Moneycontrol.comUNITED BREWERIES (HOLDINGS) LIMITED 1 Directors Dr. Vijay Mallya, Chairman Mr....

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C O N T E N T S

Report of the Directors 1

Report on Corporate Governance 28

Independent Auditors’ Report 41

Balance Sheet 46

Statement of Profit and Loss 47

Cash Flow Statement 48

Notes to the Financial Statements 50

Consolidated Financial Statements 81

UNITED BREWERIES (HOLDINGS)

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Directors

Dr. Vijay Mallya, Chairman

Mr. Sidhartha V. Mallya, Non Executive Non Independent Director

Mr. N Srinivasan, Non Executive Independent Director

Mr. M S Kapur, Non Executive Independent Director

Dr. Lalit Bhasin, Non Executive Independent Director

Ms. Daljit Mahal, Non Executive Non Independent Director[w.e.f March 28, 2015]

Executive Vice Chairman UB Group

Mr. S. R. Gupte

President & Chief Financial Officer UB Group

Mr. Ravi Nedungadi

President Mr. V. Shashikanth

Company Secretary and Compliance Officer Mr. Kaushik Majumder

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

Internal Auditors M/s B.K. Ramadhyani & Co,Chartered Accountants68, 4th Floor, Chitrapur Bhavan,15th Cross, 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

UNITED BREWERIES (HOLDINGS) LIMITED


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Report of the Directors

Report of the Directors

Your Directors present the Annual Report of your Company together with the Audited Accounts for the year ended March 31, 2015.

Centenary Year

Your Company completed 100 years of its glorious existence in March 2015. This journey began in 1915 with amalgamation of five breweries and the subsequent incorporation under the Companies Act to create United Breweries Limited which today is United Breweries (Holdings) Limited. This journey is undoubtedly one of excellence seizing business opportunities to increase Shareholders value over the years. Financial Performance of the Company

The summary of financial results of the Company for the financial year ended March 31, 2015 is as under:

(` in crores)

2014-2015 2013-2014

The working for the year resulted in Loss from Operations

42.041 280.729

Add:l Provision for doubtful advancesl Bad advances / debts written off

57.895 128.624

1,271.7052,450.594

l Provision for diminution in value of investment

280.962 -

l Depreciation 21.505 8.164Less:l Exceptional gains 965.001 1,987.890Profit / (Loss) for the yearcarried to the Balance Sheet 433.974 (2,023.302)

Dividend

With a view to conserve resources for operational requirements and considering the accumulated losses, your Directors do not recommend any dividend for the year ended March 31, 2015.

Operations of the Company

The operations of the Company comprise primarily of holding of strategic investments and other securities, international trade, development of real estate, sale and rental of constructed premises including residential property of Kingfisher Towers, licensing of trade marks, advancing of loans and provision of guarantees.

For the 20th year in a row, UB Global, export division of the Company, was awarded the Golden Trophy by Agricultural Products Export Development Authority of India. For the first time, UB Global also received the Karnataka State Export Excellence award for overall Merchant Exports. In the year under review, UB Global recorded a turnover of ` 227 crores despite loss of business from liquor sales for 10 months and a steep fall in the apparel business.

The Exceptional gain of ` 965 crores for the year under review is on account of sale of pledged shares by certain Lenders of the Company to recover their dues.

The Company is constrained by various restraint orders of the Hon’ble High Court of Karnataka as a result of which some proposals to increase operations by franchising out the Kingfisher brand and renting out vacant space at UB City, Bangalore could not be implemented.

Subsidiaries and Associate Companies

In accordance with Section 139(3) of the Companies Act 2013, the Company has prepared consolidated financial statements with four Indian Subsidiary Companies, excluding the seven Indian Subsidiary Companies (refer to Note no. 39 of the Consolidated Financial Statement appearing in page no. 106), which forms part of the Annual Report. The report on the performance and financial position on each of the subsidiary companies in the prescribed Form AOC-1 is annexed to this report as Annexure A.

The Company does not have “material non-listed Indian subsidiary” as defined under Listing Agreement with Stock Exchanges.

The affairs of the Subsidiaries and Associate Companies are conducted by their respective Board of Directors and audited by their Statutory Auditors. The Consolidated Financial Statement of the Company and its subsidiaries and associates should therefore be read in conjunction with respective financial statements, accounting policies, financial notes, cash flow statements and Statutory Auditors Reports thereon.

Directors and Key Managerial Personnel

Ms. Daljit Mahal was appointed as an Additional Director of the Company pursuant to the Section 161 and other applicable provisions of the Companies Act, 2013, Section 149(1) of the Companies Act, 2013 and the Rules made thereunder and Clause 49 (II) (A) (1) of the Listing Agreement to hold office up to the date of this Annual General Meeting. The Company has received a notice as required by Section 160 of the Companies Act, 2013 and Rules made thereunder from a Member proposing the candidature of Ms. Daljit Mahal for the office of Director of the Company liable to retire by rotation.

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

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


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Report of the Directors (contd.)

The position of Managing Director fell vacant on April 17, 2014 and efforts are being made still to identify a successor.

The Company presently does not have a Managing Director and a Chief Financial Officer. The only Key Managerial Personnels of the Company are the President and the Company Secretary.

The affairs of the Company are conducted under the directions of the Chairman, the President and the Group Chief Financial Officer.

Directors’ Responsibility Statement

Despite the absence of the Managing Director and Chief Financial Officer throughout the year, the Chairman of the Board of Directors, the Group Chief Financial Officer and President of the Company have collectively conducted the affairs of the Company and in view of this, the Directors in compliance with Section 134 (5) of the Companies Act, 2013, state that:

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

(b) 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 profit of the Company for that period;

(c) proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for prevention and detection of fraud and other irregularities;

(d) the annual accounts have been prepared on a going concern basis;

(e) internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and operating effectively;

(f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that, such systems are adequate and operating effectively

Auditors

The Statutory Auditor of the Company, Messrs. Vishnu Ram & Co., Chartered Accountants, issued separate reports on the Standalone and Consolidated Financial Statements of the Company and the same are appended here to the Report.

The qualifications in the Auditors’ Reports relating to impairment of certain investments, doubtful recovery of advances, enforcement of certain corporate guarantees, various legal disputes including winding-up petitions, sustainability of

the Company as a going concern - all these have been explained in the relevant Financial Notes to Accounts.

In the last Annual General Meeting (AGM) held on September 30, 2014, Messrs. Vishnu Ram & Co., Chartered Accountants, have been appointed Statutory Auditors of the Company for a period of 3 years. Ratification of appointment of Statutory Auditors is being sought from the Members of the Company at this AGM. Further, the Statutory Auditors have, under Section 139(1) of the Act and the Rules framed thereunder, furnished a certificate of their eligibility and consent for appointment.

Corporate Governance and Management Discussion and Analysis Report

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance and Management Discussion and Analysis Report is attached to this Annual Report.

Disclosures

Board and its Committees

The details of the Meetings of the Board and its Committees held during the financial year, the composition of the Committee and the details of Committee Meetings are given in the Report on Corporate Governance.

Independent Directors Declaration

All the Independent Directors of the Company have given declaration in terms of Section 149(6) of the Companies Act, 2013.

Internal Financial Controls

The Company is in compliance with the requirements of the Companies Act, 2013 with regard to the Internal Financial Controls which embraces adherence to Company’s policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of financial information. Internal Controls are designed to cover financial matters, operational areas, besides fraud prevention mechanism. The internal audit function has devised an appropriate audit mechanism and periodically deployed comprehensive test checks to enable Internal Audit to give reasonable assurance to the Audit Committee that the internal financial controls are adequate and operating effectively.

Given the above control system in place and involvement of the Chairman of the Board of Directors, Group Chief Financial Officer and the President of the Company, the Board opines that the internal financial controls implemented by the Company for preparation of financial statements are adequate and sufficient.


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Risk Management

The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives through the Audit Committee and Internal Auditors comprising of external firm of Chartered Accountants.The Company is exposed to various legal disputes as stated elsewhere in this Report which are handled by expert legal advisors in consultation with the Chairman of the Board.

Particulars of Conservation of Energy, Technology Absorption

The provisions of Section 134 (3) (m) of the Companies Act, 2013 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.

Policy on Appointment and Remuneration of Directors Key Managerial Personnel and Senior Employees

The Board on the recommendation of the Nomination and Remuneration Committee has laid down a policy for appointment of Directors and remuneration for the Directors, Key Managerial Personnel and Senior Employees. The same is enclosed as Annexure B to this Report. However, no Managing Director and Chief Financial Officer were appointed during the year.

Performance Evaluation of the Board and Committees

The details of annual evaluation made by the Board of its own performance and that of its Committees and Individual Directors and performance criteria for Independent Directors laid down by the Nomination and Remuneration Committees are enclosed as Annexure C to this Report.

Vigil Mechanism

The Company has implemented a vigil mechanism to provide a framework for the Company’s employees and Directors to promote responsible and secure whistle blowing. It protects the employees who raise concern about serious irregularities within the Company. A brief summary of the vigil mechanism implemented by the Company is annexed under Annexure D to this Report. This policy is available through the weblink: http://theubgroup.com/PDF/UBHL/2014-2015/UBHL-

WHISTLE-LOWER-AND-VIGIL-MECHANISM-POLICY.pdf.

Particulars of Employees and related disclosures

Disclosures with respect to the remuneration of Directors and Employees as required under Section 197 of Companies

Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as Annexure E to this Report.

Details of employee remuneration as required under provisions of Section 197 of Companies Act, 2013 and Rule 5(2) and Rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available at the Registered Office of the Company during working hours before 21 days of the Annual General Meeting and shall be made available to any shareholder on request.

Familiarisation programme for Independent Directors

The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the link: http://theubgroup.com/PDF/UBHL-FAMILIARISATION-PROGRAMME-FOR-INDEPENDENT-DIRECTORS.pdf.

Particulars of Loans, Guarantees and Investments

Particulars of loans and guarantees given and investments made are given in the Notes to the Standalone Financial Statement.

Corporate Social Responsibility

The Company, being an apex holding company of the UB Group, takes its role as a responsible corporate citizen seriously and encourages all its constituents of investee companies to pursue their business in a responsive manner. The Company has in place a Corporate Social Responsibility Committee (CSR) for overseeing CSR activities. Since the average net profit of the Company for the preceding three years was negative, there was no necessity for the Company to carry out any CSR spending for the period under review.

Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Sudhir Hulyalkar, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Report furnished by Auditor in the format prescribed under The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure F to this Report.

The material observation in the report relates to the absence of Managerial Personnel viz. Managing Director and Chief Financial Officer during the whole of the financial year. The Board is seized of this matter.



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Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT -9 is annexed herewith as Annexure G.

Major litigations involving the Company

Major litigations faced by the Company are as follows:

(i) The consortium of banks that have advanced facilities to Kingfisher Airlines Limited (KFA) (Consortium of Banks) have, pursuant to certain purported Corporate Guarantees given by the Company (the validity of which is disputed as set out hereinafter), demanded from the Company, their alleged dues from KFA amounting to ` 6,203.35 crores with further interest and other dues from June 1,2013 and have moved the Debt Recovery Tribunal (“DRT”), Bangalore for recovery of these alleged dues by way of an 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 DRT vide its Order dated November 12, 2013. The Company’s appeal before the DRAT, Chennai challenging the Order dated November 12, 2013 is pending.

(ii) Three lenders who have extended pre-delivery payment (PDP) loans to KFA for purchase of aircrafts from M/s. Airbus S.A.S. and who claim to be beneficiaries of purported Corporate Guarantees of the Company, have filed proceedings before the DRT for recovery of total dues amounting to ` 192.51 crores. By an ex-parte order dated February 4th 2014, in I.A. No.543/2014, the Hon’ble DRT 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 still in force. The Company is defending the said proceedings.

(iii) In a suit filed by United Sprits Limited (“USL”), the Goa Senior Division Court, by Orders dated April 26, 2013 and May 4, 2013 (“Interim Orders”) has granted an ad-interim injunction against any coercive action by the Consortium of Banks in respect of the Company’s property in Goa, tenanted to USL. USL has also deposited ` 35 crores in the Hon’ble Court pursuant to the said orders.

Aggrieved by the Interim Orders, the Consortium of Banks filed an appeal in the High Court of Bombay at Goa, being Appeal from Order No. 76 of 2013 praying inter alia, that the Interim Orders be quashed and set aside.

On July 18, 2014, the Hon’ble High Court of Bombay at Goa disposed off the appeal and held that the Interim Orders do not preclude the Consortium of Banks from initiating proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests Act, 2002 (SARFAESI Act). It has been clarified by the High

Court that the Interim Orders shall continue to operate until disposal of the application for temporary injunction before the Learned Judge, Mapusa, subject to the right of the Consortium of Banks to proceed under the SARFAESI Act in accordance with law.

Pursuant to the Order dated July 18, 2014, passed by the Hon’ble Bombay High Court at Goa, the Consortium of Banks have filed an application under Section 14 of the SARFAESI Act before the District Magistrate. The Interim Orders passed by the Goa Senior Division Court are still in force and pending adjudication of the suit, the Goa property continues to remain with the Company (and continues to be in the possession of USL) with a purported charge in favour of Consortium of KFA Bankers.

(iv) The Consortium of Banks have sold in periodical lots certain investments belonging to the Company pursuant to a purported Pledge Agreement dated December 21, 2010. 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 Banks, 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 defendants therein, 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 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 MDRA, including issuing a notice there under.

(c) For a permanent order and injunction restraining the defendants therein, 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 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 therein.

The Company has also filed a Notice of Motion in the said Suit, being Notice of Motion 306 of 2014 inter



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alia, for a decree on admission that the extent of the liability under the purported Corporate Guarantee is restricted to ` 1601.43 crores based on admissions by the Consortium of Banks. The said Suit and Notice of Motion are pending adjudication in the Hon’ble Bombay High Court.

(v) The Division Bench of the Hon’ble High Court of Karnataka, vide its Order dated December 20, 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 SLPs, the Hon’ble Supreme Court has, by its Order dated February 10, 2014 directed that, status quo be maintained in respect of the transaction of sale of shares to Diageo.

(vi) In addition to two winding up petitions instituted by beneficiaries of Corporate Guarantees issued by the Company, which are being challenged before the Hon’ble Supreme Court and the Karnataka High Court respectively, six more winding up petitions filed by certain purported creditors of KFA, who are purported beneficiaries of Corporate Guarantees for winding of the Company, have been admitted by the Hon’ble High Court of Karnataka vide combined Order dated January 2, 2015. The Company has filed appeals before the Division Bench of the Karnataka High Court to challenge three of the aforesaid six admission Orders of the Single Judge and such appeals are pending admission.

(vii) The Company has filed a suit for damages claiming an amount of ` 1,319.30 crores against one of the above Petitioners who have filed a winding up Petition against the Company in the City Civil Court, Bangalore and the same is pending adjudication.

(viii) The Company and Kingfisher Finvest India Limited (KFIL) have 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 a declaration that the Security Trustee Agreement dated June 30, 2008 and the Consolidated Deed of Pledge dated December 21, 2010 (in respect of pledged shares of United Spirits Limited and KFA held by the Company 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 purported Release of Residual Interest Agreement dated December 21, 2010 in respect of sale proceeds remaining after appropriation of USL and KFA shares. On June 10, 2014, IDBI Trusteeship Services Limited transferred the pledged shares to IGCF who in turn sold 4,937,395 shares of and in USL (“Sold Shares”) held by UBHL and KFIL By an Order dated June 20, 2014 in Writ Petition No. 28577 of 2014, filed by the Consortium of Banks and which has now been disposed off. IGCF deposited the surplus/balance sales proceeds from the Sold Shares with the Hon’ble High Court of Karnataka and has been restrained from disposing off the ` 690 crores retained by it. The Company is defending the aforesaid O.S. No. 25877 of 2013 and the ex-parte ad-interim orders passed therein.

During the pendency of the Writ Petition No. 28577 of 2014, the Consortium of Banks filed an application seeking to amend the plaint. The amendment application was heard and allowed vide Order dated October 15, 2014. The Company and KFIL have filed separate Writ Petitions against the said Order allowing the amendment application. The Company and KFIL have also filed applications for rejection of the suit on account of suit being barred by law and insufficient court fee.

The Company, after taking into account, various issues involved, has, as a matter of prudence and without prejudice to the rights and contentions of the Company in the legal proceedings as well as the stand adopted by KFA against the purported recall of its loans by the lenders, pursuant to which shares pledged by the Company were sold by the lenders, has debited a portion of the sale proceeds of the IGCF sale of investments of ` 106.30 crores to KFA and written off the same as unrealizable, along with other dues from KFA. The balance sale proceeds of ` 748.36 crores continues to be disclosed as due from IGCF.

(ix) The Company filed a Suit (L) No. 290 of 2015 in the High Court of Judicature at Bombay against ICICI Bank Ltd (hereinafter referred to as “ICICI”) and 3i Infotech Trusteeship Services Ltd (hereinafter referred to as “3i Infotech”) challenging ICICI’s alleged right to sell the 20,14,000 shares (the “NDU shares”) of United Breweries Limited by their notice dated February 9, 2015 on the ground that the Loan Purchase Agreement (LPA) dated December 21, 2010 entered into with ICICI has ceased to operate consequent upon ICICI transferring, assigning and/or novating all its rights and obligations under the MDRA to a third party and that the claim of ` 146.29 crores by ICICI cannot be proceeded against the 20,14,000 shares as the LPA has worked itself out.



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Accordingly, the following ad-interim reliefs were sought in the Suit:

(a) That, pending the hearing and final disposal of the Suit, for a temporary order and injunction restraining the Defendants (3i Infotech and ICICI), their servants, agents or assigns, or any other person claiming by, through or under them or any of them, from acting on the basis or in any manner giving effect to the Power of Attorney dated November 12, 2011, or from taking any other or further steps to act upon or in furtherance of the Non Disposal Arrangement, dated November 12, 2011.

(b) That, pending the hearing and final disposal of the Suit, for an Order appointing a court receiver to take custody of 20,14,000 shares of United Breweries Limited, held by the Company and which are the subject matter of the Non Disposal Arrangement dated November 12, 2011.

By an Order dated April 16, 2015, the Hon’ble Judge restrained both 3i Infotech and ICICI from selling the NDU shares and directed ICICI to deposit the NDU shares with the Prothonotary & Senior Master of Hon’ble Bombay High Court within a period of 2 weeks from the date of pronouncement of the judgement. This Order was challenged in an appeal filed by ICICI before the Division Bench of the Hon’ble Bombay High Court in which a stay has been granted only in respect of the portion of the Order which directs ICICI to deposit the NDU shares with the Prothonotary & Senior Master of Hon’ble Bombay High Court. However, the restraint Order on ICICI for sale of NDU shares continues. The suit is continuing.

Significant and material orders passed by the Regulators/ Courts

The material orders passed by the Regulators / Courts which may impact the going concern status of the Company and its future operations are as under:

(i) Order passed by the Hon’ble High Court of the Karnataka

(a) The Hon’ble High Court of Karnataka, vide its Order dated December 20, 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 Special Leave Petitions (“SLPs”) challenging the Order of the Division Bench. Pending disposal of the Company’s SLPs, the Hon’ble Supreme Court has by its Order dated February 10, 2014 directed that status

quo be maintained in respect of the transaction of sale of shares to Diageo.

(b) In addition to two winding up petitions instituted by certain purported beneficiaries of Corporate Guarantees issued by the Company, which are being challenged before the Hon’ble Supreme Court and the Karnataka High Court respectively, six more winding up petitions filed by certain creditors of KFA, who are purported beneficiaries of Corporate Guarantees issued by the Company for winding of the Company, have been admitted by the Hon’ble High Karnataka High Court vide combined Order dated January 2, 2015. The Company has since challenged three of these six winding up petitions in the Hon’ble High Court of Karnataka.

(c) The Hon’ble High Court of Karnataka vide its aforesaid Order dated December 20, 2013 have ordered 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”. The Hon’ble Karnataka High Court, by another order dated September 3, 2013 (which was confirmed by an order dated November 13, 2013) in a writ petition filed by the consortium of banks that had advanced facilities to KFA, has restrained the Company from selling, transferring, alienating, disposing off or creating any third party rights on its movable and immoveable properties. These orders have restricted the Company from borrowing by securitizing its assets and leasing its vacant space in UB City,thereby affecting the revenue generation of the Company.

(ii) Order passed by Securities Appellate Tribunal (SAT)

SEBI in its communication dated April 27, 2015 has advised the Company to restate the Accounts for the Financial Years 2012-13 and 2013-14 to address the qualifications made in the Report by the Statutory Auditors, despite a representation that most of the required adjustments have already been made in the accounts for the subsequent Financial Year 2013-14. SAT, on an appeal by the Company, has by its Order dated May 29, 2015, stayed the operation, implementation and effect of the communication dated April 27, 2015 till the next date of hearing.

Listing requirements

Your Company’s Equity shares are listed on the BSE Limited (formerly Bombay Stock Exchange Limited) and National Stock Exchange of India Limited. The listing fees have been paid to all these Stock Exchanges for the year 2015-2016. The Bangalore Stock Exchange has been derecognized under the relevant provisions of the Securities and Exchange Board of India Act, 1992 and the Securities Contracts (Regulation) Act, 1956.



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Fixed Deposits

The Company has discontinued the acceptance/ renewal of deposits. The existing deposits will run till the date of maturity and will be repaid on the due dates. There have been no defaults in the repayment of fixed deposits during the year.

The Fixed Deposits accepted from the Public and Shareholders stood at ` 10.52 crores as on March 31, 2015. A sum of ` 0.75 crores from Public and Shareholders remained unclaimed as at March 31, 2015.

Transfer to Investor Education and Protection Fund

Pursuant to the provisions of Section 205A[5] and 205C of the Companies Act, 1956, an amount of ̀ 0.07crores [Previous Year ` 0.03 crores] 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.

Contracts and Arrangements with related parties

All Related Party Transactions that were entered during the financial year were at arm’s length basis and were in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act 2013 and the Listing Agreement. There are no materially significant Related Party Transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on an annual basis for those transactions which could not be determined at the beginning of the year. The transactions entered into pursuant to the omnibus approval so granted are placed before the Audit Committee for ratification on a quarterly basis.

Similarly, all material Related Party Transactions, as defined under Clause 49 of the Listing Agreement, which require approval of the Shareholders through Special Resolution, have been obtained by the Company in the Annual General Meeting held on September 30, 2014.

The Company has adopted a Related Party Transaction Policy which is uploaded on the Company’s website. This policy is available through the weblink : http://theubgroup.com / PDF /

UBHL / 2014-2015 / UNITED%20BREWERIES(HOLDINGS)%20LIMITED-

%20RELATED%20PARTY%20TRANSACTIONS%20POLICY.pdf.

None of the Directors have any material pecuniary relationships or transactions vis-à-vis the Company.

Pursuant to Section 134 of the Companies Act, 2013 and Rules made thereunder, particulars of transactions with related parties as required under Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2 is annexed under Annexure H to this Report.

General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report.

Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Acknowledgement

Your Directors place on record the support received from Group Companies, shareholders, depositors, customers, vendors and employees.

By Order of the Board

Mumbai Dr. Vijay MallyaMay 29, 2015 Chairman



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Annexure to Report of the Directors

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LIMITED

10

Annexure B

Part A — Policy on appointment of Directors

For the Board of a Company to be effective and efficient, it should comprise of individuals who have professional qualifications and proven experience in their respective fields of specialization.

The Nomination and Remuneration Committee evaluates the Directors and recommends the Board for their appointment / reappointment and ensures optimum composition of Board. While recommending appointment of an Individual as a Director on the Board, the committee has to consider the following factors:

• DiversityoftheBoard

• Qualificationandpositiveattributes

• IndependenceofDirectors(inthecaseofIndependentDirectors)

Diversity of Board

The Committee shall take into consideration the following to ensure Board diversity:

• OptimumcompositionofExecutiveDirectorsandNon-ExecutiveDirectorsontheBoard;

• Professionalexperienceandexpertiseindifferentareasofspecialization;

• Diversitycriteriaincluding,butnotlimitedtogender,age,ethnicity,race,religion,cultureandgeographicbackground;

• Academicqualification,functionalexpertise,personalskillsandqualities

The ultimate decision will be based on merit and contribution that the selected candidates will bring to the Board.

Qualification and positive attributes

The Committee may also assess the following criteria:

• Financiallyliterate,whichmeanshe/shepossesstheabilitytoreadandunderstandbasicfinancialstatementsi.e.balancesheet,statement of profit and loss, and statement of cash flows.

• Possesshighlevelsofpersonal,professionalintegrity.

• Haveappropriateknowledge/experienceabouttheindustryandtheCompany,orabilitytoacquirerequiredknowledgeandunderstanding.

• AbletoprovideguidancetotheBoardinmattersofbusiness,finance,strategyandcorporategovernance.

• AbletoanalyticallylookintotheissuesplacedbeforetheBoardandprovidestrategiestosolvethem.

• Possessbettercommunicationskillsandabilitytoworkharmoniouslywithfellowdirectorsandmanagement.

• Willingnesstodevotetherequiredtime,includingbeingavailabletoattendBoardandCommitteemeetings.

Independence of Directors (only in the case of Independent Directors)

Any relationship between the Company and Directors other than in the normal course will affect the Independence of Directors in many ways. The Committee shall assure that the candidate proposed for the position of Independent Director meets the minimum criteria for Independence set out under Section 149 of the Companies Act, 2013. It shall also assess if the candidate would be able to meet the standards mentioned in the code for Independent Directors under the Companies Act, 2013.

Part B — Policy on Remuneration to Board of Directors, Key Managerial Personnel and Senior Employees

Introduction

With the view to attract and retain qualified industry professionals for the Board and Management in order to achieve its strategic goals this policy is designed for adopting the highest standards of good corporate governance. The remuneration policy of the Company is aimed at rewarding performance, based on review of achievements on a regular basis and is in consonance with the existing industry practices.

Annexure to Report of the Directors (contd.)


LIMITED

11


This policy is now framed to ensure that the requirements of Section 178 of the Companies Act, 2013 is met and it intends to define general guidelines for the Company’s pay to the Board of Directors, Key Managerial Personnel and Senior Management and Senior Employees.

Remuneration of Directors

The Board of United Breweries (Holdings) Limited comprises of three categories of Directors viz., Managing Director, Non -Executive Directors and Non - Executive Independent Directors.

The Remuneration to Managing Director and Non - Executive Directors are governed by the provisions of Companies Act, 2013 and the rules framed thereunder and the notifications issued by the Ministry of Corporate Affairs from time to time.

Non -Executive Directors

The Non -Executive Directors including Non- Executive Independent Directors are eligible for fixed amount of sitting fees for attending meeting of the Board of Directors and its Committees as allowed under the Companies Act 2013.

Reimbursement of expenses

All expenses incurred by the Board of Directors for attending the meetings and events of the Company are reimbursed at actuals.

Remuneration to Key Managerial Personnel and Senior Management Personnel

The remuneration structure to the Key Managerial Personnel and Senior Management Personnel shall include the following components:

(i) Basic Pay(ii) Variable Pay (iii) Perquisites and Allowances(iv) Retrial benefits(v) Performance Evaluation Payment

It is to be ensured that Key Managerial Personnel (KMP) and Senior Management Personnel are paid as per the trend prevalent in the similar industry, nature and size of business and the risks and responsibilities associated for holding such position. The level and components of remuneration is reasonable and sufficient to attract and retain the KMPs and Senior Management.

The Annual Plan and Objectives for Key Managerial Personnel and Senior Management Personnel shall be reviewed by the Nomination and Remuneration Committee and Performance Evaluation Payment will be approved by the Committee based on the achievements against the Annual Plan and Objectives.

Remuneration to Senior Employees

To retain trained and committed work force, the management while fixing remuneration to the Senior Employees ensures that it:

• AppropriatelycompensateemployeesfortheservicestheyprovidetotheCompany;• Attractandretainemployeeswithskillsrequiredtoeffectivelymanagetheoperationsandgrowthofthebusiness;• MotivateemployeestoperforminthebestinterestsoftheCompanyanditsstakeholders In consonance with this well formulated principle, the compensation of employees has been linked to performance. However for compensation above certain limits have variable component in the salary structure and are linked to Key Result Area (KRA) fixed to the employees.

Insurance coverage

To protect the interest of the Directors and Employees while carrying out their duties which are exposed to various legal and regulatory requirements, the Company has obtained various insurance policies such as Directors and Officer’s Liability Insurance, etc. The Professional Indemnity policies are intended to protect the Directors and executives from legal action. The policy normally covers legal costs for defending civil suits only.


LIMITED

12


Annexure C

Performance Evaluation Process and Criteria

Nomination and Remuneration Committee of Board of Directors has formulated criteria and questionnaires to evaluate the performance of Board, its Committees and Individual Directors including the Independent Directors. Further, the Independent Directors at their separate meeting formulated the criteria and questionnaire to evaluate the performance of Non Independent Directors and the Chairman of the Board.

The formal annual evaluation has been carried out in the manner given below:

• Basedonthequestionnaireandfeedback,theperformanceofeveryDirectorwasevaluatedinthemeetingoftheNominationand Remuneration Committee.

• IndependentDirectorsattheirseparatemeetinghavecarriedoutannualevaluationontheperformanceofNonIndependentDirectors, Board as a whole and performance of the Chairman of the Company.

• As stipulatedunder theCode for IndependentDirectors, theBoardofDirectorshascarriedout theperformanceevaluationof each Independent Directors by circulating the questionnaires to the other Board members, excluding the Director being evaluated.

Some of the key criteria for performance evaluation are as follows:

Evaluation of Non Independent Directors :

• AttendanceandparticipationatBoardandCommitteemeetings• Leveloffamiliarityandcompliancewiththecodesandpolicies• FamiliaritywithallthespheresoftheactivitiesoftheCompany• Levelofparticipationindevelopingbusinessstrategies• QualityofrelationshipwithothermembersoftheBoard

Evaluation of Independent Directors (In addition to the criteria for Non Independent Directors)

• Abilitytoexerciseresponsibilitiesinabonafidemanner• LevelofContributioninImplementingbestCorporateGovernancepractice• IndependentJudgmentduringBoard’sdeliberationonstrategy,performance,riskmanagementetc.

Annexure D

Vigil Mechanism

• EmployeesandDirectorscanmakeprotectedDisclosuresaddressedtotheEthicsCounsellorortotheChairmanoftheAuditCommittee.

• NameoftheWhistleBlowerneednotbedisclosedtotheEthicsCounsellorortotheChairmanoftheAuditCommittee.

• TheEthicsCounsellor/ChairmanoftheAuditCommitteeshallafterendofinvestigationmakeadetailedwrittenrecordoftheProtected Disclosure.

• TheEthicsCounsellor/ChairmanoftheAuditCommitteeshallfinalizeandsubmittheReporttotheAuditCommitteeonaregular basis about all Protected Disclosures referred to him/her since the last report together with the results of investigations, if any.

• OnsubmissionofReport,theEthicsCounsellor/ChairmanoftheAuditCommitteeshallrecommendtothemanagementoftheCompany to take such disciplinary or corrective action as the Ethics Counsellor / Chairman of the Audit Committee deems fit. It is clarified that any disciplinary or corrective action initiated against the Subject as a result of the findings of an investigation pursuant to this Policy shall adhere to the applicable personnel or staff conduct and disciplinary procedures.

• Notwithstandingtheabove,theWhistleBlowershallhavedirectaccesstotheChairmanoftheAuditCommitteeinexceptionalcases.


LIMITED

13

Annexure E

Statement of Disclosure of Remuneration under Section 197 of Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

i. Ratio of the remuneration of each Executive Director to the median remuneration of the Employees of the Company for the financial year 2014-15, the percentage increase in remuneration of Chief Executive Officer, Chief Financial Officer and other Executive Director and Company Secretary during the financial year 2014-15.

Sl.No.

Name of Director/KMP DesignationRatio of remuneration of each Director to median

remuneration of Employees

Percentage increase in Remuneration

1 V Shashikanth Managing Director/President (KMP) NIL NIL2 Kaushik Majumder Company Secretary Not applicable 12%

Note :(a) Mr. V Shashikanth was Managing Director upto April 17, 2014 and thereafter continued as President (KMP) with effective from

April 18, 2014.(b) The Non-Executive Directors of the Company are entitled for sitting fee as per the statutory provisions. The ratio of remuneration

and percentage increase for Non-Executive Directors Remuneration is therefore not considered for the purpose above.(c) Percentage increase in remuneration is as per the policy of the Company and as approved by the Nomination and Remuneration

Committee of the Company during the financial year 2014- 15.

ii. The percentage increase in the median remuneration of Employees for the financial year was 12%.

iii. The Company has 71 permanent Employees on the rolls of Company as on March 31, 2015.

iv. Relationship between average increase in remuneration and Company’s performance: The salary increases for the Company are decided on the basis of industry benchmark, performance of the Company and reward structure to retain key personnel as per the requirement of the Company. Variable compensation is an integral part of the total package and is directly linked to individual performance and overall business performance.

v. Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company: In line with Company’s reward philosophy and business requirement where there is a necessity to retain Key Managerial Personnel, increase in remuneration and performance linked bonus pay-outs to Employees including Key Managerial Personnel are directly linked to individual performance as well as that of the business. Given the critical business requirements, the performance rating of the Key Managerial Personnel by way of increase in pay have been awarded to the Key Managerial Personnel for the current year. This was duly reviewed and approved by the Nomination & Remuneration Committee of the Company. Although there has been a profit for the year amounting to ` 433.97 crores, the same is attributable due to an Exceptional gain of ` 965 crores on account of sale of pledged shares by certain Lenders. The operational loss for the year 2014-15 is ` 42.04 crores.

vi. The Market Capitalisation of the Company as on March 31, 2015 was ` 150.68 as compared to ` 142.66 crores as on March 31, 2014. The price earnings ratio (excluding Exceptional Item) of the Company was (0.28) as at March 31, 2015 and was (0.036) as at March 31, 2014. The closing share price of the Company at BSE Limited on March 31, 2015 being ` 22.55 per equity share of face value of ` 10/- each.

vii. Average percentage increase made in the salaries of Employees other than the managerial personnel in the financial year was 12%. The increase in the managerial remuneration was also 12%. In keeping with the Company’s reward policy, the increases this year reflect the market practice.

viii. The key parameters for any variable component of remuneration: Variable compensation is an integral part of our total reward package for all Employees including Key Managerial Personnel. Annual Bonus is directly linked to an individual performance rating and business requirements.

ix. The ratio of the remuneration of the highest paid Director to that of the Employees who are not Directors but receive remuneration in excess of the highest paid Director during the year: Not Applicable

x. It is hereby affirmed that the remuneration paid during the year is as per the Remuneration Policy of the Company.


Mumbai Dr. Vijay MallyaMay 29, 2015 Chairman



LIMITED

14


Annexure F

Form No. MR-3SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2015[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,The Members,United Breweries (Holdings) LimitedRegd. Office: Level 12, UB Tower, UB City24, Vittal Mallya Road, Bangalore - 560001

I have conducted the secretarial audit of the compliance applicable statutory provisions and the adherence to good corporate practices by United Breweries (Holdings) Limited (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/ statutory compliances and expressing my opinion thereon.

Based on my verification of the Company’s books, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on March 31, 2015, complied with the statutory provisions listed hereunder and also that the company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.

I have examined the books, papers, minute books, forms and returns filed and other records maintained by United Breweries (Holdings) Limited (“the Company”) for the financial year ended on March 31, 2015 according to the provisions of:

i. The Companies Act, 2013 (the Act) and the rules made thereunder;ii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;iii. The Depositories Act, 1996 and the Regulations and Bye-Laws framed thereunder;iv. Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct

Investment, Overseas Direct Investment and External Commercial Borrowings (No instances for compliance requirements during the year);

v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI’):

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (No instances

for compliance requirements during the year);(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)

Guidelines, 1999 (No instances for compliance requirements during the year);(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (No instances for

compliance requirements during the year);(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding

the Companies Act and dealing with client;(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (No instances for compliance

requirements during the year); and(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998, (No instances for compliance

requirements during the year).vi. All other Labour, Employee and Industrial Laws to the extent applicable to the Company;vii. I have also examined compliance with the applicable clauses of the Listing Agreements entered into by the Company with BSE

Limited and National Stock Exchange of India Limited.

During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations and Guidelines as mentioned above wherever applicable subject to the following observations:

1) The Company has filed all the forms and returns as required under the Companies Act, 2013. The Company is generally regular in filing the forms and returns within the prescribed time.


LIMITED

15


2) The Company has not complied with following clauses of listing agreement with stock exchanges:

i. Clause 41 as to submitting of audited financial results for the quarter and financial year ended on 31/03/2014 within the prescribed period;

ii. Clause 49 IX, since the Company has no CEO or CFO, the certificate as required under this clause has been given by the Chairman of the Board.

3) The Company has received notices from Stock Exchanges for non-compliance of Clause 41 of listing agreement as above and the stock exchanges have sent notices imposing penalty. However the Company has made representation giving justification to the stock exchanges against the same and no further action has been taken by the stock exchanges.

4) The Company has also received notice from stock exchanges as one of the independent director of the Company was holding membership of more than 10 committees as prohibited by Clause 49 II D of the listing agreement. However, the said independent director has subsequently complied the requirement before 31st March 2015

5) The Company has not complied the provisions of Section 203 (1) (i) and (iii) of the Companies Act, 2013, requiring the appointment of Managing Director or Chief Executive Officer or Manager or whole-time director and Chief Financial Officer.

6) The Company does not have minimum 9 directors on its Board as required under Article 112 of the Articles of Association of the Company.

I further report that

Subject to my observations as mentioned above, the Board of Directors of the Company is constituted with Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with provisions of the Act.

Adequate notice is given to all Directors to schedule the Board meetings, agenda and detailed note on agenda were sent at least seven days in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

The decisions carried through are recorded in the minutes. I did not find any dissenting views recorded in the minutes. It was informed to me that in the absence of any such dissenting views, it was not required to record any such views in the minutes.

I further report that there are adequate systems and processes in the company commensurate to the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. The Company has requisite systems and processes to monitor and ensure compliance with labour and employee related laws, environmental laws as applicable to the Company.

I further report that during the audit period the Company has following specific actions having major bearing on the Company’s affairs in pursuance of the above referred laws, rules, regulations, guidelines referred to above:

1. The Shareholders of the Company at their Annual General Meeting held on September 30, 2014 have authorized the board of directors to borrow and create the mortgage/ charge on the assets of the Company up-to ` 3,000 crores pursuant to Section 180 of the Companies Act, 2013.

2. Some of the creditors of the Kingfisher Airlines Limited, to whom the Company had given corporate guarantee, have filed winding up petition against the Company. The majority of these winding up petitions have since been admitted by the Hon’ble High Court of Karnataka. The Company is defending these suits.

3. One of the lender of Kingfisher Airlines Limited, to whom the Company had given corporate guarantee, had declared the Company as willful defaulter. The Hon’ble High Court of Calcutta has stayed such declaration and the matter is pending.

4. The BSE Limited (BSE) has advised the Company to restate the financial statements for the year 2012-13 by giving effect tothequalificationsof thestatutoryauditorspursuanttoadviseofQualifiedAuditReviewCommittee (QARC)ofSEBI.TheHon’ble Securities Appellate Tribunal by its Order dated May 29, 2015, stayed the operation, implementation and effect of the communication dated April 27, 2015 till the next date of hearing on an Appeal being filed by the Company.

Sudhir Vishnupant Hulyalkar Company Secretary in PracticePlace: Bangalore FCS No. 6040

Date: May 29, 2015 C P No. : 6137


LIMITED

16


Annexure G

Form No. MGT - 9

EXTRACT OF ANNUAL RETURNas on the financial year ended on March 31, 2015

[Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i) CIN L85110KA1915PLC000740

ii) Registration Date March 23, 1915

iii) Name of the Company United Breweries(Holdings) Limited

iv) Category / Sub-Category of the Company Company having Share Capital

v) Address of the Registered office and contact details

UB Tower, Level 12, UB City, 24, Vittal Mallya Road, Bangalore 560001; Contact No. : 080-22272808; 080-22275809; 080-398560000;

vi) Whether listed company Yes / No Yes

vii) Name, Address and Contact details of Registrar and Transfer Agent, if any

Integrated Enterprises (India) Limited30, Ramana Residency, 4th Cross,Sampige Road, Malleswaram,Bangalore – 560 003Tel.No. : 080 – 23460815 – 18Fax No. : 080 – 23460819

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10 % or more of the total turnover of the Company shall be stated:-

Sl.No.

Name and Description of main products / services NIC Code of the Product/ service

% to total turnover of the Company

i) Trading of Beer 220300 63.24

ii) Trading of Leather Shoes 640320 20.70

iii) Real Estate Development and Investment Holding - 16.00

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES -

Sl. No.

Name and Address of the Company CIN/GLN Holding/ Subsidiary/ Associate

% of shares held

Applicable Section

1. Bangalore Beverages LimitedUB Tower, Level 12, UB City, 24, Vittal Mallya Road,Bangalore - 560 001, Karnataka

U15500KA2008PLC045719 Subsidiary 100.00 2(87)

2. Bestride Consultancy Private LimitedUB Tower, Level 12, UB City, 24, Vittal Mallya Road,Bangalore - 560 001, Karnataka

U74140KA2010PTC053806 Subsidiary 100.00 2(87)

3. City Properties Maintenance Company Bangalore LimitedUB Tower, Level -1, Basement Floor, UB City,24, Vittal Mallya RoadBangalore - 560 001, Karnataka


4. Kingfisher Finvest India Limited [Formerly Kingfisher Radio Limited]UB Tower, Level 12, UB City, 24, Vittal Mallya Road,Bangalore - 560 001, Karnataka


5. Kingfisher Training and Aviation Services Limited[Formerly Kingfisher Airlines Limited]UB Tower, Level 12, UB City, 24, Vittal Mallya Road,Bangalore - 560 001, Karnataka



LIMITED

17


Sl. No.

Name and Address of the Company CIN/GLN Holding/ Subsidiary/ Associate

% of shares held

Applicable Section

6. Kingfisher Aviation Training Limited[Formerly Kingfisher Training Academy Limited]UB Tower, Level 12, UB City, 24, Vittal Mallya Road,Bangalore - 560 001, Karnataka


7. Kingfisher Goodtimes Private LimitedKingfisher House, Western Express Highway, Vile Parle (East),Mumbai - 400057, Maharashtra

U92400MH2007PTC174565 Subsidiary 71.92 2(87)

8. UB Electronic Instruments LimitedPlot No 1, Sanjeev Housing Colony, Mahendra Hills, East Marredpally, Secunderabad- 500026, Telangana

U29309TG1975PLC001936 Subsidiary 98.44 2(87)

9. UB Infrastructure Projects LimitedUB Tower, Level 12, UB City, 24, Vittal Mallya Road,Bangalore - 560 001, Karnataka


10. UB International Trading LimitedUB Tower, Level 12, UB City, 24, Vittal Mallya Road,Bangalore - 560 001, Karnataka


11. UB Sports LimitedUB Tower, Level 12, UB City, 24, Vittal Mallya Road,Bangalore - 560 001, Karnataka


12. Inversiones Mirabel, S.A.Hong Kong Building, 6th Floor, Samuel Lewis Avenue,P.O. Box 6, 4298, El Dorado

Foreign Company Overseas Subsidiary

100.00 2(87)

13. Mendocino Brewing Co. Inc, USA1601, Airport Road, Ukiah, CA, 95482


68.10 2(87)

14. Rubic Technologies Inc1050, Bridgeway, Sausalito, CA 94965, USA


100.00 2(87)

15. Rigby International Corp.Vanterpool Plaza, Wickam’s Cay, 1, P.O. Box 873,Road Town, Tortola, British Virgin Islands


100.00 2(87)

16. Releta Brewing Company LLC131, Excelsior Ave, Saratoga Springs, NY 12866, USA


68.10 2(87)

17. UB Overseas Limited2nd Floor, Geneva Place, 333, Waterfront Drive, Road Town, Tortola, B.V.I.


100.00 2(87)

18. UBHL [BVI] Limited2nd Floor, Geneva Place, 333, Waterfront Drive,Road Town, Tortola, B.V.I.


100.00 2(87)

19. United Breweries of America Inc., DelawareThree Harbor Drive, Suite 115, Sausalito,CA 94965, USA


92.49 2(87)

20. United Breweries International [UK] LimitedSpringfield House, Sandling Road, Maidstone,Kent, ME14,2LP


68.10 2(87)

21. Kingfisher Beer Europe Limited (Formerly UBSN Limited)Springfield House, Sandling Road, Maidstone,Kent, ME14,2LP


68.10 2(87)

22. UB Engineering LimitedSahyadri Sadan Tilak Road,Pune- 411030, Maharashtra

L32109MH1970PLC014509 Associate 37.18 2(6)

23. Pixray India Limited 15/11 Stephen House, Kolkata- 700001West Bengal

U51507WB1967PLC027211 Associate 30.36 2(6)

24. WIE Engineering Limited (Under Liquidation) Associate 25.88 2(6)

25. UB Pharma, (Kenya) LimitedEnterprise Road, Nairobi, Kenya

Foreign Company Associate 50.00 2(6)


LIMITED

18


IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

(i) Category-wise Share Holding

Category of Shareholders No. of Shares held at the beginning of the year (As on April 1, 2014)

No. of Shares held at the end of the year(As on March 31, 2015)

% Change during the

yearDemat Physical Total % of Total Shares

Demat Physical Total % of Total Shares

A. Promoters(1) Indiana) Individual/HUF 5,284,978 - 5,284,978 7.91 5,284,978 - 5,284,978 7.91 NILb) Central Government/ State Government(s)

- - - - - - - -

c) Bodies Corp. 12,706,798 - 12,706,798 19.02 12,706,798 - 12,706,798 19.02 NILd) Financial Institutions/ Banks - - - - - - - -e) Any Other (specify) - - - - - - - -Sub-total (A) (1) 17,991,776 - 17,991,776 26.93 17,991,776 - 17,991,776 26.93 NIL(2) Foreign - - - - - - - -a) Individuals (Non-Resident Individuals/ Foreign Individuals)

- - - - - - - -

b) Bodies Corp. 16,981,504 - 16,981,504 25.41 16,981,504 - 16,981,504 25.41 NILc) Institutions - - - - - - - -d)QualifiedForeignInvestor - - - - - - - -e) Any Other (specify) - - - - - - - -Sub-total (A) (2) 16,981,504 - 16,981,504 25.41 16,981,504 - 16,981,504 25.41 NILTotal shareholding of Promoter (A) = (A)(1)+(A)(2)

34,973,280 - 34,973,280 52.34 34,973,280 - 34,973,280 52.34 NIL

B. Public Shareholding1. Institutionsa) Mutual Funds/ UTI 1,957,695 2,576 1,960,271 2.93 1,969,411 2,576 1,971,987 2.95 0.02b) Financial Institutions/ Banks 188,555 10,898 199,453 0.30 235,461 10,898 246,359 0.37 0.07c) Central Government/ State Government(s)

- 198 198 0.00 - 198 198 0.00 NIL

d) Venture Capital Funds - - - - - - - -e) Insurance Companies 782,424 - 782,424 1.17 132,424 - 132,424 0.20 0.97f) Foreign Institutional Investors

1,880,984 1,524 1,882,508 2.82 1,127,500 1,524 1,129,024 1.69 1.13

g) Foreign Venture Capital Investors

- - - - - - - -

h)QualifiedForeignInvestor - - - - - - - -i) Any Other (specify) - - - - - - - -Sub-total (B)(1):- 4,809,658 15,196 4,824,854 7.22 3,464,796 15,196 3,479,992 5.21 1.872. Non-Institutionsa) Bodies Corporate 6,481,363 25,766 6,507,129 9.74 5,769,722 25,070 5,794,792 8.67 1.07b) Individualsi) Individual shareholders holding nominal share capital upto ` 1 lakh

13,291,661 1,364,106 14,655,767 21.93 14,605,178 1,322,910 15,928,088 23.84 1.91

ii) Individual shareholders holding nominal share capital in excess of ` 1 lakh

4,368,669 14,400 4,383,069 6.56 5,156,052 14,400 5,170,452 7.74 1.18

c)QualifiedForeignInvestor - - - - - - - -d) Others 1,386,456 87,966 1,474,422 2.21 1,387,251 84,666 1,471,917 2.20 0.01Sub-total (B)(2) 25,528,149 1,492,238 27,020,387 40.44 26,918,203 1,447,046 28,365,249 42.45 1.86

Total Public Shareholding (B)=(B)(1)+ (B)(2)

30,337,807 1,507,434 31,845,241 47.66 30,382,999 1,462,242 31,845,241 47.66 -

C. Shares held by Custodians and against which Depository Receipts have been issued

- - - - - - - -

Grand Total (A+B+C) 65,311,087 1,507,434 66,818,521 100.00 65,356,279 1,462,242 66,818,521 100.00 -


LIMITED

19

(ii) Shareholding of Promoters

Sl. No.

Shareholder’s Name

Shareholding at the beginning of the year ( As on April 1, 2014)

Shareholding at the end of the year (As on March 31, 2015) % change in

share holding during the

yearNo. of shares

% of total shares of the

company

%of Shares Pledged /

encumbered to total shares

No. of shares


company

%of Shares Pledged /

encumbered to total shares

1. Dr. Vijay Mallya 40,320 0.06 - 40,320 0.06 - NIL

2. Dr. Vijay Mallya & Sidhartha V Mallya

2,825,358 4.23 - 2,825,358 4.23 - NIL

3. Dr. Vijay Mallya & Ritu Mallya 68,400 0.10 - 68,400 0.10 - NIL

4. Dr. Vijay Mallya 2,350,900 3.52 - 2,350,900 3.52 - NIL

5. Kamsco Industries Private Limited 2,418,100 3.62 3.59 2,418,100 3.62 3.59 NIL

6. The Gem Investment & Trading Company Private Limited

1,066,184 1.60 - 1,066,184 1.60 - NIL

7. Pharma Trading Company Private Limited

519,818 0.78 0.58 519,818 0.78 0.58 NIL

8. Mallya Private Limited 2,418,100 3.62 1.20 2,418,100 3.62 3.59 NIL

9. Devi Investments Private Limited 459,412 0.69 - 459,412 0.69 - NIL

10. McDowell Holdings Limited 5,260,002 7.87 - 5,260,002 7.87 - NIL

11. Vittal Investments Private Limited 101,508 0.15 - 101,508 0.15 - NIL

12. Ganapathy Mallya Investments Private Limited

- - - - - - -

13. Rossi & Associates Private Limited 463,674 0.69 - 463,674 0.69 - NIL

14. VJM Investments Private Limited - - - - - - -

15. Watson Limited 14,159,986 21.19 - 14,159,986 21.19 - NIL

16. FirStart Inc 2,821,518 4.22 - 2,821,518 4.22 - NIL

Total 34,973,280 52.34 5.37 34,973,280 52.34 7.76 NIL

(iii) Change in Promoters’ Shareholding

Sl. No.

Change in Promoters’ Shareholding Shareholding at the beginning of the year ( As on April 1, 2014)

Cumulative Shareholding during the year April 1, 2014 to

March 31, 2015)

No. of shares % of total shares of the

Company


Company

1 At the beginning of the year 34,973,280 52.34 - -

2 Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc):

No Change *

3 At the end of the year 34,973,280 52.34 - -

*There is no change in the total shareholding of Promoters between April 1, 2014 and March 31, 2015



LIMITED

20

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

Sl. No.

Name Shareholding Date Increase / Decrease in

shareholding

Reason Cumulative Shareholding during the year

(April 1, 2014 to March 31, 2015)

No. of shares at the beginning

of the year (As on April 1, 2014)/ end of

the year March 31, 2015)


Company


Company

1. ACACIA Institutional Partners, LP

270,000 0.40 1.4.2014 0 Nil movement during

the year

270,000 0.40

270,000 0.40 31.3.2015

2. ACACIA Partners, LP 605,000 0.91 1.4.2014 0 Nil movement during

the year

605,000 0.91

605,000 0.91 31.3.2015

3. Ambitious Computech (Mumbai) Private Limited

327,201 0.49 1.4.2014 0 Nil movement during

the year

327,201 0.49

327,201 0.49 31.3.2015

4. Birla Sun Life Trustee Company Private Limited A/c

1,445,599 2.16 2.5.2014 (8,947) Sale 1,436,652 2.15

17.10.2014 (19,619) Sale 1,417,033 2.12

16.1.2015 (19,152) Sale 1,397,881 2.09

1,397,881 2.09 31.3.2015 1,397,881 2.09

5. Derive Trading Private Limited

1,071,000 1.60 1.4.2014 0 Nilmovement

duringthe year

1,071,000 1.60

1,071,000 1.60 31.3.2015

6. H Parson Private Limited 657,268 0.98 1.4.20140

Nil movementduring

the year

657,268 0.98

657,268 0.98 31.3.2015

7. Kalpana S KhandelwaL 216,435 0.32 1.4.2014

27.3.2015 (10,500) Sale 205,935 0.31

205,935 0.31 31.3.2015 205,935 0.31

8. Karvy Stock Broking Limited (BSE)

300,000 0.45 1.4.2014

4.7.2014 (50,000) Sale 250,000 0.37

8.8.2014 200,000 Purchase 450,000 0.67

22.8.2014 (55,000) Sale 395,000 0.59

9.1.2015 (35,000) Sale 360,000 0.54

30.1.2015 (40,000) Sale 320,000 0.48

320,000 0.48 31.3.2015 320,000 0.48

9. SWEW Benefit Company 245,083 0.37 1.4.2014 0 Nil movement during the year

245,083 0.37

245,083 0.37 31.3.2015

10. VJM Media Private Limited 255,000 0.38 1.4.2014 0 Nil movementduring the year

255,000 0.38

255,000 0.38 31.3.2015



LIMITED

21

(v) Shareholding of Directors and Key Managerial Personnel:

Sl. No.

Name Shareholding Date Increase / Decrease in

shareholding

Reason Cumulative Shareholding during the year

(April 1, 2014 to March 31, 2015)No. of shares at the

beginning of the year (As on April 1, 2014)/

end of the year March 31, 2015)


Company


Company

No. of shares % of total shares of the Company

A. Directors:1. Dr. Vijay Mallya

Non-Executive Chairman5,284,978 7.91 1.4.2014 0 Nil movement

during the year 5,284,978 7.915,284,978 7.91 31.3.20152. Mr. Sidhartha V Mallya

Non-Executive Director0 0.00 1.4.2014 0 Nil movement

during the year 0 0.000 0.00 31.3.20153. Mr. N Srinivasan

Independent Director 120 0.00 1.4.2014 0 Nil movement

during the year 120 0.00 120 0.00 31.3.20154. Mr. M S Kapur

Independent Director0 0.00 1.4.2014 0 Nil movement

during the year 0 0.000 0.00 31.3.20155. Dr. Lalit Bhasin

Independent Director0 0.00 1.4.2014 0 Nil movement

during the year 0 0.000 0.00 31.3.20156. Ms. Daljit Mahal

Non-Executive Director(Appointed w.e.f. March 28, 2015)

0 0.00 1.4.2014 0 Nil movementduring the year 0 0.00

0 0.00 31.3.2015B. Key Managerial Personnel:7. Mr. V. Shashikanth

President0 0.00 1.4.2014 0 Nil movement

during the year 0 0.000 0.00 31.3.20158. Mr. Kaushik Majumder

Company Secretary0 0.00 1.4.2014 0 Nil movement

during the year 0 0.000 0.00 31.3.2015

(VI). INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment(` In crores)

Secured Loans excluding deposits

Unsecured Loans Deposits Total Indebtedness

Indebtedness at the beginning of the financial yeari) Principal Amount 1,153.20 1,760.40 21.20 2,934.70ii) Interest due but not paid 0.30 21.90 2.00 24.20iii) Interest accrued but not due 2.60 85.20 5.30 93.10Total (i+ii+iii) 1,156.00 1,867.50 28.50 3,052.10Change in Indebtedness during the financial yearAdditioni) Principal Amount - 208.60 - 208.60ii) Interest due but not paid - 168.60 - 168.60iii) Interest accrued but not due - - - -Reductioni) Principal Amount 739.50 - 10.70 750.20ii) Interest due but not paid 0.30 - 0.20 0.50iii) Interest accrued but not due 1.90 (85.20) 2.60 89.70Net Changei) Principal Amount (793.50) 208.60 (10.70) (541.60)ii) Interest due but not paid (0.30) 168.60 (0.20) 168.10iii) Interest accrued but not due (1.90) (85.20) (2.60) (89.70)Indebtedness at the end of the financial yeari) Principal Amount 413.70 1,968.90 10.50 2,393.10ii) Interest due but not paid - 190.60 1.80 192.30iii) Interest accrued but not due 0.70 - 2.70 3.40Total (i+ii+iii) 414.40 2,159.50 15.00 2,588.90



LIMITED

22

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-Time Directors and/or Manager:

Sl. No.

Particulars of Remuneration V Shashikanth*Managing Director

Total Amount (` )

1. Gross salary(a) Salary as per provisions contained in section

17(1) of the Income-tax Act, 1961694,166 694,166

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

682,793 682,793

(c ) Profits in lieu of salary u/s 17(3) Income-tax Act, 1961

- -

2. Stock Option - -3. Sweat Equity - -4. Commission

- as % of profit - -- others, specify… - -

5. Others, please specify - -Total 1,376,960 1,376,960Ceiling as per the Act As per Notification No. GSR 534(E) dated July 14, 2011 issued by the Ministry of

Corporate Affairs a proviso was inserted under Sub-paragraph (C) of Paragraph (1) of Section II of Part II of Schedule XIII to the ActWhere in any financial year during the currency of the tenure of the Managing Director, the Company has no profits or its profits are inadequate, the Managing Director shall be paid the aforesaid Remuneration as “Minimum Remuneration” in the respective financial year(s) notwithstanding that the same may exceed the ceiling limit laid down under Section 198, 309 and Schedule XIII to the Act.

* Mr. V Shashikanth was Managing Director of the Company upto April 17, 2014. The remuneration shown here is remuneration paid to him as Managing Director during the period from April 1, 2014 to April 17, 2014.

B. Remuneration to other Directors: **

Sl. No.

Particulars of Remuneration

Name of Directors Total Amount (` )Vijay Mallya Sidhartha

V MallyaN. Srinivasan M S Kapur Lalit Bhasin Daljit Mahal

( Appointed w.e.f. March 28, 2015)

1. Independent Directors• Fee for attending board

/ committee meetings- - 430,000 430,000 180,000 - 1,040,000

• Commission - - - - - - -• Others, please specify - - - - - - -Total (1) - - 430,000 430,000 180,000 - 1,040,000

2. Other Non-Executive Directors• Fee for attending board

/ committee meetings180,000 60,000 - - - - 240,000

• Commission - - - - - - -• Others, please specify - - - - - - -Total (2) 180,000 60,000 - - - - 240,000Total Managerial Remuneration = (1+2)

180,000 60,000 430,000 430,000 180,000 - 1,280,000

Overall Ceiling as per the Act

Sitting Fees not exceeding Rupees One Lakh per meeting of the Board or Committee thereof in terms of Rule 4 of the Companies (Appointment and Remuneration of Managerial Personnel ) Rules, 2014

** None of the Directors are paid any remuneration except sitting fees for attending meetings of the Board and Committee.



LIMITED

23

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD ***

Sl.No.

Particulars of Remuneration Key Managerial Personnel Total(` ) V. Shashikanth

(President)Kaushik Majumder

(Company Secretary)

1. Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

15,955,834 4,146,690 20,102,524

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 13,791,911 3,326,968 17,118,879

(c ) Profits in lieu of salary u/s 17(3) Income tax Act, 1961 - - -

2. Stock Option - - -

3. Sweat Equity - - -

4. Commission

- as % of profit - - -

- others, specify… - - -

Total 29,747,745 7,473,658 37,221,403

*** Mr. V. Shashikanth and Mr. Kaushik Majumder are the only Key Managerial Personnels as the Company does not have a Chief Financial Officer at present.

VI. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of the Companies Act

Brief Description

Details of Penalty / Punishment/

Compounding fees imposed

Authority [RD / NCLT/ COURT]

Appeal made, if any (give

Details)

PenaltyNILPunishment

Compounding

C. OTHER OFFICERS IN DEFAULT

Penalty NIL

Punishment

Compounding



LIMITED

24

Annexure H

Form AOC-2 - Material Related Party Transactions

[Pursuant to Clause (h) of Sub-Section (3) of Section 134 of the Act and Rule 8 (2) of the Companies (Accounts) Rules, 2014]

Form for disclosure of particulars of Contracts/Arrangements entered into by the Company with related parties referred to in Sub-Section (1) of Section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto

1. Details of contracts or arrangements or transactions not at arm’s length basis

There were no contracts or arrangements or transactions entered into during the year ended March 31, 2015,which were not at arm’s length basis.

2. Details of material contracts or arrangement or transactions at arm’s length basis

The details of material contracts or arrangement or transactions at arm’s length basis for the year ended March 31, 2015 are as follows:

Sl.No.

Name of theRelated Party and

RelationshipTransaction Duration Salient Terms

Amount (` in

crores)

1. United Spirits Limited (USL) Receipt of Pegasus Logo fee income

Ongoing At arm’s length basis and in ordinary course of business

40.38

2. United Spirits Limited (USL) Purchase of goods or materials ( IMFL)

Up to May, 2014 At arm’s length basis and in ordinary course of business

5.08

3. United Breweries Limited (UBL) Purchase of goods or materials ( Beer)


2.90

4. Mangalore Chemicals & Fertilizers Limited (MCF)

Repayment of Pegasus Logo Security Deposit and Receipt of Pegasus Logo fee income


6.00

5. UB International Trading Limited (UBITL)

Purchase of goods or materials (leather footwear)


29.33

Appropriate approvals have been taken for related party transactions. No advances have been paid or received against the transactions mentioned above.


Mumbai Dr. Vijay Mallya

May 29, 2015 Chairman



LIMITED

25


MANAGEMENT DISCUSSION AND ANALYSIS

1. OVERVIEW

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

In order to realize value from 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 at its apex in 1999. A third vertical, namely civil aviation was identified later and Kingfisher Airlines Limited was promoted in year 2004. The market capitalization of principal group companies stands at ` 78,500 crores at present.

In each of these identified core business areas, the Company provided substantial financial support to the principal operating entity to facilitate investments and growth. As a consequence of this, United Breweries Limited, through a series of acquisitions and new capacity, grew to become the unquestionable leader in the Indian brewing industry. The strategic investment by Scottish & Newcastle Plc of the United Kingdom, subsequently Heineken, which is arguably the world’s best known brand, have led to the Company achieve a sales volume of 139 mio cases representing more than twice the share of its next competitor and a market capitalization of ` 26,675 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 manufacturer 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 UBHL.

The Company has, in the year 2013, 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 favourite 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.


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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 made sustained efforts to find a suitable investor who could capitalize on the still strong reputation of the brand. Your Company continues to provide lifeline funding to Kingfisher Airlines.

Certain lenders and other creditors have approached the Hon’ble 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.

2. RISKS, CONCERNS AND MITIGATIONS

(a) (i) Risks & Concerns

The Company follows a risk management process for identification, categorization and prioritization of various risks like operational, financial, legal and other business risks. The Group Chief Financial Officer aided by the Internal Auditor reviews the effectiveness of the process at regular intervals and reports the same to the Audit Committee and the Board.

(ii) Major risks foreseen

The Company is exposed to the following risks and concerns:

i) The Company is exposed to risks due to various legal cases arising out of recovery actions taken by its purported creditors, the details of which have been mentioned in the Report of the Directors.

Further, SEBI has directed the Company to restate its financial results for certain preceding years, which although is under adjudication before the Hon’ble Securities Appellate Tribunal, could potentially give rise to additional tax consequences should the decision go against the Company.

The Company assisted by eminent Counsels are taking all necessary steps to protect its interests .

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

iii) 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.

iv) 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.

v) The Company does not presently have a Whole-Time Director or Managing Director or a Manager and a Chief Financial Officer as required under the Companies Act, 2013 and Listing requirements though efforts are being made to fill these vacancies. Continued non-compliance could lead to proceedings against the Company.

vi) Certain leading Banks are attempting to classify the Promoter Chairman and Directors of the Company as “Wilful Defaulter” due to exposure in an erstwhile Associate Company, which is being resisted. In the event that such classification is upheld, it could jeopardize the entire relationship with the banking sector.


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

viii) One of the main income stream of the Company is earning rentals from lease of its property in UB City. The risk involved is that the Company will not be able to lease its vacant property as long as the restraint order passed by the Hon’ble High Court of Karnataka continues.

All the above issues of concerns are not uncommon 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, the Audit Committee and Internal Audit keep constant vigil over the functioning and performance of individual companies in the Group.

The Audit Committee on recommendation of the Group Chief Financial Officer decides the strategy to monitor 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. The efficacy of the internal checks and control systems are verified by the Internal Auditors as well as the Statutory Auditors. The Audit Committee reviews the internal audit plan, adequacy and effectiveness of the internal control system, significant audit observations and monitors the sustainability of remedial measures.

Your Board believes that appropriate procedures, controls and monitoring assessment procedures are in place and considered adequate.



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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 endorsed the principles of good Corporate Governance and has endeavored to follow these principles in their true letter and spirit. The Board of the Company, which is charged with the responsibility of ensuring true Corporate Governance, is constantly striving to ensure that the management protects the long term interests of all the stake-holders of the Company.

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 3 Non-Independent Directors (including a Non Executive Chairman).

The Company held 5 Board Meetings during 2014-15 and the gap between two meetings did not exceed four months. The Board Meetings were held on May 8, 2014, August 12, 2014, November 14, 2014, February 12, 2015 and February 16, 2015.

The details of attendance of Directors at the Board Meetings during the financial year 2014-15 and at the last Annual General Meeting (AGM) held on September 30, 2014, and also the number of other Directorships and Committee positions held by each of the Directors as on date are given below:

Name DIN Category

No. of Board

Meetings Attended

Attendance at the last

AGM held on 30.9.2014

Directorship in Other

Public Limited Companies

No. of Committees(other than the

Company) in which Member/

ChairmanDr. Vijay Mallya 00122890 Promoter

Non-Executive Chairman5 Yes 8 1

Mr. Sidhartha V Mallya 00991076 Promoter jointly with Dr. Vijay MallyaNon-Executive Director 2 No 1 Nil

Mr. N Srinivasan 00004195 Independent Non-Executive Director5 Yes 9

8(Chairman of 3)

Mr. M S Kapur 00703815 Independent Non-Executive Director5 Yes 7

6(Chairman of 4)

Dr. Lalit Bhasin 00001607 Independent Non-Executive Director2 Yes 7

9(Chairman of 3)

Ms. Daljit Mahal* 07140099 Non-Executive Director 0 No Nil Nil

* appointed w.e.f. March 28, 2015

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 Directorships held by Directors as mentioned above does not include directorship in Foreign Companies,

Private Limited Companies, Companies incorporated under Section 8 of the Companies Act 2013, Chamber and Committee.

4. In accordance with Clause 49 of the Listing Agreement, Membership / Chairmanship of only Audit Committee and Stakeholders Relationship Committees in all public limited companies (excluding United Breweries (Holdings) Limited) have been considered.

5. 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.


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Report on Corporate Governance (contd.)

3. COMMITTEES OF THE BOARD

The Board of Directors has constituted the following Committees viz., Audit Committee, Stakeholders Relationship Committee, Nomination and Remuneration Committee and the Corporate Social Responsibility Committee. The functions of these Committees are summarized below.

AUDIT COMMITTEE

The composition, terms of reference, powers and role of the Audit Committee meet the requirements of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The Members of the Audit Committee possess financial / accounting expertise / exposure.

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 - UB Group, The Chief Financial Officer - 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 Internal Auditor reports directly to the Audit Committee.

Mr. N Srinivasan, an Independent Director is the Chairman of the Committee. The Company Secretary acts as the Secretary to the Committee.

The Chairman of the Audit Committee was present at the last Annual General Meeting held on September 30, 2014.

Meeting and Attendance details

Five Meetings of the Audit Committee were held during 2014-15 i.e., on May 8, 2014, August 12, 2014, November 6, 2014, November 14, 2014 and February 12, 2015. The composition and attendance of Members at the Meetings of the Audit Committee held during 2014-15 are as follows:

Name Designation CategoryMeetings held during

2014 - 15Meetings attended

Mr. N Srinivasan Chairman Independent Director 5 5

Mr. M S Kapur Member Independent Director 5 5

Dr. Lalit Bhasin Member Independent Director 5 2

NOMINATION AND REMUNERATION COMMITTEE

The constitution, terms of reference and role of the Nomination and Remuneration Committee are in compliance with Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

The Nomination and Remuneration Committee recommends to the Board from time to time, compensation package for remuneration for the Directors, Key Managerial Personnel and other employees.

Mr. M S Kapur, a Non - Executive, Independent Director is the Chairman of the Committee. The Company Secretary acts as the Secretary to the Committee.


One Meeting of the Nomination and Remuneration Committee was held during 2014-15 i.e. on March 20, 2015. The composition and attendance of Members at the Meetings of the Nomination and Remuneration Committee held during 2014 - 15 are as follows:

Name Designation CategoryMeetings held during

2014 - 15Meetings attended

Mr. M S Kapur Chairman Independent Director 1 1Mr. N Srinivasan Member Independent Director 1 1Dr. Lalit Bhasin Member Independent Director 1 0

Remuneration Policy

The Company’s Remuneration Policy for Directors, Key Managerial Personnel and other employees is annexed as Annexure B to the Report of the Directors. Further, the Company has devised a Policy for performance evaluation of the Board, its Committees and individual Directors including Independent Directors.


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The Company’s remuneration policy is directed towards rewarding performance based on review of achievements periodically. The remuneration policy is in consonance with the existing industry practice.

Remuneration paid to Managing Director during 2014 - 15

Mr. V. Shashikanth, who ceased to be a Managing Director and Director of the Company w.e.f. April 17, 2014 was paid a remuneration of ` 13.76 lacs for the period from April 1, 2014 to April 17, 2014 as approved by the Members at the Annual General Meeting held on September 12, 2013.

Remuneration to Non-Executive Directors

Non-Executive Directors are being paid sitting fees of ` 40,000 per meeting of the Board and Audit Committee and ` 20,000 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 2014-15 are as follows:

Name Fees Paid (`)

Dr. Vijay Mallya 180,000

Mr. Sidhartha V Mallya 60,000

Mr. N Srinivasan 430,000

Mr. M S Kapur 430,000

Dr. Lalit Bhasin 180,000

Ms. Daljit Mahal * 0

Total 12,80,000

*appointed w.e.f. March 28, 2015

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

Name Number of Shares held

As on March 31, 2015 As on March 31, 2014

Dr. Vijay Mallya 5,284,978 5,284,978

Mr. Sidhartha V Mallya Nil Nil

Mr. N Srinivasan 120 120

Mr. M S Kapur Nil Nil

Dr. Lalit Bhasin Nil Nil

Ms. Daljit Mahal * Nil Nil

*appointed w.e.f. March 28, 2015

STAKEHOLDERS RELATIONSHIP COMMITTEE

The composition and terms of reference of the Stakeholders Relationship Committee meet the requirements of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

The Stakeholders Relationship Committee reviews all matters connected transfer of shares lodged for transfer, transmission, dematerialization, rematerialization, split, consolidation 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.

Mr. N Srinivasan, a Non - Executive, Independent Director is the Chairman of the Committee.


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4 Meetings of the Committee were held during 2014 - 15 i.e., on May 8, 2014, August 12, 2014, November 14, 2014 and February 12, 2015. The composition and attendance of Members at the Meetings of the Stakeholders Relationship Committee held during 2014 - 15 are as follows:

Name Designation CategoryMeetings held

during 2014 - 15Meetings attended

Mr. N Srinivasan Chairman Independent Director 4 4

Mr. M S Kapur Member Independent Director 4 4

Dr. Lalit Bhasin Member Independent Director 4 1

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].

Investor Grievance Redressal

Details of complaints resolved during the financial year 2014 - 15 are as follows:

No. of Complaints Received during 2014 - 15 Resolved during 2014 - 15 Closing

As per SEBI Category 12 12 Nil

Other Correspondences 371 371 Nil

As on March 31, 2015, no complaints were outstanding.

Prohibition of Insider Trading

Pursuant to the requirements of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, the Company adopted a "Code of Conduct for Prevention of Insider Trading" at the meeting of the Board of Directors held on September 30, 2002.

The Company has amended the said Code in terms of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 w.e.f. May 15, 2015 and has made it applicable to all employees and connected persons. The Code ensures prevention of dealing in shares by persons having access to unpublished price sensitive information.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The constitution and terms of reference of the Corporate Social Responsibility Committee meet the requirements of Section 135 of the Companies Act, 2013.

Mr. N Srinivasan, an Independent Director is the Chairman of the Committee. The Company Secretary acts as the Secretary to the Committee. The composition of the Corporate Social Responsibility Committee is as follows:

Name Designation Category

Mr. N Srinivasan Chairman Independent Director

Mr. M S Kapur Member Independent Director

Dr. Lalit Bhasin Member Independent Director

There was no occasion for the Committee to meet during the year 2014 - 15. In the absence of profit computed under Section 135 of Companies Act, 2013, the Company did not have to make any outlay towards corporate social responsibility.


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6. GENERAL BODY MEETINGS

Annual General 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 passed

96th Annual General Meeting April 2011 – March 2012

Thursday, September 27, 2012

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

Nil


Thursday, September 12, 2013

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

Appointment of Mr. V Shashikanth as Managing Director


Tuesday, September 30, 2014

12.00. noon Conference Hall, 1st Floor, UB Tower, UB City, No. 24, Vittal Mallya Road, Bangalore – 560 001

1. To borrow monies from banks and / or financial institutions and create mortgage /charge in connection with such borrowings.

2. Contract / Arrangement with United Spirits Limited in respect of licensing of the Pegasus logo of the Company under Section 188 of the Companies Act, 2013.

3. Contract / Arrangement with United Spirits Limited in respect of purchase of goods or materials from them under Section 188 of the Companies Act, 2013.

4. Contract / Arrangement with United Breweries Limited in respect of purchase of goods or materials from them under Section 188 of the Companies Act, 2013.

5. Contract / Arrangement with Mangalore Chemicals & Fertilizers Limited in respect of licensing of the Pegasus logo of the Company under Section 188 of the Companies Act, 2013.

6. Contract / Arrangement with UB International Trading Limited in respect of purchase of goods or materials from them under Section 188 of the Companies Act, 2013.

Special Resolution (s) passed through Postal Ballot

Pursuant to Section 110 of the Companies Act, 2013 (the “Act”) read with the Companies (Management and Administration) Rules, 2014 (including any statutory modification or re-enactment thereof for the time being in force), the Company had conducted a Postal Ballot exercise for seeking approval of the Shareholders by passing a Special Resolution to give Loans and to make Investments under Section 186 of The Companies Act, 2013.

The Board had appointed Mr. Sudhir V. Hulyalkar, Company Secretary in Whole-Time Practice as Scrutinizer for conducting the Postal Ballot voting process in a fair and transparent manner.


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The details of the voting pattern in respect of the Special Resolution passed to give Loans and to make Investments under Section 186 of The Companies Act, 2013. are as under:

Promoter/Public

No. of sharesheld

No. of votespolled

% of VotesPolled on

outstanding shares

No. of Votes– in favour

No. of Votes – against

% of Votesin favouron votes polled

% of Votesagainst on

votes polled

(1) (2) (3)=[(2) / (1)]*100

(4) (5) (6)=[(4)/(2)]*100

(7)=[(5)/(2)]*100

Promoter and Promoter Group 3,49,73,280 3,49,73,280 100.00 3,49,73,280 0 100.00 0Public - Institutional Holders 34,74,146 9,28,001 26.71 0 9,28,001 0.00 100.00Public - Others 2,83,71,095 6,92,215 2.44 6,59,688 32,527 95.30 4.70Total 6,68,18,521 3,65,93,496 54.77 3,56,32,968 9,60,528 97.38 2.62

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

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.

The Company’s major related party transactions are generally with its subsidiaries and associates in respect of which necessary approvals have been obtained.

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.

Whistle Blower Policy

The Company believes in the conduct of the affairs of the Company in a fair and transparent manner by adopting high standards of professionalism, honesty, integrity and ethical behavior. It has put in place a mechanism for reporting illegal or unethical behaviour. The Company has a Vigil Mechanism and Whistle Blower Policy under which the employees are free to report violations of applicable laws and regulations and the Code of Conduct. The reportable matters may be disclosed to the Ethics Counsellor / Chairman of the Audit Committee of the Company. During the year under review, no employee was denied access to the Audit Committee.

CEO / CFO Certification

The certificate from CEO / CFO to the Board pursuant to Clause 49 (IX) of the Listing Agreement 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 Business Conduct and Ethics for Board Members and Senior Management Personnel.

All the members of the Board and Senior Management Personnel have affirmed compliance with the Code of Conduct as on March 31, 2015.


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

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”.

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, the same are not sent to the residence of Shareholders.

Newspapers wherein Results are normally published i) The Financial Expressii) 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, 2015 is as under:

Date of 99th Annual General Meeting Venue Time

Monday, September 28, 2015 Conference Hall, Level 1, UB Tower, UB City, No. 24, Vittal Mallya Road, Bangalore – 560 001

11.30 a.m.

Book Closure From September 25, 2015 To September 28, 2015

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

Financial Calendar Declaration of Unaudited 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


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Unclaimed Dividend

Section 205A of the Companies Act, 1956, mandates 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).

During the year, the Company has credited a sum of ` 0.07 crores towards unclaimed dividend declared for the financial year 2006 - 07 to the IEPF pursuant to Section 205C of the Companies Act, 1956 read with the Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001.

Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with Companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on September 30, 2014 (date of last Annual General Meeting) on the website of the Company www.theubgroup.com.

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

2007-08 Final ` 1.00 per share December 26, 2008 January 25, 2016

2008-09 No Dividend Declared

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 BSE LimitedPhiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001

UBHOLDINGS / 507458

2 National Stock Exchange of India LimitedExchange Plaza, C-1, Block-G, Bandra Kurla Complex, Bandra East, Mumbai 400 051

UBHOLDINGS

The Annual listing fee for the year 2015 - 2016 has been paid to the above Stock Exchanges. The Bangalore Stock Exchange has been derecognized under the relevant provisions of the Securities and Exchange Board of India Act, 1992 and the Securities Contracts (Regulation) Act, 1956.


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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, 2014 to March 31, 2015 are provided in the table hereunder.

Months BSE NSEHigh Low Volume High Low Volume

` ` ` `April, 2014 34.60 24.80 31671 34.60 25.00 10547818May, 2014 42.60 26.60 71749 43.00 26.50 20292489June, 2014 52.20 35.90 108455 52.20 36.00 27863405July, 2014 49.55 36.90 68543 49.60 36.60 17212116August, 2014 43.40 28.55 55807 43.40 28.60 14950291September, 2014 35.80 22.40 48154 35.75 22.50 12642853October, 2014 28.40 24.25 23552 28.45 24.30 7169983November, 2014 28.10 20.40 16186 28.45 19.15 5389313December, 2014 25.50 16.60 26509 24.80 16.40 9556292January, 2015 27.60 20.10 37871 27.40 20.00 16520293February, 2015 24.40 20.75 11297 24.30 20.90 4389397March, 2015 25.25 18.40 22568 25.35 18.20 9030054

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


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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 to 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.

Share Transfer System

The power of approving transfers, transmissions 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. A summary of transfer/transmission of shares of the Company so approved by the Company Secretary and two Directors is placed at every Board meeting / Stakeholders’ Relationship Committee.

The Company obtains from a Company Secretary in Practice half-yearly certificate of compliance with the share transfer formalities as required under Clause 47 (c) of the Listing Agreement and files a copy of the said certificate with Stock Exchanges.

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, 2015

Sl. No. Particulars No. of Share Holders No. of Shares %1 Demat Mode

NSDL 27305 49613941 75.24CDSL 13164 15742338 22.50Total 40469 65356279 97.74

2 Physical Mode 15139 1462242 2.26Grand Total 55608 66818521 100.00

Distribution of Shareholding as on March 31, 2015

Category No. of Shareholders % No. of Shares %

Up to 5,000 54921 98.76 14797384 22.14

5,001 - 10,000 372 0.67 2759573 4.1310,001 - 20,000 161 0.29 2255589 3.3820,001 - 30,000 49 0.09 1178402 1.7630,001 - 40,000 18 0.03 636801 0.9540,001 - 50,000 16 0.03 699327 1.0550,001 - 1,00,000 38 0.07 2536272 3.81,00,001 and above 33 0.06 41955173 62.79Total 55608 100.00 66818521 100.00

Outstanding Global Depository Receipts (GDRs) / American Depository Receipts (ADRs) / Warrants or Convertible Bonds

- Not Applicable -

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.



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Shareholding Pattern as on March 31, 2015

Categories of Shareholding %

Indian Promoters

Dr. Vijay Mallya and his relatives 7.91

Kamsco Industries Private Limited 3.62

Mallya Private Limited 3.62

The 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 0.00

Rossi & Associates Private Limited 0.69

VJM Investments Private Limited 0.00

Foreign Promoters

Watson Limited 21.19

FirStart Inc 4.22

Total Promoters’ Holdings 52.34

Foreign Institutional Investors 1.69

Mutual Funds /UTI 2.95

Financial Institutions / Banks 0.37

Insurance Companies 0.20

Other Bodies Corporate 8.67

Individuals holding up to Rs. 1 lakh in nominal capital 23.83

Individuals holding more than Rs.1 lakh in nominal capital 7.74

Others 1.32

NRIs 0.89

Total Non-Promoter’s Holdings 47.66

Grand Total 100.00


LIMITED

39

Plant Location

The Company has no plants.

Address for Correspondence

For 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 Registrarsand 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 6094 ;Fax 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.

Shareholders Rights

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

Audit qualifications

With regard to Audit qualification necessary explanations are being furnished in the financial notes to accounts.

Separate posts of Chairman and CEO

The Board is looking for a suitable person to be appointed as Managing Director / Whole-Time Director of the Company.

Reporting of Internal Auditor

The Internal Auditor directly reports to the Audit Committee.



LIMITED

40

AnnexureReport 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, 2015.

Mumbai Dr. Vijay Mallya May 29, 2015 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, 2015, 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 condition:

(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.

We state that no investor grievance is pending for a period exceeding one month as on March 31, 2015 against the Company as per the records maintained by the Stakeholders Relationship 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

Place : Mumbai (S Vishnumurthy)Date : May 29, 2015 Proprietor

Membership No. : 22715 Firm Registration No.004742S


41

Independent Auditors' Report

To

The members of UNITED BREWERIES (HOLDINGS) LIMITED.

1. Report on the Financial Statements

We have audited the accompanying stand-alone financial statements of UNITED BREWERIES (HOLDINGS) LIMITED (‘the Company’) which comprise the Balance Sheet as at 31st March 2015, the Statement of Profit and Loss and the Cash Flow Statement, and a summary of the significant accounting policies and other explanatory information for the year then ended.

2. Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these stand-alone 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 principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the company and for preventing and detecting frauds and irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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 stand-alone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 the 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 financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the company has in place an adequate internal financial control system over financial reporting and the effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, 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 qualified audit opinion on the stand-alone financial statements.

4. Basis for qualified opinion

a. The company has extended corporate guarantees of ` 87,072 million in favour of lenders / lessors / creditors of Kingfisher Airlines Limited (KFA) (Refer note no. 31 to financial statements). The beneficiaries of such guarantees have invoked the guarantees and are pursuing recovery actions against the company. This may result in loss to the company (Refer note no. 31 to financial statements). No provision has been made in the accounts for such possible loss.

b. The company carries investments in certain subsidiaries and an associate company. The carrying value of such investments is ` 2,558 million. There are significant declines in the carrying value of these investments. The company has not provided for such declines. (Refer note 33(e) to financial statements).

c. Certain subsidiaries owe to the company ` 754 million. Net-worths of these companies are eroded, impairing the recovery of such loans and advances. Company has not provided for the possible loss on this count. (Refer note 39 to financial statements).

d. The company has shown ` 317 million as due from a banker who has unilaterally encashed company’s deposits lying with it and appropriated the amount towards its claims against a group company. The possible loss on account of this development has not been recognised in the financial statements (Refer note 43 to financial statements).

e. An amount of ` 8,475 million is shown as dues from a financial company which has sold the company’s investments that were pledged with it and appropriated part of the sale proceeds against dues from KFA (Ref note no. 44). Further, the

42

Independent Auditors' Report (contd.)

said finance company still holds custody of 59,150,000 shares in KFA, belonging to the company (Ref note no. 33(b). The company has petitioned the High Court of Calcutta and High Court of Karnataka challenging the validity of the pledge and for rendering full accounts. Pending outcome of the petitions, the company has shown the above amounts as good and recoverable. Should the company fail to get the reliefs as sought, there would be losses. The company has not provided for any possible losses in this regard.

According to the management, it is not possible to estimate the losses and consequently quantify the amount of provision required in the above cases.

Had the company estimated and provided for the losses as mentioned in paragraphs 4(a) to 4(e) above, the profit stated in the Statement of Profit and Loss would have been lower by such amount; the liabilities in the Balance Sheet would have been higher by the amount of provisions with respect to item mentioned in paragraph 4(a) above; the carrying value of investments in the Balance Sheet would have been lower by the amount of provision with respect to item mentioned in paragraph 4(b) above; the amount of loans and advances in the Balance Sheet would have been higher by the amount of provision with respect to item mentioned in paragraph 4(c) above and the amount of other current assets in the Balance Sheet would have been lower by the amount of provisions with respect to items mentioned in paragraphs 4(d) and 4(e) above.

f. Winding up petitions filed against the Company have been admitted by the Honourable High Court of Karnataka and are being heard [Ref. note no. 45]; the Honourable High Court of Karnataka has restrained the Company from disposing of any of its assets [Ref. note no. 52(e)]; the Company is a defendant in recovery suits instituted by certain creditors /lenders for recovery of their dues of ` 62,033 million [Ref. note no. 45]; some of the lenders have recovered their dues by disposing of the securities pledged by the company.[Ref. note no. 37]. Yet, the company has prepared its financial statements on going concern basis for the reasons stated in note no. 52. 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. 45.

g. The Company has not recognised in its financial statements, disputed liabilities amounting to ` 77,309 million arising out of invocation of its corporate guarantees [Ref. note no. 31] and claims of ` 1,463 million made against it under agreements entered into with a banker [Ref. note no. 31]. 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 ` 77,309 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 matters described in the “Basis for Qualified Opinion” paragraphs above, the aforesaid stand-alone 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, of the state of affairs of the Company as at 31st March 2015, and its profit and its 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 a banker, 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 ` 453 million and encumbered an amount of ` 156 million against the borrowings from one of the group companies which had been guaranteed by the Company [Ref note no. 43];

b. The ‘status quo’ with respect to the transaction of sale of 10,141,437 no. of shares in United Spirits Limited in favour of Diageo group, as ordered by the Honourable Supreme Court of India, continues;

c. The Company has provided for an amount of ` 579 million towards the probable loss that may arise in respect of dues from an associate. [Ref. note no. 39];

d. The Company has written off an amount of ` 13,883 million dues from Kingfisher Airlines Limited;

e. The Company has provided for an amount of ` 2,779 million towards decline, other than temporary, in the carrying value of its investments in Kingfisher Airlines Limited;

f. 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. 32(d)];

g. 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. 35];

43

Annexure to the Independent Auditors' Report

h. Note no. 53 regarding efforts being made to recover a sum of ` 200 million advanced to a vendor which is presently being shown as an advance which is good and recoverable;

i. Note no. 51 regarding non-accrual of interest payable to the extent of ` 634 million on account of the lender company's shareholders not approving the agreement granting the loan.

7. Report on Other Legal and Regulatory Requirements

i. As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

ii. As required by section 143(3) of the Act, we report that:

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

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

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

d. Except for the effects of the matters described in the Basis for Qualified Opinion paragraphs above, in our opinion, the aforesaid stand-alone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. The matters described in the Basis for Qualified opinion paragraphs above, in our opinion, may have an adverse effect on the functioning of the company;

f. On the basis of the written representations received from the directors as on 31st March 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2015, from being appointed as a director in terms of Section 164(2) of the Act;

g. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note 45 to the financial statements;

ii. The company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses except for the matters specified in the Basis for Qualified Opinion paragraphs;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

For Vishnu Ram & Co., Chartered Accountants

S.Vishnumurthy Proprietor Place : Mumbai Membership No. 22715Date : 29-05-2015 Firm Registration No.004742S

44

Re: United Breweries (Holdings) Limited

Referred to in paragraph 7(i) of our report of even date;

(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.

(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) As explained to us, the company has not granted any loans, secured or unsecured during the year to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013. However, in respect of Kingfisher Airlines Limited (KFA), which is a company listed in the register maintained under section 189 of the Companies Act, 2013, there has been a transaction wherein a lender of KFA has sold the shares pledged by the company to secure KFA’s borrowings. Out of such sale proceeds the lender has appropriated an amount of ` 1,286.195 million towards dues from KFA. This has been written off by the company.

(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) In our opinion and according to the information and explanations given to us, the company has complied with the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 and other relevant provisions of the Companies Act and the rules framed there under. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in relation to the deposits accepted by the company.

(vi) In our opinion and according to the information and explanations given to us the provisions with regard to maintenance of cost records under section 148(1) of the Companies Act, 2013 are not applicable to the company.

(vii) (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 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 31-3-2015 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.

Annexure to the Independent Auditors' Report

45

Name of the Statute Nature of duesDisputed 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

(d) According to the information and explanations given to us the amounts which were required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under have been transferred to such funds within time.

(viii) Accumulated losses of the company are more than fifty percent of its net worth. The company has not incurred cash losses during the financial year covered by our audit. The company has incurred cash losses during the immediately preceding financial year.

(ix) 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, 2015 were ` 2,363 million. Out of this ` 27 million has been repaid in April 2015. The company is in negotiation with the banker. The company has not issued any debentures.

(x) According to the information and explanations given to us, during the year, the company has not given any guarantees in favour of banks or financial institutions for loans taken by others. Therefore, the provisions of clause 3(x) of the Companies (Auditor’s Report) Order, 2015 are not applicable to the company.

(xi) The company has not raised any term loans during the year. Therefore, the provisions of clause 3(xi) of the Companies (Auditor’s Report) Order, 2015 are not applicable to the company.

(xii) 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.


S.Vishnumurthy Proprietor Place : Mumbai Membership No. 22715Date : 29-05-2015 Firm Registration No.004742S

Annexure to the Independent Auditors' Report (contd.)


LIMITED

46

` in million

Note No. As at

March 31, 2015As at

March 31, 2014

Equity and LiabilitiesShareholders’ funds

Share capital 2 668.185 668.185 Reserves and surplus 3 5,136.217 618.281

Non-current liabilitiesLong term borrowings 4 14,617.353 19,281.924 Other long term liabilities 5 4,820.485 6,034.976 Long term provisions 6 76.905 72.569

Current liabilitiesShort term borrowings 7 5,378.816 3,989.559 Trade payables 8 569.416 801.067 Other current liabilities 9 6,660.784 7,107.616 Short term provisions 10 1,006.435 1,006.435

38,934.596 39,580.612

Assets

Non-current assetsFixed assets

Tangible assets 11 9,173.248 9,383.341 Capital work in progress 11 1,362.051 1,248.355

Non-current investments 12 6,742.852 13,091.320 Long term loans and advances 13 756.932 3,691.577 Other non-current assets 14 58.666 68.576

Current assetsCurrent investments 15 27.125 27.089 Inventories 16 114.690 345.792 Trade receivables 17 637.339 609.795 Cash and cash equivalents 18 1,218.645 1,375.930 Short term loans and advances 19 4,060.798 3,223.085 Other current assets 20 14,782.250 6,515.752

38,934.596 39,580.612

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.

Balance Sheet as at March 31, 2015


Firm Regn. No. 004742S

Dr. Vijay Mallya N. Srinivasan M.S. Kapur S.Vishnumurthy Chairman Director Director Proprietor DIN 00122890 DIN 00004195 DIN 00703815 Membership No. 22715 Mumbai Kaushik Majumder May 29, 2015 Company Secretary FCS 3368


LIMITED

47

` in million

Note No. For the year ended

March 31, 2015 March 31, 2014

Revenues

Revenue from operations 21 3,814.435 4,917.648

Other incomes 22 448.135 627.628

4,262.570 5,545.276

Expenses

Purchase of traded goods 1,108.910 2,337.967

Cost of packing materials consumed 23 320.388 226.306

Change in inventories 24 223.494 (92.312)

Employee benefit expenses 25 297.740 294.512

Finance costs 26 1,853.276 4,496.226

Depreciation 11 215.047 81.639

Provision for bad and doubtful advances 578.955 12,717.054

Bad advances/debts written off 1,286.236 24,505.944

Provision for diminition in value of investments 2,809.619 -Other expenses 27 879.175 1,089.866

9,572.840 45,657.204

Loss before exceptional Items (5,310.270) (40,111.926)

Exceptional Items 28 9,650.009 19,878.906

Profit / (Loss) for the year 4,339.739 (20,233.020)

Earnings Per Share (Face value of ` 10 each)

Basic / Diluted Earnings Per Share (before exceptional items) (79.47) (600.30)

Basic / Diluted Earnings Per Share (after exceptional items) 64.95 (302.80)

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, 2015


Firm Regn. No. 004742S Dr. Vijay Mallya N. Srinivasan M.S. Kapur S.Vishnumurthy Chairman Director Director Proprietor DIN 00122890 DIN 00004195 DIN 00703815 Membership No. 22715 Mumbai Kaushik Majumder May 29, 2015 Company Secretary FCS 3368


LIMITED

48

` in million

For the year ended March 31, 2015

For the year endedMarch 31, 2014

A. Cash Flow from Operating Activities

Net profit/ (loss) before taxes 4,339.739 (20,233.020)

Adjustments for :

Depreciation 215.047 81.639

Dividend income (48.706) (68.450)

Exceptional items (9,650.009) (19,878.906)

Loss / (Profit) on sale of old assets 0.042 (0.073)

Interest and finance charges 1,853.276 4,496.226

Interest income (370.563) (393.901)

Liabilities no longer required written back (66.397) (207.198)


Provision for bad and doubtful debts - 9.558

Bad debts/ advances written off 1,286.236 24,505.944

Provision for diminution in value of investments 2,809.619

Unrealised exchange fluctuation loss 196.323 135.253

(3,196.176) 21,397.146

Operating profit before working capital changes 1,143.563 1,164.126

Adjustments for :

Increase in trade and other receivables (951.330) (844.302)

Decrease /(increase) in inventories 231.102 (84.268)

(Decrease)/ increase in trade payable / other liabilities (626.714) 1,348.330

(1,346.942) 419.760

Cash (used in)/generated from operations (203.379) 1,583.884

Direct taxes paid (138.276) (615.080)

Net cash (used in) /generated from operating activities (341.655) 968.804

B. Cash Flow from Investing Activities

Purchase of fixed assets (including changes in capital work in progress) (118.874) (119.489)

Sale of fixed assets/ advance for residential units 160.109 250.599

Loans and advances (net) 1,087.416 (616.793)

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

Sale of investments (other than short term investments)

4,714.271 23,437.224

Dividend income (other than short term investments) 48.666 68.450

Decrease / (increase) in fixed deposits with bank 574.194 (4,200.922)

Deposit with court - (2,535.000)

Net cash generated from investing activities 6,465.782 15,820.751

Cash Flow Statement for the year ended March 31, 2015


LIMITED

49

` in million

For the year ended March 31, 2015


C. Cash Flow from Financing ActivitiesInterest and finance charges (1,014.936) (4,193.282)

Interest received 352.601 363.561 Increase / (decrease) in short term borrowings 1,388.966 (1,455.187)Increase/ (decrease) in bank borrowings (161.329) (3,728.775)Increase/ (decrease) in Long term borrowings (6,716.005) (8,078.591)Net cash used in financing activities (6,150.703) (17,092.275)

Net decrease in cash and cash equivalents (26.575) (302.721)Cash and cash equivalents at the beginning of the year 867.272 1,169.993 Closing balance of cash and cash equivalents 840.697 867.272

Cash and Cash equivalents comprises of:Cash in hand (including foreign currencies) 0.385 0.754

Balance with banks in current accounts 813.187 839.429 Current investments 27.125 27.089

840.697 867.272 Reconciliation of cash and cash equivalents as per Balance Sheet and Cash Flow Statement

Cash and cash equivalents as per Balance Sheet 1,218.645 1,375.930

Less: Deposits maturing beyond 3 months 405.073 535.747

Add: Current investments 27.125 27.089 840.697 867.272

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 ` 2.261 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 ` 67.164. million in escrow account which cannot be used by the Company except for repayment of secured loan by a lender.

3. Cash in hand includes foreign currencies ( Refer note 41)

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

Cash Flow Statement for the year ended March 31, 2015 (contd.)





LIMITED

50

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.

vii. Depreciation:

Depreciation is provided under written down value method at the rates prescribed under Schedule II to the Companies Act, 2013.


LIMITED

51

Notes to the Financial Statements (contd.)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 :

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

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

c. 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.

d. 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

52

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

53


` in million

As at March 31, 2015


2. Share capital

Authorised

100,000,000 (2014: 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 (2014: 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 period

2014 - 2015 2013 - 2014

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

March 31, 2015 March 31, 2014

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 preceding the reporting date is nil.


LIMITED

54

` in million



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 8,550.705 1,042.113 Add: additions during the year (refer note 32(a) ) - 7,508.592

8,550.705 8,550.705

Foreign Currency Monetary Item Translation Difference Account

(183.463) (361.660)

(refer note no. 47)General reserve 75.000 75.000

Surplus / (deficit) as per Statement of Profit and Loss: At the beginning of the year (16,489.104) 3,743.916 Less : Profit/ (loss) for the year 4,339.739 (20,233.020)

(12,149.365) (16,489.104)

5,136.217 618.281

4 Long term borrowingsSecuredFrom banks 2,249.319 2,410.938 From others 1,729.367 8,255.387

UnsecuredFixed deposits 105.156 211.720 From group companies 13,394.095 13,394.095 From others 1,074.452 1,085.652

18,552.389 25,357.792 Less: Current maturitiesSecuredFrom banks 2,249.115 2,318.054 From others 1,365.528 3,423.117

UnsecuredFixed deposits 95.393 109.697 From group companies 20.000 20.000 From others 205.000 205.000

3,935.036 6,075.868

14,617.353 19,281.924



LIMITED

55

Nature of security Terms of repayment

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

(1) Vehicle loan from HDFC Bank amounting to ` 2.519 million (Pr. year ̀ 4.609 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 Lakshmi Vilas Bank Limited amounting to ̀ Nil million (Pr. year ̀ 159.529 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. This loan has been adjusted by the lender against the Company’s deposits with them. The Company is legally chalenging this unilateral act of the lender.

(3) Loan from Yes Bank Limited amounting to ` 2,246.800 million (Pr. year ` 2,246.800 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, 6,050,000 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 @ 15.00%. Additional interest rate of 2.00% for delay in interest payment. Further 7.00% of loan is payable as fees. Over due interest of ` 53.915 million is since paid, Over due fees of ` 62.663 million is pending for payment. Although, 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 ` 207.647 million (Pr year ` 390.247 million) is secured by the pledge of 1,048,991 shares in United Spirits Limited held by the company besides corporate guarantee by a subsidiary.

Rate of interest @ 17.75% p.a. Lender has retained interest till maturity date ie. 31st March 2016 for ` 54.64 million in a reserve account.

(5) Loan from HDFC Limited (including foreign currency denominated loan of USD) amounting to ` 1521.720 million (Pr year ` 7,864.687 million) are secured by the pledge of 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 1,500,000 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 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

56


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. Following the non approval of the loan by the shareholder of USL at their EGM on 28th November 2014, The Company has stopped accruing interest on this loan w.e.f 1st October 2014.

Loan from group company Amounting to ` 20 million

Overdue for repayment. Rate of interest @ 12% p.a. Extension of loan term being negotiated with the lender.

(3) Loan from Others

a) Amounting to ` 5 million Overdue for repayment. Rate of interest @ 12% p.a. Extension of loan term being negotiated with the lender.

b) Amounting to ` 200 million Overdue for repayment. Rate of interest @ 18% p.a. Extension of loan term being negotiated with the lender.

c) Amounting to ` 869.451 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 , however, that the entire loan is repayable before the company takes possession of its full share. Rate of interest @ 12%.


` in million As at

March 31, 2015 March 31, 2014

5. Other long term liabilities

Trademark licence security deposits 577.741 889.157Lease security deposits 345.050 346.334 Interest accrued and not due - 846.683Refundable security deposit 67.500 67.500 Instalments from allottees for residential units 1,545.184 1,385.302 Advance licence fees for Pegasus loan 2,285.010 2,500.000

4,820.485 6,034.976

6. Long term provisions

For legal cases 37.428 37.428 Leave encashment 39.477 35.141

76.905 72.569


LIMITED

57


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 @ 14.5% p.a.

b. Terms of repayment for unsecured borrowings

(1) Loan from Group Companies amounting to ` 4,612.796 million

` 508.800 million with interest @ 21.25% p.a. is repayable in June 2015. Balance loan is repayable on demand.

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


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


` in million

As atMarch 31, 2015 March 31, 2014

7. Short term borrowingsSecuredWorking capital loan / cash credit from bank 157.970 157.680

From others - 707.822

UnsecuredFrom group companies 4,612.796 2,516.008

From Others 608.050 608.049

5,378.816 3,989.559

` in million



LIMITED

58

As atMarch 31, 2015 March 31, 2014

8. Trade payables

Trade creditors 569.416 801.067

569.416 801.067

9. Other Current Liabilities

Current maturities of long term borrowings 3,935.036 6,075.868

Interest accrued and not due 34.253 84.687

Interest accrued and due 1,923.400 242.036

Statutory dues 27.802 64.210

Employee dues 7.971 1.851

Advertisement and sales promotion expenses payable 428.053 338.514

Advances received from customers 28.550 67.784

Claims payable 13.283 7.921

Other liabilities 183.086 174.745

Provision for expenses 65.101 34.231

Creditor for capital goods 11.894 12.637

Investor Education and Protection Fund:

Unclaimed public deposits/interest 0.132 0.132

Unclaimed dividends 2.223 3.000

6,660.784 7,107.616

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

59


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LIMITED

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` in million

As at March 31, 2015 As at March 31, 2014

12. Non-current investments ( Refer note 33 )

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 1,311.462

Mangalore Chemicals & Fertilisers Limited 17,836,068 ` 10 205.456 17,836,068 ` 10 205.456

United Spirits Limited 4,208,556 ` 10 123.693 8,977,699 ` 10 263.862

McDowell Holdings Limited 489,482 ` 10 16.273 1,128,762 ` 10 37.527

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

Kingfisher Airlines Limited* 59,550,000 ` 10 2,779.287 131,918,897 ` 10 6,156.712

4,861.098 8,399.947

Less : Provision for diminution in value of investments

2,779.287 -

2,081.812 8,399.947

* Trading has been suspended temporarily

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 25,050,002 ` 10 250.500

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 1,006.379


56.890 26.558

949.489 979.821



LIMITED

61

` in million

As at March 31, 2015 As at March 31, 2014

PARTICULARSNUMBER

OFSHARES

FACEVALUE

COSTNUMBER

OFSHARES

FACEVALUE

COST

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


9.435 9.435

- -

In Preference Shares

In Subsidiary Companies

UB Overseas Limited - 0.001% Unsecured Optionally - Convertible Redeemable Preference Shares 24,515,605 USD 1 1,211.553 23,515,605 USD 1 1,211.553

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

3,711.553 3,711.553

Total Investments 6,742.852 13,091.320

Aggregate amount of quoted investments 2,081.812 8,399.947

Aggregate amount of un quoted investments 4,661.040 4,691.373

Market value of quoted investments 47,441.590 50,091.610

SHARE MOVEMENTS DURING THE YEAR - NON CURRENT INVESTMENTS

` in Million

Particulars No. of Shares Cost

A. ADDITION DURING THE YEAR Nil

B. SALES DURING THE YEAR

United Spirits Limited 4,769,143 140.169 McDowell Holdings Limited 639,280 21.254

Kingfisher Airlines Limited 72,368,897 3,377.425

Total 3,538.848



LIMITED

62


` in million As at As at

March 31, 2015 March 31, 201413. Long term loans and advance

Loans and advances to subsidiariesConsidered good 754.282 2,886.774 Considered doubtful 139.982 139.982

894.264 3,026.756 Less: Provision 139.982 754.282 139.982 2,886.774

Loans and advances to associatesConsidered good - 802.153

Considered doubtful 578.955 12,597.072 578.955 13,399.225

Less: Provision 578.955 12,597.072 - 802.153

Loans and advances to others Considered good 2.650 2.650 Considered doubtful 4.746 7.988

7.396 10.638 Less: Provision 4.746 2.650 7.988 2.650

756.932 3,691.577

14. Other non-current assetsOther deposits - considered good 58.666 68.576

58.666 68.576

15. Current investmentsMutual funds* 27.125 27.089

27.125 27.089

* Market value as on 31.03.15 is ` 38.496 million.


LIMITED

63

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

As at As at March 31, 2015 March 31, 2014

16. Inventories

Raw materials 0.684 0.981

Packing materials, stores and spares 36.315 43.627

Finished goods including goods in transit 77.691 301.184

114.690 345.792

17. Trade receivables

Unsecured

Exceeding six months:

Considered good 297.175 301.541

Considered doubtful 10.919 12.096

308.094 313.637

Less: Provision 10.919 297.175 12.096 301.541

Others: considered good 340.164 308.254

637.339 609.795

18. Cash and cash equivalents

Cash on hand 0.385 0.754

Balances with banks:

in Current accounts 810.926 836.392

in Unpaid dividend account 2.261 3.037

in Deposit account 405.073 535.747

1,218.645 1,375.930

19. Short term loans and advances

Advances to suppliers 1,448.703 898.971

Advance income tax 2,083.947 1,945.671

Other receivables 528.148 378.443

4,060.798 3,223.085

20. Other current assets

Deposit with court 2,535.000 2,535.000

Bank deposits 3,353.986 3,797.506

Duty drawback receivable 101.557 183.246

Other recoverables 8,791.707 -

14,782.250 6,515.752


LIMITED

64

` in million

Year ended

March 31, 2015 March 31, 2014

21. Revenue from operations Sales 2,305.593 3,466.049

Dividends 48.706 68.450

Guarantee commission 8.916 18.833

Lease rent 524.625 511.738 Income from property maintenance 113.769 101.188 Licence fees 665.304 552.506 Management service fees 32.400 30.000 Duty drawback 115.122 168.884

3,814.435 4,917.648

22. Other income Interest income 370.563 393.901 Profit on sale of old assets - 0.073 Provisions / liabilities no longer required/payable written back 66.397 207.198 Miscellaneous income 11.175 26.456 448.135 627.628

23. Cost of packing material consumedPacking materials consumed 320.388 226.306

320.388 226.306

24. Changes in inventories of finished goodsOpening stock:

Finished goods 301.184 208.872

301.184 208.872

Closing stock:

Finished goods 77.691 301.184

77.691 301.184

(Increase)/ decrease in stocks 223.494 (92.312)


25. Employee benefits expensesSalaries, wages and bonus 242.001 209.069Contribution to provident and other funds 28.396 57.740

Workmen and staff welfare 27.343 27.703

297.740 294.512 26. Finance costs

Interest expense 1,853.218 4,418.008 Processing charges and bank charges 0.058 78.218

1,853.276 4,496.226


LIMITED

65

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

Year ended

March 31, 2015 March 31, 2014

27. Other expenses

Rent including lease rent 32.092 31.014Rates and taxes 24.458 42.362Insurance premium 13.744 5.597Communication expenses 7.857 8.514Travel and conveyance 31.966 30.639Electricity charges 2.025 1.634Printing and stationery 3.186 3.145Repairs & maintenance i) Buildings 15.006 12.904 ii) Machinery 3.345 3.109 iii) Others 0.447 2.503Vehicle repairs and maintenance 6.937 7.108Property maintenance expenses 86.310 78.163Advertisement and sales promotion 177.839 288.481Brokerage 0.113 2.431Rebate and discount 0.497 1.324Commission paid to selling agents 26.365 47.134Freight charges 104.503 109.845Exchange loss 91.023 161.283Miscellaneous expenses 65.397 26.904Claims paid 5.362 0.376Legal and Professional charges 155.777 193.105Directors' sitting fees 1.280 0.920Auditor's remuneration 3.151 3.565Provision for debts - 9.558Loss on sale of old assets 0.042 -Other expenses 20.452 18.250

879.175 1,089.868

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) 6,257.344 2,136.259 Profit on sale of pledged securities by the company’s lenders 3,392.665 3,613.817

9,650.009 19,878.906


LIMITED

66


29. 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.

The Company has issued allotment letters in respect of seven residential units in Kingfisher Towers by collecting booking amounts of ` 1,545.184 million (Pr year ` 1,385.302 million).

30. Estimated amount of contracts remaining to be executed on capital account as at 31st March 2015 and not provided for is ` Nil million (net of advances) (Pr year ` 6.600 million).

31. Contingent liabilities: ` in million


As atMarch 31, 2014

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

Nil Nil

b) Guarantees given by the Company on behalf of associates / KFA 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 88,280.760

c) Claim against the company not acknowledged as debt 1,462.900 1,462.900

d) Demand raised by Income Tax authorities against which the Company has preferred appeals

776.774 776.774

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, 2015 is ` 15,275.400 million (Pr year ` 15,275.400 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 ` 62,033.500 million due from KFA along with interest, if any, decided by the Court. This matter is being contested by the Company in various Courts. Accordingly, the Company continues to recognize these obligations as only ‘contingent liabilities’. Based on management’s opinion no provision is presently considered necessary. In any event, the amount is not quantifiable.

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.”

32. 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 revaluation is ` 5,835.605 million and that of building is ` 1,672.987 million. The incremental appreciation of ` 7,508.592 million, has been credited to the Fixed Assets revaluation reserve.

b) The Company owns a valuable trademark which is in the form of the Company logo carried at NIL value. This logo has been licensed 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

67


33. Investments:

a) The Company has pledged 1,713,820 shares of United Spirits Limited, 4,753,881 shares of Mangalore Chemicals & Fertilisers Limited, 317,030 shares of McDowell Holding Limited, 8,794,000 shares of United Breweries 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 2,014,000 shares held in United Breweries Limited.

b) Investments as on 31st March, 2015 include 59,150,000 shares of Kingfisher Airlines Limited, held in custody of a lender after they have invoked the pledge of the shares.

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

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.

e) Based on a critical review during the year of the carrying value of long term strategic investments, the management has provided an aggregate amount of ` 2,809.619 million, as disclosed in the accounts, as a matter of commercial prudence. While in respect of other strategic investments the matter will be reviewed during the following year based on business plans, investor funding and potential opportunities.

f) SREI Infrastructure Finance Limited, one of the Company’s lenders, has invoked the Company’s pledge and sold 500,000 shares of United Spirits Limited. They have used a portion of the sale proceeds to retire the loan outstanding and holding a balance of ` 99.09 crores against their purported dues from KFA, which is being contested.

34. Sale of shares in United Spirits Limited

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 by its Order dated 10th February, 2014 directed that status quo be maintained in respect of the transaction of sale of shares to Diageo.

35. Tax provision

There is no income tax liability on the profits of the year, taking into account the exempted profit on sale of securities. Futher, having regard to the adjustments required to be made to the book profit in respect of write off of certain advances against the provision made for such advances, there would also not be any liability on account of Minimum Alternate Tax.

36. Exceptional Items

Exceptional items comprised of :

a) Profit (net) of ` 6,257.344 million on sale of 3,497,985 equity shares in United Spirits Limited, 639,280 equity shares in McDowell Holdings Limited and 72,368,897 equity shares in Kingfisher Airlines Limited by lenders of Kingfisher Airlines Limited.

b) Profit of ` 3,392.665 million on sale of 1,271,158 equity share in United Spirits Limited by the Company’s lenders.


LIMITED

68

37. a) The Consortium of KFA lenders, have sold certain investments belonging to the Company pursuant to the purported pledge.

b) KFA lenders have invoked Company’s Corporate Guarantee and demanded payment of dues from KFA amounting to ` 62,033.500 million.

c) The Consortium of KFA Bankers, have sold in periodical lots certain investments belonging to the Company pursuant to the purported pledge. 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 lenders, who have advanced loans to 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 ` 1601.43 crores based on admissions by the consortium of lenders. The said Suit and Notice of Motion are pending adjudication in the Hon’ble Bombay High Court.

38. 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.

39. The Company has advanced ̀ 1,333.240 million (Pr year ̀ 1,306.049 million) to overseas subsidiaries and a domestic associate, which have not yet been repaid. In case of the associate, the Company has made a further assessment of its financial condition, considering its operations for the current year, and has decided, as a matter of prudence, to provide for ` 578.960 million (Pr year ` Nil) due from it. In respect of overseas subsidiaries, no provision has been considered at this stage.

40. The Company has accrued interest of ` 17.962 million (Pr year ` 88.020 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.

41. Cash in hand includes foreign currency notes.

42. As required under Section 205C of the Companies Act, 1956, the Company has transferred ` 0.777 million (Pr year ` 0.330 million) to the Investor Education and Protection Fund (IEPF) during the year. As on March 31, 2015, no amount was due to be transferred to the IEPF.

43. Claim against a banker for restitution of deposits of ` 609.60 million, which were unilaterally encashed and thereafter appropriated towards their claims against a Group Company is being pursued before the Hon’ble High Court of Karnataka. Appropriate amounts are being shown as recoverable from the said bank.



LIMITED

69

44. The Company and Kingfisher Finvest India Limited (KFIL) have 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 a declaration that the Security Trustee Agreement dated 30th June, 2008 and the Consolidated Deed of Pledge dated 21st December, 2010 (in respect of pledged shares of United Spirits Limited and KFA held by the Company 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 21st December, 2010 in respect of sale proceeds remaining after appropriation of USL and KFA shares. On 10th June 2014, IDBI Trusteeship Services Limited transferred the pledged shares to IGCF who in turn sold 4,937,395 shares of United Spirits Limited (“Sold Shares”) held by UBHL and KFIL. By an Order dated 20th June, 2014 in Writ Petition No. 28577 of 2014, filed by the Consortium of Banks and which has now been disposed off, IGCF deposited the surplus/balance sales proceeds from the Sold Shares with the Hon’ble High Court of Karnataka and has been restrained from disposing off ` 690 crores retained by it. The Company is defending the aforesaid O.S. No. 25877 of 2013 and the ex-parte ad-interim orders passed therein.

During the pendency of the Writ Petition No. 28577 of 2014, the Consortium of Banks filed an application seeking to amend the plaint. The amendment application was heard and allowed vide Order dated 15.10.2014. The Company and KFIL have filed separate Writ Petitions against the said Order allowing the amendment application. The Company and KFIL have also filed applications for rejection of the suit on account of suit being barred by law and insufficient court fee.

The company, after taking into account, various issues involved, has, as a matter of prudence and without prejudice to the rights and contentions of the Company in the legal proceedings as well as the stand adopted by KFA against the purported recall of its loans by the lenders, pursuant to which shares pledged by the company were sold by the lenders, has debited a portion of the sale proceeds of the IGCF sale of investments of ` 106.30 crores to KFA and written off the same as unrealizable, along with other dues from KFA. The balance sale proceeds of ` 847.46 crores continues to be disclosed as due from IGCF.

45. 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 alleged dues from KFA amounting to ` 6,203.35 crores with further interest and other dues from 01/06/2013 and have moved the Debt Recovery Tribunal (“DRT”), Bangalore for recovery of these alleged dues by way of an 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. The Company’s appeal before the DRAT, Chennai challenging the DRT Order is pending.

b) Further, three lenders who have extended pre-delivery payment (PDP) loans to KFA for purchase of aircrafts from M/s. Airbus S.A.S. and who claim to be beneficiaries of Corporate Guarantees of the Company, 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. DRT 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 still in force. The Company is defending the said proceedings.

c) In a suit filed by United Spirits Limited (“USL”), the Goa Senior Division Court, by an Order dated 26th April, 2013 has granted an ad-interim injunction against any coercive action by lenders of KFA in respect of the Company’s property in Goa, tenanted to USL. USL has also deposited ` 35 crores in the Hon’ble Court pursuant to the said order.

Aggrieved by the Interim Order, the lenders filed an appeal in the High Court of Bombay at Goa, being Appeal from Order No. 76 of 2013 praying inter alia, that the Interim Order granting ad-interim injunction be quashed and set aside. On 18th July, 2014, the Hon’ble High Court of Bombay at Goa disposed off the appeal. The impugned order does not preclude the Banks from initiating proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests Act, 2002 (SARFAESI Act). It has been clarified by the High Court that the Interim Orders of 26th April and 4th May, 2013 shall continue to operate until disposal of the application for temporary injunction before the Learned Judge, Mapusa, subject to the right of the Banks to proceed under the SARFAESI Act in accordance with law.



LIMITED

70

Pursuant to the Order dated 18th July, 2014, passed by the Hon’ble Bombay High Court at Goa, the banks have filed an application under Sec. 14 of the SARFAESI Act before the District Magistrate. The Interim Order dated 26th April, 2013 passed by the Goa Senior Division Court is still in force and pending adjudication of the suit, the Goa property continues to remain with the Company (and continues to be in the possession of USL) with a purported charge in favour of Consortium of KFA Bankers.

d) In addition to two winding up petitions instituted by purported beneficiaries of Corporate Guarantees issued by the Company, which are being challenged before the Hon’ble Supreme Court and the Karnataka High Court respectively, six more winding up petitions filed by certain creditors of KFA, who are purported beneficiaries of Corporate Guarantees for winding of the Company, have been admitted by the Hon’ble High Court of Karnataka vide combined Order dated 02nd January, 2015. The Company has filed appeals before the Division Bench of the Karnataka High Court to challenge three of the aforesaid six admission Orders of the single judge and such appeals are pending admission. No Order for appointment of a provisional Liquidator or Order of winding up of the Company, has been passed till date.

e) The Company has filed a suit for damages claiming an amount of ` 1,319.30 crores against one of the above Petitioners who have filed a winding up Petition against the Company in the City Civil Court, Bangalore and the same is pending adjudication.

f) The Company filed a Suit (L) No. 290 of 2015 in the High Court of Judicature at Bombay against ICICI Bank Ltd (hereinafter referred to as “ICICI”) and 3i Infotech Trusteeship Services Ltd (hereinafter referred to as “3i Infotech”) challenging ICICI’s alleged right to sell the 20,14,000 shares (the “NDU shares”) of United Breweries Limited by their notice dated 9th February, 2015 on the ground that the Loan Purchase Agreement dated 21st December, 2010 entered into with ICICI has ceased to operate consequent upon ICICI transferring, assigning and/or novating all its rights and obligations under the MDRA to a third party and that the claim of ` 146.29 crores by ICICI cannot be proceeded against the 20,14,000 shares as the LPA has worked itself out.Accordingly, the following ad-interim reliefs were sought in the Suit:

(i) That pending the hearing and final disposal of the Suit, for a temporary order and injunction restraining the Defendants (3i Infotech and ICICI), their servants, agents or assigns, or any other person claiming by, through or under them or any of them, from acting on the basis or in any manner giving effect to the Power of Attorney dated 12th November 2011, or from taking any other or further steps to act upon or in furtherance of the Non Disposal Arrangement, dated 12th November 2011.

(ii) That pending the hearing and final disposal of the Suit, for an Order appointing a court receiver to take custody of 20,14,000 shares of United Breweries Limited, held by the Company and which are the subject matter of the Non Disposal Arrangement dated 12th November 2011.

By an Order dated 16th April, 2015, the Hon’ble Judge restrained both 3i Infotech and ICICI from selling the NDU shares and directed ICICI to deposit the NDU shares with the Prothonotary & Senior Master of Hon’ble High Court of Bombay within a period of 2 weeks from the date of pronouncement of the judgement. This Order has been challenged in an appeal filed by ICICI before the Division Bench of the Hon’ble Bombay High Court which had only stayed the portion of the Order which directs ICICI to deposit the NDU shares with the Prothonotary & Senior Master of Hon’ble Bombay High Court. However, the restraint Order on ICICI for sale of NDU shares continues. Pending adjudication of the Suit and without prejudice to the Company’s rights and contentions therein ICICI purported claim of ` 146.29 crores is disclosed as a contingent liability.

46. Events occurring after the date of the Balance Sheet

The Company has appealed to Securities Appellate Tribunal (SAT) challenging the communication dated 27th April 2015 by SEBI to restate the Company’s accounts for Financial Years 2012-13 and 2013-14. By its Order dated 29th May, 2013, the SAT has stayed the operation, implementation and effect of the communication dated 27th April, 2015 till the next date of hearing.

47. The Company’s Rupee loan from HDFC Limited was converted into a “Dollar Denominated Loan’ at concessional rate of interest in Financial Year 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 ` 178.197 million is charged to the Statement of Profit and Loss and the Balance of ` 183.463 Million is carried in Foreign Currency Monetary Item Translation Difference Account.



LIMITED

71

48. The position of Managing Director fell vacant on 17th April 2014 and efforts are being made to identify a successor. The Company presently does not have any Managerial Personnel namely Managing Director and Chief Financial Officer. The day to day operations of the Company are managed by Senior Executives of the Company under directions of the Group Chief Financial Officer and Chairman of the Board.

49. Zuari Fertilizers and Chemicals Limited (“Acquirer”) together with Zuari Agro Chemicals Limited as the person acting in concert (“PAC”) with the Acquirer, by way of an Open Offer in terms of the SEBI guidelines, acquired 43,329,000 fully paid-up equity shares of face value of INR 10 (Rupees ten) each, comprising 36.56% of the equity share capital, from the public shareholders of Mangalore Chemicals & Fertilizers Limited (“MCF”). Post this open offer, the shareholding of Acquirer in MCF increased from 16.47% to 53.03%. However, in terms of the an Agreement entered into between the UB Group with the Acquirer, the UB Group have an option to purchase such number of shares from the Acquirer so as to equalize the respective shareholdings of both UB Group and Zuari Group. The Board has resolved to exercise this option in due course.

50. Due to certain non-compliances under Listing Agreement with Stock Exchanges, the trading in the equity shares of KFA and UB Engineering Ltd. has been “suspended from trading” w.e.f 1st December 2014 and the suspension is still continuing.

51. The Company had entered into a loan agreement with United Spirits Limited on July 3, 2013 under which, an amount of ` 1,337.41 crores is outstanding as on March 31, 2015. The loan is for a period of 9 years. At an EGM of United Spirits Limited on November 28, 2014, the said loan agreement between the Company and United Spirits Limited, was not approved. The Company is examining the impact and consequences of such non-approval and has not accounted for any interest on the loan in Quarter 3 and 4 of the current financial year.

52. 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. As stated herein above, 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) Connected with the Corporate Guarantees, the winding up petitions filed in Hon’ble Karnataka High Court referred to in the Directors report, in the opinion of Counsel, can be successfully resisted.

c) 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. 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 an Asset Reconstruction Company (ARC).

d) Under direction of Court pending resolution of various disputes, amounts totaling ̀ 794.38 crores are held as cash deposits.

e) Due to restraint orders passed by the High Court of Karnataka, rentable commercial office space could not be leased out resulting in continued loss of significant rental revenue. The Company has filed an Application vide CA No. 1428 of 2014 in COP 185/12 with a prayer to permit the Company to lease/rent out the vacant premises at UB City and grant such other further orders as are just. Also, high value residential units in Kingfisher Towers, could not be sold which has impacted the cash flow. The said application is pending.

Having regard to the totality of all the above facts and also the substantial assets of the Company which can be monetized in case of necessity, the financial statements for the year ended 31st March 2015 have been presented on principles applicable to Going Concern.

53. The Company has had advanced ` 20 crores to a vendor. Due to the demise of the owner of the vendor company, the supply arrangement could not be consummated. Discussions are on with the legal heirs for recovery of the advance.

54. 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 2014-15.

(ii) Mr. V Shashikanth who held office as a Managing Director till 17th April 2014 received remuneration of ` 1.376 million.



LIMITED

72

` in million

2014-15 2013-1455. Remuneration to Auditors:

Statutory Audit 2.000 2.000Tax Audit 0.200 0.200Limited Reviews 0.300 0.300Certification fees 0.651 1.065

3.151 3.565

56. Employee benefitGratuity computations as on 31-03-2015Disclosure as per AS 15Defined benefit plansReconciliation of opening and closing balances of the present value of the defined benefit obligation:

2014-15 2013-14

Obligations at period beginning 101.601 70.68Service cost 9.704 32.073Interest cost 7.494 6.132Benefits settled (15.859) (6.900)Actuarial (gain)/loss (9.504) (0.384)Obligations at period end 93.436 101.601Defined benefit obligation liability as at the Balance Sheet Is wholly funded by the Company

Change in plan assetsPlan assets at period beginning, at fair value 104.153 57.153

Expected return on plan assets 7.698 5.402Actuarial gain/(loss) 0.771 0.113Contributions 0.001 48.385Benefits settled (15.859) (6.900)Plans assets at period end, at fair value 96.763 104.153Reconciliation 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 96.763 104.153Present value of the defined benefit obligations at the end of the period 93.436 101.601Net asset recognized in the Balance Sheet 3.327 2.552

Details of Gratuity cost Service cost 9.704 32.073Interest cost 7.494 6.131Expected return on plan assets (7.698) (5.402)Actuarial (gain) / loss (10.275) (0.496)Net gratuity cost (0.775) 32.306

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 8.00% 9.12%Discount factor 8.00% 9.12%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

73

57. 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, 2015 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.

58. 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).

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

Description 2014-15 2013-14

Gross Block at the beginning of the year 1,607.639 455.095

Add: Increase due to revaluation - 1,292.856 1747.951

Accumulated depreciation 226.803 140.312

Less : Deletion - - 140.312

Net Block at the end of the year 1,380.836 1,607.639

60. Deferred tax

Particulars 2014-15 2013-14

Deferred Tax Asset in respect of

i) Depreciation on fixed assets 10.200 0.079

ii) Allowance for carried forward losses 5,816.418 942.769

iii) Others 13.524 12.020

Total 5,840.142* 954.868*

Note : *Deferred tax asset is not recognized as a matter of prudence.

61. 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 337,154 162.346 2,038,563 601.08 2,171,099 1,426.88 204,618 50.536

(396,554) (144.601) (2,687,014) (1,187.84) (2,746,414) (2,121.11) (337,154) (162.346)

2. Leather products

Pairs 22,356 22.178 265,542 605.77 283,320 364.17 4,578 4.913

(3,498) (3.461) (320,863) (294.407) (302,005) (371.98) (22,356) (22.178)

3. Processed Food Tons 46 4.733 2,408 122.457 2,391 193.13 63 3.059

(202) (10.57) (1,326) (109.004) (1,482) (160.99) (45) (4.733)

4. Readymade garments

Pieces 217,632 111.93 592,507 292.681 787,580 284.24 22,559 8.459

(135,386) (50.24) (1,923,034) (709.407) (1,840,788) (783.17) (217,632) (111.93)

Figures in brackets relates to previous year



LIMITED

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62. Segment reporting:

Segment-wise business performance for the year ended March 31, 2015

Primary Segment InformationSegment Revenue Segment Result 2014-15 2013-14 2014-15 2013-14

a) Alcoholic beverages 1,490.228 2,200.384 289.345 392.470

b) Leather products 404.432 415.359 67.739 73.672

c) Readymade garments 307.685 849.483 10.297 66.917

d) Investments 48.706 68.450 (141.205) (81.053)

e) Logo fees 665.304 552.506 474.393 403.003

f) Property development 524.625 511.738 312.446 321.175

g) Guarantee services 8.916 18.833 (181.996) (130.670)

h) Others 364.540 300.897 (60.336) (65.844)

Total 3,814.435 4,917.648 769.681 979.669

Other income 448.135 627.628

Provision for doubtful advances (578.955) (12,717.054)

Bad debts /advances written off (1,286.236) (24,505.944)

Provision for diminution in value of investments (2,809.619) -

Finance costs (1,853.276) (4,496.226)

Exceptional items 9,650.009 19,878.906

Loss before tax 4,339.739 (20,233.020)

OtherInformation:

2014-15 2013-14 2014-15 2013-14

Segment Assets

Segment Liabilities

Segment Assets

Segment Liabilities

Capital Expenditure

Depreci-ation

Capital Expenditure

Depreci-ation

a) Alcoholic beverages 1,175.620 994.372 922.877 1,020.100 0.080 0.311 0.433 0.090

b) Leather products 444.936 27.998 325.958 27.118 0.514 9.522 2.933 9.227

c) Readymade garments 1,183.370 10.689 1,249.780 23.737 - 9.136 3.950 6.987

d) Investments 24,954.710 31,055.381 26,007.620 36,187.740 - - - -

e) Property development 404.805 - 419.385 - - - - 19.591

f) Others 136.503 35.317 158.617 29.012 0.239 4.575 4.159 45.744

Total 28,299.942 32,123.759 29,084.234 37,287.710 0.832 23.543 11.475 81.639

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 interest expenses, other 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 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.

Secondary segments, based on geographical locations

Particulars Segment Revenue Segment Assets

Segment 2014-15 2013-14 2014-15 2013-14

Within India 1,546.050 1,480.395 25,494.621 26,170.761

Outside India 2,268.385 3,437.253 2,805.321 2,913.474

Total 3,814.435 4,917.648 28,299.942 29,084.235


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75

63. Related Party Transactions:

Persons having significant influence over the affairs of the Comapny :-

Dr. Vijay Mallya - Chairman of the Board Mr. Ravi Nedungadi - Group Chief Financial Officer

Key Management Personnel:

Mr. V. Shashikanth* (*Managing Director up to 17th April 2014, President / KMP thereafter)

Mr. Kaushik Majumder – Senior Vice President Legal and Company Secretary

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

UB Engineering Limited, WIE Engineering Limited (Under Liquidation), Pixray India Limited, UB Pharma (Kenya) Limited.



LIMITED

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ii) Transactions with Related Parties during the year.

Subsidiary CompaniesKingfisher Finvest

India LtdUB Electronic

Instruments LimitedKingfisher Training and

Aviation Services LtdUB Infrastructure

Projects LtdKingfisher Aviation

Training Ltd

City Prperties Maintenance Company

B’Lore Ltd

UB International Trading Ltd UB Overseas Ltd UBHL-BVI Ltd. Bangalore Beverages

Limited UB Sports Limited Kingfisher Beer Europe Ltd

Bestride Consultancy Pvt Ltd Total

2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14Purchase of goods (finished or unfinished)

- - - - - - - - - - 293.454 313.327 - - - - - - - - 11.255 13.711 - 304.709 327.038

Sale of goods (finished or unfinished)

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

Purchase of fixed assets - - - - - - - - - - - - - - - - - - - - - - - - - Receiving of services - - - - - - - - - 22.086 22.224 - - - - - - - - - - - - 22.086 22.224 Leasing arrangement - - - - - - - - - 0.561 0.630 - - - - - - - - - - - - 0.561 0.630 Investments Redeemed - - - - - - - - - - - - - - - - - - - - - - - - - Licence Agreement - - - - - - - - - - - - - - - 0.007 0.006 - - - - - - 0.007 0.006 Finance (including loans in cash or in kind) paid

1,642.257 818.179 0.060 0.240 - - - 50.048 0.168 0.079 36.495 34.009 415.644 316.000 - - - - 22.050 155.074 0.057 0.011 12.080 13.631 15.491 226.812 2,144.302 1,614.083

Finance (including loans in cash or in kind) received

5,870.975 7,664.398 - - - - - - - - 12.849 0.404 0.030 0.121 - - - - - 316.705 - - - 3.000 125.565 5,886.853 8,107.194

Investments made - - - - - - - - - - - - 250.000 - 59.659 - - - - - - - - - 309.659 Dividend received - - - - - - - - - - - - - - - - - - - - - - - - - Guarantee Commission received - - - - - - - - - - - - - - - - - - - - - - - - - Deposit Received - - - - - - - - - - - - - - - - - - - - - - - - - Interest Received - - - - - - - - - - - - - - 36.597 - - - - - - - - - 36.597 Interest Paid - - 0.600 2.400 - - - - - - - - - - - - - - - - - - - 0.600 2.400 Bad advances written off - - - - - - - 2,171.115 - 383.577 - - - - - 18,121.757 - 6.364 - - 3,823.130 - 24,505.944 General Expenses 0.168 - 0.057 0.806 1.031 - Professional Charges 11.685 11.685 - Guarantees and collaterals - - - - - - - - - - - - - - - - - - - - - - - - Management contracts including deputation of employees

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

Amount due from as on 31st March 2015 (2,096.878) 2,131.840 - - 119.982 119.982 - - - - 21.734 19.486 186.547 64.387 453.292 453.292 300.990 300.983 22.050 - - - 0.222 1.046 - - (992.060) 3,091.017 Amount due to as on 31st March 2015 - - 25.948 25.408 - - - - - - 0.870 0.743 - - - - - - - - - - - - - 26.818 26.151

Associate Companies UB Engineering Limited Total Key Management Personnel

Purchase of goods (finished or unfinished)

- - Current Year Previous Year


- - - -

Purchase of fixed assets - - - - Receiving of services - - - - Rendering of Services - - - - Sale of Assets - - - - Licence Agreement-Pegasus 2.809 12.500 2.809 12.500 - - Pegasus Advance Received - - - - Finance (including loans in cash or in kind paid)

7.959 162.000 7.959 162.000 - -

Finance (including loans in cash or in kind received)

4.964 5.744 4.964 5.744 - -

Investments made - - - - Dividend received - - - - Guarantee Commission received 3.416 13.330 3.416 13.330 - - Guarantee Commission Paid - - - - Deposit Received - - - - - - Interest Received 17.962 51.423 17.962 51.423 - - Interest Paid - - - - - - Bad advances written off - - Guarantees and collaterals 650.000 650.000 650.000 650.000 - - Payment of remuneration for employment

38.599 34.379

Management contracts including deputation of employees

- - - - - -

Amount due from as on 31st March 2015 578.955 551.774 578.955 551.774 - - Amount due to as on 31st March 2015 - - - - - -


LIMITED

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Subsidiary CompaniesKingfisher Finvest

India LtdUB Electronic

Instruments LimitedKingfisher Training and

Aviation Services LtdUB Infrastructure

Projects LtdKingfisher Aviation

Training Ltd

City Prperties Maintenance Company

B’Lore Ltd

UB International Trading Ltd UB Overseas Ltd UBHL-BVI Ltd. Bangalore Beverages

Limited UB Sports Limited Kingfisher Beer Europe Ltd

Bestride Consultancy Pvt Ltd Total

2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14Purchase of goods (finished or unfinished)

- - - - - - - - - - 293.454 313.327 - - - - - - - - 11.255 13.711 - 304.709 327.038


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

Purchase of fixed assets - - - - - - - - - - - - - - - - - - - - - - - - - Receiving of services - - - - - - - - - 22.086 22.224 - - - - - - - - - - - - 22.086 22.224 Leasing arrangement - - - - - - - - - 0.561 0.630 - - - - - - - - - - - - 0.561 0.630 Investments Redeemed - - - - - - - - - - - - - - - - - - - - - - - - - Licence Agreement - - - - - - - - - - - - - - - 0.007 0.006 - - - - - - 0.007 0.006 Finance (including loans in cash or in kind) paid

1,642.257 818.179 0.060 0.240 - - - 50.048 0.168 0.079 36.495 34.009 415.644 316.000 - - - - 22.050 155.074 0.057 0.011 12.080 13.631 15.491 226.812 2,144.302 1,614.083

Finance (including loans in cash or in kind) received

5,870.975 7,664.398 - - - - - - - - 12.849 0.404 0.030 0.121 - - - - - 316.705 - - - 3.000 125.565 5,886.853 8,107.194

Investments made - - - - - - - - - - - - 250.000 - 59.659 - - - - - - - - - 309.659 Dividend received - - - - - - - - - - - - - - - - - - - - - - - - - Guarantee Commission received - - - - - - - - - - - - - - - - - - - - - - - - - Deposit Received - - - - - - - - - - - - - - - - - - - - - - - - - Interest Received - - - - - - - - - - - - - - 36.597 - - - - - - - - - 36.597 Interest Paid - - 0.600 2.400 - - - - - - - - - - - - - - - - - - - 0.600 2.400 Bad advances written off - - - - - - - 2,171.115 - 383.577 - - - - - 18,121.757 - 6.364 - - 3,823.130 - 24,505.944 General Expenses 0.168 - 0.057 0.806 1.031 - Professional Charges 11.685 11.685 - Guarantees and collaterals - - - - - - - - - - - - - - - - - - - - - - - - Management contracts including deputation of employees

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

Amount due from as on 31st March 2015 (2,096.878) 2,131.840 - - 119.982 119.982 - - - - 21.734 19.486 186.547 64.387 453.292 453.292 300.990 300.983 22.050 - - - 0.222 1.046 - - (992.060) 3,091.017 Amount due to as on 31st March 2015 - - 25.948 25.408 - - - - - - 0.870 0.743 - - - - - - - - - - - - - 26.818 26.151

Associate Companies UB Engineering Limited Total Key Management Personnel

Purchase of goods (finished or unfinished)

- - Current Year Previous Year


- - - -

Purchase of fixed assets - - - - Receiving of services - - - - Rendering of Services - - - - Sale of Assets - - - - Licence Agreement-Pegasus 2.809 12.500 2.809 12.500 - - Pegasus Advance Received - - - - Finance (including loans in cash or in kind paid)

7.959 162.000 7.959 162.000 - -

Finance (including loans in cash or in kind received)

4.964 5.744 4.964 5.744 - -

Investments made - - - - Dividend received - - - - Guarantee Commission received 3.416 13.330 3.416 13.330 - - Guarantee Commission Paid - - - - Deposit Received - - - - - - Interest Received 17.962 51.423 17.962 51.423 - - Interest Paid - - - - - - Bad advances written off - - Guarantees and collaterals 650.000 650.000 650.000 650.000 - - Payment of remuneration for employment

38.599 34.379

Management contracts including deputation of employees

- - - - - -

Amount due from as on 31st March 2015 578.955 551.774 578.955 551.774 - - Amount due to as on 31st March 2015 - - - - - -


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

Provisions:

Particulars of disclosure Provision for legal cases Provision for leave encashment

1 Balance as on 1.04.14 37.428 35.141

2 Provision made during year - 6.676

3 Provision used during the year. - 2.340

4 Balance as on 31.03.15 37.428 39.477*

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.

65. Earnings per share (before exceptional items) 2014-15 2013-14

Loss before exceptional items (5,310.270) (40,111.926)

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

Earnings per share (Basic)/ (Diluted) - in ` (79.47) (600.30)

Earnings per share (after exceptional items) 2014-15 2013-14

Profit / (Loss) after exceptional items and tax 4,339.739 (20,233.020)

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

Earnings per share (Basic)/ (Diluted) - in ` 64.95 (302.80)

66. Value of imports calculated on CIF basis 2014-15 2013-14Raw materials 40.560 18.618Capital Goods - 4.116Finished Goods 17,700 21.800Total 58.260 44.534

67. Expenditure in Foreign Currency: 2014-15 2013-14Foreign Travel expenses 5.600 9.111Commission to Agents 0.828 8.933Professional and Legal fees 0.864 43.901Imports of material and capital goods 58.260 44.534Others 50.877 166.663Investments - 59.600Total 116.429 332.742

68. Earnings in Foreign Exchange 2014-15 2013-14

Export of goods calculated on FOB basis 2,238.481 3,406.748

Total 2,238.481 3,406.748



LIMITED

79




69. 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 2014-15 2013-14 2014-15 2013-14USD - 3.922 - 235.730GBP - 0.034 - 3.349Euro - 0.561 - 46.329Euro (0.004) (0.004) (0.275) (0.330)

USD (21.063) (76.053) (1,378.366) (4,570.755)GBP - (0.011) - (1.046)

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

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



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80

COMPANY’S GENERAL BUSINESS PROFILE

I Registration Details

Registration / CIN : 740 /85110KA1915PLC000740

State Code : 08

Balance Sheet Date : 31.3.2015

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 38,934,596 Total Assets 38,934,596

Sources of funds Application of Funds

Paid up Capital 668,185 Net Fixed Assets 10,535,297

Reserves & surplus 5,136,217 Investments 6,769,979

Secured Loans 4,136,656 Other Assets 21,629,320

Unsecured Loans 19,794,548

Other Liabilities 9,198,989

IV Performance of the Company

Turnover 3,650,608 Total Expenditure 45,710,643

Profit for the year 4,339,739 Profit after Tax 4,339,739

Earning per Share 64.95 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

81

Independent Auditor’s Report on Consolidated Financial Statements

ToThe members of

UNITED BREWERIES (HOLDINGS) LIMITED

1. Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of UNITED BREWERIES (HOLDINGS) LIMITED (hereinafter referred to as “the Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”) and its associates, comprising of the Consolidated Balance Sheet as at 31st March 2015, the Consolidated Statement of Profit and Loss, the Consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial statements”).

2. Management’s Responsibility for the Consolidated Financial Statements

The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as “the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group including its Associates in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The respective Board of Directors of the companies included in the Group, are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.

3. Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the 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 financial control relevant to the Holding Company’s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Holding Company has an adequate internal financial controls system over financial reporting in place and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in Other Matters paragraph below, is sufficient and appropriate to provide a basis for our qualified audit opinion on the consolidated financial statements.

4. Basis for qualified opinion

a. The holding company has extended corporate guarantees of ` 87,072 million in favour of lenders/lessors/creditors of Kingfisher Airlines Limited (KFA) (Refer note no. 44 to financial statements). The beneficiaries of such guarantees have invoked the guarantees and are pursuing recovery actions against the holding company. This may result in loss to the holding company (Refer note no. 44 to financial statements). No provision has been made in the accounts for such possible loss.


LIMITED

82

Independent Auditor’s Report on Consolidated Financial Statements (contd.)

b. The holding 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 ` 425 million. There are significant declines in the carrying value of these investments. The holding company has not provided for such declines (refer note 31 to financial statements).

c. The holding company has shown ` 317 million as due from a banker who has unilaterally encashed holding company’s deposits lying with it and appropriated the amount towards its claims against a group company. The possible loss on account of this development has not been recognised in the financial statements (refer note 47 to financial statements).

d. An amount of ̀ 8,475 million is shown as dues from a financial company, which has sold the holding company’s investments that were pledged with it and appropriated part of the sale proceeds against dues from KFA. Further, the said finance company still holds custody of 59,150,000 shares in KFA, belonging to the holding company. The holding company has petitioned the High Court of Calcutta and High Court of Karnataka challenging the validity of the pledge and for rendering full accounts. Pending outcome of the petitions, the Holding company has shown the above amounts as good and recoverable. Should the Holding company fail to get the reliefs as sought, there would be losses. The Holding company has not provided for any possible losses in this regard (refer note 48 to financial statements).

According to the management, it is not possible to estimate the losses and consequently quantify the amount of provisions required in the above cases.

Had the holding company estimated and provided for the losses as mentioned in paragraphs 4(a) to 4(d) above, the profit stated in the Consolidated Statement of Profit and Loss would have been lower by such amount; the liabilities in the Consolidated Balance Sheet would have been higher by the amount of provision with respect to item mentioned in paragraph 4(a) above; the carrying value of investments in the Consolidated Balance Sheet would have been lower by the amount of provision with respect to item mentioned in paragraph 4(b) above and the amount of other current assets in the Consolidated Balance Sheet would have been lower by the amount of provisions with respect to items mentioned in paragraphs 4(c) and 4(d) above.

e. Winding up petitions filed against the Holding Company have been admitted by the Honourable High Court of Karnataka and are being heard [Ref. note no. 37]; the Honourable High Court of Karnataka has restrained the Holding Company from disposing of any of its assets [Ref. note no. 38(e)]; the Holding Company is a defendant in recovery suits instituted by certain creditors/lenders for recovery of their dues of ̀ 62,033 million [Ref. note no. 37]; some of the lenders have recovered their dues by disposing of the securities pledged by the Holding Company. [Ref. note no. 34]. Yet, the Holding Company has prepared its financial statements on going concern basis for the reasons stated in note no. 38. The appropriateness of preparation of financial statements on going concern basis is subject to the Holding 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 37.

f. The Holding Company has not recognised in its consolidated financial statements, disputed liabilities amounting to ` 77,309 million arising out of invocation of its corporate guarantees [Ref. note no. 44] and claims of ` 1,463 million made against it under an agreement entered into with a banker [Ref. note no. 44]. Had the holding 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 ` 77,309 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 matters described in the Basis for Qualified Opinion paragraphs above, the aforesaid consolidated 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, of the consolidated state of affairs of the Group, and its associates as at 31st March, 2015, and their consolidated profit and their consolidated cash flows for the year ended on that date.


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83

6. Emphasis of Matter

Attention is invited to the following:

a. A term deposit for ` 609 million with a banker, 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 ` 453 million and encumbered an amount of ` 156 million against the borrowings from one of the group companies which had been guaranteed by the Holding Company [Ref. note no. 47];

b. The ‘status quo’ with respect to the transaction of sale of 10,141,437 no. of shares in United Spirits Limited in favour of Diageo group, as ordered by the Honourable Supreme Court of India, continues;

c. The Group has provided for an amount of ` 589 million towards the probable loss that may arise in respect of dues from an associate [Ref. note no. 35];

d. The Group has written off an amount of ` 18,742 million dues from Kingfisher Airlines Limited;

e. The Group has provided for an amount of ` 11,160 million towards decline, other than temporary, in the carrying value of its investments in Kingfisher Airlines Limited;

f. A lender of Kingfisher Airlines Limited has initiated action to attach and dispose of the Holding Company’s property in Goa to recover its dues [Ref. note no. 30(iii)];

g. The Group has considered the write-off of the amount due from subsidiaries as tax deductible having regard to an opinion obtained by it [Ref. note no. 33];

h. Note no. 45 regarding efforts being made to recover a sum of ` 200 million advanced to a vendor which is presently being shown as an advance which is good and recoverable;

i. Note no. 46 regarding non-accrual of interest payable to the extent of ` 634 million on account of the lender company’s shareholders not approving the agreement granting the loan;

j. For the reasons stated in note 39 to the financial statements, the holding company has followed “AS-13 – Accounting for investments” in respect of its investments in certain associates, instead of “AS 23- Accounting for investments in Associates in Consolidated Financial Statements”;

k. For the reasons stated in note 39 to the financial statements, the holding company has followed “AS-13 – Accounting for investments” in respect of its investments in 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 ` 8,643.089 million as at March 31, 2015, total revenues of ` 2,855.188 million and net cash inflows amounting to ` 173.353 million for the year ended on that date. These financial statements have been audited by other auditors whose reports have been furnished to us by the Management, and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries and our report in terms of sub-sections (3) and (11) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, is based solely on the reports of such auditors.

Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements certified by the Management.

8. Report on Other Legal and Regulatory Requirements

i. As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, based on the comments in the auditors’ reports of the Holding company and subsidiary companies incorporated in India, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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Independent Auditor’s Report on Consolidated Financial Statements (contd.)

ii. As required by Section 143(3) of the Act, we report, to the extent applicable, that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements;

b. In our opinion proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors;

c. The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, and the Consolidated Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements;

d. In our opinion, except for the effect of the matters described in the Basis for Qualified Opinion paragraphs above, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. The matters described in the Basis for Qualified Opinion paragraphs above, in our opinion, may have an adverse effect on the functioning of the Group;

f. On the basis of the written representations received from the directors of the Holding Company as on 31st March, 2015 and taken on record by the Board of Directors of the Holding Company and the reports of the other statutory auditors of its subsidiary companies incorporated in India, none of the directors of the Group’s companies is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act;

g. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditor’s) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

a. The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group – Refer Note 37 to the consolidated financial statements;

b. The Group has made provision, as required under the applicable law or accounting standards, for material foreseeable losses except for the matters specified in the Basis for Qualified Opinion paragraphs;

c. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company.


S. Vishnumurthy Proprietor Place: Mumbai Membership No. 22715

Date : 29-05-2015 Firm Registration No. 004742S


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Re: United Breweries (Holdings) Limited

Referred to in paragraph 8(i) of our report of even date

This report includes matters relating to subsidiary companies incorporated in India and which are considered for Consolidation. Our report in respect of these subsidiaries is based solely on the reports of the auditors of such subsidiary companies.

(i) In respect of the fixed assets of the Holding Company and its aforesaid subsidiaries:(a) The respective entities have 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 of the respective entities 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 and based on the other auditors’ reports, such verification is reasonable having regard to the size of the respective entities and the nature of its assets. Discrepancies noticed on verification during the year have been properly dealt with in the books of account.

(ii) In respect of the inventories of the Holding Company and its aforesaid subsidiaries: (a) As explained to us and based on the other auditors’ reports issued in accordance with the Order on the aforesaid subsidiaries,

the inventory have been physically verified during the year by the management of the respective entities. In our opinion, the frequency of such verification is reasonable and adequate in relation to the size of the respective entities and the nature of their businesses.

(b) In our opinion and according to the information and explanations given to us and based on the other auditors’ reports issued in accordance with the Order on the aforesaid subsidiaries, the procedures of physical verification of inventories followed by the respective management were reasonable and adequate in relation to the size of the respective entities and the nature of their businesses.

(c) In our opinion and according to the information and explanations given to us and based on the other auditors’ reports issued in accordance with the Order on the aforesaid subsidiaries, the respective entities were maintaining proper records of their inventory. The discrepancies noticed on physical verification of inventory have been properly dealt with in the books of account of the respective entities.

(iii) According to the information and explanations given to us and based on the other auditors’ reports issued in accordance with the Order on the aforesaid subsidiaries, the Group has not granted any loans, secured or unsecured during the year to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013. However, in respect of Kingfisher Airlines Limited (KFA), which is a company listed in the register maintained under section 189 of the Companies Act, 2013, there has been a transaction wherein a lender of KFA has sold the shares pledged by the company to secure KFA’s borrowings. Out of such sale proceeds the lender has appropriated an amount of ` 1,286.195 million towards dues from KFA. This has been written off by the holding company.

(iv) In our opinion and according to the information and explanations given to us and based on the other auditors’ reports issued in accordance with the Order on the aforesaid subsidiaries, there exists in the respective entities an adequate internal control system commensurate with the size of the respective entities and the nature of their businesses with regard to purchases of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit and based on the other auditors’ reports issued in accordance with the Order on the aforesaid subsidiaries, we have not observed any continuing failure to correct major weaknesses in the internal control system.

(v) In our opinion and according to the information and explanations given to us, the holding company has complied with the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 and other relevant provisions of the Companies Act and the rules framed thereunder. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in relation to the deposits accepted by the Holding company. Based on the other auditors’ reports issued in accordance with the Order on the aforesaid subsidiaries, we report that the aforesaid subsidiaries have not accepted any deposits during the year and do not have any unclaimed deposits.

(vi) In our opinion and according to the information and explanations given to us and based on the other auditors’ reports issued in accordance with the Order on the aforesaid subsidiaries, the provisions with regard to maintenance of cost records under section 148(1) of the Companies Act, 2013 are not applicable to the holding company and its aforesaid subsidiaries except one subsidiary. Based on the other auditor’s report issued in accordance with the Order on the aforesaid subsidiary, we report that Central Government has prescribed the maintenance of cost records under section 148(1) of the Companies Act, 2013 and the aforesaid subsidiary is maintaining the prescribed accounts and records.

(vii) According to the information and explanations given to us and based on other auditors’ reports issued in accordance with the Order on the aforesaid subsidiaries, in respect of statutory dues of the holding company and its aforesaid subsidiaries:(a) The respective entities have generally been 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 delays in depositing dues of service tax and tax deducted at source with the appropriate authorities by the holding company and delays in depositing labour welfare fund dues by one of the subsidiaries.

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Annexure to the Independent Auditor’s Report (contd.)

(b) According to the information and explanations given to us and based on other auditors’ reports issued in accordance with the Order on the aforesaid subsidiaries, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, excise duty etc., were in arrears as at 31-3-2015 for a period of more than six months from the date they became payable except a sum of ` 0.615 million towards labour welfare fund dues by one of the subsidiaries.

(c) According to the information and explanations given to us and based on other auditors’ reports issued in accordance with the Order on the aforesaid subsidiaries, 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 duesDisputed amount

( ` in million)Forum where dispute is pending

Income Tax Act, 1961 Income tax for the A.Y. 1997-98 31.998 Supreme CourtIncome Tax Act, 1961 Income tax for the A.Y. 2001-02 0.482 High Court of KarnatakaIncome Tax Act, 1961 Income tax for the A.Y. 2007-08 69.535 CIT (Appeals)Income Tax Act, 1961 Income tax for the A.Y. 2008-09 171.040 CIT (Appeals)

Income Tax Act, 1961 Income tax for the A.Y. 2009-10 68.987 CIT (Appeals)Income Tax Act, 1961 Income tax for the A.Y. 2010-11 200.661 CIT (Appeals)Foreign Trade (Development & Regulation) Act, 1992

Penalty 5.000 High Court of Judicature, Madras

Income Tax Act, 1961 Income tax for the A.Y. 2010-11(in respect of subsidiary)

2.960 CIT (Appeals)

Income Tax Act, 1961 Income tax for the A.Y. 2008-09 (in respect of subsidiary)

16.083 CIT (Appeals)

Finance Act, 1994 Service tax for the year 2007-08 & 2008-09 (in respect of subsidiary)

10.752 Appellate Tribunal of Service Tax

(d) According to the information and explanations given to us the amounts which were required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder have been transferred to such funds within time by the holding company. Based on other auditors’ reports issued in accordance with the Order on the aforesaid subsidiaries, we report that there were no amounts required to be transferred to Investor Education and Protection Fund.

(viii) Accumulated losses of the group is more than fifty percent of its net worth. The Group has not incurred cash losses during the financial year covered by our audit. The Group has incurred cash losses during the immediately preceding financial year

(ix) As per the information and explanations given to us, the holding company has defaulted in repayment of dues to a bank. The unpaid dues to the bank as at March 31, 2015 were ` 2,363 million. Out of this ` 27 million has been repaid in April 2015. The holding company is in negotiation with the banker. The company has not issued any debentures. Based on other auditors’ reports issued in accordance with the Order on the aforesaid subsidiaries, we report that the aforesaid subsidiaries have not defaulted in repayment of dues to bank or financial institutions.

(x) According to the information and explanations given to us and based on other auditors’ reports issued in accordance with the Order on the aforesaid subsidiaries during the year, the holding company and its aforesaid subsidiaries have not given any guarantees in favour of banks or financial institutions for loans taken by others. Therefore, the provisions of clause 3(x) of the Companies (Auditor’s Report) Order, 2015 are not applicable to the group.

(xi) According to the information and explanations given to us and based on the other auditors’ reports issued in accordance with the Order on the aforesaid subsidiaries, the respective entities have not raised any term loans during the year. Therefore, the provisions of clause 3(xi) of the Companies (Auditor’s Report) Order, 2015 are not applicable to the group.

(xii) According to the information and explanations given to us and based on the other auditors’ reports issued in accordance with the Order on the aforesaid subsidiaries, no fraud on or by the company and its aforesaid subsidiaries have been noticed or reported during the year.


S. Vishnumurthy Proprietor Place: Mumbai Membership No. 22715

Date : 29-05-2015 Firm Registration No. 004742S


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` in million

NoteNo.



Equity and Liabilities

Shareholders’ fundsShare capital 2 668.185 668.185Reserves and surplus 3 1,170.246 807.339

Minority interest 83.309 96.454

Non current liabilitiesLong term borrowings 4 14,641.269 19,341.368Deferred tax liabilities (net) 1.838 3.647Other long-term liabilities 5 4,820.486 6034.976Long term provisions 6 118.815 96.102

Current liabilitiesShort-term borrowings 7 6,604.424 7,171.659Trade payables 8 1,126.011 1,226.243Other current liabilities 9 7,224.017 7,984.413Short-term provisions 10 1,184.000 1,176.666

37,642.600 44,607.052Assets

Non current assetsFixed assets

Tangible assets 11 9,709.909 9,954.658Capital work in progress 11 1,362.051 1,248.355

Goodwilll on consolidation 434.464 434.464Non current investments 12 3,157.181 18,017.156Long term loans and advances 13 3.246 1,097.207Other non current assets 14 98.606 101.425

Current assetsCurrent investments 15 34.396 33.949Inventories 16 267.455 537.893Trade receivables 17 982.980 689.505Cash and cash equivalents 18 2,286.640 2,271.213Short term loans and advances 19 4,270.692 3,705.475Other current assets 20 15,034.979 6,515.752

37,642.600 44,607.052Significant 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, 2015





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` in million

Note No.

For the year ended

March 31, 2015 March 31, 2014

RevenueRevenue from operations 21 6,241.263 7,363.785 Other income 22 591.590 750.735

6,832.853 8,114.520 ExpensesPurchase of traded goods 804.521 2,024.661 Cost of materials consumed 23 1,924.663 1,928.660 Change in inventories 222.723 (96.236)Employee benefit expenses 24 603.552 502.690 Finance costs 25 1,986.343 4,844.596 Depreciation 11 303.106 150.453 Provision for bad and doubtful advances 589.337 12,759.598 Bad advances/debts written off 6,125.065 24,564.935 Provision for diminution in value of investments 11,190.261 -Other expenses 26 1,758.013 1,967.935

25,507.584 48,647.292

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

(18,674.731) (40,532.772)

Exceptional items 27 20,223.534 26,748.506 Profit / (Loss) before tax and share in profits/(losses) of associates 1,548.803 (13,784.266)Tax expense:

Current tax 1,248.476 167.230 Deferred tax (1.809) 0.732

Profit / (Loss) after tax and before share in profits/(losses) of associates 302.136 (13,952.228)Share in profits/(losses) of associates - - Profit / (Loss) before minority interest 302.136 (13,952.228)Share of minority interest 17.825 15.675 Net Profit / (Loss) for the year 319.961 (13,936.553)Earnings per share (face value of ` 10 each)

Basic / Diluted Earnings Per Share (before exceptional items ) (297.87) (608.88)Basic / Diluted Earnings Per Share (after exceptional items ) 4.79 (208.57)

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, 2015


Firm Regn. No. 004742S Dr. Vijay Mallya N. Srinivasan M.S. Kapur S.Vishnumurthy Chairman Director Director Proprietor DIN 00122890 DIN 00004195 DIN 00703815 Membership No. 22715 Mumbai Kaushik Majumder May 29, 2015 Company Secretary FCS 3368


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Consolidated Cash Flow Statement fo r the year ended March 31, 2015

` in million



A. Cash flow from operating activities

Net Profit / (Loss) before taxation 1,548.803 (13,784.266)

Adjustments for :

Depreciation 303.106 150.453

Dividend income (58.754) (86.780)

Interest income (499.165) (509.366)

Loss on sale of assets 0.081 3.586

Exceptional items (20,223.534) (26,748.506)

Interest and finance charges 1,986.343 4,844.596

Liabilities no longer required (66.397) (207.198)

Unrealised exchange fluctuation loss 196.323 188.693

Effect of exchange differences on translation of subsidiaries (130.571) (419.126)

Effect of exchange differences on translation of foreign currency cash and cash equivalents

(0.112) (0.637)

Bad debts / advances written off 6,125.065 24,564.935


Provision for Diminution in value of investments 11,190.261

Provision for bad and doubtful debts - 9.558

(588.017) 14,549.806

Operating profit before working capital changes 960.786 765.540

Adjustment for changes in working capital:

(Increase) /decrease in inventories 270.438 (116.137)

(Increase)/ decrease in trade and other receivables (1,186.432) (862.990)

Increase in current liabilities / other liabilities (487.444) (1,403.438) 1,317.504 338.377

Cash generated from/ ( used in) operations (442.652) 1,103.917

Less : taxes paid (1,404.437) (743.697)

Net cash generated from / (used in) operating activities (1,847.089) 360.220

B. Cash flow from investing activities

Purchase of Fixed Assets (including changes in capital work in progress)

(177.234) (222.486)

Sale of fixed assets/ advance for residential units 165.026 305.110

Purchase of investments (other than current investments) - (238.402)

Sale of investments (other than current investments) 10,579.833 34,178.406

Loans given (net) (763.652) (7,800.635)

Dividend income (other than current investments) 58.710 86.780

Interest received 481.207 458.028

Increase in fixed deposits with bank 473.281 (4,996.975)

Deposit with court - (2,535.000)

Net cash generated from investing activities 10,817.170 19,234.825


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` in million



C. Cash flow from financing activities

Interest and Finance Charges (1,111.003) (4,582.536)

Proceeds from loans from banks and others (net) (7,813.555) (15,344.865)

Net cash used in financing activities (8,924.558) (19,927.401)

Net increase / (decrease) in cash and cash equivalents 45.523 (332.356)

Cash and cash equivalents at the beginning of the year 963.030 1,317.954

Elimination on cessation of subsidiaries - (23.205)

Effect of exchange differences on translation of foreign currency cash and cash equivalents

0.112 0.637

Cash and cash equivalents at the end of the year 1,008.665 963.030

Cash and cash equivalents comprise of :

Cash in hand 3.121 3.835

Balance with banks in current accounts 971.148 925.246

Short term investments 34.396 33.949

1,008.665 963.030

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

Cash and cash equivalents as per Balance Sheet 2,286.640 2,271.213

Less: Deposits maturing beyond 3 months 1,312.371 1,342.132

Add: Current investments 34.396 33.949

1,008.665 963.030

Notes to the Consolidated Cash Flow Statement1. Short term investments represents amounts invested in mutual funds which are readily convertible into cash.2. Balances with banks include ̀ 2.261 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 ` 67.164 million in escrow account which cannot be used by the Company except for repayment of secured loan by a lender.

3. Cash in hand includes foreign currencies.

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, 2015 (contd.)





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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., 92.49 United States of America15 Inversiones Mirabel, S.A. 100.00 Republic of Panama16 Mendocino Brewing Company, Inc. 68.10 United States of America17 United Breweries International [UK] Limited 68.10 United Kingdom18 Kingfisher Beer Europe Limited (formerly known as UBSN Limited) 68.10 United Kingdom19 Releta Brewing Company, LLC 68.10 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 UB Engineering Limited 37.18 India2 Pixray India Limited 30.36 India3 WIE Engineering Limited (under liquidation) 25.88 India4 UB Pharma (Kenya) Limited 50.00 Kenya


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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 Pixray India Limited These are operating under severe long term restrictions

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

4 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.


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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 II of the Companies Act, 2013, 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 not 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 are recognized as expenses during the period in which the employees perform the services that the payment covers.


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94

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.

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 employee benefits 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

95

` in millionAs at

March 31, 2015 As at

March 31, 20142. Share Capital

Authorised100,000,000 (2014: 100,000,000) Equity Shares of `10/- each 1,000.000 1,000.000

1,000.000 1,000.000 Issued, Subscribed and Paid-up66,818,521 (2014: 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

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 sharesThe 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 companyMarch 31, 2015 March 31, 2014

No. of Shares

% holdingNo. 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 preceding the reporting date is nil.

` in millionAs at

March 31, 2015 As at

March 31, 2014

3. Reserves and SurplusCapital reserve 511.365 511.365 Securities premium account 8,331.975 8,331.975 Fixed assets revaluation reserve

At the beginning of the year 8,550.705 1,042.113 Add: Addition during the year - 7,508.592

8,550.705 8,550.705

Foreign currency monetary item translation difference account (183.463) (361.660)Foreign currency translation reserve (1,456.072) (1,320.821)

Surplus / (deficit) as per Statement of Profit and Loss:At the beginning of the year (14,904.224) 3,845.657 add: Elimination of the brought forward loss of subsidiaries - 583.328 Less: Elimination of share of associate profits - (5,396.655)Profit / (Loss) for the year 319.959 (13,936.554)

(14,584.264) (14,904.224)

1,170.246 807.339



LIMITED

96

` in million

As at As at

March 31, 2015 March 31, 2014

4 Long term borrowings

Secured

Term Loans

From banks 2,249.319 2,410.938

From others 1,730.394 8,631.691

Unsecured

Fixed deposits 105.156 211.720

From group companies 13,374.095 13,374.095

From others 1,462.503 1,467.123

18,921.467 26,095.567

Less: Current maturities

Secured

From banks 2,249.115 2,318.054

From others 1,365.878 3,798.436

Unsecured

Fixed deposits 95.393 109.697

From others 569.812 528.012

4,280.198 6,754.199

14,641.269 19,341.368

(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, securitisation of rent receivables from the property let out and securitisation of sale proceeds from the luxury residential buildings)

5. Other long term liabilities

Trademark licence security deposits 577.741 889.157

Pegasus advance received 2,285.011 2,500.000

Lease security deposits 345.050 346.334

Interest accrued and not due - 846.683

Refundable deposit 67.500 67.500

Instalments from allottees for residential units 1,545.184 1,385.302

4,820.486 6,034.976

6. Long term provisions

For legal cases 37.428 37.428

Employee benefits 81.387 58.674

118.815 96.102



LIMITED

97

` in million

As at As at

March 31, 2015 March 31, 2014

7. Short term borrowingsSecuredFrom banks 3,480.456 3,339.780

From others 608.049 707.822

UnsecuredFrom group company 2,515.919 2,516.008

From others - 608.049

6,604.424 7,171.659

(Borrowings are secured by pledge of shares held by the parent company andcharge on fixed assets of the company.)

8. Trade payablesTrade creditors 1,126.011 1,226.243

1,126.011 1,226.243

9. Other current liabilities

Current maturities of long term borrowings 4,280.198 6,754.199

Interest accrued and not due 34.253 81.725

Interest accrued and due 1,957.437 242.036

Statutory dues 33.136 71.563

Employee dues 61.344 10.826

Advertisement and sales promotion expenses payable 428.053 338.514

Advances received from customers 36.645 75.470

Claims payable 13.283 7.921

Other liabilities 365.419 386.390

Creditor for capital goods 11.894 12.637

Investor Education and Protection Fund: -

Unclaimed public deposits/interest 0.132 0.132

Unclaimed Dividends 2.223 3.000

7,224.017 7,984.413

10. Short term provisions

Income tax 1,174.331 1,173.865

Employee benefits 9.669 2.801

1,184.000 1,176.666



LIMITED

98 11

Fixe

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in m

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31.0

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Land

6

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63.

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1,3

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248.

355



LIMITED

99

` in

milli

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1,

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341



LIMITED

100

` in million



12. Non current investments

Long term investments

In fully paid equity shares

In associate companies 11,585.010 14,962.435

In other companies 2,771.869 3,064.157

14,356.879 18,026.592

Less: Provision for diminution in value ofinvestments

11,199.698 9.436

3,157.181 18,017.156

13. Long term loans and advances

Considered good 3.246 1,097.207

Considered doubtful 714.065 12,737.054

717.311 13,834.261

Less: Provision 714.065 3.246 12,737.054 1,097.207

3.246 1,097.207

14. Other non current assets

Other deposits - considered good 98.606 101.425

98.606 101.425

15. Current investments

In Mutual funds * 34.396 33.949

34.396 33.949

* Market value as on 31.03.2015 is ` 45.767 million.



LIMITED

101

` in million



16. Inventories

Raw materials 13.030 27.087

Packing materials, stores and spares 37.691 44.834

Work in progress 17.323 13.627

Finished goods including goods in transit 199.411 452.345

267.455 537.893

17. Trade receivables

Unsecured

Exceeding six months:

Considered good 301.044 13.501

Considered doubtful 10.919 12.096

311.963 25.597

Less: Provision 10.919 301.044 12.096 13.501

Others: considered good 681.936 676.004

982.980 689.505

18. Cash and cash equivalents

Cash on hand 3.121 3.835

Balances with Banks:

in current accounts 968.887 922.209

in unpaid dividend account 2.261 3.037

in deposit account 1,312.371 1,342.132

2,286.640 2,271.213

19. Short term loans and advances

Advances to suppliers 1,282.545 854.884

Advance income tax 2,283.034 2,126.607

Prepaid expenses 53.996 34.888

Other receivables - considered good 651.117 689.096

4,270.692 3,705.475

20. Other current assets

Deposit with court 2,535.000 2,535.000

Bank deposit 3,353.986 3,797.506

Duty drawback receivable 101.557 183.246

Other receivables 9,044.436 - 15,034.979 6,515.752



LIMITED

102

` in million

Year ended March 31, 2015


21. Revenue from operations

Sales 4,355.873 5,537.267

Dividends 58.754 86.780

Guarantee commission 8.916 18.833

Lease rent 524.625 511.738

Income from property maintenance 464.995 443.478

Licence fees 680.578 566.805

Management service fees 32.400 30.000

Duty drawback 115.122 168.884

6,241.263 7,363.785

22. Other Income

Interest income 499.165 509.366

Provisions/ liabilities no longer required/ payable written back 66.397 207.198

Miscellaneous income 26.028 34.171

591.590 750.735

23. Cost of material consumed

Raw material consumed 1,604.275 1,702.354

Packing materials consumed 320.388 226.306

1,924.663 1,928.660



LIMITED

103

` in million



24. Employee benefits expensesSalaries, wages and bonus 490.778 374.105

Contribution to provident and other funds 75.267 89.921

Workmen and staff welfare 37.507 38.664

603.552 502.690

25. Finance costsInterest expenses 1,986.235 4,766.328

Processing charges and bank charges 0.108 78.268

1,986.343 4,844.596

26. Other expensesRent including lease rent 38.478 36.600

Rates and taxes 26.141 50.997

Insurance premium 14.129 5.935

Communication expenses 9.314 9.714

Travel and conveyance 41.542 37.647

General administrative expenses 284.173 209.529

Repairs & maintenance 107.465 99.115

Vehicle repairs and maintenance 6.937 7.108

Property maintenance expenses 168.764 191.496

Selling and promotion expenses 530.714 617.397

Brokerage 0.113 2.431

Commission paid to selling agents 26.365 47.134

Freight charges/job charges 167.172 160.234

Miscellaneous expenses 68.710 48.154

Claims paid 5.362 0.376

Legal & professional charges 166.723 218.729

Directors' sitting fees 1.626 1.305

Auditor's remuneration 3.181 4.186

Loss on asset sold/discarded / written off 0.081 3.586

Exchange loss (net) 91.023 206.704

1,758.013 1,967.935

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) 11,056.405 1,023.894

Profit on sale of pledged securities by the lenders of the company 9,167.129 4,812.480

Loss on sale of other securities - (2,390.324)

20,223.534 26,748.506



LIMITED

104

28. 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.

The parent company has issued allotment letters in respect of seven residential units in Kingfisher Towers by collecting booking amounts of ` 1,545.184 million (Pr year 1,385.302 million)

29. Estimated amount of contracts remaining to be executed, on capital account as on 31.03.15 and not provided for, in the case of parent company is ` Nil (net of advances) (Pr year ` 6.600 million).

30. 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 revaluation 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 on fixed assets is provided on reducing balance method based on useful life of the assets as prescribed in Schedule II to the Companies Act 2013, in respect of the parent Company and domestic subsidiaries. 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 ` 508.727 million (Pr year ` 548.690 million).

iii) KFA lenders have sent a notice purportedly under the SARFAESI Act in respect of the Parent Company’s property in Goa. The Parent Company has responded to the notice issued to it, challenging the same. Pending adjudication of the suit, the Goa property continues to remain as an asset of the Parent Company.

31. Based on a critical review during the year of the carrying value of long term strategic investments, the management has provided an aggregate amount of ` 11,190.216 million, as disclosed in the accounts, as a matter of commercial prudence. While in respect of other strategic investments the matter will be reviewed during the following year based on business plans, investor funding and potential opportunities.

32. 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 by its Order dated 10th February, 2014 directed that status quo be maintained in respect of the transaction of sale of shares to Diageo.

33. There is no income tax liability on the profits for the years, on the parent company, taking into account the exempted profit on sale of securities. Further, having regard to the adjustments required to be made to the book profit in respect of write off of certain advances against the provision made for such advances, there would also not be any liability on account of Minimum Alternate Tax.

34. i) The Consortium of KFA lenders, have sold certain investments belonging to the parent company and a subsidiary pursuant to the purported pledge.

ii) The Consortium of KFA Bankers, have sold in periodical lots certain investments belonging to the Parent Company pursuant to the purported pledge. KFA lenders have invoked parent company’s Corporate Guarantee and demanded payment of dues from KFA amounting to ` 62,033.550 million.

iii) The Consortium of KFA Bankers, have sold in periodical lots certain investments belonging to the Company pursuant to the purported pledge. 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 lenders, 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 Parent 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 thereunder.



LIMITED

105

(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 Parent 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 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 lenders. The said Suit and Notice of Motion are pending adjudication in the Hon’ble Bombay High Court.

35. The Parent Company has advanced ` 578.960 million (Pr year ` 551.774 million) to an associate, which have not yet been repaid. The Parent Company has made a further assessment of its financial condition. Considering its operations for the current year, and has decided, as a matter of prudence, to provide for ` 578.960 million. (Pr year ` Nil) due from it.

36. Events occurring after the date of the Balance Sheet

The parent Company has appealed to SAT challenging the communication dated 27th April 2015 by SEBI to restate the parent Company’s accounts for Financial Years 2012-13 and 2013-14. By its Order dated 29th May, 2013, the SAT has stayed the operation, implementation and effect of the communication dated 27th April, 2015 till the next date of hearing.

37. Litigation

a) The lenders of Kingfisher Airlines Limited (KFA) have, pursuant to certain Corporate Guarantees given by the Parent Company (the validity of which is disputed as set out hereinafter), demanded from the Parent Company, their alleged dues from KFA amounting to ` 6,203.35 crores with further interest and other dues from 01/06/2013 and have moved the Debt Recovery Tribunal (“DRT”), Bangalore for recovery of these alleged dues by way of an Original Application (OA). The Interim Application filed by the Parent 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. The Parent Company’s appeal before the DRAT, Chennai challenging the DRT Order is pending.

b) Further, three lenders who have extended pre-delivery payment (PDP) loans to KFA for purchase of aircrafts from M/s. Airbus S.A.S. and who claim to be beneficiaries of Corporate Guarantees of the Parent Company, 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. DRT 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 still in force. The Parent Company is defending the said proceedings.

c) In a suit filed by United Sprits Limited (“USL”), the Goa Senior Division Court, by an Order dated 26th April, 2013 has granted an ad-interim injunction against any coercive action by lenders of KFA in respect of the Parent Company’s property in Goa, tenanted to USL. USL has also deposited ` 35 crores in the Hon’ble Court pursuant to the said order.

Aggrieved by the Interim Order, the lenders filed an appeal in the High Court of Bombay at Goa, being Appeal from Order No. 76 of 2013 praying inter alia, that the Interim Order granting ad-interim injunction be quashed and set aside. On 18th July, 2014, the Hon’ble High Court of Bombay at Goa disposed off the appeal. The impugned order does not preclude the Banks from initiating proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests Act, 2002 (SARFAESI Act). It has been clarified by the High Court that the Interim Orders of 26th April and 4th May, 2013 shall continue to operate until disposal of the application for temporary injunction before the Learned Judge, Mapusa, subject to the right of the Banks to proceed under the SARFAESI Act in accordance with law.

Pursuant to the Order dated 18th July, 2014, passed by the Hon’ble Bombay High Court at Goa, the banks have filed an application under Sec. 14 of the SARFAESI Act before the District Magistrate. The Interim Order dated 26th April, 2013 passed by the Goa Senior Division Court is still in force and pending adjudication of the suit, the Goa property continues to remain with the Parent Company (and continues to be in the possession of USL) with a purported charge in favour of Consortium of KFA Bankers.

d) In addition to two winding up petitions instituted by purported beneficiaries of Corporate Guarantees issued by the Parent Company, which are being challenged before the Hon’ble Supreme Court and the Karnataka High Court respectively, six more winding up petitions filed by certain creditors of KFA, who are purported beneficiaries of Corporate Guarantees for winding of the Parent Company, have been admitted by the Hon’ble High Court of Karnataka vide combined Order dated 02nd January, 2015. The Parent Company has filed appeals before the Division Bench of the Karnataka High Court to challenge three of the aforesaid six admission Orders of the single judge and such appeals are pending admission. No Order for appointment of a provisional Liquidator or Order of winding up of the Parent Company, has been passed till date.



LIMITED

106

e) The Parent Company has filed a suit for damages claiming an amount of ` 1,319.30 crores against one of the above Petitioners who have filed a winding up Petition against the Parent Company in the City Civil Court, Bangalore and the same is pending adjudication.

f) The Parent Company filed a Suit (L) No. 290 of 2015 in the High Court of Judicature at Bombay against ICICI Bank Ltd (hereinafter referred to as “ICICI”) and 3i Infotech Trusteeship Services Ltd (hereinafter referred to as “3i Infotech”) challenging ICICI’s alleged right to sell the 20,14,000 shares (the “NDU shares”) of United Breweries Limited by their notice dated 9th February, 2015 on the ground that the Loan Purchase Agreement dated 21st December, 2010 entered into with ICICI has ceased to operate consequent upon ICICI transferring, assigning and/or novating all its rights and obligations under the MDRA to a third party and that the claim of ̀ 146.29 crores by ICICI cannot be proceeded against the 20,14,000 shares as the LPA has worked itself out.

Accordingly, the following ad-interim reliefs were sought in the Suit:

(i) That pending the hearing and final disposal of the Suit, for a temporary order and injunction restraining the Defendants (3i Infotech and ICICI), their servants, agents or assigns, or any other person claiming by, through or under them or any of them, from acting on the basis or in any manner giving effect to the Power of Attorney dated 12th November 2011, or from taking any other or further steps to act upon or in furtherance of the Non Disposal Arrangement, dated 12th November 2011.

(ii) That pending the hearing and final disposal of the Suit, for an Order appointing a court receiver to take custody of 20,14,000 shares of United Breweries Limited, held by the Company and which are the subject matter of the Non Disposal Arrangement dated 12th November 2011.

By an Order dated 16th April, 2015, the Hon’ble Judge restrained both 3i Infotech and ICICI from selling the NDU shares and directed ICICI to deposit the NDU shares with the Prothonotary & Senior Master of Hon’ble High Court of Bombay within a period of 2 weeks from the date of pronouncement of the judgement. This Order has been challenged in an appeal filed by ICICI before the Division Bench of the Hon’ble Bombay High Court which had only stayed the portion of the Order which directs ICICI to deposit the NDU shares with the Prothonotary & Senior Master of Hon’ble Bombay High Court. However, the restraint Order on ICICI for sale of NDU shares continues. Pending adjudication of the Suit and without prejudice to the Company’s rights and contentions therein ICICI purported claim of ` 146.29 crores is disclosed as a contingent liability.

38. 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. As stated herein above, the Parent 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) Connected with the Corporate Guarantees, the winding up petitions filed in Hon’ble Karnataka High Court referred to in the Directors report, in the opinion of Counsel, can be successfully resisted.

c) 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. 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 an Asset Reconstruction Company (ARC).

d) Under direction of Court pending resolution of various disputes, amounts totaling ` 794.38 crores are held as cash deposits.

e) Due to restraint orders passed by the High Court of Karnataka, rentable commercial office space could not be leased out resulting in continued loss of significant rental revenue. The Company has filed an Application vide CA No. 1428 of 2014 in COP 185/12 with a prayer to permit the Company to lease/rent out the vacant premises at UB City and grant such other further orders as are just. Also, high value residential units in Kingfisher Towers, could not be sold which has impacted the cash flow. The said application is pending.

Having regard to the totality of all the above facts and also the substantial assets of the Company which can be monetized in case of necessity, the financial statements for the year ended 31st March 2015 have been presented on principles applicable to Going Concern.



LIMITED

107

39. The following associates, namely, 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.

` in million 40. Employee benefit

Disclosure as per AS 15Defined benefit plans 2014-15 2013-14Reconciliation of opening and closing balances of the present value of the defined benefit obligation:Obligations at period beginning 108.311 75.300Service cost 75.084 34.102Interest cost 7.967 6.534Benefits settled (16.363) (7.321)Actuarial (gain)/loss (10.826) (0.304)Obligations at period end 164.173 108.312Defined benefit obligation liability as at the Balance Sheet Is wholly funded by the CompanyChange in plan assetsPlan assets at period beginning, at fair value 107.945 60.619Expected return on plan assets 10.038 6.149Actuarial gain/(loss) 0.820 0.113Contributions 51.414 48.385Benefits settled (16.363) (7.321)Plans assets at period end, at fair value 153.854 107.946Reconciliation 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 164.173 108.312Present value of the defined benefit obligations at the end of the period 153.854 107.946Net assets/(liability) recognized in the Balance Sheet 10.319 0.366Details of Gratuity CostService Cost 75.084 34.102Interest Cost 7.967 6.533Expected return on plan assets (10.038) (5.402)Acturial (gain)/loss (11.646) (0.724)Net Gratuity Cost 61.367 34.509

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 8.00% 9.12%Discount factor 8.00% 9.12%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

108

41. Deferred Tax:

The following deferred tax assets / liabilities are recognized for the year.` in million

Name of the Company Deferred tax Liability

DeferredTax Asset

City Properties Maintenance Company Bangalore Limited - 0.951UB Electronic Instruments Limited - 0.017UB International Limited - 0.841Total deferred tax asset (recognized in the Profit and Loss Account) - 1.809

42. Segment Reporting:

Segment-wise business performance for the year ended March 31, 2015` in million

Primary Segment Information 2014-15 2013-14Segment Revenue:a) Alcoholic Beverages 3,520.169 4,260.63b) Leather products 416.735 418.654c) Readymade Garments 307.685 849.483d) Investments 58.754 86.780e) Logo Fee 680.578 566.805f) Property development 524.625 639.238g) Maintenance 464.995 315.978h) Others 267.720 226.217Total Revenue 6,241.263 7,363.785Segment Results:a) Alcoholic Beverages 229.202 369.173b) Leather products 57.602 (243.603)c) Readymade Garments 10.297 66.900d) Investments (314.882) (182.810)e) Logo Fee 441.939 392.300f) Property development 264.718 354.183g) Maintenance 81.681 114.116h) Others (145.871) 15.364Total Result 624.686 885.623Other income 591.590 750.735Provision for bad and doubtful debts/ advances (589.337) (12,759.598)

Bad advances/debts written off (6,125.065) (24,564.935)

Diminution in value of investments (11,190.261) -Finance cost (1,986.343) (4,844.596)Exceptional items 20,223.534 26,748.506Profit / (Loss) before tax 1,548.803 (13,784.266)

Other Information2014-15 2013-14 2014-15 2013-14

Segment Assets

Segment Liabilities

Segment Assets

Segment Liabilities

Capital Expenditure

Depreci-ation

Capital Expenditure

Depreci-ation

a) Alcoholic Beverages 2,681.558 2,510.817 2,428.381 2,426.387 55.528 79.192 98.394 62.759b) Leather Products 1,072.403 376.652 675.335 81.834 0.514 13.160 4.312 9.473c) Readymade Garments 1,183.372 10.689 1,249.781 23.737 0.177 9.136 3.950 6.987d) Investments 34,249.170 45,002.835 28,803.356 39,058.116 - - - -e) Property Development 404.805 - 419.385 - - 110.668 - 19.591

f) Maintenance 158.043 150.285 149.538 74.091 2.619 4.870 3.655 2.830g) Others 185.274 55.480 203.968 197.045 4.700 86.080 4.160 48.813

Total 39,934.625 48,106.758 33,929.744 41,861.210 63.538 303.106 114.471 150.453



LIMITED

109

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.

Secondary segments, based on geographical locations

Particulars Segment Revenue Segment AssetsSegment 2014-15 2013-14 2014-15 2013-14Within India 1,922.577 1,866.286 35,433.540 32,072.595Outside India 4,318.686 5,497.499 4,501.085 1,857.149Total 6,241.263 7,363.785 39,934.625 33,929.744

43. Related Party Transactions: Persons having significant influence over the affairs of the Company :-

Dr. Vijay Mallya - Chairman of the Board

Mr. Ravi Nedungadi - Group Chief Financial Officer

Key Management Personnel:

Mr. V. Shashikanth* - President (*Managing Director up to 17th April 2014)

Mr. Kaushik Majumder – Senior Vice President Legal and Company Secretary

Associates

UB Engineering Limited, WIE Engineering Limited (Under Liquidation), Pixray India Limited, UB Pharma (Kenya) Limited.

ii. Transactions with Related Parties during the year :

Sl. No. Nature of Transactions AssociatesKey Management Personnel/

Persons having significant influence over the affairs of the Company

Current Year Previous Year Current Year Previous Year1. Purchase of goods/services2. Rendering of services3. Receiving of services4. Guarantee commission paid5. Licence Fees received 2.809 12.5006. Dividend received7. Guarantee commission received 3.416 13.3308. Interest received 17.962 51.4239. Interest paid10. Investment made11. Guarantees given 650.000 650.00012. Finance (including loans in cash or

in kind paid) 7.959 162.000

13. Finance (including loans in cash or in kind received) 4.964 5.744

14. Payment of remuneration for employment 103.784 81.779

15. Management contracts16. Pegasus advance received

Amount Due from as on March 31, 2015 602.752 551.774



LIMITED

110

44. Contingent liabilities:

Particulars 2014-15 2013-14i) Guarantees given

88,280.760 88,280.760(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 have preferred appeals

5.454 5.454

iv) Demand raised by Income Tax authorities against which the parent Company has preferred appeals

776.774 776.774

v) Demands raised against subsidiary by Service Tax Authorities against which the subsidiary has preferred appeals

10.752 10.752

vi) Claim against the company not acknowledged as debt 1,462.900 1,462.900

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, 2015 is ` 15,275.400 million (Pr year ` 15,275.400 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 ` 62,033.500 million due from KFA along with interest, if any, decided by the Court This matter is being contested by the Company in various Courts. Accordingly, the Company continues to recognize these obligations as only ‘contingent liabilities’. Based on management’s opinion no provision is presently considered necessary. In any event, the amount is not quantifiable.

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.”

45. The Parent Company has advanced ` 20 crores to a vendor. Due to the demise of the owner of the vendor company, the supply arrangement could not be consummated. Discussions are on with the legal heirs for recovery of the advance.

46. The Parent Company had entered into a loan agreement with United Spirits Limited on July 3, 2013 under which, an amount of ` 1,337.41 crores is outstanding as on March 31, 2015. The loan is for a period of 9 years. At an EGM of United Spirits Limited on November 28, 2014, the said loan agreement between the Parent Company and United Spirits Limited, was not approved. The Parent Company is examining the impact and consequences of such non-approval and has not accounted for any interest on the loan in Quarter 3 and 4 of the current financial year.

47. The Parent Company is pursuing a claim before the Hon’ble High Court of Karnataka against a banker for restitution of deposits of Rs. 609.60 million, which were unilaterally encashed and thereafter appropriated towards their claims against a Group Company. The parent company is showing the appropriate amounts as recoverable from the said bank.

48. The Parent Company and a subsidiary company have 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 a declaration that the Security Trustee Agreement dated 30th June, 2008 and the Consolidated Deed of Pledge dated 21st December, 2010 (in respect of pledged shares of United Spirits Limited and KFA held by the Parent Company and the subsidiary company ) 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, the Parent Company and the subsidiary company 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 sale proceeds remaining after appropriation of USL and KFA shares. On 10th June 2014, IDBI Trusteeship Services Limited transferred the pledged shares to IGCF who in turn sold 4,937,395 shares of United Spirits Limited (“Sold Shares”) held by the Parent Company and the subsidiary company. By an Order dated 20th June, 2014 in Writ Petition No. 28577 of 2014, filed by the Consortium of Banks and which has now been disposed off, IGCF deposited the surplus/balance sales proceeds from the Sold Shares with the Hon’ble High Court of Karnataka and has been restrained from disposing off ` 690 crores retained by it. The Parent Company is defending the aforesaid O.S. No. 25877 of 2013 and the ex-parte ad-interim orders passed therein.



LIMITED

111

During the pendency of the Writ Petition No. 28577 of 2014, the Consortium of Banks filed an application seeking to amend the plaint. The amendment application was heard and allowed vide Order dated 15.10.2014. The Parent Company and the subsidiary company have filed separate Writ Petitions against the said Order allowing the amendment application. The Parent Company and the subsidiary company have also filed applications for rejection of the suit on account of suit being barred by law and insufficient court fee.

The Parent company, after taking into account, various issues involved, has, as a matter of prudence and without prejudice to the rights and contentions of the Parent Company in the legal proceedings as well as the stand adopted by KFA against the purported recall of its loans by the lenders, pursuant to which shares pledged by the Parent company were sold by the lenders, has debited a portion of the sale proceeds of the IGCF sale of investments of ` 106.30 crores to KFA and written off the same as unrealizable, along with other dues from KFA. The balance sale proceeds of ` 847.46 crores continues to be disclosed as due from IGCF by the Parent Company.

49. Earnings per Share:

Earnings per Share (before exceptional items) 2014-15 2013-14

Loss before exceptional items (18,674.731) (40,532.772)

Weighted average number of equity shares 66,818,521 66,818,521

Earnings per share (Basic / Diluted) - in ` (297.87) (608.88)

Earnings per Share (after exceptional items) 2014-15 2013-14Profit / (Loss) after exceptional items and tax 319.961 (13,936.553)

Weighted average number of equity shares 66,818,521 66,818,521

Earnings per share (Basic / Diluted) - in ` 4.79 (208.57)

50. 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

2014-15 2013-14

Amount receivable - 46.329

Amount payable 1,378.641 4,572.131

51. All amounts are in Rupees millions, unless otherwise stated.

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






LIMITED

112


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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: 080-22274890Corporate Identity Number:L85110KA1915PLC000740

Website: www.theubgroup.com; e-mail:[email protected]

NOTICE is hereby given that the Ninety-Ninth Annual General Meeting of the Members of UNITED BREWERIES (HOLDINGS)LIMITED will be held at Conference Hall, Level 1, UB Tower, UB City, No. 24, Vittal Mallya Road, Bangalore – 560 001 on Monday, September 28, 2015 at 11.30 a.m. to transact the following business:

Ordinary Business

1. To receive, consider and adopt the Standalone Audited Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and Cash Flow Statement for the financial year ended on that date and the Reports of the Auditors and Directors thereon.

2. To receive, consider and adopt the Consolidated Audited Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and Cash Flow Statement for the financial year ended on that date and the Reports of the Auditors thereon.

3. 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.

4. Ratification of Auditors’ Appointment :

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 Section 139 of the Companies Act, 2013 (the “Act”), the Companies (Audit and Auditors) Rules, 2014, and such other applicable provisions, if any, of the Act and the rules framed thereunder and pursuant to the resolution passed by the Members at the Annual General Meeting on September 30, 2014, the Company hereby ratifies the appointment of Messrs. Vishnu Ram & Co, Chartered Accountants (Firm Registration No.004742S), as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting and that their remuneration be fixed by the Board of Directors of the Company.

Special Business

5. 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 of the Companies Act, 2013 (the “Act”) and the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended from time to time, read with Clause 49 of the Listing Agreement, Ms. Daljit Mahal (DIN 07140099) who was appointed as Additional Director of the Company with effect from March 28, 2015 in terms of Section 161 of the Companies Act, 2013 and Article 114 of the Articles of Association of the Company and whose term of office expires at the Annual General Meeting and in respect of whom the Company has received a notice in writing from a Member under Section 160 of the Act proposing her candidature for the office of Director, be and is hereby appointed as a Director of the Company liable to retire by rotation.

6. To consider and if thought fit, to pass with or without modification, the following resolution as a Special 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 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) for the financial year 2015 - 2016 on such terms and conditions as may be mutually agreed upon between the Company and United Breweries 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.

Registered Office: By Order of the BoardUB Tower, Level 12, UB City No.24, Vittal Mallya Road Kaushik Majumder Bangalore – 560 001 Senior Vice President – Legal & Company SecretaryMumbai July 23, 2015


LIMITED

2

Notice (contd.)

Notes:

1. The Explanatory Statement pursuant to Section 102 of the Companies Act, 2013, forms part of this Notice.

2. 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.

A person can act as a proxy on behalf of Members not exceeding fifty and holding in the aggregate not more than ten percent of the total share capital of the Company carrying voting rights. A Member holding more than ten percent of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other person or Shareholder.

3. 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.

4. Members are requested to lodge / notify the transfer deeds, dividends, communication for change of address, bank details, ECS details, wherever applicable, mandates (if any), and matters related therewith may be addressed directly 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.

5. Members / Beneficial Owners holding shares in dematerialised form are requested to 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 and not to the Company or to the Registrar and Share Transfer Agents of the Company, as the Company is obliged to use only the data provided by the Depositories.

6. Non-Resident Indian Members are requested to inform Integrated Enterprises (India) Limited, immediately of: (a) change in their residential status on return to India for permanent settlement (b) particulars of their bank account maintained in India with complete name, branch, account type, account number and address of the bank with pin code number, if not furnished earlier.

7. The Register of Members and the Share Transfer Books of the Company will remain closed from Friday, September 25, 2015 to Monday, September 28, 2015 (both days inclusive).

8. Voting rights shall be reckoned on the paid up value of shares registered in the name of the Member / beneficial owner (in case of electronic shareholding) as on the cut-off date i.e. September 21, 2015.

9. The Companies Act, 2013 authorises the Company to send all statutory communications via email to the Members who have registered their email ID. The Company, therefore, requests:

a. The Members who are holding shares in physical mode to submit their valid e-mail ID to Integrated Enterprises (India) Limited, the Registrar and Share Transfer Agents, by quoting their folio number and also any change therein from time to time; and

b. The Members / Beneficial Owners holding shares in dematerialized form are requested to inform / update their valid e-mail ID to their respective depository participants from time to time.

10. 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.

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. The Company has transferred unclaimed dividends declared up to financial years 2006-07, from time to time on due dates to the “Investor Education and Protection Fund” (IEPF) established by the Central Government.


LIMITED

3

Notice (contd.)

Pursuant to the provisions of Investor Education and Protection Fund (uploading of Information regarding unpaid and unclaimed amounts lying with Companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on September 30, 2014 (date of last Annual General Meeting) on the website of the Company www.theubgroup.com.

13. Members may note that the Notice of the Ninety Ninth Annual General Meeting and the Annual Report for 2014-15 is also available on the Company’s website www.theubgroup.com.

14. 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].

15. 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.

16. 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.

17. 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.

18. The relevant information relating to the Directors seeking appointment / re-appointment viz., Mr. Sidhartha V Mallya and Ms. Daljit Mahal are given in the Annexure to the Notice.

19. Electronic copies of the Annual Report and Notice are being sent to all the Members whose email IDs are registered with the Company / Depository Participants for communication purposes unless any Member has requested for a hard copy of the same. For Members who have not registered their email address, physical copies of the Annual Report and Notice is being sent in the permitted mode.

20. Voting options:-

(I) Voting through electronic means

In compliance with provisions of Section 108 of the Companies Act, 2013 and the Companies (Management and Administration) Rules, 2014, as amended and Clause 35B of the Listing Agreement, the Company is pleased to provide the Members a facility to exercise their voting rights for the businesses to be transacted at the Annual General Meeting (AGM) by electronic means (remote e-voting) through remote e-voting services provided by Central Depository Services (India) Limited (CDSL).

The instructions for Members voting electronically are as under:

(i) The remote e-voting period begins on Friday, September 25, 2015 at 9.00 a.m. and ends on Sunday, September 27, 2015 at 5.00 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 September 21, 2015 may cast their vote electronically. The remote e-voting module shall be disabled by CDSL for voting thereafter.

(ii) Log on to the remote e-voting website www.evotingindia.com

(iii) Click on “Shareholders” tab.

(iv) Now Enter your User ID

a. For CDSL: 16 digits beneficiary IDb. For NSDL: 8 Character DP ID followed by 8 Digits Client IDc. Shareholders holding shares in Physical Form should enter Folio Number registered with the Company.

(v) Next enter the Image Verification as displayed and Click on Login.

(vi) 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.


LIMITED

4

(vii) If you are a first time user follow the steps given below:

For Shareholders 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)

• Shareholderswho have not updated their PANwith theCompany / Depository Participant arerequested to use the first two letters of their name and the last 8 digits of the sequence number in the PAN field.

• Incasethesequencenumberislessthan8digitsentertheapplicablenumberof0’sbeforethenumber after the first two characters of the name in CAPITAL letters. eg. If your name is Ramesh Kumar with sequence number 1 then enter RA00000001 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.

DividendBank 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 member id / folio number in the Dividend Bank details field as mentioned in instruction (iv).

(viii) After entering these details appropriately, click on “SUBMIT” tab.

(ix) Shareholders holding shares in physical form will then reach directly the Company selection screen. However, Shareholders 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 remote 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.

(x) For Shareholders holding shares in physical form, the details can be used only for remote e-voting on the resolutions contained in this Notice.

(xi) Click on the EVSN 150831032 of United Breweries (Holdings) Limited to vote.

(xii) 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.

(xiii) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.

(xiv) 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.

(xv) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.

(xvi) You can also take out print of the voting done by you by clicking on “Click here to print” option on the Voting page.

(xvii) 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.

(xviii) Note for Non – Individual Shareholders and Custodians

• Non-Individualshareholders(i.e.otherthanIndividuals,HUF,NRIetc.)andCustodiansarerequiredtologontowww.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 [email protected].

Notice (contd.)


LIMITED

5

• Afterreceivingthelogin details a compliance user should be created using the admin login and password. The Compliance user would be able to link the account(s) for which they wish to vote on.

• Thelistofaccountsshouldbemailedtohelpdesk.evoting@cdslindia.comandonapprovaloftheaccountstheywould be able to cast their vote.

• TheyshoulduploadascannedcopyoftheBoardResolutionandPowerofAttorney(POA)whichtheyhaveissued in favour of the Custodian, if any, in PDF format in the system for the Scrutinizer to verify the same.

• In case you have any queries or issues regarding remote e-voting, you may refer the Frequently Asked Questions (“FAQs”) and remote e-voting manual available at www.evotingindia.com under help section or write an email to [email protected].

(II) Voting at AGM

Members who have not cast their votes through remote e-voting, can exercise their voting rights at the AGM.

21. Members holding shares under multiple folios / demat accounts shall choose the voting process separately for each of the folios / demat accounts.

22. In case of joint holders attending the Meeting, only such joint holder who is higher in the order of names will be entitled to vote.

23. Voting has to be done for each item of the Notice separately. In case you do not desire to cast your vote on any specific item it will be treated as abstained.

24. A Member can opt for only one mode of voting i.e. either in person or through proxy at the Meeting or through remote e-voting. Members attending the Annual General Meeting who have not already cast their vote by remote e-voting shall be able to exercise their right to vote at the Annual General Meeting. Members who have already cast their vote by remote e-voting shall not be allowed to vote again at the Annual General Meeting. If a member casts votes by all the modes, then voting done through remote e-voting shall prevail and voting through other means shall be treated as invalid.

25. Any person, who acquires shares of the Company and becomes a Member of the Company after dispatch of the Notice and holding shares as of the cut-off date i.e. September 21, 2015, may obtain a copy of the Notice by sending a request at [email protected] / [email protected]. Such persons may follow the instructions given in the Notice for casting their votes through remote e-voting provided by CDSL. In case of any assistance on remote e-voting, please contact the Registrar at [email protected] / Phone No. 080-23560815-818 / Fax: 080-23460819.

26. A person, whose name is recorded in the Register of Members or in the Register of Beneficial Owners maintained by the Depositories as on the cut-off date only shall be entitled to avail the facility of remote e-voting as well as voting at the AGM.

27. The Company has appointed Mr. Sudhir Hulyalkar, Company Secretary in Practice (Membership No. FCS 6040, CP 6137), as the Scrutinizer to scrutinize the remote e-voting process as well as voting through Ballot Paper at the AGM in a fair and transparent manner.

The Scrutinizer shall immediately after the conclusion of the General Meeting, first count the votes cast at the meeting and thereafter unblock the votes cast through remote e-voting in the presence of at least two (2) witnesses not in the employment of the Company and shall make a consolidated Scrutinizer’s Report of the votes cast in favour or against, if any, forthwith to the Chairman within a period not exceeding three (3) days from the conclusion of the General Meeting.

28. The Results shall be declared at or after the Annual General Meeting of the Company by the Chairman or the person authorized by him. The results declared along with the Scrutinizer’s Report shall be placed on the website of the Company - www.theubgroup.com and on the website of CDSL – www.cdslindia.com. The results shall simultaneously be communicated to the Stock Exchanges.

Notice (contd.)


LIMITED

6

EXPLANATORY STATEMENT as required under Section 102 of the Companies Act, 2013

Item No. 5

Ms. Daljit Mahal was appointed as an Additional Director of the Company with effect from March 28, 2015, pursuant to the provisions of Section 161 and other applicable provisions of the Companies Act, 2013, Article 114 of the Articles of Association of the Company, Section 149(1) of the Companies Act, 2013 and the Rules made thereunder and Clause 49 (II) (A) (1) of the Listing Agreement. She holds office up to the date of this Annual General Meeting.

A notice in writing in the prescribed manner as required by Section 160 of the Companies Act, 2013 and Rules made thereunder has been received from a Member proposing the candidature of Ms. Daljit Mahal for the office of Director of the Company.

The Board considers that her association would be of immense benefit to the Company and it is desirable to avail the services of Ms. Daljit Mahal. Accordingly, the Board recommends the resolution in relation to appointment of Ms. Daljit Mahal as a Director liable for retirement by rotation, for approval by the Members of the Company.

Except Ms. Daljit Mahal, being an appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, financial or otherwise, in the resolution set out at Item No. 5. Ms. Daljit Mahal does not hold any equity shares of the Company and is not related to any other Director of the Company.

The Board recommends the Resolution set out at Item No. 5 of the Notice as an Ordinary Resolution for your approval.

Item No. 6

The Members of the Company at the Annual General Meeting held on September 30, 2014 by way of Special Resolution in terms of the provisions of Section 188(1) of the Companies Act, 2013 read with Rule 15(3) of the Companies (Meetings of Board and its Powers) Rules 2014 (as amended from time to time) and Clause 49-VII of the Listing Agreement had approved the following monetary limits for related party transactions for financial year 2014-15:

Name of the Related Party Nature of the contract or arrangementMonetary limit of the transaction

(` In crores)

United Spirits Limited (USL) Receipt of Pegasus Logo fee income 50

United Spirits Limited (USL) Purchase of goods or materials (IMFL) 150

United Breweries Limited (UBL) Purchase of goods or materials (Beer) 150

Mangalore Chemicals & Fertilizers Limited (MCF)

Repayment of Pegasus Logo Security Deposit and Receipt of Pegasus Logo fee income

90

UB International Trading Limited (UBITL) Purchase of goods or materials(leather footwear)

100

Although the limits as approved by the Shareholders at the Annual General Meeting held on September 30, 2014 have not been fully utilized, in the absence of clarity as to whether prior approval of the Shareholders has to be taken for each financial year and also in the light of the provisions of the Companies (Amendment) Act, 2015 (“CA Amendment 2015”), the Board of Directors of your Company have, by way of abundant caution, approved the proposed transaction along with annual limit (as mentioned below) that your Company may enter into 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 2015-16.

In terms of the provisions of the CA Amendment 2015 which received the assent of the President on May 25, 2015 and published in the Official Gazette on May 26, 2015, the requirement for approving related party transactions covered under the proviso to Section 188 (1) of the Companies Act, 2013 read with the Companies (Meeting of Board and its Powers), Rules, 2014 by shareholders has been changed from a Special Resolution to an Ordinary Resolution. However, in terms of Clause 49(VII)(E) of the Listing Agreement, a “material related party transaction” requires approval of the Shareholders by way of a Special Resolution.

The proposed transaction under consideration qualifies as a “material related party transaction” in terms of Clause 49 of the Listing Agreement and therefore the Board of Directors of your Company recommend the resolution to be adopted as a Special Resolution.


LIMITED

7

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

Personnel who is related

Nature of Relationship Nature of the proposed contract or

arrangement

Monetary limit of the transaction(` In crores)

United BreweriesLimited (UBL)

Dr. Vijay Mallya, Director Group Company Purchase of goods or materials ( Beer)

150.00

Except Dr. Vijay Mallya and his relatives none of the other Directors are concerned or interested in the above resolutions.

Your Directors recommend the Special Resolution as set out in Item No. 6 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 Senior Vice President – Legal & Company SecretaryMumbai July 23, 2015

Details of Directors seeking re-appointment at the Ninety Ninth 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 / Age May 7, 1987 / 28 yearsNationality AmericanQualification B.Sc. Queen Mary University, London

Expertise Marketing and Brand Development Date of appointment May 7, 2005Shares held in the Company NilDirectorship in other Companies Kamsco Industries Private Limited

Mallya Private LimitedRoyal Challengers Sports Private LimitedThe Gem 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

Number of meetings attended Two Mr. Sidhartha V Mallya is the son of Dr. Vijay Mallya who is a Director of the Company and may be concerned or interested in the resolution relating to the re-appointment of Mr. Sidhartha V Mallya.

Details of Directors seeking appointment under Item No. 5 of the Notice of the Ninety Ninth Annual General Meeting of the Company:

Name Ms. Daljit Mahal (DIN 07140099)Date of Birth / Age May 22, 1959 / 56 yearsNationality BritishQualification Graduate, Malaspina College, Nanaimo, British Columbia, CanadaExpertise Secretarial and Office AdministrationExperience Ms. Daljit Mahal has been working with the UB Group for over 22 years Date of appointment March 28, 2015Shares held in the Company NilDirectorship in other Companies NilChairman / Member of the Committees* ofother Companies in which he is a Director

Nil

Number of meetings attended Nil. Appointed w.e.f. March 28, 2015


LIMITED

8

ROUTE MAP

Venue :Conference Hall, Level 1, UB Tower,UB City, No. 24, Vittal Mallya Road,

Bangalore – 560 001.

UB City, a landmark in Vittal Mallya Road,named after the founder of the Group.

UNITED BREWERIES (HOLDINGS) LIMITEDRegistered Office: “UB Tower”, Level 12, UB City, No.24, Vittal Mallya Road, Bangalore 560001

Tel: 080-22272808, 22275809, 39856000; Fax: 080-22274890; Corporate Identity Number: L85110KA1915PLC000740; Website: www.theubgroup.com

e-mail:[email protected]

ATTENDANCE SLIPTH

99 ANNUAL GENERAL MEETINGDate: Monday, September 28, 2015 at 11.30 a.m.

Place: Conference Hall, Level 1, UB Tower, UB City, No.24, Vittal Mallya Road, Bangalore - 560001

I/We hereby record my/our presence at the NINETY-NINTH ANNUAL GENERAL MEETING of the Company being held on Monday, September 28, 2015 at 11.30 a.m. at Conference Hall, Level 1, UB Tower, UB City, No.24, Vittal Mallya Road, Bangalore - 560001

Signature of the Member(s) / Proxy / Authorised Representative* ……………...........………………………

* Strike off whichever is not applicable.

NOTE:

1. The Company will accept only the Attendance Slip of a person personally attending the Meeting as a Member or a valid Proxy duly registered in time with the Company. The Company will not accept Attendance Slip from any other person even if signed by a Member. Members are requested not to bring non-Members or children.

2. Persons representing bodies corporate are required to submit with the Company original Resolution of the Board of Directors or other governing body of such Member, authorizing such person to act as its representative under Section 113 of the Companies Act, 2013.

3. Member/Proxy - holder attending the Meeting should bring his/her copy of the Annual Report for reference at the Meeting.

4. To facilitate Members, registration of attendance will commence at 11.00.a.m. on September 28, 2015.

5. Remote E-voting particulars are set out below:

Remote e-voting period begins on

Remote e-voting period ends on

Name of the Scrutinizer

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Friday, September 25, 2015 at 9.00.a.m.

Sunday, September 27, 2015 at 5.00.p.m.

Mr. Sudhir Hulyalkar, Practising Company Secretary

150831032

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UNITED BREWERIES (HOLDINGS) LIMITEDRegistered Office: “UB Tower”, Level 12, UB City, No.24, Vittal Mallya Road, Bangalore 560001

Tel: 080-22272808, 22275809, 39856000; Fax: 080-22274890; Corporate Identity Number: L85110KA1915PLC000740; Website: www.theubgroup.com

e-mail:[email protected]

Name of the Member(s) : _______________________________________________________________________

Registered Address : _______________________________________________________________________

_______________________________________________________________________

E-mail Id : ________________________________________________________________________

Folio No. / Client ID. : ______________________________________ DP ID. : __________________________

I/We, being the holder(s) of _________________Equity Shares of United Breweries (Holdings) Limited, hereby appoint:

(1) Name : _____________________________________ Address : ___________________________________

E-mail Id : _____________________________________ Signature : ________________________, or failing him

(2) Name : _____________________________________ Address : ___________________________________

E-mail Id : _____________________________________ Signature : ________________________, or failing him

(3) Name : _____________________________________ Address : ___________________________________

E-mail Id : _____________________________________ Signature: __________________________________

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the Ninety Ninth Annual General Meeting of the Company to be held on Monday, September 28, 2015 at Conference Hall, Level 1, UB Tower, UB City, No 24, Vittal Mallya Road, Bangalore -560001 at 11.30 a.m. and at any adjournment(s) thereof in respect of such resolutions as are indicated below:

Signed this ............................................day of ............................2015.

.......................................................Signature of the Proxy holder(s)

Notes :

1. This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting.

2. A person can act as proxy on behalf of Members not exceeding Fifty Members and holding in the aggregate not more than ten percent of the total share capital of the Company. Further, a Member holding more than ten percent of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as proxy for any other person or member.

3. A Member entitled to attend and vote at the Meeting is entitled to appoint a Proxy to attend and vote instead of himself and the Proxy need not be a Member.

1. Adoption of Standalone Audited Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and Cash Flow Statement for the financial year ended on that date and the Reports of the Auditors and Directors thereon.

2. Adoption of Consolidated Audited Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and Cash Flow Statement for the financial year ended on that date and the Reports of the Auditors thereon.

3. Re-appointment of Mr. Sidhartha V Mallya (DIN 00991076), who retires by rotation.

4. Ratification of Auditors' Appointment.

5. Appointment of Ms. Daljit Mahal (DIN 07140099) as a Director liable to retire by rotation.

6. Contract/Arrangement with United Breweries Limited in respect of purchase of goods or materials from them (including purchase of Beer) under Section 188 and other applicable provisions of the Companies Act, 2013 and the Rules made thereunder.

............................................................Signature of the Shareholder(s)

PROXY FORM[Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014]

AffixRe.1/-

RevenueStamp

Moneycontrol.comUNITED BREWERIES (HOLDINGS) LIMITED 1 Directors Dr. Vijay Mallya, Chairman Mr....

Documents

Transcript of Moneycontrol.comUNITED BREWERIES (HOLDINGS) LIMITED 1 Directors Dr. Vijay Mallya, Chairman Mr....