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Notes to Accounts of Pioneer Distilleries Ltd.

Mar 31, 2016

1. Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 181,091,021/- (2015: Rs 257,670,478/-)

2. Employee Benefits :

Defined benefit plan - Gratuity

The Company provides for gratuity, a defined benefit plan (the Gratuity Plan), to its employees. The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, of an amount based on the respective employee’s last drawn salary and years of employment with the Company. The Company has employees’ gratuity funds managed by a Insurance Company:

3. Segment Reporting :

The Company is primarily engaged in the business of Extra Neutral Alcohol and allied products. Since the inherent nature of all activities are integrated and governed by the same set of risk and returns and operating in the same economic environment, these have been grouped as a single segment in the financial segments. The said treatment is in accordance with the Accounting Standard (AS 17) on “Segment Reporting”

4.. Income Tax:

A) Current Taxation : Nil

B) Deferred Taxation

5. a) In the opinion of the management assets other than fixed assets have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

b) The accounts of certain Banks, Secured Loans, Trade Receivable, Trade Payable, Other Current Liabilities and Loans & Advances are however, subject to formal confirmations/reconciliation & consequent adjustments if any. The Management does not expect any material difference affecting the current period''s financial statements on such reconciliations/adjustments.

6. The Company has not received the intimation from the suppliers regarding their status under the Micro, Small and Medium enterprises development Act,2006 and hence disclosures, if any relating to amounts unpaid as at year and together with interest paid, payable as required under the said Act have not been given.

7. There are no foreign exchange earnings and outflows during the year.

8. The Company’s liability on Sales Tax Deferment provision made up to the year 2009-10 is Rs. 2,878.06 lakhs under the head Unsecured Loans (Schedule 4) which has been collected under deferral scheme of Maharashtra State Government and is repayable in 14 years starting from the end of the 10th year i.e 2010-11. During the year 2015-16 the company has repaid its 6th installment of Rs.24,602,020/-.

9. a. The reference made by the Company to the Hon''ble Board for Industrial and Financial Reconstruction (BIFR) in compliance with Section 15 of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) has been registered as Case No. 70/2012. The matter is pending before BIFR for further orders.

b. Considering the projects on bottling capacity expansion and completion of malt spirit plant, the management is hopeful of reversing the losses in the coming years with the committed Financial, Technical and Administrative support from the Holding Company. Accordingly, these financial statements have been prepared on a going concern basis.

10) a. Based on the expert opinion received and in accordance with the treatment prescribed under the Accounting Standard 12 -Government Grants, the Company has during the year recognized subsidy receivable pursuant to PSI Scheme 2007 of the Government of Maharashtra under the Income approach.

b. The Company is entitled to a Government Grant up to Rs. 14489.00 Lacs mostly in the form of VAT refund from the State of Maharashtra and which is being recognized as other operating income in the statement of Profit & loss on a systemic basis over the period it accrues. Until March 16, the Company has recognized Grant aggregating to Rs. 12834.04 Lacs (including Rs. 3117.02 Lacs in Quarter ended March-16; Rs. 8127.27 Lacs for the year ended 31st March 2016 and Rs. 3094.76 Lacs in the previous financial year ended on 31st Mar15).

11) Previous year’s figures have been regrouped or rearranged wherever necessary to be in conformity with the current year’s classification.


Mar 31, 2015

1. The Company's pending litigations comprise of claims against the Company and proceedings pending with Tax and other Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not reasonably expect the outcome of these proceedings to have a material impact on its financial statements.

2. Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 257,670,478 (2014: Rs 274,165,165/-)

3. Employee Benefits :

Defined benefit plan – Gratuity

The Company provides for gratuity, a defined benefit plan (the Gratuity Plan), to its employees. The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, of an amount based on the respective employee's last drawn salary and years of employment with the Company. The Company has employees' gratuity funds managed by a Insurance Company:

4. Segment Reporting :

The Company is primarily engaged in the business of Extra Neutral Alcohol and allied products. Since the inherent nature of all activities are integrated and governed by the same set of risk and returns and operating in the same economic environment, these have been grouped as a single segment in the financial segments. The said treatment is in accordance with the Accounting Standard (AS 17) on "Segment Reporting"

5. Related Party transaction :

Related parties and transactions with them, as identified by the management in accordance with the Accounting Standard 18, as notified by the Companies (Accounting standard) Rules 2006, are as follows:

United Spirits Limited : Holding Company

Mr. Ranjan Satsangi; Key Management Personnel

* During the year, in Q4, the holding company has raised a debit note aggregating to Rs.2077.64 lacs, with respect to interest for the period from 01.04.2012 to 31.03.2015,on advance granted to the Company of Rs.60 Crore in the year 2011-12.

6. Income Tax :

A) Current Taxation : Nil

B) Deferred Taxation

7. A) In the opinion of the management assets other than fixed assets have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

B) The accounts of certain Banks, Secured Loans, Trade Receivable, Trade Payable, Other Current Liabilities and Loans & Advances are however, subject to formal confirmations/reconciliation & consequent adjustments if any. The Management does not expect any material difference affecting the current period's financial statements on such reconciliations/adjustments.

8. The Company has not received the intimation from the suppliers regarding their status under the Micro, Small and Medium enterprises development Act,2006 and hence disclosures, if any relating to amounts unpaid as at year and together with interest paid payable as required under the said Act have not been given.

9. There are no foreign exchange earnings and outflows during the year.

10. The Company's liability on Sales Tax Deferment provision made up to the year 2009-10 is Rs. 2,878.06 lakhs under the head Unsecured Loans (Schedule 4) which has been collected under deferral scheme of Maharashtra State Government and is repayable in 14 years starting from the end of the 10th year i.e 2010-11. During the year 2014-15 the company has repaid its 5th installment of Rs.24,602,020/-.

11. (a) The reference made by the Company to the Hon'ble Board for Industrial and Financial Reconstruction (BIFR) in compliance with Section 15 of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) has been registered as Case No. 70/2012. The matter is pending before BIFR for further orders.

(b) Considering the future projects on bottling capacity expansion and completion of malt spirit plant ,the management is hopeful of reversing the losses in the coming years with the committed Financial, Technical and Administrative support from the Holding Company. Accordingly, these financial statements have been prepared on a going concern basis.

12. Based on the expert opinion received and in accordance with the treatment prescribed under the Accounting Standard 12 –Government Grants , the Company has during the year recognised subsidy receivable pursuant to PSI Scheme 2007 of the Government of Maharashtra under the Income approach.

13. Previous year's figures have been regrouped or rearranged wherever necessary to be in conformity with the current year's classification.


Mar 31, 2014

Nature of security

(i) Term loan from a bank Rs.2,55,07,062 (2012-13: Rs 10,23,11,748) are secured by a charge on fixed assets of the company including Plant & Machinery and building of Bio Gas Electricity Plant

(ii) Term loan from a bank Rs.15,48,53,285 (2012-13: Rs.20,66,18,614) are secured by a charge on fixed assets of the company including land and building

(iii) Term loan from a bank Rs.3,09,73,668 (2012-13: Rs.4,96,92,553) are secured by a charge on fixed assets of the company including land and building

(iv) Term loan from a bank Rs.29,34,34,213 (2012-13: Rs.29,64,34,147) are secured by a charge on entire fixed assets of the company including hypothecation charge over entire plant & Machinery ,building of the proposed expansion project

Terms of Repayment

Repayable in 5 equal quarterly installments

commencing from Mar-13 along with interest of 14.35% p.a.

Repayable in 13 equal quarterly installments

commencing from Mar-13 along with interest of 14.35% p.a.

Repayable in 9 equal quarterly installments

commencing from Mar-13 along with interest of 14.35% p.a.

Repayable in 21 equal quarterly installments

commencing from Mar-13 along with interest of 14.35% p.a.

Above loans are further secured by second charge over the entire current assets and by corporate guarantee issued by the Holding Company, United Spirits Limited

2. Contingent Liabilities:

i) Disputed Income Tax demand: Rs.Nil (2013: Rs. Nil)

ii) Disputed Central Excise demand: Rs. Nil (2013: Rs. Nil)

3. Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs.274,165,165/- (2013: Rs.135,866,669/-)

4. Employee Benefits :

Defined benefit plan - Gratuity

The Company provides for gratuity, a defined benefit plan (the Gratuity Plan), to its employees. The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, of an amount based on the respective employee''s last drawn salary and years of employment with the Company. The Company has employees'' gratuity funds managed by a Insurance Company:

5. Segment Reporting :

The Company is primarily engaged in the business of Extra Neutral Alcohol and allied products. Since the inherent nature of all activities are integrated and governed by the same set of risk and returns and operating in the same economic environment, these have been grouped as a single segment in the financial segments. The said treatment is in accordance with the Accounting Standard (AS 17) on "Segment Reporting"

6. Related Party transaction :

Related parties and transactions with them, as identified by the management in accordance with the Accounting Standard 18, as notified by the Companies (Accounting standard) Rules 2006, are as follows:

United Spirits Limited : Holding Company

Tern Distilleries Private Limited: Fellow Subsidary

Mr. Ranjan Satsangi; Key Management Personnel

7. A) In the opinion of the management assets other than fixed assets have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

B) The accounts of certain Banks, Secured Loans, Trade Receivable, Trade Payable, Other Current Liabilities and Loans & Advances are however, subject to formal confirmations/reconciliation & consequent adjustments if any. The Management does not expect any material difference affecting the current period''s financial statements on such reconciliations/adjustments.

8. The Company has not received the intimation from the suppliers regarding their status under the Micro, Small and Medium enterprises development Act, 2006 and hence disclosures, if any relating to amounts unpaid as at year and together with interest paid /payable as required under the said Act have not been given.

9. There are no foreign exchange earnings and outflows during the year.

10. The Company''s liability on Sales Tax Deferment provision made up to the year 2009-10 is Rs. 2,878.06 lakhs under the head Unsecured Loans (Schedule 4) which has been collected under deferral scheme of Maharashtra State Government and is repayable in 14 years starting from the end of the 10th year i.e 2010-11. During the year 2013-14 the company has repaid its 4th installment of Rs.12,520,110/-.

11. a) The Company has made a reference to the Board for Industrial and Financial Reconstruction (BIFR) in compliance with Section 15 of Sick Industrial Companies (Special Provisions) Act, 1985, because the Company''s net worth has been fully eroded because of losses. This has been registered as Case No.70/2012, and the BIFR by order pronounced on February 08, 2014 has appointed IDBI Bank Limited to conduct Special Investigative Audit (SIA) for FY 2010-11, 2011- 12 and FY 2012-13. IDBI Bank Limited has appointed M/s. Dagliya & Company on April 25, 2014 to conduct the SIA ordered by BIFR.

b) Considering ongoing projects of bottling and malt spirit plant are on course, the management is confident of reversing the losses in the coming years with the committed Financial, Technical and Administrative support from the Holding Company. Accordingly, these financial statements have been prepared on a going concern basis.

12. Based on the expert opinion received and in accordance with the treatment prescribed under the Accounting Standard 12 -Government Grants , the Company has during the year recognised subsidy receivable pursuant to PSI Scheme 2007 of the Government of Maharashtra under the Income approach as against hitherto being accounted under capital approach. Accordingly, subsidy receivable under the said Scheme of Rs.161,200,144 (including Rs.61,944,014 for earlier years) has been credited to Other Operating income .

13. Previous year''s figures have been regrouped or rearranged wherever necessary to be in conformity with the current year''s classification.


Mar 31, 2013

1. Contingent Liabilities:

i) Disputed Income Tax demand: Rs. Nil (2012: Rs.12,13,281/-)

ii) Disputed Central Excise demand: Rs. Nil (2012: Rs.15,89,466/-)

2. Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs.13,58,66,669/- (2012: Rs.39,39,00,000/-)

3. Employee Benefits :

Defined benefit plan - Gratuity

The Company provides for gratuity, a defined benefit plan (the Gratuity Plan), to its employees. The Gratuity Plan provides a lumpsum payment to vested employees, at retirement or termination of employment, of an amount based on the respective employee''s last drawn salary and years of employment with the Company. The Company has employees'' gratuity funds managed by an Insurance Company:

4. Segment Reporting:

The Company is primarily engaged in the business of Extra Neutral Alcohol and allied products. Since the inherent nature of all activities are integrated and governed by the same set of risk and returns and operating in the same economic environment, these have been grouped as a single segment in the financials. The said treatment is in accordance with the Accounting Standard (AS 17) on "Segment Reporting"

5. Transaction with Related Party:

Related parties and transactions with them, as identified by the management in accordance with the Accounting Standard 18, as notified by the Companies (Accounting standard) Rules 2006, are as follows:

United Spirits Limited : Holding Company

Fellow Associates:

1) United Spirits Nepal Private Limited (USNPL), 2) Asian Opportunities & Investment Limited (AOIL),

3) Bouvet -Ladubay SA.S (BL), 4) Chapin Landais SA.S (CL), 5) Palmer Investment Group Limited(PIG),

6) Montrose International SA (MI), 7) JIHL Nominees Limited (JIHL), 8) RG Shaw & Company Limited (RGSC), 9) Shaw Darby & Company Limited (SDC), 10) Shaw Scott & Company Ltd (SSC), 11), Thames Rice Milling Company Limited (TRMCL), 12) Shaw Wallace Overseas Limited (SWOL), 13) McDowell (Scotland) Limited (MSL), 14) USL Holdings Limited (USLHL), 15) Royal Challengers Sports Private Limited (RCSPL), 16) USL Holdings (UK) Limited, 17) United Spirits (UK) Limited, 18) United Spirits (Great Britain) Limited, 19) SW Finance Co. Limited (SWFCL), 20) Ramanreti Investments & Trading Company Limited (RITCL), 21) Daffodils Flavours and Fragrances Private Limited (DFFPL), 22) Four Seasons Wines Limited (FSWL), 23) United Vintners Limited (UVL), 24) United Alcobev Limited (UAL) , 25) McDowell Beverages Limited (MBL), 26) McDowell & Company Limited, 27) Jasmine Flavours and Fragrances Private Limited, 28) Liquidity Inc, 29) Whyte and Mackay Group Limited, 30) Whyte and Mackay Holdings Ltd, 31) Whyte and Mackay Limited (W&M), 32) Whyte and Mackay Warehousing Limited, 33) Bruce & Company (Leith) Limited, 34) Charles Mackinlay & Company Limited, 35) Dalmore Distillers Limited 36) Dalmore Whyte & Mackay Limited 37) Edinburgh Scotch Whisky Company Limited, 38) Ewen & Company Limited, 39) Fettercairn Distillery Limited, 40) Findlater Scotch Whisky Limited, 41) Glayva Liqueur Limited, 42) Glentalla Limited, 43) GPS Realisations Limited, 44) Grey Rogers & Company Limited, 45) Hay & MacLeod Limited, 46) Invergordon Distillers (Holdings) Limited, 47) Invergordon Distillers Group Limited, 48) Invergordon Distillers Limited, 49) Invergordon Gin Limited, 50) Isle of Jura Distillery Company Limited, 51) Jarvis Halliday & Company Limited, 52) John E McPherson & Sons Limited, 53) Kensington Distillers Limited, 54) Kyndal Spirits Limited, 55) Leith Distillers Limited, 56) Loch Glass Distilling Company Limited, 57) Longman Distillers Limited, 58) Lycidas (437) Limited, 59) Pentland Bonding Company Limited, 60) Ronald Morrison & Company Limited, 61) St The Sheep Dip Whisky Company Limited, 62) Vincent Street (437) Limited, 63) Tamnavulin-Glenlivet Distillery Company Limited, 64) TDL Realisations Limited, 65) W & S Strong Limited, 66) Watson & Middleton Limited, 67) Wauchope Moodie & Company Limited, 68) Whyte & Mackay Distillers Limited, 69) William Muir Limited, 70) WMB Realisations Limited, 71) Whyte and Mackay Property Limited, 72) Whyte and Mackay de Venezuela CA, 73) KI Trustees Limited, 74) USL Shanghai Trading Company Limited 75) Tern Distilleries Private Limited(Tern), 76) Sovereign Distilleries Limited, 77) Whyte & Mackay Americas Limited, 78) Whyte & Mackay Singapore Limited.

6. A) In the opinion of the management assets other than fixed assets have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

B) The accounts of certain Banks, Secured Loans, Trade Receivable, Trade Payable, Other Current Liabilities and Loans & Advances are however, subject to formal confirmations/reconciliation & consequent adjustments if any. The Management does not expect any material difference affecting the current period''s financial statements on such reconciliations/adjustments.

7. The Company has not received the intimation from the suppliers regarding their status under the Micro, Small and Medium enterprises development Act,2006 and hence disclosures, if any relating to amounts unpaid as at year and together with interest paid / payable as required under the said Act have not been given.

8. There are no foreign exchange earnings and outflows during the year.

9. The Company''s liability on Sales Tax Deferment provision made up to the year 2009-10 is Rs. 2,878.06 lakhs under the head Unsecured Loans (Schedule 4) which has been collected under deferral scheme of Maharashtra State Government and is repayable in 14 years starting from the end of the 10th year i.e 2010-11. During the year 2012-13 the company has repaid its 3rd installment of Rs.97,29,897/-.

10. The Company has became subsidiary of United Spirits Limited, the new promoter effective 24th May, 2011.

11. The Company has been incurring losses since last three years and its net worth has been fully eroded. Necessary orders are awaited in respect of reference made to Board for Industrial and Financial Reconstruction. Considering upcoming projects of bottling and malt spirit plant are on course, the management is confident of reversing the losses in the coming years with the committed Financial, Technical and Administrative support from the Holding Company. Accordingly, these financial statements have been prepared on a going concern basis.

12. Previous year''s figures have been regrouped or rearranged wherever necessary to be in conformity with the current year''s classification.


Mar 31, 2012

Government Subsidy A Package Scheme of Incentive

The Company's manufacturing facility at Balapur Village, Dharmabad, Nanded Distict has been granted "Mega Project Status" by Government of Maharashtra and therefore is eligible for Industrial Promotion Subsidy (IPS) under Packaged Scheme of Incentive (PSI) 2007. The company has been granted Eligibility Certificate for Rs 10,542.60 Lacs, issued by the Directorate of Industries, Government of Maharashtra in this regard. Entitlement of:

a. Electricity Duty exemption for the period of 7 years from date of commencement of commercial Production.

b. 100% exemption from payment of Stamp duty under the relevant Government resolution of Revenue and Forest Department

c. Taxes paid to the State Government within a period of 7 Years

d. 75% reimbursement of expenditure on account of contribution towards ESI & EPF schemes for a period of 5 years commencing from 01-April-2007 To 31-March-2012 limited to 25% of FCI Further, in terms of the Accounting Standard (AS 12) "Accounting for Government Grants" prescribed by Companies (Accounting Standards) Amendment Rules, 2006, eligible incentive is considered to be in the nature of promoters' contribution. Therefore, subsidy of Rs.1,63,50,700/- has been credited to the Capital Reserve

B Subsidy by Ministry of New and Renewable Energy

Subsidy of Rs 4,72,50,000/- received from MNRE towards installation of 4.725 MW power generation project using biogas being produced through Distillery waste through 100% biogas engines. The Incentive amount is considered to be in the nature of promoters' contribution, therefore has been Credited to Capital Reserve.

1. Contingent Liabilities

i) Disputed Income Tax demand: Rs 12,13,281/- (2011: Rs Nil)

ii) Disputed Central Excise demand: Rs 15,89,466/- (2011: Rs Nil)

2. Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs.39,39,00,000 /- (2011: Rs Nil)

3. Employee Benefits

Defined benefit plan - Gratuity

The Company provides for gratuity, a defined benefit plan (the Gratuity Plan), to its employees. The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, of an amount based on the respective employee's last drawn salary and years of employment with the Company. The Company has employees ' gratuity funds managed by an Insurance Company:

4. Segment Reporting :

The Company is primarily engaged in the business of Extra Neutral Alcohol and allied products. Since the inherent nature of all activities are integrated and governed by the same set of risk and returns and operating in the same economic environment, these have been grouped as a single segment in the financial segments. The said treatment is in accordance with the Accounting Standard (AS 17) on "Segment Reporting"

5. Transaction with Related Party:

Related parties and transactions with them, as identified by the management in accordance with the Accounting Standard 18, as notified by the Companies (Accounting standard) Rules 2006, are as follows:

United Spirits Limited : Holding Company Fellow Associates:

1) United Spirits Nepal Private Limited (USNPL), 2) Asian Opportunities & Investment Limited (AOIL), 3) Bouvet -Ladubay S.A.S (BL), 4) Chapin Landais S.A.S (CL), 5) Palmer Investment Group Limited(PIG), 6) Montrose International SA (MI), 7) JIHL Nominees Limited (JIHL), 8) RG Shaw & Company Limited (RGSC), 9) Shaw Darby & Company Limited (SDC), 10) Shaw Scott & Company Ltd (SSC, 11), Thames Rice Milling Company Limited (TRMCL), 12) Shaw Wallace Overseas Limited (SWOL), 13) McDowell (Scotland) Limited (MSL), 14) USL Holdings Limited (USLHL), 15) Royal Challengers Sports Private Limited (RCSPL), 16) USL Holdings (UK) Limited, 17) United Spirits (UK) Limited, 18) United Spirits (Great Britain) Limited, 19) Shaw Wallace Breweries Limited (SWBL), 20) Ramanretti Investment & Trading Limited (RITL), 21) Daffodils Fragrance and Flavors Private Limited (DFFPL), 22) Four Seasons Wines Limited (FSWL), 23) United Vintners Limited (UVL), 24) United Alcobev Limited (UAL) , 25) McDowell Beverages Limited (MBL), 26) McDowell & Company Limited, 27) Jasmine Flavors and Fragrances Private Limited, 28) Liquidity Inc, 29) Whyte and Mackay Group Limited, 30) Whyte and Mackay Holdings Ltd, 31) Whyte and Mackay Limited (W&M), 32) Whyte and Mackay Warehousing Limited, 33) Bruce & Company (Leith) Limited, 34) Charles Mackinlay & Company Limited, 35) Dalmore Distillers Limited, 36) Dalmore Whyte & Mackay Limited, 37) Edinburgh Scotch Whisky Company Limited, 38) Ewen & Company Limited, 39) Fetter cairn Distillery Limited, 40) Findlater Scotch Whisky Limited, 41) Glayva Liqueur Limited, 42) Glentalla Limited, 43) GPS Realizations Limited, 44) Grey Rogers & Company Limited, 45) Hay & MacLeod Limited, 46) Invergordon Distillers (Holdings) Limited, 47) Invergordon Distillers Group Limited, 48) Invergordon Distillers Limited, 49) Invergordon Gin Limited, 50) Isle of Jura Distillery Company Limited, 51) Jarvis Halliday & Company Limited, 52) John E McPherson & Sons Limited, 53) Kensington Distillers Limited, 54) Kyndal Spirits Limited, 55) Leith Distillers Limited, 56) Loch Glass Distilling Company Limited, 57) Longman Distillers Limited, 58) Lycidas (437) Limited, 59) Pent land Bonding Company Limited, 60) Ronald Morrison & Company Limited, 61) St The Sheep Dip Whisky Company Limited, 62) Vincent Street (437) Limited, 63) Tamnavulin-Glenlivet Distillery Company Limited, 64) TDL Realizations Limited, 65) W & S Strong Limited, 66) Watson & Middleton Limited, 67) Wauchope Moodie & Company Limited, 68) Whyte & Mackay Distillers Limited, 69) William Muir Limited, 70) WMB Realizations Limited, 71) Whyte and Mackay Property Limited, 72) Whyte and Mackay de Venezuela CA, 73) KI Trustees Limited, 74) USL Shanghai Trading Company Limited 75) Tern Distillery Private Limited(Tern) 76) Chennai Breweries Private Limited(CBPL) 77) Sovereign Distilleries Limited, 78) USL Benefit Trust,,79) Wine Soc of India Pvt Ltd

The management is confident of reversing the losses in the coming years with the committed Financial, Technical and Administrative support from the Holding Company hence Deferred Tax Asset to the extent of 16,02,86,870 has been recognized.

6. A) In the opinion of the management assets other than fixed assets and non-current investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

B) The accounts of certain Banks, Secured Loans, Debtors, Creditors and Loans & Advances are however, subject to formal confirmations/reconciliation & consequent adjustments if any. The Management does not expect any material difference affecting the current period's financial statements on such reconciliations/adjustments.

7. The Company has not received the intimation from the suppliers regarding their status under the Micro, Small and Medium enterprises development Act,2006 and hence disclosures, if any relating to amounts unpaid as at year and together with interest paid / payable as required under the said Act have not been given.

8. There are no foreign exchange earnings and outflows during the year.

9. The Company's liability on Sales Tax Deferment provision made up to the year 2009-10 is Rs. 2,878.06 lakhs under the head Unsecured Loans (Schedule 4) which has been collected under deferral scheme of Maharashtra State Government and is repayable in 14 years starting from the end of the 10th year i.e 2010-11. During the year 2011-12 the company has repaid its 2nd installment of Rs.62,39,730/-.

10. The Company has become subsidiary of United Spirits Limited, the new promoters, effective 24th May 2011 consequent to acquisition of 10,977,132 equity shares constituting 81. 99% of the paid up capital of the Company

11. The management is confident of reversing the losses in the coming years with the committed Financial, Technical and Administrative support from the Holding Company. Accordingly these financial statements have been prepared on a going concern basis.

12. Previous year's figures have been regrouped or rearranged wherever necessary to be in conformity with the current year's classification.


Mar 31, 2010

1. Segment Reporting :

The Company is primarily engaged in the business of Rectified Spirit, Extra Neutral Alcohol and allied products. Since the inherent nature of both these activities are integrated and governed by the same set of risk and returns and operating in the same economic environment, these have been grouped as a single segment in the financial segments. The said treatment is in accordance with the Accounting Standard (AS 17) on "Segment Reporting"

2. Related Party disclosures :

a)Names of Related Parties & relationship Party Name Relation

i) Pioneer I Serve Limited Associate

(formerly Raynolds Infovision Ltd.)

ii) Pioneer Infra Ventures Ltd Associate

iii) Pioneer Gas Power Ltd Associate

iv) K. Sudhir Rao Key Management Personnel (Vice-Chairman)

v) K. Suhan Rao Key Management Personnel (Managing Director)

3. Income Tax :

Income Taxes are computed using the tax effect accounting method, where taxes are accrued in the same period the related revenue and expenses arise. A provision is made for income tax annually based on the tax liability computed after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable.

The differences that result between the profits offered for income taxes and the profit as per the financial statements are identified and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on prevailing enacted regulations of the Indian Income Tax Act, 1961. Deferred tax assets are recognized only if there is reasonable certainty that they will be realized.

4. Secured Loans :

a) Term Loan : Term Loans from State Bank of Mysore and State Bank of Indore are secured by first charge by way of equitable mortgage by deposit of title deeds to cover all immovable properties of the company and hypothecation of all movable properties both present and future subject to prior charges created/to be created in favour of Companys bankers for securing borrowings for working capital requirements. The mortgage/charges created above shall rank pari-passu with the charges created/to be created in favour of the Banks.

The above said loans are also guaranteed by some of the directors of the Company in their personal capacities.

All the above loans were utilized for the purpose of establishment and expansion of the distillery unit and related acquisition of Fixed Assets.

b) Working Capital loan :

Cash credit facility with State Bank of Mysore & Indian Overseas Bank are secured by hypothecation of stocks of raw materials, semi-finished and finished goods, consumable stores and book debts; and

Secured by second charges on fixed assets of the Company ranking pari passu, inter-se with term loan lenders; and

The above said loan is also guaranteed by some of the directors of the Company in their personal capacities.

5. Excise Duty :

The company is availing CENVAT credit on purchase of raw materials and is being utilized on sale of Special Denatured Spirit (SDS),Co2 and Ethanol. Excise duty paid on the quantum of raw-materials used for production of Extra Neutral Alcohol (ENA) and Rectified Spirit (RS) is reversed by debiting to Profit and Loss Account as required under sub-rule (3) (a) (i) of Rule 6 of CENVAT Credit Rules, 2004.

6. There are no overdue amounts exceeding Rs. 1.00 lakh which are outstanding for more than 30 days payable to Small Scale Industrial Undertaking(s) as at 31st March, 2010.

7. Contingent Liabilities :

Estimated amount of Contracts remaining to be executed on account of Capital Account and not provided for (net of advances) is Rs. Nil.

8. There are no foreign exchange earnings during the year.

9. The Company determines liability on Sales Tax Deferment on a Net Present Value basis and accordingly provision is made. Provision will be made in each year for the incremental liability. Amount Shown under the head Unsecured Loans (Schedule 4) includes sales tax amounting to Rs.2,878.06 lakhs collected under deferral scheme of Maharashtra State Government and is repayable in 14 years starting from the end of the 10th year in which it is so collected and earliest year to start repayment is 2010-2011.

10. Paise rounded off to nearest rupee.

11. Previous years figures have been regrouped or reclassified wherever necessary to be in conformity with the current years classification.

12. Schedules 1 to 20 form an integral part of the Balance Sheet and Profit and Loss Account.