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Directors Report of United Breweries (Holdings) Ltd.

Mar 31, 2014

Dear members,

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

FINANCIAL RESULTS

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

The summary of financial results of the Company for the financial year

ended March 31, 2014 is as under: (Rs. in million) 2013-2014 2012-2013

The working for the year resulted in

(Loss) from Operations (2,807.289) (2,400.450)

Less:

*Provision for doubtful advances 12,717.054 -

*ad advances/debts written off 24,505.944 -

Add: 19,878.906 863.025

*Exceptional Items

Less:

*Depreciation 81.639 92.145

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





DIVIDEND

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

OPERATIONS OF THE COMPANY

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

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

Some other ventures, notably Kingfisher Airlines (KFA), suffered due to a hostile environment,engine failure, lack of funding support from banks and incurred losses over its years in business, leading to a shut down of operations in September, 2012. The Company continued to support KFA throughout its difficult period by way of loans, guarantees etc. It has been the practice of the Company to provide support for all businesses promoted by it. Post shut down, the Company has been in discussion with potential investors for revival of the airline and had maintained minimal financial support to KFA.

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

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

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

SALE OF SHARES TO DIAGEO PLC

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

COMPETING OPEN OFFER OF MCF SHARES

Pursuant to and in compliance with Regulation 20 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, as amended ("SEBI (SAST) Regulations") read with Regulation 3(1) and other applicable regulations of the SEBI (SAST) Regulations, Zuari Fertilizers and Chemicals Limited (Acquirer) together with Zuari Agro Chemicals Limited [together referred to as "Zuari Group"] and the Company along with its wholly owned subsidiary Kingfisher Finvest India Limited and an associate company McDowell Holdings Limited [ together referred to as "UB Group"], as persons acting in concert, made an competing offer/open offer for acquisition of up to 3,08,13,939 (Three Crore Eight Lakh Thirteen Thousand Nine Hundred and Thirty Nine) fully paid-up equity shares of face value of Rs. 10 each ("Equity Shares") from all the public shareholders of Mangalore Chemicals and Fertilizers Limited (MCF) constituting 26% of the fully diluted voting equity share capital at a price of Rs. 68.55 per Equity Share ("Offer Price"), payable in cash (the "Competing Offer"). This Offer is a competing offer, under Regulation 20 of the SEBI (SAST) Regulations, to the open offer made by SCM Soilfert Limited along with Deepak Fertilizers and Petrochemicals Corporation Limited on April 23, 2014 (Original Offer). In view of the legal restrains presently faced by the UB Group, Zuari Group has agreed to subscribe to all the shares that would be tendered in the Competing Offer and all financial obligations, costs, charges and expenses including payment of considerations to public shareholders in terms of the Takeover Regulations will be borne by the Zuari Group alone. Your Company will continue to have management control of MCF. The salient features of the Agreement entered into by UB Group with the Zuari Group, pursuant to which the Competing Offer was made, are mentioned in detail in Clause No. 2.1.5 of the draft Letter of Offer. The Public Announcement for the Competing Offer was made on May 12, 2014, the Detailed Public Statement was published on May 20, 2014, the Draft Letter of Offer was filed with Securities and Exchange Board of India ("SEBI") and the concerned stock exchanges on May 27, 2014. On July 15, 2014 SEBI gave it clearance to the Draft Letter of Offer.. The UB Group, the current promoters of MCF and desirous of protecting its investment, had to make this Competing Offer against the Original Offer.

EXPORT BUSINESS

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

PROPERTY DEVELOPMENT

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

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

LITIGATION UPDATE

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

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

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

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

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

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

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

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

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

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

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

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

SBICAP Trustee and the Consortium of Banks, which have advanced loans to KFA have filed a suit, inter alia, against IDBI Trusteeship Services Limited, SREI Venture Capital Limited, UBHL and KFIL in the Court of City Civil Judge in Bangalore, being O.S. No. 25877 of 2013 to enforce their alleged rights under the Release of Residual Interest Agreement dated December 21, 2010 in respect of the 3,147,985 shares held by UBHL in USL, 59,150,000 shares held by UBHL in KFA and 1,789,410 shares held by KFIL in USL. In the suit, the Plaintiffs have called upon the Defendants to sell the pledged shares in the market, discharge their loan commitment and pass on the residue to the consortium. By an Order dated June 14, 2013, the Hon''ble Judge granted ex-parte reliefs restraining the defendants therein from selling the pledged shares below the best available market price and at any event, at any price below Rs. 2350.68 per share (95% of the average closing market price on 07/06/2013 on the BSE/NSE), without the consent of the Plaintiffs therein, and restraining the Defendant Nos. 1 to 3 (IDBI Trusteeship Services Limited, SREI Venture Capital Limited and India Global Competitive Fund) from returning/ handing over the pledged shares to UBHL and KFIL and/or releasing the pledge over the pledged shares and/or altering the nature of the pledge in any manner, till the disposal of the suit. The Consortium of Banks also filed Writ Petition No. 28577 of 2014 in the Hon''ble Karnataka High Court in respect of the pledged shares. On June 10, 2014, IDBI Trusteeship Services Limited transferred the pledged shares to India Global Competitive Fund (managed by SREI Venture Capital Limited), who in turn sold 4,937,395 shares of and in United Spirits Limited held by UBHL and KFIL. By an order dated June 20, 2014 in Writ Petition No. 28577 of 2014, India Global Competitive Fund has been ordered to deposit the surplus/balance sales proceeds from the aforesaid sale of shares in USL after India Global Competitive Fund purportedly adjusted Rs. 690 crores against its alleged dues from KFA. UBHL is defending the aforesaid Writ Petition No. 28577 of 2014, O.S. No. 25877 of 2013 and the ex-parte ad-interim orders passed therein.

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

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

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

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

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

SUBSIDIARIES

The following are the subsidiaries of the Company:

A.Indian Subsidiary Companies

1.Bangalore Beverages Limited

2.Bestride Consultancy Private Limited

3.City Properties Maintenance Company Bangalore Limited

4.Kingfisher Finvest India Limited [Formerly Kingfisher Radio Limited]

5.Kingfisher Training and Aviation Services Limited [Formerly Kingfisher Airlines Limited]

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

7.Kingfisher Goodtimes Private Limited

8.UB Electronic Instruments Limited

9.UB Infrastructure Projects Limited

10.UB International Trading Limited

11.UB Sports Limited

B.Overseas Subsidiary Companies

12.Inversiones Mirabel, S.A.

13.Mendocino Brewing Co. Inc, USA

14.Rubic Technologies Inc

15.Rigby International Corp

16.Releta Brewing Company LLC

17.UB Overseas Limited

18.UBHL [BVI] Limited

19.United Breweries of America Inc., Delaware

20.United Breweries International [UK] Limited

21.Kingfisher Beer Europe Limited (Formerly UBSN Limited)

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

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

Consolidated Accounts

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

DIRECTORS

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

After the resignation of Mr. V. Shashikanth as Managing Director on April 17, 2014, the Company is yet to appoint a Whole-Time Director or Managing Director. The Company also does not have a Chief Financial Officer. The Board aided by the Chairman is looking for suitable persons to be appointed as Managing Director / Whole - Time Director and Chief Financial Officer.

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

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

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

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

AUDITORS

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

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

QUALIFICATIONS OF AUDITORS AND MANAGEMENT RESPONSE

With reference to observations in the Auditors Report regarding non-provision for loans and advances to certain Subsidiaries and an Associate Company and for decline in value of investment in certain Subsidiaries and an Associate Company, the relevant notes on the accounts comprehensively explain the management''s views on such matters.

LISTING OF SHARES OF THE COMPANY

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

CORPORATE GOVERNANCE

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

MANAGEMENT DISCUSSION AND ANALYSIS

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

FIXED DEPOSITS

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

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

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

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

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

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

PARTICULARS OF EMPLOYEES

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

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

Particulars of Conservation of Energy, Technology Absorption

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

Foreign Exchange Earnings and outgo

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

DIRECTORS'' RESPONSIBILITY STATEMENT

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

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

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

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

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

ACKNOWLEDGEMENT

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

By Order of the Board

London Dr. Vjay Mallya

August 13, 2014 Chairman


Mar 31, 2013

The Directors have pleasure in presenting the 97th Annual Report of your Company together with the Audited Accounts for the year ended March 31, 2013.

FINANCIAL RESULTS

The summary of financial results of the Company for the financial year ended March 31, 2013 is as under:

(Rs.in million)

2012-2013 2011-2012

The working for the year resulted in

- Profit/(Loss) from Operations (1,577.425) 185.315

(Add)/Less

- Depreciation (92.145) 102.328

- Taxation 6.499

Profit /(Loss) after tax (1,669.570) 76.488

Profit /(Loss) for the year carried to the Balance Sheet (1,669.570) 76.488

DIVIDEND

In view of loss for the year, your Directors are unable to recommend any dividend for the year ended March 31, 2013.

OPERATIONS

The Company''s revenues comprise of sale/lease rentals of property at UB City, Bangalore, Export Sales, Trade Mark License Fees, Dividends, Guarantee Commission and Interest on Loans and Deposits.

PROPERTY DEVELOPMENT

The construction work for development of a luxury residential building "Kingfisher Towers - Residences at UB City" in the available land in UB City is progressing fast and is expected to be completed in 2015. The super built up area of the building would be 7,67,870 sq. ft. and the share of the Company would be 4,18,388 sq. ft. When completed, this residential development will become a landmark in Bangalore and will also augment revenues on sale of the residential units.

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

EXPORT BUSINESS

For an unprecedented eighteenth consecutive year, UB Global has been awarded the Golden Trophy Award by Agricultural Produce Export Development Authority of India for achieving the highest exports of beverage alcohol. This helped UB Global in achieving its highest sales of Rs. 328 crores, despite uncertain market sentiment in Europe. With the addition of another manufacturing unit, apparel sales has grown by 32%.

SUBSIDIARIES

The following are the subsidiaries of the Company:

A. Indian Subsidiary Companies

1. Bangalore Beverages Limited

2. Bestride Consultancy Private Limited

3. City Properties Maintenance Company Bangalore Limited

4. Kingfisher Finvest India Limited [Formerly Kingfisher Radio Limited]

5. Kingfisher Training and Aviation Services Limited [Formerly Kingfisher Airlines Limited]

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

7. Kingfisher Goodtimes Private Limited

8. UB Electronic Instruments Limited

9. UB Infrastructure Projects Limited

10. UB International Trading Limited

11. UB Sports Limited

B. Overseas Subsidiary Companies

12. Inversiones Mirabel, S.A.

13. Mendocino Brewing Co. Inc, USA

14. Rubic Technologies Inc

15. Rigby International Corp

16. Releta Brewing Company LLC

17. UB Overseas Limited

18. UBHL [BVI] Limited

19. United Breweries of America Inc., Delaware

20. United Breweries International [UK] Limited

21. Kingfisher Beer Europe Limited (Formerly UBSN Limited)

A summary of performance of all the above mentioned subsidiaries including turnover, profit before and after taxation are available in the statement under the heading Summarized Financials of Subsidiary Companies 2012 -13 included in the Annual Report. The Company had invested in the above subsidiaries besides significant advances to them over the years.

The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2/2011 dated February 8, 2011 has issued directions under Section 212(8) of the Companies Act, 1956 granting general exemption from applicability of the provisions of Section 212 of the Companies Act, 1956 in relation to the Subsidiary Companies, subject to fulfillment of the conditions specified in the said circular.

The Company has availed the benefit of general exemption provided by the aforesaid circular and accordingly, the documents mentioned in Section 212(a) to (d) of the Companies Act, 1956 relating to the Company''s subsidiaries are not attached to the Accounts of the Company. In terms of the said circular, your Company shall fulfill the prescribed conditions, make the requisite disclosures and further undertake that the Annual Accounts of the Subsidiary Companies and the related detailed information shall be made available to Shareholders of the Company and its Subsidiary Companies seeking such information. These documents will also be available for inspection during business hours at the Registered Office of the Company and of the respective Subsidiary Companies concerned.

SALE OF INVESTMENTS IN UNITED SPIRITS LIMITED TO RELAY B.V., AN INDIRECT WHOLLY OWNED SUBSIDIARY OF DIAGEO PLC

On November 9, 2012, the Board of Directors of your Company approved the execution, delivery and performance of a share purchase agreement between your Company, Kingfisher Finvest India Limited (a wholly owned subsidiary of the Company), certain other shareholders of United Spirits Limited ("USL"), Diageo plc and Relay B.V., an indirect wholly owned subsidiary of Diageo plc ("Share Purchase Agreement"), which agreement provided for the sale and purchase of certain shares of USL to Relay B.V. Further on November 9, 2012, your Company, Kingfisher Finvest India Limited the wholly owned subsidiary of your Company, Diageo plc and Relay B.V., entered into a shareholders agreement

to record their respective rights and obligations as shareholders of USL ("Shareholders Agreement") which agreement would become effective upon the completion of the sale and purchase of USL shares as contemplated under the Share Purchase Agreement ("Completion"). The sale of shares under the Share Purchase Agreement was subject to various conditions precedent, including obtaining leave of relevant High Court under Sections 536(2) and 537(1) of the Companies Act, 1956 in respect of winding up petitions filed against your Company (and other sellers, if any) before Completion. Accordingly, the Company filed applications before the Hon''ble High Court of Karnataka ("High Court") under Sections 536(2) and 537(1) of the Companies Act, 1956 and the High Court passed an order on May 24, 2013 granting leave to the Company to sell 13,612,591 equity shares of USL to Relay B.V. at a price of Rs. 1,440 per share (the "Court Order"). Following receipt of the Court Order, on July 4, 2013, your Company sold 10,141,437 equity shares of the face value of Rs.10/- each held by your Company in USL to Relay B.V. for a consideration of Rs. 1,440/- per equity share and an aggregate consideration ofRs. 14,603,669,280 and Kingfisher Finvest India Limited sold 6,575,550 equity l shares of the face value of Rs. 10/- each held by it in USL '' to Relay B.V. for a consideration of Rs. 1,440/- per equity share and an aggregate consideration of Rs. 9,468,792,000. As contemplated under the Share Purchase Agreement, the shares sold by your Company were released by '' certain lenders (in whose favour some of the shares were pledged) along with the simultaneous transfer of the sale consideration to those lenders as repayment of amounts owed to them through an escrow mechanism. With the completion of the Share Purchase Agreement, the Shareholders'' Agreement between Diageo plc, Relay B.V, your Company and Kingfisher Finvest India Limited became effective from July 4, 2013 and Relay B.V. and Diageo plc have been included as co-promoters of USL, together with your Company and other existing promoters. Following the sale, your Company, together with, Kingfisher Finvest India Limited now holds 16,108,323 shares representing I 11.08% of USL''s share capital. Consequent upon the above sale, United Spirits Limited, will not be considered as an Associate, for accounting purposes.

The Hon''ble High Court of Karnataka in the Company Petitions while passing an Order on May 24, 2013 granting leave to the Company to sell 13,612,591 equity shares of USL to Relay B.V. at a price of Rs..1,440 per share has imposed some restrictions on your Company, inter alia refraining your Company "from creating pledge/ hypothecation/charge/encumbrance over its movable and immovable properties pending disposal of the company winding up petitions." Your Company is complying with these restrictions imposed by the Hon''ble High Court of Karnataka and has applied for modification of the Order.

KINGFISHER AIRLINES LIMITED

| Kingfisher Airlines Limited [KFA] is an Associate of the Group where your Company through itself and through its other subsidiaries holds 30.25% of the paid up capital

I of KFA. As a significant shareholder in KFA, your Company has significant exposure on various counts in it by way of loans and guarantees.

The lenders of KFA have, pursuant to certain Corporate Guarantees given by the Company (the validity of which is disputed), demanded from the Company, their alleged

| dues from KFA amounting to Rs. 6203.35 crores and have moved the Debt Recovery Tribunal ("DRT") for recovery of

| these alleged dues. The Company is taking steps to defend

| the proceedings before the DRT as per the advice of its

i lawyers.

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

KFA lenders have also sold certain investments belonging

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

(a) For a declaration that the Corporate Guarantee dated 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 Notices 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 Master Debt Recast Agreement (MDRA), including issuing a notice there under.

(c) For a permanent order and injunction restraining the consortium of bankers, their servants, agents or assigns, or any other person claiming by, through or under them or any of them, from acting upon, in furtherance of the Corporate Guarantee dated 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 Rs. 3,199.68 Cr. as set out in the Particulars of Claim be awarded to the Plaintiffs.

(e) That the maximum limit under the Company''s Corporate Guarantees be Rs. 16,014.300 million for reasons set out in the Suit.

The said Suit is pending adjudication in the Hon''ble Bombay High Court.

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

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 the 3,147,985 shares held by UBHL in USL, 59,150,000 shares held by UBHL in KFA and 1,789,410 shares held by KFIL in USL. In the suit, the Plaintiffs have called upon the Defendants to sell the pledged shares in the market, discharge their loan commitment and pass on the residue to the consortium. By an Order dated 14th July, 2013, the Judge granted ex-parte reliefs restraining the defendants therein from selling the pledged shares below the best available market price and at any event, at any price below Rs. 2350.68 per share (95% of the average closing market price on 07/06/2013 on the BSE/NSE), without the consent of the Plaintiffs therein, and restraining the Defendant Nos. 1 to 3 (IDBI Trusteeship Services Limited, SREI Venture Capital Limited and India Global Competitive Fund) from returning/ handing over the pledged shares to UBHL and KFIL and/or releasing the pledge over the pledged shares and/or altering the nature of the pledge in any manner, till the disposal of the suit. UBHL is in the process of obtaining appropriate legal advice to defend the aforesaid O.S. No. 35877 of 2013 and the ex-parte ad-interim orders passed therein.

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

Certain alleged Corporate Guarantees on behalf of KFA have been invoked and certain purported benefactors of Corporate Guarantees issued on behalf of KFA have filed petitions against the Company under Sections 433/434 of the Companies Act 1956.

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

Although KFAs license has expired on December 31, 2012, under civil aviation regulations, KFA has a period of 24 months to reinstate the same. A revival plan has been submitted to DGCA which is under consideration. Further, discussions are in progress with some prospective investors for restarting the airline operations which of course will be subject to statutory and regulatory approvals.

The Board of Directors of your Company at an appropriate time will discuss the merits of commissioning an in- depth study to assess the recoverability of the amounts advanced to KFA as part of its strategic review of all core investments. Meanwhile, in order to keep its investment prospects alive, your Board has decided to keep the Airline funded on a need basis.

DIRECTORS

Dr. Lalit Bhasin was appointed as Director of the Company with effect from May 30, 2013 in the casual vacancy caused by the demise of Mr. Shrikant G. Ruparel.

Mr. V Shashikanth was appointed as an Additional Director with effect from August 14, 2013 to hold office up to the date of the ensuing Annual General Meeting. The Company has received notice under Section 257 of the Companies Act, 1956, from a Member signifying his intention to propose Mr. V Shashikanth as a candidate for the office of the Director of the Company not liable to retire by rotation. Mr. V Shashikanth was also appointed by the Board as Managing Director of the Company with effect from August 21, 2013 for a period of three years subject to approval of the Members at the ensuing Annual General Meeting.

Mr. A Harish Bhat was appointed as Managing Director of the Company, without remuneration, with effect from the close of business hours on August 20, 2010 for l a period of three years . Accordingly, the term of office '' of Mr. Bhat as Managing Director ends on August 20, 2013. Mr. Bhat will cease to be a Director and Managing | Director of the Company with effect from close of i business hours on August 20, 2013. The Board wishes I to place on record the valuable services rendered by Mr. Bhat during his tenure as Director and Managing Director of the Company.

Mr. Shrikant G. Ruparel, a Member of the Board of Directors of the Company expired on February 11, 2013. Mr. Ruparel was a Director for the past 22 years since December 21, 1991. The Board placed on record the valuable services rendered by Mr. Ruparel during his tenure as a Director of the Company.

Mr. B S Patil resigned as Director of the Company with effect from June 1, 2013. The Board placed on record the valuable services rendered by Mr. Patil during his tenure as a Director of the Company.

Mr. M S Kapur and Mr. N. Srinivasan, Directors, retire by rotation and, being eligible, offer themselves for re- appointment, as Directors 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.

AUDITORS

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

With reference to observations in the Auditors Report regarding accrual of guarantee/security commission from an Associate Company (erstwhile subsidiary), inclusion of interest from Subsidiaries and Associates, non- I provision for loans & advances to certain Subsidiaries and an Associate Company and for decline in value of investment in certain Subsidiaries and an Associate Company, the relevant notes to the accounts comprehensively explain the management''s views on such matters.

LISTING OF SHARES OF THE COMPANY

The shares of your Company are listed on Bangalore Stock Exchange Limited [Regional Exchange], The BSE Limited, Mumbai and National Stock Exchange of India Limited.

CORPORATE GOVERNANCE

¦ A Report on Corporate Governance is annexed separately i as part of the Report along with a Certificate of Compliance ] from the Statutory Auditor. Necessary requirements | of obtaining certifications/declarations in terms of Clause 49 of the Listing Agreement have been complied with.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis Report is annexed and forms an integral part of the Annual Report.

FIXED DEPOSITS

The Fixed Deposits accepted from the Public and Shareholders stood at Rs. 524.754 million as on March 31, 2013 (including an amount of Rs. 132.553 million accepted during the year under review).

A sum of Rs. 0.261 million from Public and Shareholders remained unclaimed as at March 31, 2013.

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

The Board of your Company has decided not to accept fresh deposits or renewals.

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 Rs. 0.237 million [Previous Year Rs. 0.132 million] being the aggregate of the Unclaimed Dividend and Deposits, remaining unclaimed and unpaid for more than 7 years, have been transferred to the Investor Education and Protection Fund.

PARTICULARS OF EMPLOYEES

The information as are required to be provided in terms of Section 217[2A] of the Companies Act, 1956 read with the Companies [Particulars of Employees] Rules, 1975 is enclosed.

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

Particulars of Conservation of Energy, Technology Absorption

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

Foreign Exchange Earnings and outgo

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

DIRECTORS'' RESPONSIBILITY STATEMENT

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

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

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

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

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

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company is carrying out CSR activities through its other Associate Companies.

GREEN INITIATIVE

Annual Report is transmitted through emails to those identifiable members while print version of the Annual Report is posted to others. The other details are available in the Company''s website www.theubgroup.com.

ACKNOWLEDGEMENT

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

By Order of the Board

Goa Dr. Vijay Mallya

August 14, 2013 Chairman


Mar 31, 2012

The summary of financial results of the Company for the financial year ended March 31, 2012 is as under:

(Rs. in million)

2011-2012 2010-2011

The working for the year resulted in

- Profit from Operations 185.315 720.186 Less:

- Depreciation 102.328 101.335

- Taxation 6.499 201.963

Profit after tax 76.488 416.887

Profit for the year 76.488 416.887

Your Directors have made the following appropriations:

- Proposed Dividend - 66.819

- Tax on Proposed Dividend - 11.099

- Transfer to General Reserve Surplus carried to the Balance Sheet 76.488 338.970

DIVIDEND

With a view to conserve resources for working capital, your Directors do not recommend any dividend for the year ended March 31, 2012.

OPERATIONS

The Company's revenues comprise of sale/lease rentals of property at UB City, Bangalore, Export Sales, Trademark License Fees, Dividends, Guarantee Commission and Interest on Loans and Deposits.

PROPERTY DEVELOPMENT

The construction work for development of a luxury residential building named as "Kingfisher Towers - Residences at UB City" on the available land in UB City is progressing fast. The super built up area of the building would be 7,67,870 sq. ft. The super built up area falling to the share of the Company would be 4,18,388 sq. ft. When built, this residential development will become a landmark building in Bangalore and will also augment revenues by sale of the residential units.

Arising from the economic slow down, several Lessees of rental space especially the retail lessees have re-negotiated the rentals. This has impacted the potential revenue of the Company.

SALE OF PROPERTY

During the year, the Company sold Commercial Space measuring 43,822.61 sq.ft. of saleable super built up commercial area in UB City.

EXPORT BUSINESS

UB Global, the Export division of the Company was again awarded the "Golden Trophy" by APEDA, in continued appreciation of its dominant export performance in the Beverage Alcohol category. Also, the Federation of Karnataka Chambers of Commerce & Industry (FKCCI) conferred the "Special Recognition Certificate - Merchant Category" on UB Global, in recognition of its export excellence.

The Export division registered its highest ever Revenues and Profits, despite severe economic volatility in key markets such as Europe and currency swings. High level of domestic inflation continues to remain a concern, as it increases input costs.

The beverage alcohol business registered its highest ever sales Volume, Revenue and Profits. The distribution of Kingfisher Bohemia Wines was further widened, increasing its footprint in several developed markets.

During the year, the apparel business performed exceedingly well and with the second factory in operation for the full year, turnover increased by 67%.

The Company's investments in Leather footwear business has continued in Ambur, the hub of Leather industry in South India. This has enabled manufacturing of high quality shoes.

SUBSIDIARIES

The following are the subsidiaries of the Company:

A. Indian Subsidiary Companies

1. Bangalore Beverages Limited

2. Bestride Consultancy Private Limited

3. City Properties Maintenance Company Bangalore Limited

4. Kingfisher Finvest India Limited [Formerly Kingfisher Radio Limited]

5. Kingfisher Training and Aviation Services Limited [Formerly Kingfisher Airlines Limited]

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

7. Kingfisher Good times Private Limited

8. UB Electronic Instruments Limited

9. UB Infrastructure Projects Limited

10. UB International Trading Limited

11. UB Sports Limited

B. Overseas Subsidiary Companies

12. Inversiones Mirabel, S.A.

13. Mendocino Brewing Co. Inc, USA

14. Rubic Technologies Inc

15. Rigby International Corp

16. Releta Brewing Company LLC

17. UB Overseas Limited

18. UBHL [BVI] Limited

19. United Breweries of America Inc., Delaware

20. United Breweries International [UK] Limited

21. Kingfisher Beer Europe Limited (Formerly UBSN Limited)

A summary of performance of all the above mentioned subsidiaries including turnover, profit before and after taxation are available in the statement under the heading Summarized Financials of Subsidiary Companies 2011 -12 is included in the Annual Report. The Company had invested in the above subsidiaries besides significant advances to them over the years. Being strategic long term investment and considering the respective business plans of the respective subsidiaries, no impairment is presently addressed.

The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2/2011 dated February 8, 2011 has issued directions under Section 212(8) of the Companies Act, 1956 granting general exemption from applicability of the provisions of Section 212 of the Companies Act, 1956 in relation to the Subsidiary Companies, subject to fulfillment of the conditions specified in the said circular.

The Company has availed the benefit of general exemption provided by the aforesaid circular and accordingly, the documents mentioned in Section 212(a) to (d) of the Companies Act, 1956 relating to the Company's subsidiaries are not attached to the Accounts of the Company. In terms of the said circular, your Company shall fulfill the prescribed conditions, make the requisite disclosures and further undertake that the Annual Accounts of the Subsidiary Companies and the related detailed information shall be made available to Shareholders of the Company and its Subsidiary Companies seeking such information. These documents will also be available for inspection during business hours at the Registered Office of the Company and of the respective Subsidiary Companies concerned.

Kingfisher Airlines Limited

Kingfisher Airlines Limited [KFA] has ceased to be Company's subsidiary as on February 18, 2012 consequent upon it allotting shares against Optionally Convertible Debentures. However, the Company is exposed to significant guarantees given on behalf of KFA. It is to be stated that till date no such guarantees has ultimately devolved on the Company.

The Indian airline industry and KFA in particular is currently exposed to one of the toughest operating environments and is expected to struggle with profitability pressures. One of the highest prices for Jet Fuel in the world, high tax structure, recent depreciation of the rupee, and high cost of borrowing all contribute to the challenges facing domestic aviation. The Government of India is committed to usher in fiscal measures and reforms that will make the operating environment more conducive for a sustainable business.

When these initiatives are implemented by the Government, KFA will undertake a phased and pragmatic approach to re-induction of capacity as well as further market expansion in future.

DIRECTORS

Mr. Piyush G Mankad resigned as Director of the Company with effect from February 19, 2012. The Board placed on record the valuable services rendered by Mr. Mankad during his tenure as a Director of the Company.

Mr. V K Rekhi who was appointed as Director of the Company in the casual vacancy caused by the resignation of Mr. R N Pillai with effect from August 2, 2011 vacates office at the ensuing Annual General Meeting. The Company has received a notice under Section 257 of the Companies Act, 1956 from a Member signifying his intention to propose Mr. V. K. Rekhi as a candidate for the office of the Director of the Company liable to retire by rotation.

Mr. Sidhartha V Mallya and Mr. S G Ruparel, Directors, retire by rotation and, being eligible, offer themselves for re-appointment, as Directors 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.

AUDITORS AND AUDITORS' REPORT

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

With reference to observations in the Auditors Report regarding accrual of Guarantee/security commission from an Associate Company (erstwhile subsidiary), inclusion of interest from Subsidiaries and Associates, non-provision for loans & advances to certain Subsidiaries an Associate Company and for decline in value of investment in certain Subsidiaries an Associate Company, the relevant notes to the accounts comprehensively explain the management's views on such matters.

LISTING OF SHARES OF THE COMPANY

The shares of your Company are listed on Bangalore Stock Exchange Limited [Regional Exchange], The Bombay Stock Exchange Limited, Mumbai and National Stock Exchange of India Limited.

CORPORATE GOVERNANCE

A report on Corporate Governance is annexed separately as part of the report along with a Certificate of Compliance from the Statutory Auditor. Necessary requirements of obtaining certifications /declarations in terms of Clause 49 of the Listing Agreements have been complied with.

MANAGEMENT DISCUSSION AND ANALYSIS

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

FIXED DEPOSITS

The Fixed Deposits accepted from the Public and Shareholders stood at Rs. 850.797 million as on March 31, 2012 (including an amount of Rs. 128.54 million accepted during the year under review).

A sum of Rs. 0.498 million from Public and Shareholders remained unclaimed as at March 31, 2012.

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

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 205A[5] and 205C of the Companies Act, 1956, an amount of Rs. 0.167 million [Previous Year Rs. 0.367 million] being the aggregate of the Unclaimed Dividend and Deposits, remaining unclaimed and unpaid for more than 7 years, have been transferred to the Investor Education and Protection Fund.

PARTICULARS OF EMPLOYEES

The information as are required to be provided in terms of Section 217[2A] of the Companies Act, 1956 read with the Companies [Particulars of Employees] Rules, 1975 is enclosed.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars of Conservation of Energy, Technology Absorption

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

Foreign Exchange Earnings and outgo

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

DIRECTORS' RESPONSIBILITY STATEMENT

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

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

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

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

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

GREEN INITIATIVE

Annual Report is transmitted through Emails to those identifiable members while print version of the Annual Report are posted to others. The other details are available in the Company's website www.theubgroup.com.

ACKNOWLEDGEMENT

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

By Order of the Board

Mumbai Dr. Vijay Mallya

August 24, 2012 Chairman

 
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