short term loans and advances 19 3,705.475 2,962.948 Other current assets 20 6,515.752 124.850

44,607.052 83,571.505 Significant Accounting Policies and other notes 1


This is the Consolidated Balance Sheet referred to in our report of even date.

Consolidated Balance Sheet as at March 31, 2014






LIMITED

70

` in millionNote No. For the year ended

March 31, 2014 March 31, 2013

RevenueRevenue from operations 21 7,363.785 6,729.212 Other income 22 750.735 1,108.953

8,114.520 7,838.165 ExpensesPurchase of traded goods 2,024.661 1,978.036 Cost of materials consumed 23 1,928.660 1,815.749 Change in inventories (96.236) 43.386 Employee benefit expenses 24 502.690 336.165 Finance Costs 25 4,844.596 5,615.353 Depreciation 11 150.453 157.831 Provison for bad and doubtful advances (refer note no. 34) 12,759.598 -Bad advances/debts written off (refer note no. 35) 24,564.935 2.050

Other expenses 26 1,967.935 1,447.040 48,647.292 11,395.610

Loss before exceptional items, tax and share in profits/(losses) of associates

(40,532.772) (3,557.445)

Exceptional items 27 26,748.506 863.025 Loss before tax and share in profits/(losses) of associates (13,784.266) (2,694.420)Tax expense: Current tax 167.230 4.784 Deferred tax 0.732 (0.147)Loss after tax and before share in profits/(losses) of associates (13,952.228) (2,699.057)Share in profits/(losses) of associates - (216.913)Loss before minority interest (13,952.228) (2,915.970)Share of minority interest 15.675 (7.378)Net loss for the year (13,936.553) (2,923.348)Earnings Per Share (Face value of ` 10 each)

Basic / Diluted Earnings Per Share (before exceptional items and tax) (608.88) (56.66)

Basic / Diluted Earnings Per Share (after exceptional items and tax) (208.57) (43.75)

Significant Accounting Policies and other notes. 1


This is the Consolidated Statement of Profit and Loss referred to in our report of even date.

Consolidated Statement of Profit and Loss for the year ended March 31, 2014






LIMITED

71

Consolidated Cash Flow Statement for the year ended March 31, 2014

` in million



A. Cash flow from operating activitiesNet loss before taxation (13,784.266) (2,694.420)

Adjustments for :Depreciation 150.453 157.831 Dividend income (86.780) (157.225)Interest income (509.366) (1,064.123)Property development - (27.860)

(Profit)/ loss on sale of assets 3.586 (0.268)Loss on assets written off - 10.535 Exceptional items (26,748.506) (863.025)Interest and finance charges 4,844.596 5,615.353 Liabilities no longer required (207.198) (5.835)Unrealised exchange fluctuation loss 188.693 73.386 Effect of exchange differences on translation of subsidiaries (419.126) (212.053)Effect of exchange differences on translation of foreign currecny cash and cash equivalents (0.637) (0.503)Bad debts / advances written off 24,564.935 -Provision for bad and doubtful advances 12,759.598 2.050 Provision for bad and doubtful debts 9.558 -

14,549.806 3,528.263 Operating profit before working capital changes 765.540 833.843

Adjustments for changes in working capital:(Increase) /decrease in inventories (116.137) 26.444 Increase in trade and other receivables (862.989) (930.974)

Increase in current liabilities / other liabilities 1,317.504 338.378 173.550 (730.980)Cash generated from operations 1,103.918 102.863 Less : taxes paid (743.697) (184.837)Net cash generated from / (used in) operating activities 360.221 (81.974)

B. Cash flow from investing activitiesPurchase of Fixed Assets (including changes in capital work in progress)

(222.485) (210.474)

Sale of fixed assets/ advance for residential units 305.110 341.202 Purchase of investments (238.402) (34.170)Sale of investments 34,178.406 1,137.463 Loans given (net) (7,800.636) (14,428.870)Dividend income 86.780 157.225 Interest received 458.028 35.243 Increase in fixed deposits with bank (4,996.975) (53.720)Deposit with Court (2,535.000) -

Net cash generated from /(used in) investing activities 19,234.826 (13,056.101)


LIMITED

72

` in million



C. Cash flow from financing activities Proceeds from issue of shares - 2,000.000 Interest and Finance Charges (4,582.536) (4,446.896)Proceeds from loans from banks and others (net) (15,344.865) 16,489.670

Net cash generated from / (used in) financing activities (19,927.401) 14,042.774

Net increase / (decrease) in cash and cash equivalents (332.354) 904.699

Cash and cash equivalents at the beginning of the year

1,317.954 412.751

Elimination on cessation of subsidiaries (23.205) -

Effect of exchange differences on translation of for-eign currecny cash and cash equivalents

0.637 0.503

Cash and cash equivalents at the end of the year` 963.032 1,317.954

Cash and cash equivalents comprise of :

Cash in hand 3.835 7.238 Balance with banks in current accounts 925.246 1,284.204 Short term invetments 33.949 26.512

963.030 1,317.954 Reconciliation of cash and cash equivalents as per Balance sheet and Cash Flow StatementCash and cash equivalents as per Balance Sheet 2,271.213 1,434.105 Less: Deposits maturing beyond 3 months 1,342.132 142.663 Add: Current investments 33.949 26.512

963.030 1,317.954

Notes to the Consolidated Cash Flow Statement

1 Short term investments represents amounts invested in mutual funds which are readily convertible into cash.2 Balances with banks include ` 3.239 million being balances in unpaid dividend account which cannot be used by

the Company except for payment of unpaid dividend / transfer to Invester Education and Protection Fund and ` 43.110 million in escrow account which can not be used by the Company except for repayment of secured loan by a lender.

This is the Consolidated Cash Flow Statement referred to in our report of even date.

Consolidated Cash Flow Statement for the year ended March 31, 2014 (contd.)






LIMITED

73

Notes to the Consolidated Financial Statements

1. SIGNIFICANT ACCOUNTING POLICIES ADOPTED IN THE PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS.

i. Basis of Preparation of Consolidated Financial Statements:

The consolidated financial statements relate to UNITED BREWERIES (HOLDINGS) LIMITED (the Company), its subsidiaries and associates (the Group). The consolidated financial statements are prepared in accordance with Accounting Standard 21- “Consolidated Financial Statements” and Accounting Standard 23-“Accounting for Investments in Associates in Consolidated Financial Statements”. The consolidated financial statements are prepared by adopting uniform accounting policies for like transactions and other events in similar circumstances and are presented to the extent possible, in the same manner as the Company’s separate financial statement, except as otherwise stated.

ii. The subsidiary companies required to be considered in the consolidated financial statements are:

Name of the SubsidiaryOwnership Percentage

Country of Incorporation

1 Kingfisher Training and Aviation Services Limited 71.92 India2 UB International Trading Limited 100.00 India3 UB Electronic Instruments Limited 98.44 India4 Kingfisher Finvest India Limited 100.00 India5 UB Infrastructure Projects Limited 100.00 India6 Kingfisher Aviation Training Limited 100.00 India7 City Properties Maintenance Company Bangalore Limited 55.00 India8 Bangalore Beverages Limited 100.00 India 9 UB Sports Limited 100.00 India10 Kingfisher Goodtimes Private Limited 71.92 India11 Bestride Consultancy Private Limited 100.00 India12 Rigby International Corp. 100.00 British Virgin Islands13 Rubic Technologies Inc. 100.00 British Virgin Islands14 United Breweries of America Inc., Delaware 92.49 United States of America15 Inversions Mirabel, S.A. 100.00 Republic of Panama16 Mendocino Brewing Company, Inc. 66.26 United States of America17 United Breweries International [UK] Limited 66.26 United Kingdom18 Kingfisher Beer Europe Limited

(formerly known as UBSN Limited)66.26 United Kingdom

19 Releta Brewing Company, LLC 66.26 United States of America20 UB Overseas Limited 100.00 British Virgin Islands21 UBHL [BVI] Limited 100.00 British Virgin Islands

The following subsidiary companies are excluded from the consolidation for the year under review for reasons

mentioned there against.

Name of the Subsidiary Company Reason for exclusion1 Kingfisher Training and Aviation Services Limited These are operating under severe long term

restrictions that has significantly impaired their ability to transfer funds to the company.

2 UB Infrastructure Projects Limited3 Kingfisher Aviation Training Limited 4 Bangalore Beverages Limited5 UB Sports Limited6 Kingfisher Goodtimes Private Limited 7 Bestride Consultancy Private Limited

The associate companies required to be considered in the consolidated financial statements are:

Name of the Associate Company Ownership Percentage

Country of Incorporation

1 Kingfisher Airlines Limited 22.94 India 2 UB Engineering Limited 37.18 India3 Pixray India Limited 30.36 India4 WIE Engineering Limited (under liquidation) 25.88 India5 UB Pharma (Kenya) Limited 50.00 Kenya


LIMITED

74

Notes to the Consolidated Financial Statements (contd.)

All the above companies are excluded from the consolidation for the year under review for reasons mentioned there against.

Name of the Associate Company Reason for exclusion1 WIE Engineering Limited Under liquidation proceedings2 UB Pharma (Kenya) Limited Closed operations3 Kingfisher Airlines Limited These are operating under severe long term

restrictions that has significantly impaired their ability to transfer funds to the company.

4 Pixray India Limited5 UB Engineering Limited

iii. Basis of Presentation of Financial Statements:

The financial statements of the parent Company and that of its subsidiaries, UB Electronic Instruments Limited, Kingfisher Finvest India Limited, UB International Trading Limited, City Properties Maintenance Company Bangalore Limited have been prepared in accordance with the Generally Accepted Accounting Principles (GAAP) applicable in India and the financial statements of Rigby International Corp, Rubic Technologies Inc, Inversiones Mirabel, S.A., Mendocino Brewing Company, Inc., United Breweries of America, Inc., Delaware, United Breweries International (UK) Limited, Kingfisher Beer Europe Limited (formerly known as UBSN Limited) , Releta Brewing Company LLC, UB Overseas Limited and UBHL [BVI] Limited have been prepared in accordance with the accounting / financial reporting standards applicable in their respective countries of incorporation and as realigned to GAAP applicable in India. The consolidated financial statements have been prepared based on such financial statements.

iv. Principles of Consolidation:

i) The financial statements of the parent Company and its subsidiaries have been consolidated on a line by line basis by adding together the book values of like items of assets, liabilities, income and expenses after eliminating intra-group balances and intra-group transactions.

ii) Unless otherwise stated, the financial statements of the parent company and its subsidiaries have been consolidated using uniform accounting polices for like transactions and other events in similar circumstances.

iii) Goodwill represents the difference between the group’s share in the networth of a subsidiary and the cost of acquisition at each point of time of making the investment in the subsidiary. Goodwill arising on consolidation is not amortised. For this purpose the group’s share of networth is determined on the basis of the latest financial statement prior to the acquisition after making necessary adjustments for material events between the date of such audited financial statement and the date of respective acquisition. Negative goodwill is recognised as capital reserve on consolidation. However for the purposes of consolidation, capital reserve arising on consolidation of subsidiaries is set off against the goodwill arising on consolidation.

v. Valuation of Inventories: Inventories are valued at lower of costs and net realizable value. Cost of inventories comprise of cost of purchase,

cost of conversion and other costs incurred in bringing the inventories to their present location and condition. In respect of the parent Company and its Indian subsidiary, UB International Trading Limited, and its overseas

subsidiaries, cost is determined under the weighted average cost method.

vi. Revenue recognition: All revenues are generally recognized on accrual basis except where there is an uncertainty of ultimate realization.

i) Sales are recognized when the property in goods are transferred for a price and it is reasonable to expect the ultimate collection.

ii) Interest is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.

iii) Dividends and royalty income are accounted for, when the right to receive the payment is established.

vii. Fixed Assets:i) Fixed Assets are stated at cost less depreciation, wherever applicable. The land and building in Bangalore is

stated at the revalued amount as adjusted in accordance with the revaluation done in March 2014 at the market value determined by approved valuers. All costs relating to the acquisition and installation of fixed assets are capitalized and include borrowing cost relating to borrowed funds attributable to the acquisition of qualifying assets for the period upto the date of acquisition.

ii) Capital work-in-progress comprise advances paid towards acquisition of fixed assets and cost of fixed assets that are not ready for intended use at the year-end.

iii) Assets acquired under leases where the company has substantially all the risks and rewards of ownership are classified as assets acquired under finance leases. Such assets are capitalised at the inception of the lease at lower of the fair value or the present value of minimum lease payments.


LIMITED

75


viii. Borrowing costs:

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of such assets till such time as the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognized as an expense in the period in which they are incurred.

ix. Depreciation:

i) Depreciation has been provided at the rates prescribed under Schedule XIV of the Companies Act, 1956, under written down value method with regard to the parent Company and its Indian subsidiaries.

ii) In respect of foreign subsidiaries, depreciation is provided on straight line basis.

x. Effect of changes in foreign exchange rates:

i) Transactions in foreign currencies are translated applying the following exchange rates:

a) In respect of export transactions of the parent Company, at the average exchange rate prevailing in the month preceding the month in which the transaction took place.

b) In respect of all other transactions at the rate of exchange prevailing on the date of transaction.

ii) Monetary assets and liabilities denominated in foreign currency are translated at the rates of exchange at the Balance Sheet date and the resultant gain or loss is recognized in the Statement of Profit and Loss except exchange difference arising on reporting of long term foreign currency monetary items which are accumulated in a Foreign Currency Monetary Translation Difference Account and amortised over the balance period of such long term asset / liability but not beyond March 31, 2020.

iii) Financial statements of non-integral foreign operations are translated using the average rate of exchange for the year, in so far as their Statement of Profit and Loss is concerned and the closing rate in so far as their Balance Sheet is concerned.

iv) Exchange difference arising on translation of financial statements of non-integral foreign operations is accumulated in foreign currency translation reserve.

xi. Accounting for Export benefits:

Government grants available to the Company are considered for inclusion in the accounts, where there is reasonable assurance that the Company will comply with the conditions attached to them and where such benefits have been earned by the Company and it is reasonably certain that the ultimate collection will be made. Revenue grants are recognized in the Statement of Profit and Loss.

xii. Investments:

i) Current investments refer to the investments that are readily realizable and intended to be held for not more than a year.

ii) Trade investments refer to the investments made with the aim of enhancing the group’s business interest. iii) Long term investments are stated at cost. All expenses relating to acquisition of shares are capitalized. Diminution

in the value of investment, if considered permanent, is provided for.iv) Current investments are stated at the lower of cost and fair value.v) Investments in associates and subsidiary companies that have been considered for consolidation are dealt with

as Investments in accordance with AS-13 “Accounting for Investments”.

xiii. Retirement Benefits:

a) Defined-contribution plans

These are plans in which the group pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. These comprise of contributions to the Employees’ Provident Fund, Superannuation Fund and Employees’ Pension Scheme and certain state plans like Employees’ State Insurance. The group’s payments to the defined contribution plans recognized as expenses during the period in which the employees perform the services that the payment covers.

b) Defined-benefit plans Gratuity: The group provides for gratuity, a defined benefit plan (Gratuity Plan), to certain categories of

employees. Liability with regard to gratuity plan is accrued based on actuarial valuation, based on Projected Unit Credit Method, carried out by an independent actuary, at the Balance Sheet date. Actuarial gains and losses comprise experience adjustments and the effect of changes in the actuarial assumptions are recognized immediately in the Statement of Profit and Loss as income or expense.


LIMITED

76

c) Other long term employee benefits Compensated absences which are not expected to occur within twelve months after the end of the period in

which the employee renders the related services are recognized as a liability at the present value of the defined benefit obligation at the Balance Sheet date based on actuarial valuation carried out at each Balance Sheet date.

d) Short term employee benefits

Undiscounted amount of short term employees benefit expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the services. These benefits include compensated absences such as paid annual leave and performance incentives.

xiv. Segment reporting:

The operations of the Group are divided into alcoholic beverages, leather products, readymade garments, investment, property development, maintenance, training and other activities. Accordingly, the primary segment reporting comprises the performance under these segments and the secondary segment reporting is based on geographical locations of customers.

xv. Related Party disclosures:

Transactions between related parties is disclosed as per Accounting Standard 18, “Related Party Disclosure” , and disclosure regarding the name of the transacting related party, description of the relationship between the parties, nature of transactions and amount outstanding as at the end of the accounting year, are made.

xvi. Taxes on Income:

i) Tax expenses comprises of current and deferred tax.

ii) Current income tax is measured at the amount expected to be paid to the tax authorities by the components (holding and subsidiary companies) and in accordance with the Income tax laws of the respective countries in which they are incorporated.

iii) Deferred tax is recognized, on timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

xvii. Accounting for Leases:

Lease income from non cancellable operating leases are recognized in the Statement of Profit and Loss, on straight line basis, over the non-cancellable lease term. In respect of other operating leases, lease income is recognized in accordance with the terms of the lease deeds as modified based on negotiations from time to time.

xviii. Impairment of assets:

The group evaluates all the assets for assessing any impairment and accordingly recognizes the impairment wherever applicable as provided in Accounting Standards 28 “Impairment of Assets”.

xix. Provisions and Contingencies:

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an out flow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on Management estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.

xx. Earnings per share:

Earnings per equity share (basic/diluted) is arrived at by dividing the net profit or loss for the period attributable to the equity share holders by the weighted average number of equity shares outstanding during the year.



LIMITED

77

` in million


As atMarch 31, 2013

2. Share Capital

Authorised

100,000,000 (2013: 100,000,000 Equity Shares of ` 10/- each

1,000.000 1,000.000

1,000.000 1,000.000

Issued, Subscribed and Paid-up

66,818,521 (2013: 66,818,521) Equity Shares of `10/- each fully paid up.

668.185 668.185

668.185 668.185

a. Reconciliation of equity shares outstanding at the beginning and at the end of the reporting year

2013-14 2012-13

No. of Shares

Amount No. of Shares

Amount

As at the beginning of the year 66,818,521 668.185 66,818,521 668.185

Issued during the year - - - -

Outstanding at the end of the year 66,818,521 668.185 66,818,521 668.185

b. Terms and rights attached to equity shares

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. The rights of shareholder is governed by the Articles of Association of the company and the Companies Act, 2013.

c. Details of shareholders holding more than 5% shares in the company

31 March 2014 31 March 2013

Number of shares

% holding Number of shares

% holding

Dr Vijay Mallya 5,284,978 7.91% 5,284,978 7.91%

McDowell Holdings Limited 5,260,002 7.87% 5,260,002 7.87%

Watson Limited 14,159,986 21.19% 14,159,986 21.19%

d. Aggregate number of shares issued for consideration other than cash during the period of five years immediately preceeding the reporting date is Nil.



LIMITED

78

` in million



3. Reserves and SurplusCapital reserve 511.365 511.365

Securities premium account 8,331.975 8,331.975

Capital reserve arising on consolidation of associates - 7,731.742

Fixed assets revaluation reserve

At the beginning of the year 1,042.113 1,044.484

Addition during the year (refer note no. 31 (i)) 7,508.591 -

Less: Adjustment on sale of land and building - 2.371

8,550.704 1,042.113

Foreign currency monetary item translation difference account

(361.660) (214.043)

Foreign currency translation reserve (1,320.821) (895.730)

Surplus as per Statement of Profit and Loss

At the beginning of the year 3,845.657 6,769.005

Less: Elimination of the brought forward loss of subsidiaries 583.328 -

Add: Elimination of share of associate profits (5,396.655) -

Less: Loss for the year (13,936.554) (2,923.348)

(14,904.224) 3,845.657

807.339 20,353.079



LIMITED

79

` in million



4 Long term borrowings

Secured

Term Loans

From banks 2,410.938 4,662.688

From others 8,631.691 21,063.839

Unsecured

Fixed deposits 211.720 524.675

From group companies 13,374.095 250.000

From others 1,467.123 4,069.126

26,095.567 30,570.328

Less: Current maturities

Secured

From banks 2,318.054 151.416

From others 3,798.436 10,767.369

Unsecured

Fixed deposits 109.697 361.161

From group companies - 250.000

From others 528.012 15.000

6,754.199 11,544.946

19,341.368 19,025.382

(Borrowings are secured by pledge of shares held by the parent company and its subsidiary, deposit of title deed of the parent company’s land and structures in Bangalore, charge on fixed assets, charge on current assets, securitisa-tion of rent receivables from the property let out, assignment of receivables for use of trade marks and securitisation of sale proceeds from the luxury residential buildings.)

5. Other long term liabilities

Trademark licence security deposits 889.157 2,365.000

Pegasus advance received 2,500.000 -

Lease security deposits 346.334 354.950

Interest accrued and not due 846.683 -

Refundable deposit 67.500 67.500

Instalments from allottees for residential units 1,385.302 1,135.222

6,034.976 3,922.672

6. Long term provisions

For legal cases 37.428 37.428

Employee benefits 58.674 38.690

96.102 76.118



LIMITED

80

` in million

As atMarch 31, 2014

As atMarch 31, 2013

7. Short term borrowingsSecuredFrom banks 3,339.780 1,773.692

From others 707.822 4,733.247

UnsecuredFrom bank - 2,719.465 From group company 2,516.008 6,717.413

From others 608.049 250.000

Intercorporate deposits - 300.000

7,171.659 16,493.817

(Borrowings are secured by pledge of shares held by the parent company and charge on fixed assets of the company.)

8. Trade payablesTrade creditors 1,226.243 944.463

1,226.243 944.463

9. Other current liabilities

Current maturities of long term borrowings 6,754.199 11,544.946

Interest accrued and and not due 81.725 857.109

Interest accrued and due 242.036 761.420

Statutory dues 71.563 112.820

Employee dues 10.826 7.581

Security Deposit 0.100 0.100

Advertisement and sales promotion expenses payable 338.514 201.997

Advances received from customers 75.470 132.714

Claims payable 7.921 14.906

Other liabilities 386.290 5,244.966

Creditor for capital goods 12.637 13.043

Investor Education and Protection Fund:

Unclaimed public deposits/interest 0.132 0.217

Unclaimed Dividends 3.000 3.245

7,984.413 18,895.065

10. Short term provisions

Income tax 1,173.865 1,079.794

Employee benefits 2.801 3.851

1,176.666 1,083.645



LIMITED

8111 F

IXED

ASS

ETS

(ref

er n

ote

no

. 31)

` in

mill

ion

Desc

riptio

n

Cos

t / V

alua

tion

Dep

recia

tion

Impa

irmen

t N

et v

alue

of A

sset

As a

t 0

1.04

.13

Add

ition

s d

urin

g th

e y

ear

Reva

lua-

tion

Del

etio

n d

urin

gth

e ye

ar

As a

t A

s at

Ded

uc-

tions

d

urin

g th

e y

ear

for t

he

yea

r

As a

t A

s at

As a

t

31.

03.1

4 0

1.04

.13

31.

03.1

4 31

.03.

1431

.03.

1331

.03.

1431

.03.

13

Inta

ngib

le A

sset

s

Com

pute

r sof

twar

e 0

.161

-

0.1

61

0.1

61

0.1

61

- -

- -

- -

Tota

l int

angi

ble

asse

ts

0.1

61

- -

0.1

61

0.1

61

0.1

61

- -

- -

- -

Tang

ible

ass

ets

Lan

d (r

efer

no

te n

o. 3

1(i)

)1,

124.

906

5,8

35.6

05

- 6

,960

.511

-

- -

- -

6,9

60.5

12

1,1

24.9

06

Bui

ldin

gs (r

efer

no

te n

o. 3

1(i)

) 1,

007.

758

2.7

29

1,6

72.9

87

0.1

47

2,6

83.3

27

288

.172

0

.143

3

8.46

8 3

26.4

97

- -

2,3

56.8

30

719

.586

Pla

nt &

mac

hine

ry

1,0

64.8

78

104

.519

7

7.20

7 1

,092

.190

5

46.0

37

18.

477

78.

277

605

.837

0.5

00

0.5

00

485

.853

5

18.3

41

Off

ice E

quip

men

ts

38.

362

1.2

25

2.2

74

37.

313

19.

299

0.7

75

3.3

88

21.

912

- -

15.

401

19.

063

Fur

nitu

re &

Fix

ture

s 2

55.1

22

2.7

85

6.8

05

251

.102

1

36.5

51

3.9

85

18.

707

151

.273

-

- 9

9.82

8 1

18.5

71

Com

pute

rs

36.

605

1.3

90

10.

466

27.

529

29.

199

10.

566

2.7

68

21.

401

- -

6.1

28

7.4

06

Veh

icles

6

8.96

2 1

.514

6

.589

6

3.88

7 5

4.18

8 6

.432

4

.491

5

2.24

8 -

11.

639

14.

774

Tang

ible

ass

ets (

oth

ers)

Impr

ovem

ent t

o le

ase-

hold

Bu

ildin

gs

13.

324

- 1

3.32

4 -

11.

289

11.

289

- -

- -

- 2

.035

Impr

ovem

ent t

o le

ase-

hold

Pl

ants

6

5.50

0 0

.309

2

.968

6

2.84

1 4

2.98

7 2

.968

4

.354

4

4.37

3 -

- 1

8.46

7 2

2.51

3

Gro

und

supp

ort &

oth

er

equi

pmen

t 3

2.85

9 -

32.

859

- 1

2.96

4 1

2.96

4 -

- -

- -

19.

895

Tota

l tan

gibl

e as

sets

3,

708.

276

114

.471

7,5

08.5

92 1

52.6

39 1

1,17

8.69

8 1,

140.

686

67.

598

150

.453

1,

223.

540

0.5

00

0.5

00

9,9

54.6

58

2,5

67.0

87

Capi

tal w

ork

in p

rogr

ess

1,24

8.35

5 1,

140.

341



LIMITED

82

Cos

t / V

aluat

ion

Dep

recia

tion

Impa

irmen

t N

et v

alue

of A

sset

s

Desc

riptio

n A

s at

Add

ition

s d

urin

g th

e y

ear

Del

etio

n d

urin

g th

e y

ear

As a

t A

s at

for t

he

yea

r

Ded

uc-

tions

d

urin

g th

e y

ear

As a

t A

s at

As a

t

01.

04.1

2 3

1.03

.13

01.

04.1

2 3

1.03

.13

31.

03.1

2 3

1.03

.13

31.

03.1

3 3

1.03

.12

Inta

ngib

le A

sset

s

Com

pute

r Sof

twar

e 0

.161

-

- 0

.161

0

.161

-

0.1

61

- -

- -

-

Oth

ers

1.9

03

- 1

.903

-

- -

- -

- -

- 1

.903

Tota

l int

angi

ble

asse

ts

2.06

4 -

1.9

03

0.1

61

0.1

61

- -

0.1

61

- -

- 1

.903

Tang

ible

ass

ets

Lan

d

1,1

27.3

20

- 2

.415

1

,124

.905

-

- -

- -

- 1

,124

.905

1

,127

.320

Bui

ldin

gs

1,0

31.6

02

- 2

3.84

4 1

,007

.758

2

59.7

09

39.

974

11.

511

288

.172

-

- 7

19.5

86

771

.893

Pla

nt &

mac

hine

ry

1,0

01.3

22

92.

983

29.

427

1,0

64.8

78

499

.153

7

5.96

5 2

9.08

1 5

46.0

37

0.5

00

0.5

00

518

.341

5

01.6

69

Off

ice E

qipm

ents

3

8.60

8 0

.092

0

.338

3

8.36

2 1

6.50

3 2

.970

0

.174

1

9.29

9 -

- 1

9.06

3 2

2.10

5

Fur

nitu

re &

Fix

ture

s 2

54.4

50

1.6

01

0.9

29

255

.122

1

14.3

08

23.

040

0.7

97

136

.551

-

- 1

18.5

70

140

.142

Com

pute

rs

33.

022

4.5

97

1.0

14

36.

605

25.

781

4.3

93

0.9

75

29.

199

- -

7.4

06

7.2

41

Veh

icles

6

8.24

8 2

.229

1

.515

6

8.96

2 4

9.25

0 6

.105

1

.167

5

4.18

8 -

- 1

4.77

4 1

8.99

8

Tang

ible

ass

ets (

oth

ers)

Impr

ovem

ent t

o le

ase-

hold

Bui

ldin

gs

12.

444

0.8

80

- 1

3.32

4 1

1.24

0 0

.049

-

11.

289

- -

2.0

34

1.2

04

Impr

ovem

ent t

o le

ase-

hold

Pla

nts

64.

681

0.8

19

- 6

5.50

0 3

9.20

9 3

.778

-

42.

987

- -

22.

513

25.

472

Gro

und

supp

ort &

oth

er e

quip

men

t 3

2.85

9 -

- 3

2.85

9 1

1.40

7 1

.557

-

12.

964

- -

19.

895

21.

452

Tot

al T

angi

ble

Asse

ts

3,6

64.5

56

103

.201

5

9.48

1 3

,708

.275

1,

026.

560

157

.831

4

3.70

5 1

,140

.685

0

.500

0

.500

2

,567

.087

2

,637

.496

Cap

ital w

ork

in p

rogr

ess

1,1

40.3

41

1,03

3.06

8



LIMITED

83

` in million



12. Non current investments

Long term investments

In fully paid equity shares

In associate companies 14,962.435 36,418.486

In other companies 3,064.157 2,196.141

18,026.592 38,614.627

Less: Provision for diminution in value ofinvestments 9.436 9.436

18,017.156 38,605.191

13. Long term loans and advances

Considered good 1,097.207 35,174.040

Considered doubtful 12,737.054 20.000

13,834.261 35,194.040

Less: Provision 12,737.054 20.000

1,097.207 35,174.040

14. Other non current assets

Other deposits - considered good 101.425 100.370

101.425 100.370

15. Current investments

Mutual funds* 33.949 26.512

33.949 26.512

* current market value as on 31.03.2014 is ` 43.535 million



LIMITED

84

` in million



16. Inventories


Packing materials, stores and spares 44.834 53.359

Work in progress 13.627 37.225

Finished goods including goods in transit 452.345 259.255

537.893 421.756

17. Trade receivables

Unsecured

Exceeding six months:

Considered good 13.501 27.757


25.597 30.295

Less: Provision 12.096 13.501 2.538 27.757

Others: considered good 676.004 552.011

689.505 579.768

18. Cash and cash equivalents

Cash on hand 3.835 7.238

Balances with Banks:

in current accounts 922.209 1,280.965

in unpaid dividend account 3.037 3.239

in deposit account 1,342.132 142.663

2,271.213 1,434.105

19. Short term loans and advances

Advances to suppliers 854.884 841.217

Advance Income Tax 2,126.607 1,662.715

Prepaid expenses 34.888 24.191

Other receivables - considered good 689.096 434.825

3,705.475 2,962.948

20. Other current assets

Deposit with court (refer note no. 36 (b)) 2,535.000 -

Bank deposit (refer note no. 36 (c)) 3,797.506 -

Duty drawback receivable 183.246 124.850

6,515.752 124.850



LIMITED

85

` in million

Year ended March 31, 2014


21. Revenue from operations

Sales 5,537.267 5,286.520

Dividends 86.780 157.225

Guarantee commission 18.833 73.672

Lease rent 511.738 473.973

Income from property maintenance 443.478 265.475

Licence fees 566.805 175.164

Management service fees 30.000 34.200

Duty drawback 168.884 210.417

Property development - 27.860

Training - 23.370

Profit on sale of Investments - 1.336

7,363.785 6,729.212

22. Other Income

Interest income 509.366 1,064.123

Profit on sale of fixed assets - 0.268

Provisions/ liabilities no longer required/ payable written back 207.198 5.835

Exchange gain - 23.453

Miscellaneous income 34.171 15.274

750.735 1,108.953

23. Cost of material consumed

Raw material consumed 1,702.354 1,600.925

Packing materials consumed 226.306 214.824

1,928.660 1,815.749



LIMITED

86

` in million



24. Employee benefits expensesSalaries, wages and bonus 374.105 261.603Contribution to provident and other funds 89.921 40.984Workmen and staff welfare 38.664 33.578

502.690 336.165 25. Finance costs

Interest expenses 4,766.328 5,324.451Processing charges and bank charges 78.268 290.902

4,844.596 5,615.353 26. Other expenses

Rent including lease rent 36.600 45.244

Rates and taxes 50.997 52.393

Insurance premium 5.935 4.066

Communication expenses 9.714 9.765Travel and conveyance 37.647 29.394General administrative expenses 209.529 190.113Repairs & maintenance 99.115 82.110Vehicle repairs and maintenance 7.108 5.892Property maintenance expenses 191.496 85.571Selling and promotion expenses 617.397 470.916Brokerage 2.431 5.459Commission paid to selling agents 47.134 26.159Freight charges/job charges 160.234 212.247Miscellaneous expenses 48.154 43.759Claims paid 0.376 0.206Legal & professional charges 218.729 167.947Directors' sitting fees 1.305 1.712Auditor's remuneration 4.186 3.552Provision for bad and doubtful debts 9.558 -Loss on asset sold/discarded / written off 3.586 10.535

Exchange loss 206.704 -

1,967.935 1,447.040

27. Exceptional itemsProfit on sale of shares to Diageo Plc (net of expenses) 23,302.456 -

Profit on sale of pledged securities by KFA lenders (net) 1,023.894 863.025 Profit on sale of pledged securities by the lenders of the company 4,812.480 - Loss on sale of other securities (2,390.324) -

26,748.506 863.025



LIMITED

87

28 Financial statements have been prepared on basis similar to last year in view of the clarifications issued by Ministry of Corporate Affairs, Govt. of India, vide its Circular no. 1/19/2013-CL-V dated 4th April 2014.

29. UB City Luxury residential Project

The parent company has executed a Joint Development Agreement with a Developer on 26th April, 2010 for development of a luxury residential building to be named as “Kingfisher Towers – Residences at UB City”. The development of the above project (in which the Company is entitled to 55% share of super built up area) is under progress and is expected to be completed in 2015.

The parent company has issued allotment letters in respect of seven residential units in Kingfisher Towers by collecting booking amounts of ` 1,385.302 million (Pr year 1,135.222 million)

30 Estimated amount of contracts remaining to be executed, on capital account as on 31.03.14 and not provided for, in the case of parent company is ` 6.600 million (net of advances) (Pr year ` 2.190 million).

31. Fixed Assets :

i) The parent company has revalued its land & buildings in Bangalore, as on March 31, 2014 at their Fair Market Value based on Valuation Report of an independent approved valuer and the carrying values of the respective assets have been adjusted accordingly. The incremental appreciation in the value of land arising out of the aforesaid valuation is ` 5,835.605 million and that of building is ` 1,672.987 million. The total incremental appreciation of ` 7,508.592 million has been credited to the Fixed Assets revaluation reserve.

ii) Depreciation has been charged under the written-down value method as per the rates prescribed under the Companies Act 1956, in respect of the parent Company. In respect of the overseas subsidiaries, depreciation is charged under the straight-line method at the rates prescribed under the statute governing those subsidiaries. The net book value of fixed assets of overseas subsidiaries on which straight-line method of depreciation is used, is ` 548.133 million (Pr year ` 583.045 million).

32. Investments in subsidiaries (including step down subsidiaries) and associates that have not been considered for consolidation are presently considered as long term and strategic in nature and diminution in their carrying cost, though significant, is considered temporary and accordingly no provision has been considered necessary.

33. The parent company along with its subsidiaries has significant financial exposure on various counts to Kingfisher Airlines Limited (KFA). Although KFA’s license has expired on December 31, 2012, under civil aviation regulations, KFA has a period of 24 months to reinstate the same. As at March 31, 2014, the financial exposure includes equity investment of ` 8,424.300 million and corporate guarantees to banks/aircraft lessors, some of which have been invoked. Such invocations are being contested in court. The company considers the diminution in the value of this investment to be temporary and as such no provision has been considered in the accounts.

34. The Board of Directors has reviewed the significant amounts due from KFA and in the light of KFA’s liquidity constraints and as a matter of prudence, has made a provision for the amounts due of ` 12,597.072 million and written off ` 58.975 million. Additionally provision has also been made for a sum of ` 119.982 million due from a subsidiary which has not been considered for consolidation.

35. The parent company, over the years advanced significant amounts to subsidiaries aggregating to ` 27,596.573 million. The parent company has made a critical appraisal of the amount recoverable from certain subsidiaries which has not been considered for consolidation and taking into consideration the net worth of those companies, a sum of ` 24,505.944 million due from those subsidiaries have been written off.

36. Sale of shares in United Spirits Limited

Pursuant to the Share Purchase Agreement entered into by the parent company and its subsidiary Kingfisher Finvest India Ltd (KFIL) for sale of 16,716,987 equity shares held by it in United Spirits Ltd to Relay BV, an indirect wholly owned subsidiary of Diageo plc., the parent company, on July 4, 2013, with leave of the Hon’ble High Court of Karnataka under sec. 536(2) of the Companies Act, 1956 sold 10,141,437 Equity shares. Appeals were filed by the petitioners in the Winding up petition before the Karnataka High Court seeking to set aside the above Order of the Company Judge. The Division Bench of the Hon’ble High Court of Karnataka vide its order dated 20th December 2013 has set aside the permission granted by the Hon’ble Company Judge under Section 536(2) of the Companies Act, 1956 to dispose of the shares of USL in favour of Diageo Plc / Relay BV. The Company and Diageo Plc have approached the Hon’ble Supreme Court by way of SLPs challenging the order of the Division Bench. Pending, disposal of the Company’s SLP’s, the Hon’ble Supreme Court has directed that status quo be maintained in respect of the transaction of sale of shares to Diageo. Accordingly the parent company has accounted for the said sale of shares in its books.



LIMITED

88

The company’s subsidiary Kingfisher Finvest India Limited (KFIL) sold 6,575,550 equity shares held by it in United Spirits Ltd to Relay BV. Although KFIL is a respondent in the SLP pending before the Hon’ble Supreme Court, no relies have been sought against.

b) The leave of the Court under section 536 (2), also mandated the parent company to keep a sum of ` 2,500 million deposited with the Court. Accordingly, the parent company has deposited ` 2,500 million with The Registrar General, High Court of Karnataka, Bangalore and the same is included under “Other Current Assets”.

c) Further, the order granting permission to sell the shares as above, mandated the parent company to keep the net sales proceed remaining after paying off the permitted secured lenders, transaction costs and taxes, invested in bank deposits until further orders. Accordingly, the parent company has kept deposited a sum of ` 3,797.506 million with a bank, which has been shown under “ Other Current Assets”.

37. The Consortium of Bankers who have advanced loans to Kingfisher Airlines Limited have filed an application being Original Application (O.A.) 766 of 2013 before the Debt Recovery Tribunal (DRT) under Section 19 of the Recovery of Debts Due to Banks & Financial Institutions Act, 1993, for recovery of dues amounting to ` 6,493.29 crores from Kingfisher Airlines Limited (KFA), the parent company, Dr. Vijay Mallya and subsidiary company Kingfisher Finvest India Limited (KFIL), who are respondents to these proceedings, have taken steps to defend the aforesaid proceedings before the DRT as per the advice of their lawyers.

The Bankers have further filed an application bearing no. 5081 of 2013 in O.A. 766 of 2013 inter-alia seeking an order directing KFIL, to refrain from transferring, alienating, disposing or creating any encumbrances or third party interests in any manner on any property and assets (movable, immovable, tangible & intangible) belonging to it including proceeds arising out of sale of certain investments in shares of United Spirits Limited and KFA pending disposal of the application. In terms of various restraint orders passed by the Hon’ble DRT, High Court and the Debt Recovery Appellate Tribunal, KFIL is presently restrained from dealing with its property and assets as mentioned above till final disposal of the matters. KFIL has since filed ̀ cross writ’ before the Hon`ble High Court seeking vacation of the ex-parte, ad-interim restraint order and the matter is pending adjudication.

38. Tax provision

The parent company has received tax opinion that amounts due from subsidiaries which have been written off, are tax admissible.

39. i) The Consortium of KFA Bankers, have sold certain investments belonging to the parent company and a subsidiary pursuant to the purported pledge.

ii) KFA lenders have invoked parent company’s Corporate Guarantee and demanded payment of dues, due from KFA amounting to ` 64,932.900 million.

iii) The parent company and others have filed a suit in the Hon’ble Bombay High Court, being Suit No. 311 of 2013 (Bombay Suit) against the consortium of bankers, who have advanced loans to Kingfisher Airlines Limited (“KFA”), inter alia, seeking the following reliefs:-

(a) For a declaration that the Corporate Guarantee dated 21st December, 2010 given by the Company and the Pledge Agreement dated 21st December, 2010, are void ab-initio and non-est;

(b) For a permanent order and injunction restraining the consortium of bankers, their servants, agents or assigns, or any other person claiming by, through or under them or any of them, from acting upon, in furtherance or in any manner giving effect to the impugned Notice dated 16th March, 2013, or from taking any other or further steps to act upon or in furtherance of the Pledge Agreement dated 21st December, 2010, save and except in accordance with the procedure set out in clause 8.1 of the MDRA, including issuing a notice there under.

(c) For a permanent order and injunction restraining the consortium of bankers, their servants, agents or assigns, or any other person claiming by, through or under them or any of them, from acting upon or in furtherance of the Corporate Guarantee dated 21st December, 2010 given by the Company and the Pledge Agreement dated 21st December, 2010;

(d) That an order and decree of damages of the sum of ` 3,199.68 Crores as set out in the Particulars of Claim be awarded to the Plaintiffs.”



LIMITED

89

The parent company has also filed a Notice of Motion in the said Suit, being Notice of Motion 306 of 2014 inter alia, for a decree on admission that the extent of the liability under the Corporate Guarantee is restricted to ` 1,601.43 crores based on admissions by the consortium of bankers. The said Suit and Notice of Motion are pending adjudication in the Hon’ble Bombay High Court.

The gross sale proceeds from the sale of securities by the lenders of KFA, have been adjusted by the said lenders against their dues from KFA. The management has obtained legal advice that the company has a potential claim against lenders for recovery of the above sale proceeds. Without prejudice to the rights and contentions of the company in the pending legal proceedings, the sale proceeds appropriated by the lenders against KFA’s dues is included under Loans and Advances recoverable from KFA.

40. The parent company and its subsidiary has advanced ` 812.155 million to an associate, which have not yet been repaid. Even though there is erosion in the net worth of the associate, the Management is of the view that all the amounts are ultimately recoverable, taking into consideration their business plans and growth strategies

41. The parent company has accrued interest of ` 51.423 million on loans to an associate as per Loan Agreements signed with them. Considering the income stream of those companies, realisability of this interest could possibly take protracted period of time beyond those stipulated in the Loan Agreement.

42. Events occurring after the date of the Balance Sheet

a) Between 17th June and 26th June 2014, HDFC Limited, a lender to the parent company, has sold 482,000 shares of United Spirits Ltd, held by the parent company and 1,748,000 shares of United Spirits Ltd, held by a subsidiary by invoking the pledge created in its favour to secure the parent company’s borrowings.

b) On 12th May 2014, the parent company (along with other constituents of the UB Group) entered into agreement with Adventz Group in respect of their respective shareholding in Mangalore Chemicals and Fertilizers Limited. Further, the Company joined Zuari Fertilisers and Chemicals Limited (a constituent of the Adventz Group) in making a competing offer under Regulation 20 of SEBI (SAST) Regulations, 2011, as amended, for acquisition of up to 30,813,939 equity shares of ̀ 10 each from the public shareholders of Mangalore Chemicals and Fertilizers Limited, at a price of ̀ 68.55 per equity share. In terms of the agreement, Zuari Fertilisers and Chemicals Limited (Zuari), has agreed to subscribe to all the shares that will be tendered in the competing offer and all financial obligations, costs, charges and expenses including payment of consideration to public shareholders in terms of the Takeover Regulations will be borne by the Zuari alone. Management control, however, will continue to be with UB Group. SEBI has issued its no objection for the Open Offer subject to receipt of approval from Competition Commission of India (CCI).

c) On June 30th and July 3rd 2014, Term Deposits of ` 609.674 million kept by the parent company with a bank, pursuant to Court order, has been unilaterally pre-closed by the bank by exercising its general lien, to adjust a claim arising out of a Corporate Guarantee issued by the parent company, in favour of a Group company. The parent company has initiated legal action for restitution of the said deposits.

d) On 10th June 2014, IDBI Trusteeship Services Limited have transferred 4,937,395 shares of United Spirits Limited held by the parent company and its subsidiary, pledged in their favour to secure the borrowings of KFA, to IGCF who in turn sold the said shares. Earlier, the parent company and it’s subsidiary, Kingfisher Finvest India Limited (KFIL) had filed a suit, inter alia, against IDBI Trusteeship Services Limited (IDBI Trusteeship), Indian Global Competitive Fund (IGCF) and SREI Venture Capital Limited (SREI), in the City Civil Court at Calcutta, being T.S. No. 966 of 2013, inter alia, for declaring the Security Trustee Agreement dated 30th June, 2008 and the Consolidated Deed of Pledge dated 21st December, 2010 (in respect of shares of United Spirits Limited and KFA held by the Company and KFIL) as void, unenforceable and of no effect. The said suit is pending.

SBICAP Trustee and the Consortium of Banks, which have advanced loans to KFA had also filed a suit, inter alia, against IDBI Trusteeship Services Limited, SREI Venture Capital Limited, UBHL and KFIL in the Court of City Civil Judge in Bangalore, being O.S. No. 25877 of 2013 to enforce their alleged rights under the Release of Residual Interest Agreement dated 21st December, 2010 in respect of the aforesaid USL and KFA shares.

On 17th July 2014, the Consortium of Banks filed Writ Petition No. 28577 of 2014 in the Hon’ble Karnataka High Court praying for deposit of excess sales proceeds of the pledged shares with the court. By an order dated 20th June, 2014 the Hon’ble High Court of Karnataka ordered India Global Competitive Fund to deposit the surplus/balance sales proceeds from the aforesaid sale of shares in court. The Company is contesting the aforesaid Writ Petition No. 28577 of 2014, O.S. No. 25877 of 2013 and the ex-parte ad-interim orders passed therein.



LIMITED

90

43. Litigation

a) The lenders of Kingfisher Airlines Limited (KFA) have, pursuant to certain Corporate Guarantees given by the Company (the validity of which is disputed as set out hereinafter), demanded from the Company, their dues from KFA amounting to ̀ 6,493.29 crores with further interest and other dues from 01/06/2013 and have moved the Debt Recovery Tribunal (“DRT”) for recovery of these dues by way of Original Application (OA). The Interim Application filed by the Company before the DRT seeking to reject the said OA on the ground of jurisdiction has been dismissed by the Tribunal vide its order dated 12th November, 2013. Further, the Writ Petition against the DRT dismissal order, preferred by the Company, has also been disposed of by the Hon’ble High Court of Karnataka on 4th February, 2014, with liberty to move the Debts Recovery Appellate Tribunal for suitable reliefs by way of appeal. The Company has already preferred an Appeal before the Hon’ble DRAT challenging the DRT dismissal Order and the same is pending adjudication.

Further, 3 lenders who have extended pre delivery payment (PDP) loans to KFA and who claim to be beneficiaries of Corporate Guarantees of the Company; for purchase of aircrafts from M/s. Airbus S.A.S., have filed proceedings before the DRT for recovery of total dues amounting to ` 192.51 crores. By an ex-parte order dated February 4, 2014, in I.A. No. 543/2014, the Hon. Tribunal has passed an ad-interim order attaching pre-delivery payments made by KFA to M/s. Airbus S.A.S. up to ` 192.51 crores. This ad-interim order is continuing.

b) KFA lenders have sent a notice purportedly under the SARFAESI Act in respect of company‘s property in Goa (Goa property) which was mortgaged to secure KFA borrowings. The Company has responded to the notice challenging the same.

Pending adjudication of the suit, the Goa property continues to remain as an asset of the company.

c) Winding up Petitions

The parent company is contesting nine winding up petitions filed by certain creditors of KFA under Section 433/434 of the Companies Act, 1956 before the Hon’ble High Court of Karnataka.

Certain alleged Corporate Guarantees on behalf of KFA have been invoked and certain purported beneficiaries of Corporate Guarantees issued on behalf of KFA including the Consortium of Banks have filed petitions against the Company under Sections 433/434 of the Companies Act 1956. On 19th November, 2013, the Hon’ble Karnataka High Court admitted Company Petition No. 248 of 2013 filed by BNP Paribas, one of the beneficiaries under the Corporate Guarantee. The Company filed Original Side Appeal No. 52 of 2013 before the Division Bench of the Karnataka High Court challenging the judgment and order dated 19th November, 2013 which appeal was dismissed by a judgment and order dated 16th December, 2013. The Company has now filed a Special Leave Petition in the Hon’ble Supreme Court of India, being Special Leave Petition No. 1163 of 2014 challenging the order of the Karnataka High Court dated 16th December, 2013. The said Special Leave Petition is pending.

On 13th December, 2013, the Hon’ble Karnataka High Court also admitted Company Petition No. 185 of 2012 filed by Avions De Transport Regionale, one of the other purported beneficiaries of a purported Corporate Guarantee. Company has filed Original Side Appeal No. 18 of 2014 before the Division Bench of the Karnataka High Court challenging the judgment and order dated 13th December, 2013. The said appeal is still pending.

The parent company has filed a suit for damages claiming an amount of ` 13,193.000 million against some of the above Petitioners in the City Civil Court, Bangalore and the same is pending adjudication

44. Going concern

a) The parent company is defending recovery proceedings by the Consortium of Banks of KFA based on corporate guarantees, the validity of which is being contested. The company has filed in Bombay High Court, a suit seeking to declare the corporate guarantee null, void ab initio and non-est. The suit is still pending adjudication.

b) The parent company has filed a suit for damages against the aircraft engine manufacturers for supply of inherently defective engines, both in design and manufacture, to KFA. The suit is pending. However, the parent company is pursuing without prejudice, negotiations to try and settle the dispute amicably. Similarly, the parent company is pursuing without prejudice, negotiations with two of the creditors who have filed winding up petitions against the parent company, to try and settle the disputes amicably. Two members of the Consortium of Bankers of KFA have assigned their debt to a Asset Reconstruction Company (ARC). The ARC is in discussion

with the parent company for settlement of these loans.



LIMITED

91

c) The total funds of the parent company kept deposited with banks/courts pursuant to direction of Court pending resolution of various disputes amounts to ` 7,943.800 million.

d) Due to embargo by the High Court of Karnataka, rentable commercial office space of 30,606 sq feet could not be leased out resulting in a potential loss of revenue. Also for the same reason booking could not be accepted for high value residential units in Kingfisher Towers, which has impacted the cash flow. The parent company is making an application to the court seeking approval for leasing vacant space in UB City and for sale of it’s share of apartment units in Kingfisher Towers.

Further, the parent company has substantial assets to monetize in case of necessity.

Having regard to all the above facts, the financial statements for the year ended 31, March 2014 have been presented on principles applicable to Going Concern.

45. The following associates, namely, Kingfisher Airlines Limited, UB Engineering Limited and Pixray (India) Limited, have been facing liquidity crunch resulting in their ability to transfer funds to parent company being significantly impaired. In view of this they have not been considered for the consolidation and investments in them have been dealt in accordance with AS 13 - Accounting for Investments.

The following subsidiaries, namely, Kingfisher Training and Aviation Services Limited, UB Infrastructure Projects Limited, Kingfisher Aviation Training Limited, Bangalore Beverages Limited, UB Sports Limited, Kingfisher Goodtimes Private Limited and Bestride Consultancy Private Limited have been facing liquidity crunch, resulting in their ability to transfer funds to parent company being significantly impaired. In view of this they have not been considered for the consolidation and investments in them have been dealt in accordance with AS 13 - Accounting for Investments.

46. Employee benefitDisclosure as per AS 15Defined benefit plans 2013-14 2012-13Reconciliation of opening and closing balances of the present value of the defined benefit obligation:

Obligations at period beginning 75.300 66.364

Less : pertaining to erstwhile subsidiary - -

Service Cost 34.102 11.241



Actuarial (gain)/loss (0.304) 4.199

Obligations at period end 108.312 75.300

Change in plan assets

Plans assets at period beginning, at fair value 60.619 55.264

Expected return on plan assets 6.149 4.113

Actuarial gain/(loss) 0.113 (3.824)

Contributions 48.385 11.921


Plan assets at period end, at fair value 107.946 57.153

Reconciliation of present value of the obligation and the fair value of the plan assets:Fair value of plan assets at the end of the year 108.312 57.153

Present value of the defined benefit obligations at the end of the period 107.946 75.300Liability recognized in the Balance Sheet 0.366 18.147

Details of Gratuity cost

Service cost 34.102 11.241


Expected return on plan assets (5.402) (4.113)

Actuarial (gain) / loss (0.724) 3.334



LIMITED

92

Net gratuity cost 34.509 14.427

Description of the basis used to determine the overall expected rate of return on assets including major categories of plan assets. The expected return is calculated on the average fund balance based on the mix of investments and the expected yield on them.AssumptionsInterest rate 9.12% 8.50%Discount factor 9.12% 8.50%Estimated rate of return on plan assets 8.00% 8.00%Salary Increase 5.00% 5.00%Retirement age ( years) 58 58

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

47. Deferred Tax:

The following deferred tax assets / liabilities are recognized for the year.

Name of the Company Deferred tax Liability

DeferredTax Asset

City Properties Maintenance Company Bangalore Limited - 0.605UB Electronic Instruments Limited - 0.047UB International Limited 0.171 0.251Total 0.171 0.903Total deferred tax asset (recognized in the Profit and Loss Account) - 0.732

48. Segment Reporting:

Segment-wise business performance for the year ended March 31, 2014

Primary Segment Information 2013-14 2012-13Segment Revenue:a) Alcoholic Beverages 4,260.630 4,471.355b) Leather products 418.654 285.317c) Readymade Garments 849.483 604.336d) Investments 86.780 158.270e) Logo Fee 566.805 175.164f) Property development 639.238 501.833g) Maintenance 315.978 265.475h) Training - 23.370i) Others 226.217 243.892Total Revenue 7,363.785 6,729.212Segment Results:a) Alcoholic Beverages 369.173 488.023b) Leather products (243.603) 3.375c) Readymade Garments 66.900 15.151d) Investments (182.810) 9.327e) Logo Fee 392.300 72.248f) Property development 354.183 368.951g) Maintenance 114.116 16.954h) Training - (10.800)i) Others 15.364 (14.274)Total Result 885.623 948.955Other income 750.735 1,108.953Provision for bad and doubtful debts/ advances (12,759.598) -Bad advances/debts written off (24,564.935) -Finance cost (4,844.596) (5,615.353)Exceptional items 26,748.506 863.025Loss before tax (13,784.266) (2,694.420)



LIMITED

93

Other Information2013-14 2012-13 2013-14 2012-13

Segment Assets

Segment Liabilities

Segment Assets

Segment Liabilities

Capital Expenditure

Depreci-ation

Capital Expenditure

Depreci-ation

a) Alcoholic Beverages 2,428.381 2,426.387 2,497.188 2,196.709 98.394 62.759 86.229 54.546b) Leather Products 675.335 81.834 291.223 113.423 4.312 9.473 0.119 13.777c) Readymade

Garments 1,249.781 23.737 934.655 10.890 3.950 6.987 5.642 7.437

d) Investments 28,803.356 39,058.116 74,751.291 56,723.552 - - - -e) Property

Development419.385 - 439.010 - - 19.591 - 21.209

f) Maintenance 149.538 74.091 116.419 69.187 3.655 2.830 4.402 2.561g) Training - - 813.166 100.875 - - 0.880 3.745h) Others 203.968 197.045 589.202 149.643 4.160 48.813 5.929 54.556

Total 33,929.744 41,861.210 80,432.155 59,364.279 114.471 150.453 103.201 157.831

Notes :

1 Income under the segment “investments” represents dividends received, profit on sale of investments.

2. Income under the segment “property development” represents lease rent and profit on sale of immovable property

3. Segment results represents profit/(loss) before finance expenses, interest income, tax and exceptional items.

4. Capital expenditure represents the gross additions made to fixed assets during the year.

5. Segment assets include Non-Current Assets and Current Assets except goodwill and income tax assets.

6. Segment Liabilities include Non-Current Liabilities and Current Liabilities provision for tax and dividend.

7. Exceptional items represents profit on sale of shares in United Spirits Limited in favour of Diageo Plc, profit (net) on sale of pledged shares by lenders.

Secondary segments, based on geographical locations

Particulars Segment Revenue Segment Assets

Segment 2013-14 2012-13 2013-14 2012-13

Within India 1,866.286 1,451.279 32,072.595 78,046.031

Outside India 5,497.499 5,277.933 1,857.149 2,386.124

Total 7,363.785 6,729.212 33,929.744 80,432.155

49. Related Party Transactions:

i. Key Management Personnel : Dr. Vijay Mallya, Chairman of the parent Company and Chairman & Managing Director of Kingfisher Airlines Limited,

Name of the Related Parties where control exists:

Associates

United Spirits Limited*, Mangalore Chemicals & Fertilizer Limited**, McDowell Holdings Limited***, Kingfisher Airlines Limited, UB Engineering Limited, WIE Engineering Limited (Under Liquidation), Pixray India Limited, UB Pharma (Kenya) Limited

Subsidiary of Associates :

SW Finance Co.Limited (formerly Shaw Wallace Breweries Limited)* & Royal Challengers Sports Private Limited*

* upto 4th July 2013

**upto 30th April 2013

*** upto 9th January 2014



LIMITED

94

ii. Transactions with Related Parties during the year :

Sl. No.

Nature of Transactions Associates Subsidiary of Associates

Key Management Personnel

2013-14 2012-13 2013-14 2012-13 2013-14 2012-131. Purchase of goods/services 507.273 520.181 - - 2. Rendering of services 142.631 38.662 - - 3. Receiving of services 127.500 -4. Guarantee commission paid 12.568 - - - 5. Licence Fees received 492.500 102.040 - - 6. Dividend received 64.480 125.487 - - 7. Guarantee commission received 18.833 73.672 - - 8. Interest received 51.423 1,029.004 - - 9. Interest paid 1203.635 399.606 201.486 308.160 -

10. Investment made 84.744 34.170 - - 11. Guarantees given 88,869.451 88,869.451 - - 12. Finance (including loans in cash

or in kind) paid10,918.090 22,523.742 7,127.465 30.816 -

13. Finance (including loans in cash or in kind) received

10,072.186 13,603.958 - 4,265.315 -

14. Payment of remuneration for employment

- - - - 16.059 14.545

15. Management contracts 30.000 34.200 - - 16 Pegasus advance received 2,500.000 -

Amount Due from as on March 31, 2014

13,740.571 24,888.769 - - -

Amount Due to as on March 31, 2014 17,791.860 7,759.072 - 6,925.979 -

50. Contingent liabilities:

Particulars 2013-14 2012-13i) Guarantees given

88,280.760 90,852.200(the enforceability of the guarantee issued for Kingfisher Airlines Limited beneficiaries are being contested in appropriate Courts of Law)

ii) Claims against the parent Company and its subsidiaries, not acknowledged as debts

0.961 0.961

iii) Demands raised by Income Tax Authorities against which the subsidiaries has preferred appeals

5.454 3.468

iv) Demand raised by Income Tax authorities against which the parent Company has preferred appeals

786.774 948.793

v) Demands raised against subsidiary by Service Tax Authorities against which the subsidiary has preferred appeals

10.752 10.752

vi) Claim against the parent company not acknowledged as debt 1,462.900 -

Certain aircraft lessors and vendors of Kingfisher Airlines Limited (KFA) have invoked the corporate guarantees given by the parent company on behalf of KFA. The total amount invoked and outstanding as on March 31, 2014 is ` 15,275.400 million (Pr year ` 9,874.600 million) and Kingfisher Airlines Limited is under negotiation with the beneficiaries. Also, Consortium of KFA bankers have invoked parent company’s corporate guarantee and demanded payment of ` 64,932.900 million due from KFA. This matter is being contested by the parent company in various Courts. Accordingly, the parent company continues to recognize these obligations as only ‘contingent liabilities’.

A claim has been made for ` 1,462.900 million by a Bank towards share recompense amount. The company has obtained legal advice that this claim is not enforceable and accordingly the amount is presently shown above as “claims against the Company not acknowledged as debt.”



LIMITED

95

51. The parent company is pursuing confirmation for an amount of ̀ 200.000 million advanced to a vendor. The confirmation

has been delayed due to the unexpected demise of the Owner of the business.

52. Earnings per Share:

Earnings per Share 2013-14 2012-13

Loss before exceptional items and tax (40,685.059) (3,786.373)



Earnings per Share 2013-14 2012-13Loss after exceptional items and tax (13,936.553) (2,923.375)Weighted average number of equity shares 66,818.521 66,818.521Earnings per share (Basic / Diluted) - in ` (208.57) (43.75)

53. There are no speculative derivative transactions. Hedging is restricted to the business needs of the companies. As at the Balance Sheet date, foreign currency exposures that have not been hedged by any derivative instrument or otherwise are as follows:

` in million

2013-14 2012-13

Amount receivable 46.329 664.233

Amount payable 4,572.131 5,715.241

54. All amounts are in Rupees million, unless otherwise stated..

55. Previous year’s figures have been regrouped wherever necessary.







LIMITED

96 SUM

MA

RIS

ED F

INA

NC

IALS

OF

SUB

SID

IARY

CO

MPA

NIE

S 20

13-1

4`

in m

illio

nC

apit

alR

eser

ves

Tota

l A

sset

sTo

tal

Liab

iliti

esD

etai

ls o

f In

vest

-m

ents

Tota

l R

even

ue

Pro

fit

bef

ore

Ta

x

Tax

Pro

vi-

sio

n

Pro

fit

afte

r Ta

x

Pro

po

-se

d D

i-vi

den

dIn

dia

n S

ub

sid

iari

es1

Cit

y Pr

op

erti

es M

ain

ten

ance

Co

mp

any

B

ang

alo

re L

imit

ed

0.9

09

49.

932

137

.059

8

6.21

8 6

.860

2

18.4

37

16.

194

6.0

53

10.

141

-

2K

ing

fish

er F

inve

st In

dia

Lim

ited

1

0.50

0 (

874.

066)

1,8

28.0

40

2,6

91.6

06

485

.063

2

91.0

21

680

.663

1

60.8

10

519

.853

-

3

UB

Ele

ctro

nic

Inst

rum

ents

Lim

ited

2

9.19

3 2

3.31

7 6

3.20

4 1

0.69

3 -

1

2.81

7 4

.281

1

.220

3

.061

-

4

UB

Inte

rnat

ion

al T

rad

ing

Lim

ited

2

50.5

00

(20

.021

) 3

25.9

87

95.

508

230

.000

3

20.2

86

(0.

339)

0.0

80

(0.

419)

-

Ove

rsea

s Su

bsi

dia

ries

-

1R

igb

y In

tern

atio

nal

Co

rp.

908

.438

(

1.23

8) 9

08.4

38

1.2

38

908

.438

-

(

0.12

0) -

(

0.11

4) -

2

UB

Ove

rsea

s Li

mit

ed

1,55

1.57

3 (1

,066

.904

) 4

,068

.243

3

,583

.575

4,

035.

550

0.2

82

(170

.831

) -

(1

70.8

31)

-

3R

ub

ic T

ech

no

log

ies

Inc.

3

3.05

5 (

33.3

55)

-

0.3

00

-

-

-

-

-

-

4U

BH

L (B

VI)

Lim

ited

1

4.32

6 (

263.

024)

55.

140

303

.838

0

.054

1

4.30

4 1

2.76

0 -

1

2.76

0 -

5

Un

ited

Bre

wer

ies

Inte

rnat

ion

al (

UK

) Li

mit

ed

9.9

85

16.

215

63.

288

37.

088

-

113

.318

0

.084

-

0

.084

-

6

Kin

gfi

sher

B

eer

Euro

pe

Lim

ited

(F

orm

erly

kn

ow

n a

s U

BSN

Ltd

) 9

.985

(

88.5

75)

218

.115

2

96.7

05

-

1,

269.

598

55.

615

-

55.

615

-

7U

nit

ed B

rew

erie

s o

f A

mer

ica

Inc.

, Del

awar

e 9

44.8

89

(24

5.92

4) 8

38.3

72

139

.407

6

08.3

87

5.2

06

(2.

353)

-

(2.

353)

-

8R

elat

a B

rew

ing

Co

mp

any

LLC

3

00.4

99

(33

4.85

2) 3

19.4

13

353

.766

-

2

50.1

25

(64

.003

) -

(

64.0

03)

-

9In

vers

ion

es M

irab

el, S

.A.

0.0

01

319

.190

3

33.8

54

14.

663

333

.854

-

(

0.18

0) -

(

0.17

2) -

10

Men

do

cin

o B

rew

erin

g C

om

pan

y In

c. U

SA

921

.206

(

396.

082)

1,2

51.5

46

726

.423

3

74.1

23

537

.950

(

47.7

65)

(0.

051)

(47

.713

) -

TO

TAL

No

te:

1Th

e ex

chan

ge

rate

pre

vela

nt

on

th

e la

st d

ay o

f th

e fi

nan

cial

yea

r h

as b

een

tak

en f

or

con

vers

ion

fo

r th

e b

alan

ce s

hee

t it

ems

wh

ile t

he

con

vers

ion

ra

te f

or

the

reve

nu

es h

as b

een

th

e av

erag

e ra

te f

or

the

per

iod

.2

No

ne

of

the

abo

ve C

om

pan

ies

has

pro

po

sed

an

y d

ivid

end

.3

The

An

uu

al R

epo

rt a

lon

g w

ith

rel

ated

info

rmat

ion

of

the

abo

ve c

om

pan

ies

shal

l be

mad

e av

aila

ble

fo

r in

vest

ors

of

the

Co

mp

any

and

its

sub

sid

iari

es

seek

ing

th

e R

epo

rt /i

nfo

rmat

ion

at

any

po

int

of

tim

e.4

The

An

nu

al R

epo

rt is

als

o a

vaila

ble

fo

r in

spec

tio

n o

f in

vest

ors

at

the

Reg

iste

red

Off

ice

of

the

Co

mp

any

and

its

Sub

sid

iari

es.

5In

res

pec

t o

f o

vers

eas

sub

sid

iari

es, U

SD is

val

ued

at

` 60

.09

and

GB

P at

` 9

9.85

as

on

31.

03.2

014

(fo

r B

alan

ce s

hee

t it

ems)

an

d a

vera

ge

rate

at

` 57

.22

for

USD

, `

91.2

9 fo

r G

BP

(fo

r P&

L ac

cou

nt

item

s).


C O N T E N T S

Kaushik MajumderCorporate Vice President - Legal & Company Secretary

V. Shashikanth

The Team

Dr. Lalith Bhasin M.S. Kapur


N. Srinivasan Sidhartha V. Mallya

Board of Directors (as on August 13, 2014)

Ravi Nedungadi Anil PisharodySubhash R. Gupte

01

11

24

30

31

32

69

69

71

Registered Office: “UB Tower”, Level 12,UB City, No.24, Vittal Mallya Road, Bangalore 560 001Tel: 080-22272808, 22275809, 39856000; Fax: 080-22274890

Corporate Identity Number: L85110KA1915PLC000740; Website:www.theubgroup.com


LIMITED

1

Notice of Annual General Meeting

UNITED BREWERIES (HOLDINGS) LIMITEDRegistered Office: “UB Tower”, Level 12,UB City, No.24, Vittal Mallya Road, Bangalore 560 001

Tel: 080-22272808, 22275809, 39856000; Fax: 080-22274890 Corporate Identity Number: L85110KA1915PLC000740; Website:www.theubgroup.com

NOTICE is hereby given of the Ninety-Eighth Annual General Meeting of the Members of UNITED BREWERIES (HOLDINGS) LIMITED to be held at Conference Hall, 1st Floor, UB Tower, UB City, No. 24, Vittal Mallya Road, Bangalore – 560 001 on Tuesday, September 30, 2014 at 12.00 noon to transact the following business:

Ordinary Business

1. To consider and adopt the Audited Accounts for the year ended March 31, 2014 and the Reports of the Auditors and Directors thereon.

2. To appoint a Director in the place of Mr. Sidhartha V Mallya (DIN 00991076), who retires by rotation and, being eligible, offers himself for re-appointment.

3. To appoint Auditors and fix their remuneration and in this connection, to consider and if thought fit, to pass with or without modification, the following Resolution as an Ordinary Resolution:

RESOLVED THAT Messrs. Vishnu Ram & Co, Chartered Accountants (Firm Registration No.004742S), the retiring Auditors be re-appointed as Auditors of the Company pursuant to Section 139 of the Companies Act, 2013, the Companies (Audit and Auditors) Rules, 2014, and such other applicable provisions, if any, of the Companies Act, 2013, or Rules framed there under to hold office from the conclusion of this Annual General Meeting till the conclusion of the One Hundred and First Annual General Meeting of the Company subject to ratification of their appointment at every Annual General Meeting and that their remuneration be fixed by the Board of Directors of the Company.

Special Business

4. To consider and if thought fit, to pass with or without modification, the following resolution as an Ordinary Resolution:

RESOLVED THAT pursuant to the provisions of Sections 149,152 and other applicable provisions, if any, of the Companies Act, 2013 and the Rules made thereunder (including amendments thereto), read with Schedule IV to the Act and applicable provisions of the Listing Agreement (including amendments thereto) Mr. N Srinivasan (DIN: 00004195), a Non-Executive Independent Director of the Company, being eligible for appointment as Independent Director as per the provisions of the Companies Act, 2013 and the Rules made thereunder and in respect of whom a notice has been received from a Member under Section 160 of the Companies Act, 2013, be and is hereby appointed as an Independent Director of the Company to hold office for a term of five consecutive years up to September 30, 2019 and not liable to retire by rotation.


RESOLVED THAT pursuant to the provisions of Sections 149,152 and other applicable provisions, if any, of the Companies Act, 2013 and the Rules made thereunder read with Schedule IV to the Act and applicable provisions of the Listing Agreement (including amendments thereto) Mr. M S Kapur (DIN: 00703815), a Non-Executive Independent Director of the Company, being eligible for appointment as Independent Director as per the provisions of the Companies Act, 2013 and the Rules made thereunder and in respect of whom a notice has been received from a Member under Section 160 of the Companies Act, 2013, be and is hereby appointed as an Independent Director of the Company to hold office for a term of five consecutive years up to September 30, 2019 and not liable to retire by rotation.


RESOLVED THAT pursuant to the provisions of Sections 149,152 and other applicable provisions, if any, of the Companies Act, 2013 and the Rules made thereunder read with Schedule IV to the Act and applicable provisions of the Listing Agreement (including amendments thereto) Dr. Lalit Bhasin (DIN: 00001607), a Non-Executive Independent Director of the Company being eligible for appointment as Independent Director as per the provisions of the Companies Act, 2013 and the Rules made thereunder and in respect of whom a notice has been received


LIMITED

2

Notice (contd.)

from a Member under Section 160 of the Companies Act, 2013, be and is hereby appointed as an Independent Director of the Company to hold office for a term of five consecutive years up to September 30, 2019 and not liable to retire by rotation.

7. To consider and if thought fit, to pass, with or without modification, the following Resolution as a Special Resolution:

RESOLVED THAT in supersession of the Ordinary Resolution passed by the Members of the Company on July 29, 2013 and pursuant to the provisions of Section 180(1)(c) of the Companies Act, 2013, and such other applicable provisions, if any, of the Companies Act, 2013 and/or Rules framed there under, including any statutory modifications or re-enactment thereof from time to time, the Foreign Exchange Management Act, 1999 and Rules framed there under, such other applicable laws and approval of the Court, if any, the Board of Directors of the Company (hereinafter referred to as the “Board” which term shall include any Committee thereof exercising the powers conferred on the Board by this Resolution) be and is hereby authorized to borrow moneys from any Bank(s) and / or any Public Financial Institution(s) as defined under Section 2(72) of the Companies Act, 2013 and / or any Foreign Financial Institution(s) and / or any other entity / entities or authority / authorities and / or through suppliers credit, securities, instruments such as floating rate notes, fixed rate bonds, syndicated loan and / or through credit from official agencies and / or by way of commercial borrowings from the private sector window of Multilateral Financial Institutions, either in Rupees or in such foreign currency as may be permitted by law from time to time, as may be deemed appropriate by the Board for an aggregate amount not exceeding ` 3,000,00,00,000/- (Rupees Three Thousand Crores only) or equivalent thereof in foreign exchange as may be required from time to time for the Company’s activities and/or for general corporate purposes including capital expenditure, working capital requirements, strategic investments, mergers, de-mergers, amalgamations, acquisitions, reconstructions or rearrangements or any other re-organizations as the Board may deem fit for the purpose of the business of the Company, notwithstanding that moneys so borrowed together with the moneys already borrowed by the Company, if any, (apart from temporary loans obtained from the Company’s bankers in the ordinary course of business) may exceed the aggregate for the time being of the paid-up capital of the Company and its free reserves, that is to say, reserves not set apart for any specified purpose, provided that the total amount of the moneys to be so borrowed together with the moneys already borrowed (apart from temporary loans obtained from the Company’s bankers in the ordinary course of business) shall not exceed ` 3,000,00,00,000/- (Rupees Three Thousand Crores only)

RESOLVED FURTHER THAT in supersession of the Ordinary Resolution passed by the Members of the Company on July 29, 2013 consent and authority be and are hereby given to the Board of Directors of the Company (hereinafter referred to as the “Board” which term shall include any Committee thereof exercising the powers conferred on the Board by this Resolution) to do all such acts, deeds, matters and things as it may at its discretion deem fit and proper in the aforementioned premises including, if and when necessary, creation of such mortgage(s) and / or charge(s) in respect of the securities on the whole or substantially the whole of all or any of the undertaking(s) of the Company as contemplated by Section 180(1)(a) of the Companies Act, 2013, and such other applicable provisions if any, of the Companies Act, 2013 or Rules framed there under, including any statutory modifications or re-enactment thereof from time to time, in connection therewith and to perfect and execute all requisite documents or writings for giving effect to this Resolution.


RESOLVED THAT pursuant to Section 188 and other applicable provisions of the Companies Act, 2013, (including any amendments thereto or re-enactment thereof, for the time being in force), Rule 15 of the Companies (Meetings of Board & its Powers) Rules 2014, provisions of revised Clause 49-VII of the Listing Agreement (effective from October 1, 2014) and subject to the approvals, permission of Hon’ble Court wherever necessary, the consent of the Members be and is hereby accorded to enter into a contract/arrangement with United Spirits Limited in respect of licensing of the Pegasus logo of the Company (including receipt of Pegasus logo fee income in this regard) for an estimated amount of up to ̀ 50,00,00,000/- (Rupees Fifty Crores only) every financial year on such terms and conditions as may be mutually agreed upon between the Company and United Spirits Limited.

RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to do all such acts, deeds, matters and things as may be required to give effect to the above resolution subject to the approval/condition which may be imposed by any Hon’ble Court.


RESOLVED THAT pursuant to Section 188 and other applicable provisions of the Companies Act, 2013, (including any amendments thereto or re-enactment thereof, for the time being in force), Rule 15 of the Companies (Meetings of Board & its Powers) Rules 2014, provisions of revised Clause 49-VII of the Listing Agreement (effective from October 1, 2014) and subject to the approvals, permission of Hon’ble Court wherever necessary, the consent of the Members


LIMITED

3

Notice (contd.)

be and is hereby accorded to enter into a contract/arrangement with United Spirits Limited in respect of purchase of goods or materials from them (including purchase of Indian Made Foreign Liquor [IMFL]) for an estimated amount of up to Rs.150,00,00,000/- (Rupees One Hundred and Fifty Crores only) every financial year on such terms and conditions as may be mutually agreed upon between the Company and United Spirits Limited.



RESOLVED THAT pursuant to Section 188 and other applicable provisions of the Companies Act, 2013, (including any amendments thereto or re-enactment thereof, for the time being in force), Rule 15 of the Companies (Meetings of Board & its Powers) Rules 2014, provisions of revised Clause 49-VII of the Listing Agreement (effective from October 1, 2014) and subject to the approvals, permission of Hon’ble Court wherever necessary, the consent of the Members be and is hereby accorded to enter into a contract/arrangement with United Breweries Limited in respect of purchase of goods or materials from them (including purchase of Beer) for an estimated amount of up to ` 150,00,00,000/- (Rupees One Hundred and Fifty Crores only) every financial year on such terms and conditions as may be mutually agreed upon between the Company and United Breweries Limited.



RESOLVED THAT pursuant to Section 188 and other applicable provisions of the Companies Act, 2013, (including any amendments thereto or re-enactment thereof, for the time being in force), Rule 15 of the Companies (Meetings of Board & its Powers) Rules 2014, provisions of revised Clause 49-VII of the Listing Agreement (effective from October 1, 2014) and subject to the approvals, permission of Hon’ble Court wherever necessary, the consent of the Members be and is hereby accorded to enter into a contract/arrangement with Mangalore Chemicals & Fertilizers Limited in respect of licensing of the Pegasus logo of the Company (including receipt of Pegasus logo fee and repayment of Pegasus logo security deposit in this regard) for an estimated amount of up to Rs.90,00,00,000/- (Rupees Ninety Crores only) every financial year on such terms and conditions as may be mutually agreed upon between the Company and Mangalore Chemicals & Fertilizers Limited.



RESOLVED THAT pursuant to Section 188 and other applicable provisions of the Companies Act, 2013, (including any amendments thereto or re-enactment thereof, for the time being in force), Rule 15 of the Companies (Meetings of Board & its Powers) Rules 2014, provisions of revised Clause 49-VII of the Listing Agreement (effective from October 1, 2014) and subject to the approvals, permission of Hon’ble Court wherever necessary, the consent of the Members be and is hereby accorded to enter into a contract/arrangement with UB International Trading Limited in respect of purchase of goods or materials from them (including purchase of leather footwear) for an estimated amount of up to Rs.100,00,00,000/- (Rupees One Hundred Crores only) every financial year on such terms and conditions as may be mutually agreed upon between the Company and UB International Trading Limited.


Registered Office: By Order of the Board UB Tower, Level 12, UB City No.24, Vittal Mallya Road Kaushik Majumder Bangalore – 560 001 Corporate Vice President – Legal & Company SecretaryLondon August 13, 2014


LIMITED

4

Notes:

1. A Member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote instead of himself and such proxy need not be a Member of the Company. The proxies, in order to be effective, must be received by the Company not less than 48 hours before the Meeting.

2. Explanatory Statement pursuant to Section 102(1) of the Companies Act, 2013, (corresponding to Section 173(2) of the Companies Act, 1956) forms part of this Notice.

3. The Register of Members and the Share Transfer Books of the Company will remain closed from Monday, September 29, 2014 to Tuesday, September 30, 2014 (both days inclusive).

4. Members who have opted for the emailing of the Annual Report and the Accounts are kindly requested to bring the print out thereof when they attend the Annual General Meeting.

5. Members / Proxies are requested to bring their copy of the Annual Report and Attendance/Proxy Slip sent herewith duly filled in for attending the meeting to avoid inconvenience and delay at the time of registration and avoid being accompanied by non-members and children. Copies of Annual Report and Attendance slip will NOT be available for distribution at the venue of the Meeting.

6. The Statutory Auditors of the Company, Messrs. Vishnu Ram & Co, Chartered Accountants (Firm Registration No.004742S), shall retire at the conclusion of this Annual General Meeting (AGM) and have consented to be re-appointed. In terms of the provisions of the Companies Act, 2013 and Rules framed there under, appointment of Auditors can be made for two terms of 5 years each. Messrs. Vishnu Ram & Co, Chartered Accountants have completed more than 5 years as Auditors and the Board of Directors at its meeting held on August 13, 2014 have recommended their appointment for a period of 3 years subject to ratification by the Members at every AGM.

7. The trading in the Company’s Shares has been made compulsory in dematerialized form effective August 28, 2000 for all class of investors. To enable us to serve our investors better, we request Members whose shares are in physical mode to dematerialize shares and to update their bank accounts with the respective depository participants.

8. Members are requested to quote the Folio Number / Client ID /DP ID in all correspondence. The Company has designated an e-mail address of the Compliance Officer viz., [email protected] exclusively for the purpose of registering complaints, if any, by investors.

9. Members are requested to notify change in their address, quoting Folio number to the Company’s Registrars and Share Transfer Agents viz., Integrated Enterprises (India) Limited,30, Ramana Residency, 4th Cross, Sampige Road, Malleswaram, Bangalore 560 003.

10. Members holding shares in dematerialised form should address all their correspondence including change of address, nominations, ECS mandates, bank details to be incorporated on dividend warrants, powers of attorney, etc. to their Depository Participant.

11. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in electronic form are, therefore, requested to submit the PAN to their Depository Participants with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN details to the Company/Registrar and Share Transfer Agents.

12. Pursuant to Section 205A of the Companies Act, 1956 all dividends remaining unclaimed for more than seven years from the date they first became due for payment are now required to be transferred to the “Investor Education and Protection Fund” (IEPF) established by the Central Government under the amended provisions of the Companies Act, 1956.

13. Members may also note that the Notice of the 98th Annual General Meeting and the Annual Report for 2013-14 is also available on the Company’s website www.theubgroup.com.

14. Notice, Annual Report and instructions for participating in e-voting along with Attendance Slip and Proxy Form, are being sent by electronic mode to all Members whose e-mail addresses are registered with the Company/Depository Participant(s). For Members who have not registered their e-mail addresses, physical copy of the aforesaid documents are being sent by the permitted mode.

Notice (contd.)


LIMITED

5

15. Members who require communication in physical form in addition to e-communication or have any other queries, may write to the Company at [email protected].

16. Physical copies of all documents referred to in the Notice and the Explanatory Statement shall be open for inspection at the Registered Office of the Company during normal business hours on all working days except on Saturdays, Sundays and Public Holidays up to and including the date of Annual General Meeting of the Company.

17. The relevant information relating to the Directors seeking appointment /re-appointment viz., Mr. N Srinivasan, Mr. M S Kapur, Dr. Lalit Bhasin and Mr. Sidhartha V Mallya are given in the Annexure to the Notice.

18. Pursuant to Section 108 of the Companies Act, 2013, Members may exercise their right to vote by electronic means for the resolutions to be passed at the meeting. A note on the e-voting process is provided hereunder:

Voting through Electronic means:

In compliance with provisions of Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management

and Administration) Rules, 2014, the Company is pleased to provide the Members a facility to exercise their voting

right at the Annual General Meeting (AGM) by electronic means (e-voting) and the business may be transacted through

e-voting services provided by Central Depository Services (India) Limited (CDSL).

The instructions for Members for voting electronically are as under:-

In case of Members receiving the Notice by e-mail:

(i) Log on to the e-voting website www.evotingindia.com

(ii) Click on “Shareholders” tab.

(iii) Now Enter your User ID

a. For CDSL: 16 digits beneficiary ID

b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID

c. Members holding shares in Physical Form should enter Folio Number registered with the Company.

(iv) Next enter the Image Verification as displayed and Click on “Login”.

(v) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier

voting of any company, then your existing password is to be used.

(vi) If you are a first time user follow the steps given below:

For Members holding shares in Demat Form and Physical Form

PAN* Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department (Applicable for both Demat Shareholders as well as Physical Shareholders)

• Members who have not updated their PAN with the Company/Depository Participant are requested to use the first two letters of their name and the last 8 digits of the Demat Account/Folio Number in the PAN field.

• In case the folio number is less than 8 digits enter the applicable number of 0’s before the number after the first two characters of the name in CAPITAL letters. eg. If your name is Ramesh Kumar with folio number 100 then enter RA00000100 in the PAN field.

DOB# Enter the Date of Birth as recorded in your Demat Account or in the Company records for the said Demat Account or Folio in dd/mm/yyyy format.

Dividend Bank Details#

Enter the Dividend Bank Details as recorded in your Demat Account or in the Company records for the said Demat Account or Folio.• Please enter the DOB or Dividend Bank Details in order to login. If the details are not recorded

with the Depository or Company please enter the number of shares held by you as on the cut off date in the Dividend Bank details field.

Notice (contd.)


LIMITED

6

(vii) After entering these details appropriately, click on “SUBMIT” tab.

(viii) Members holding shares in physical form will then reach directly the Company selection screen. However, Members holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter their login password in the new password field. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other Company on which they are eligible to vote, provided that Company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.

(ix) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice.

(x) Click on the EVSN of United Breweries (Holdings) Limited to vote.

(xi) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.

(xii) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.

(xiii) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.

(xiv) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.

(xv) You can also take out print of the voting done by you by clicking on “Click here to print” option on the Voting page.

(xvi) If Demat account holder has forgotten the changed password then enter the User ID and the image verification code and click on “Forgot Password” & enter the details as prompted by the system.

• Institutional Shareholders (i.e. other than Individuals, HUF, NRI etc.) are required to log on to www.evotingindia.com and register themselves as Corporates.

• They should submit a scanned copy of the Registration Form bearing the stamp and sign of the entity to [email protected].

• After receiving the login details they have to create a User who would be able to link the account(s) which they wish to vote on.

• The list of accounts should be mailed to [email protected] and on approval of the accounts they would be able to cast their vote.

• They should upload a scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any, in PDF format in the system for the Scrutinizer to verify the same.

In case of Members receiving the physical copy of the Notice, please follow all steps from sl. no. (i) to sl. no. (xvi) above to cast vote electronically.

• The voting period begins on Wednesday, September 24, 2014 at 9.30.a.m. and ends on Friday, September 26, 2014 at 5.30.p.m. During this period Shareholders of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date of August 29, 2014 may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter.

• Mr. Sudhir Hulyalkar, Company Secretary in Practice (Membership No. FCS 6040, CP 6137), has been appointed as the Scrutinizer to scrutinize the e-voting process in a fair and transparent manner. The Scrutinizer will submit the report on e-voting to the Chairman of the Company.

• The results shall be declared on or after the AGM of the Company. The results declared along with the Scrutinizer’s Report shall be placed on the Company’s website www.theubgroup.com and on the website of CDSL – www.cdslindia.com within two days from the date of AGM and communicated to the stock exchanges.

• In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-voting manual available at www.evotingindia.com under help section or write an email to [email protected].

Notice (contd.)


LIMITED

7

EXPLANATORY STATEMENT as required under Section 102 of the Companies Act, 2013

Item Nos. 4 to 6

In compliance with the provisions contained in Clause 49 of the Listing Agreement entered into with the stock exchanges, the Company had appointed Mr. N. Srinivasan and Mr. M S Kapur as Independent Directors on various dates. Under erstwhile provisions of the Companies Act, 1956 their period of office is determined by retirement by rotation. Further Dr. Lalit Bhasin, who was also appointed as an Independent Director of the Company with effect from May 30, 2013, in the casual vacancy caused by the demise of Mr. S. G. Ruparel, would have retired by rotation at this Annual General Meeting.

In terms of the provisions of Section 149 of the Companies Act, 2013, which Section has come into force with effect from April 1, 2014, an Independent Director shall hold office for a term up to five consecutive years on the Board of a Company and is not liable to retire by rotation. In compliance with applicable provisions of the Companies Act, 2013, appointment of Independent Directors for a fixed term of five years from this Annual General Meeting is proposed.

Each of the proposed Independent Directors are independent of the management and have submitted a declaration that they meet the criteria for independence as provided in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. In the opinion of the Board, these Directors fulfill the conditions specified in the Companies Act, 2013 and Rules framed thereunder for their appointment as Independent Directors and they have considerable experience and knowledge to enable the Board to discharge its functions and duties efficiently. For appointment of each of the Independent Directors proposed herein, a Notice in writing under Section 160 of the Companies Act, 2013 has been received by the Company from Member(s) signifying their intention to propose their appointment

The profile of the Directors proposed to be appointed as Independent Directors is annexed to this notice.

The terms and conditions of appointment of the above Directors shall be open for inspection by the Members at the Registered Office of the Company during normal business hours on all working days except on Saturdays, Sundays and Public Holidays up to and including the date of Annual General Meeting of the Company.

None of the Directors and Key Managerial Personnel of the Company except Mr. N. Srinivasan, Mr. M S Kapur and Dr. Lalit Bhasin, are concerned or interested in the Resolutions of the accompanying Notice relating to their own appointment.

Your Directors recommend the Ordinary Resolution(s) as set out in Items No.4 to 6 for your approval.

Item No. 7

The Members of the Company through Postal Ballot on July 29, 2013 approved, by way of an Ordinary Resolution under Section 293(1)(d) of the Companies Act, 1956, borrowings over and above the aggregate of paid up share capital and free reserves of the Company provided that the total amount of such borrowings together with the amounts already borrowed and outstanding at any point of time shall not be in excess of ` 5,000 crores (Rupees Five Thousand Crores).

Sections 180(1)(c) and 180(1)(a) of the Companies Act, 2013 empower the Board to borrow moneys in excess of the aggregate of its Paid-up Capital and Free Reserves, and to create any mortgage/charge in connection with such borrowings, subject to the approval of the Members of the Company in General Meeting.

Ministry of Corporate Affairs, Government of India vide its Circular No. 4/2014 dated March 25, 2014 has clarified that the Resolution passed under Section 293 of the Companies Act, 1956, prior to September 12, 2013 with reference to borrowing (subject to the limits prescribed) and/or creation of security on assets of the Company will be effective for a period of 1 (one) year from the date of notification of Section 180 of the Companies Act, 2013. In view of the enactment of the Companies Act, 2013, the Company would be required to pass a fresh Resolution as aforesaid enabling it to exercise powers under Sections 180(1)(c) and 180(1)(a) of the Companies Act, 2013.

It is now proposed to seek the approval of the Members for borrowing limits up to ` 3000 crores by way of a Special Resolution as required under the provisions of the Companies Act, 2013. Consequently, approval of the Members is also sought by way of a Special Resolution for creation of mortgage/charge if necessary in connection with such borrowings from time to time.

Notice (contd.)


LIMITED

8

None of the Directors and Key Managerial Personnel of the Company and their relatives is concerned or interested, financial or otherwise, in the above resolution.

Your Directors recommend the Special Resolution as set out in Item No.7 for your approval.

Item No. 8 to 12The provisions of Section 188(1) of the Companies Act, 2013 that govern the below mentioned related party transactions require the Company to obtain prior approval of the Board of Directors. In case the transaction is covered by any of the categories provided in Rule 15(3) of the Companies (Meetings of Board and its Powers) Rules 2014 (as amended vide notification of the Ministry of Corporate Affairs dated August 14, 2014) prior approval of Shareholders by way of Special Resolution is also required in respect of the following, subject to the limits as specified under the said Rule 15(3):

a. sale, purchase or supply of any goods or materials;b. selling or otherwise disposing of, or buying, property of any kind;c. leasing of property of any kind;d. availing or rendering of any services;e. appointment of any agent for purchase or sale of goods, materials, services or property; andf. such related party’s appointment to any office or place of profit in the company, its subsidiary company or associate

company;

Further, the revised Clause 49-VII of the Listing Agreement (effective from October 1, 2014), also prescribes the requirement of taking approval of Shareholders for material related party transactions.

In the light of the above, the Board of Directors of your Company has approved the proposed transactions along with annual limits (as mentioned below), that your Company may enter in to with its related parties (as defined under the Companies Act, 2013) and the revised Clause 49-VII of the Listing Agreement for the financial year 2014-15 and beyond.

All prescribed disclosures as required to be given under the provisions of the Companies Act, 2013 and The Companies (Meetings of Board and its Powers) Rules, 2014 are provided hereunder:

Name of the Related Party

Name of the Director/Key Managerial Per-

sonnel who is related

Nature ofRelationship

Nature of theproposed contract or

arrangement

Monetary limit of the transaction

(` In crores)United Spirits Limited (USL)

Dr. Vijay Mallya, Director

The Company is a Promoter of USL

Receipt of Pegasus Logo fee income

50.00

United Spirits Limited (USL)


The Company is a Promoter of USL

Purchase of goods or materials ( IMFL)

150.00

United Breweries Limited


Group Company Purchase of goods or materials ( Beer)

150.00

Mangalore Chemicals & Fertilizers Limited


Group Company Repayment of Pegasus Logo Security Deposit and Receipt of Pegasus Logo fee income

90.00

UB International Trading Limited

Mr. Kaushik Majumder, Director

Wholly Owned Subsidiary

Purchase of goods or materials (leather footwear)

100.00

Except Dr. Vijay Mallya and Key Managerial Personnel of the Company and their respective relatives, none of the other Directors is concerned or interested in the above resolution.

Your Directors recommend the Special Resolution as set out in Item No.8 to 12 for your approval.

Registered Office: By Order of the Board UB Tower, Level 12, UB City No.24, Vittal Mallya Road Kaushik Majumder Bangalore – 560 001 Corporate Vice President – Legal & Company SecretaryLondon August 13, 2014

Notice (contd.)


LIMITED

9

Details of Directors seeking re-appointment at the Ninety Eighth Annual General Meeting of the Company and this information forms part of the notice for the Annual General Meeting:

Name Mr. Sidhartha V Mallya (DIN 00991076)

Date of Birth May 7, 1987

Nationality American

Qualification B.Sc. Queen Mary University, London

Expertise Marketing and Brand Development

Date of appointment May 7, 2005

Shares held in the Company 28,25,358 shares held jointly in the names of Dr. Vijay Mallya (first holder) and Mr. Sidhartha V Mallya ( second holder)

Directorship in other Companies

Kamsco Industries Private LimitedMallya Private LimitedRoyal Challengers Sports Private LimitedGem Investment and Trading Company Private LimitedUnited Mohun Bagan Football Team Private Limited

Chairman/ Member of the Committees of other Companies in which he is a Director

Nil

Mr. Sidhartha V Mallya is the son of Dr. Vijay Mallya who is a Director of the Company.

Details of Directors seeking appointment as Independent Directors under Item No. 4 to 6 of the Notice of the Ninety Eighth Annual General Meeting of the Company:

NameMr. N Srinivasan(DIN: 00004195)

Mr. M S Kapur(DIN:00703815)

Dr. Lalit Bhasin(DIN: 00001607)

Date of Birth July 27, 1931 March 10, 1946 January 19, 1939

Nationality Indian Indian Indian

Qualification B.Com. Chartered Accountant B.Sc, M.A Punjab University B.A. (Hons.) LL.B

Expertise Finance, Accounts and Audit Finance and Banking Employment and Labour Laws, Corporate Law, Banking and Finance etc.

Experience Mr. N Srinivasan has over fifty years of professional experience in the field of Finance, Accounts and Audit. Served as a Senior Partner of Fraser & Ross, Delloite Haskins & Sells, Chennai.

Mr. M S Kapur is a career banker with more than 38 years experience. He retired as Chairman & Managing Director of Vijaya Bank. He was also the former Executive Director and Officiating Chairman & Managing Director of Syndicate Bank and Punjab & Sind Bank.

Dr. Lalit Bhasin started Law Practice in September, 1962. The professional services rendered by Lalit Bhasin through his law firm include Corporate Law (including Merger & Acquisitions, Incorporation of Companies, Formation of Joint Venture Companies, Foreign Collaborations), Competition Law, Contract and Conveyancing, Banking and Finance, Employment and Labour Laws, Aviation & Shipping (including Purchase Agreement and Dry & Wet Lease, Accident Investigation), Consumer Protection Laws, Arbitration and General Litigation, Family and Personal Laws.

Date of appointment

August 25, 1997 December 7, 2009 May 30, 2013

Shares held in the Company

120 Nil Nil

Notice (contd.)


LIMITED

10

NameMr. N Srinivasan(DIN: 00004195)

Mr. M S Kapur(DIN:00703815)

Dr. Lalit Bhasin(DIN: 00001607)

Directorship in other Companies

Essar Shipping LimitedGATI LimitedThe India Cements LimitedIndia Cements Capital LimitedMcDowell Holdings LimitedRedington (India) LimitedTafe Motors and Tractors LimitedThe United Nilgiri Tea Estates Company LimitedTractors & Farm Equipment LimitedKartiken Logistics LimitedRedington (India) Investments LimitedBest and Crompton Engineering LimitedTrinetra Cement Limited (Director appointed in casual vacancy)Essar Oilfield Services India Limited(Additional Director)SCM Microsystems (India) Private LimitedPaterson Consulting Group Private Limited

Broad Cast Initiatives LimitedCHD Developers LimitedShakti Bhog Foods LimitedSri Adhikari Brothers Television Network LimitedG.B. Tools and Forgings LimitedThe Lake Shore Palace Hotel Private LimitedInternational Space and Infrastructure Deliveries Private Limited

Ansal Properties & Industries LimitedApollo Zippers India LimitedAsian Hotels (North) LimitedAsian Hotels (West) LimitedBharat Hotels LimitedGodfrey Philips India LimitedModicare LimitedOmex Autos LimitedUrban Infrastructure Trustees LimitedLeading Hotels Limited

Chairman/ Member of the Committees* of other Companies in which he is a Director

Audit Committee:Chairman:GATI LimitedRedington (India) LimitedTractors & Farm Equipment Limited

Member:Essar Shipping LimitedThe India Cements LimitedMcDowell Holdings LimitedTafe Motors and Tractors LimitedThe United Nilgiri Tea Estates Company Limited

Audit Committee:Chairman:Broad Cast Initiatives Limited G.B. Tools and Forgings Limited

Member:Shakti Bhog Foods Limited Sri Adhikari Brothers Television Network Limited

Audit Committee:Chairman:Asian Hotels (North) LimitedGodfrey Philips India Limited

Member:Asian Hotels (West) LimitedBharat Hotels LimitedLeading Hotels Limited

Stakeholders Relationship Committee :Member:Asian Hotels (North) LimitedAsian Hotels (West) LimitedAnsal Properties & Industries LimitedGodfrey Philips India Limited



Documents

Registered Office: “UB Tower”, Level 12,UB City, No.24 ... · PDF fileDr. Vijay Mallya Chairman CONTENTS Kaushik Majumder Corporate Vice President - Legal & Company Secretary V