Home  »  Company  »  UnitedBreweries(Hol)  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of United Breweries (Holdings) Ltd.

Mar 31, 2015

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

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

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

Certain aircraft lessors and vendors of Kingfisher Airlines Limited (KFA) have invoked the corporate guarantees given by the company on behalf of KFA. The total amount invoked and outstanding as on March 31, 2015 is Rs. 15,275.400 million (Pr year Rs. 15,275.400 million) and Kingfisher Airlines Limited is under negotiation with the beneficiaries. Also, Consortium of KFA bankers have invoked Company's corporate guarantee and demanded payment of Rs. 62,033.500 million due from KFA along with interest, if any, decided by the Court. This matter is being contested by the Company in various Courts. Accordingly, the Company continues to recognize these obligations as only 'contingent liabilities'. Based on management's opinion no provision is presently considered necessary. In any event, the amount is not quantifiable.

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

3. Fixed Assets

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

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

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

d) KFA lenders have sent a notice purportedly under the SARFAESI Act in respect of the Company's property in Goa. The Company has responded to the notice issued to it purportedly under the SARFAESI Act challenging the same Pending adjudication of the suit, the Goa property continues to remain as an asset of the Company

4. Investments:

a) The Company has pledged 1,713,820 shares of United Spirits Limited, 4,753,881 shares of Mangalore Chemicals & Fertilizers Limited, 317,030 shares of McDowell Holding Limited, 8,794,000 shares of United Breweries Limited to secure the borrowings of the company along with the borrowings of subsidiary companies and an associate company. The Company has also given undertaking in favor of it's lender and that of an associate company, for non-disposal of 2,014,000 shares held in United Breweries Limited

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

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

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

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

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

5. Sale of shares in United Spirits Limited

The Division Bench of the Hon'ble High Court of Karnataka, vide its Order dated 20th December 2013 has set aside the permission granted by the Hon'ble Company Judge under Section 536(2) of the Companies Act 1956 to dispose of the shares of USL in favor of Diageo Plc / Relay BV. The Company and Diageo Plc have approached the Hon'ble Supreme Court by way of SLPs challenging the Order of the Division Bench. Pending disposal of the Company's SLP's, the Hon'ble Supreme Court has by its Order dated 10th February, 2014 directed that status quo be maintained in respect of the transaction of sale of shares to Diageo.

6. Tax provision

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

7. Exceptional Items

Exceptional items comprised of

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

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

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

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

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

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

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

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

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

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

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

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

11. The Company has accrued interest of Rs. 17.962 million (Pr year Rs. 88.020 million) on loans to associate / overseas subsidiary, as per Loan Agreements signed with them. Considering the income stream of those companies, realizability of this interest could possibly take protracted period of time beyond those stipulated in the Loan Agreement.

12. Cash in hand includes foreign currency notes

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

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

15. The Company and Kingfisher Finevest India Limited (KFIL) have filed a suit, inter alia, against IDBI Trusteeship Services Limited (IDBI Trusteeship), Indian Global Competitive Fund (IGCF) and SREI Venture Capital Limited (SREI), in the City Civil Court at Calcutta, being T.S. No. 966 of 2013, inter alia, for a declaration that the Security Trustee Agreement dated 30th June, 2008 and the Consolidated Deed of Pledge dated 21st December, 2010 (in respect of pledged shares of United Spirits Limited and KFA held by the Company and KFIL) are void, unenforceable and of no effect. The said suit is pending

SBICAP Trustee and the Consortium of Banks, which have advanced loans to KFA have filed a suit, inter alia, against IDBI Trusteeship Services Limited, SREI Venture Capital Limited, UBHL and KFIL in the Court of City Civil Judge in Bangalore, being O.S. No. 25877 of 2013 to enforce their alleged rights under the Release of Residual Interest Agreement dated 21st December, 2010 in respect of sale proceeds remaining after appropriation of USL and KFA shares. On 10th June 2014, IDBI Trusteeship Services Limited transferred the pledged shares to IGCF who in turn sold 4,937,395 shares of United Spirits Limited ("Sold Shares") held by UBHL and KFIL. By an Order dated 20th June, 2014 in Writ Petition No. 28577 of 2014, filed by the Consortium of Banks and which has now been disposed off, IGCF deposited the surplus/balance sales proceeds from the Sold Shares with the Hon'ble High Court of Karnataka and has been restrained from disposing off Rs. 690 crores retained by it. The Company is defending the aforesaid O.S. No. 25877 of 2013 and the ex-parte ad-interim orders passed therein

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

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

16. Litigation

a) The lenders of Kingfisher Airlines Limited (KFA) have, pursuant to certain Corporate Guarantees given by the Company (the validity of which is disputed as set out hereinafter), demanded from the Company, their alleged dues from KFA amounting to Rs. 6,203.35 crores with further interest and other dues from 01/06/2013 and have moved the Debt Recovery Tribunal ("DRT"), Bangalore for recovery of these alleged dues by way of an Original Application (OA). The Interim Application filed by the Company before the DRT seeking to reject the said OA on the ground of jurisdiction has been dismissed by the Tribunal vide its Order dated 12th November, 2013. The Company's appeal before the DRAT, Chennai challenging the DRT Order is pending.

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

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

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

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

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

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

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

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

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

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

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

17. Events occurring after the date of the Balance Sheet

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

18. The Company's Rupee loan from HDFC Limited was converted into a "Dollar Denominated Loan' at concessional rate of interest in Financial Year 2011-12. A portion of the foreign currency translation difference has been recognized as interest in terms of AS16 - 'Borrowing costs', and the balance is kept in Foreign Currency Monetary Item Translation Difference Account which is amortized over the life of the loan but not beyond March 2020, as provided in Government of India Notification No G.S.R.913 (E) (FNo. 17/133/208-CL. Vj, Dated 29.12.2011). Accordingly an amount of Rs. 178.197 million is charged to the Statement of Profit and Loss and the Balance of Rs. 183.463 Million is carried in Foreign Currency Monetary Item Translation Difference Account.

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

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

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

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

23. Going Concern

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

b) Connected with the Corporate Guarantees, the winding up petitions filed in Hon'ble Karnataka High Court referred to in the Directors report, in the opinion of Counsel, can be successfully resisted

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

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

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

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

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

25. Remuneration to Chairman, Managing Director and Managerial Personnel

(i) The Chairman of the Company has received remuneration from two subsidiaries, amounting to USD 120,000 (Pr year USD 120,000) and GBP 89,600 (Pr year GBP 89,600) during the year 2014-15

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

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

Based on the response received by the Company, there are no outstanding as at March 31, 2015 to suppliers, as defined under the Micro, Small & Medium Enterprises Development Act, 2006.

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

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

i) Name of the Related Parties and description of relationship Subsidiaries

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

Associates

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

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

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

30. Previous year's figures have been regrouped wherever necessary.


Mar 31, 2014

CORPORATE INFORMATION:

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

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

2. UB City Luxury residential Project

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

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

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

4. Contingent liabilities: Rs.in million

As at As at

March 31, 2014 March 31, 2013

a) Guarantees given by the Company on behalf of subsidiaries to banks and Nil 1,500.000 financial institutions and others

b) Guarantees given by the Company on behalf of associates to banks and 88,280.760 90,852.200 financial institutions and others (The enforce -ability of the Guarantees issued for Kingfisher Airlines Ltd beneficiaries are being contested in appropriate Courts of law)

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

d) Demand raised by Income Tax authorities against which the Company has 786.774 948.793 preferred appeals

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

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

5. Fixed Assets

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

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

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

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

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

6. Investments:

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

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

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

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

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

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

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

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

8. The Board of Directors has reviewed the significant amounts due from KFA and in the light of KFA''s liquidity constraints and as a matter of prudence, has made a provision for the amounts due of Rs. 12,597.072 million.

Additionally provision has also been made for a sum of Rs. 119.982 million due from a subsidiary.

9. Sale of shares in United Spirits Limited

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

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

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

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

10. Tax provision

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

11. Exceptional Items

Exceptional items includes :

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

16. Cash in hand includes foreign currency notes.

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

18 Events occurring after the date of the Balance Sheet

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

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

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

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

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

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

20. Litigation

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

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

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

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

c) Winding up Petitions

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

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

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

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

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

BREWERIES

22. Going concern (HOLDINGS)

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

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

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

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

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

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

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

24. Remuneration to Chairman, Managing Director and Managerial Personnel

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

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

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

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

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

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

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

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

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

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

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

26. The Company has recognized the rent from cancellable operating leases in accordance with the terms of the lease deed.

In respect of the non-cancellable operating leases, the Company recognizes the rent on a straight line basis over the non- cancellable lease term.

Future minimum lease payments receivable under non-cancellable operating lease Rs. Nil (Pr year Nil)

Notes :

1 Income under the segment "investments" represents dividends received, profit on sale of investments

2 Income under the segment "property development" represents lease rent and profit on sale of immovable property.

3 Segment results represents profit/(loss) before interest expenses, other income, tax and exceptional items.

4 Capital expenditure represents the gross additions made to fixed assets during the year.

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

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

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

27. Related Party Transactions:

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

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

i) Name of the Related Parties and description of relationship Subsidiaries

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

Associates

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

Subsidiary of an Associate

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

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


Mar 31, 2013

CORPORATE INFORMATION:

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

1. UB City Luxury residential Project

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

The Company has issued allotment letters in respect of seven residential units in Kingfisher Towers by collecting booking amounts of Rs. 1,135.222 million (Pr year Rs. 826.925 million)

2. Estimated amount of contracts remaining to be executed on capital account as at 31st March 2013 and not provided for is Rs. 2.190 million (net of advances) (Pr year Rs. 5.357 million).

3. Contingent liabilities:

As at As at March 31, 2013 March 31, 2012

a) Guarantees given by the Company on behalf of subsidiaries to banks and 1500.000 1500.000 financial institutions and others

b) Guarantees given by the Company on behalf of associates to banks and 90,852.200 77,228.600 financial institutions and others

(The enforceability of the Guarantees issued for Kingfisher Airlines Limited beneficiaries are being contested in appropriate Courts of law)

c) Demand raised by Income Tax authorities against which the Company has 948.793 234.210 preferred appeals

Certain beneficiaries have invoked the corporate guarantees given by the company on behalf of Kingfisher Airlines Limited, an associate company. The total amount invoked and outstanding as on March 31, 2013 isRs. 9,874.600 million (Pr year Rs. 8,357.700 million) and Kingfisher Airlines Limited is under negotiation with the beneficiaries. The Company continues to recognise these obligations as only ‘contingent liabilities'' in view of the legal advice obtained by the company.

4. Fixed Assets

a) The Company''s land in Bangalore was revalued in August 2001, based on an independent valuer''s report. Accordingly, the value of the land was restated at Rs. 1,707 million, with a corresponding adjustment to the Fixed Assets Revaluation Reserve. The amounts shown in the Balance Sheet are after making adjustments for disposals.

b) The Company owns certain valuable trademarks which are carried at NIL value. Some of these trademarks / logo have been licenced to Group companies.

c) The Company''s UB City property and the land, in which residential properties are being developed, are under charge in favour of HDFC Limited, for facilities granted to the Company. ICICI Bank has second charge in UB City properties for the loans granted by them.

d) The Company''s property in Goa is tenanted to an associate company and is also under charges in favour of a bank for facilities granted to another associate company. The lessee has obtained an injunction from court restraining the lender from taking any coercive action in enforcing the charge.

5. Investments:

a) The Company has pledged 22,451,587 shares of United Spirits Limited, 14,961,610 shares of Mangalore Chemicals & Fertilizers Limited, 6,269,728 shares of UB Engineering Limited, 194,633,555 shares of Kingfisher Airlines Limited and 3,420,239 shares of McDowell Holdings Limited to secure the borrowings of the company along with the borrowings of subsidiary companies and an associate company.

b) Investment as on March 31, 2013, includes 21,870,156 shares of Kingfisher Airlines Limited, 7,196 shares of McDowell Holdings Limited,10,000,000 shares of Mangalore Chemicals & Fertilizers Limited and 2,446,352 shares of United Spirits Limited held in custody of lenders after they have invoked the pledge of these shares.

c) 21,870,156 shares of Kingfisher Airlines Limited, 215,000 shares of McDowell Holdings Limited, 10,000,000 shares of Mangalore Chemicals & Fertilizers Limited, 2,446,155 shares of United Spirits Limited held by the Company and pledged with banks for credit facilities extended to Kingfisher Airlines Limited have been sold by them, subsequent to Balance Sheet date.

d) The Company''s investment of Rs. 26.512 million with IDFC Mutual Fund is given as a lien to secure the borrowings of an associate company.

e) The investment in subsidiaries (including step down subsidiaries) have been considered as long term strategic investments and diminution in their market value / net worth, though significant is considered temporary and hence no provision is considered necessary.

f) The Preference Shares held in an overseas subsidiary, UB Overseas Limited are to be redeemed anytime at the option of the company or at the end of 10 years from the date of allotment of shares. The company also has the option for partial / full conversion of preference shares into equity shares of UB Overseas Limited, in the ratio one equity share for one preference share held, at face value of USD 1 each to be determined and issued by the issuer. During the year, the subsidiary has redeemed 1.600 million preference shares of USD 1 each.

6. Agreement to sell shares in United Spirits Limited

The Company and its wholly owned subsidiary Kingfisher Finvest India Limited have entered into a share purchase agreement on 9th November, 2012 with Relay B.V. and Diageo plc. for the sale of 16,716,987 equity shares of United Spirits Limited at a price of Rs. 1,440/- per equity share. All the requisite permissions, including the leave of Hon'' ble High Court of Karnataka have been obtained and it is expected that the transaction of sale of shares will be consummated shortly.

7. Sale of pledged shares by lenders of Kingfisher Airlines Limited

Certain lenders of Kingfisher Airlines Limited (KFA) have disposed of the securities in the form of shares pledged with them. These actions on the part of the lenders are under challenge by the Company in legal proceedings, including Suit No. 311 of 2013 filed, inter alia, by the Company in the Hon'' ble Bombay High Court. These proceedings are pending. Without prejudice to the rights and contentions of the Company in various pending legal proceedings the profits arising on such sale is included under "Profit on sale of investments". Although the sale proceeds have been appropriated by the lenders against KFAs dues, without prejudice to the right and contentions of the Company in the legal proceedings as well as the stance adopted by KFA against the purported recall of its loans by the lenders, pursuant to which the shares pledged by the Company were sold by the lenders, it is included under "Loans and advances" recoverable from KFA.

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

9. The Company, over the years has advanced significant amounts to subsidiaries including overseas subsidiaries aggregating to Rs. 1,709.556 million (Pr year Rs. 1,627.300 million) which have not yet been repaid. Even though there is erosion in the net worth of these subsidiaries, the Management is of the view that all the amounts are ultimately recoverable, taking into consideration their business plans and growth strategies

10. The Company has accrued interest of Rs. 1,046.459 million (Pr year Rs. 1,285.272 million) on loans to associate /

1 subsidiaries, including overseas subsidiaries as per Loan Agreements signed with them. Considering the income stream of those companies, realisability of this interest could possibly take protracted period of time beyond those stipulated in the Loan Agreements.

11. Cash in hand includes foreign currency notes.

12. As required under Section 205C of the Companies Act, 1956, the Company has transferred Rs. 0.237 million (Pr year Rs. 0.132 million) to the Investor Education and Protection Fund (IEPF) during the year. As on March 31, 2013, no amount was due to be transferred to the IEPF

13. Events occurring after the date of the Balance sheet

a) Kingfisher Airlines Limited (KFA) lenders have sold the following investments belonging to the company:

i) 2,446,155 equity shares in United Spirits Limited

ii) 215,000 equity shares in McDowell Holdings Limited

iii) 10,000,000 equity shares in Mangalore Chemicals & Fertilizers Limited

iv) 21,870,156 equity shares in Kingfisher Airlines Limited

b) KFA lenders have invoked company''s Corporate Guarantee and demanded payment of dues, due from KFA amounting to Rs. 64,932.900 million

c) the Company and others have filed a suit in Hon'' ble Bombay High Court against the Consortium of lenders who have advanced loans to Kingfisher Airlines Ltd, inter alia seeking the following reliefs:

i) for a declaration that the corporate guarantee agreement and pledge agreement, both dated 21st December, 2010 and executed by the Company are void ab-initio and non-est;

ii) for a permanent order and injunction, restraining 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 MDRA, including issuing a notice thereunder.

iii) for a permanent order and injunction restraining Consortium of Bankers, their servants, agents or assigns, or any other person claiming by or through or under or any of them, from acting upon or in furtherance of the Corporate Guarantee dated 21st December, 2010 given by the company and Pledge Agreement dated 21st December, 2010.

iv) that an order and decree for damages of sum of Rs. 31,996.800 million as set out in the particulars of claim be awarded to the plaintiffs.

v) that the maximum limit under the Companys'' Corporate Guarantees be Rs. 16,014.300 million for reasons set out in the Suit.

14. Cash flows

The mis-match between the inflows and outflows of cash has resulted in the company not being able to meet certain interest and loan installments on due dates. Proceeds from the sale of certain shares to Diageo plc. pursuant to an agreement dated 9th november 2012 is expected to address the mis-match.

15. Winding up Petitions

Certain Aircraft lessors of KFA have invoked the company''s Corporate Guarantees and have filed winding up petitions against the company. These petitions are pending disposal before the Hon'' ble High Court of Karnataka. The Company has filed a Suit for damages, claiming an amount of Rs. 13,193.000 million against some of the above Petitioners in the City Civil Court, Bangalore.

16. The Company along with its subsidiaries has significant financial exposure on various counts to Kingfisher Airlines Limited (KFA). Although KFAs license has expired on December 31, 2012, under civil aviation regulations, KFA has period of 24 months to reinstate the same. As at March 31, 2013, the financial exposure includes equity investment ofRs. 20,953.043 million, loans and advances Rs. 23,592.484 million & other receivables Rs. 3,104.505 million & corporate guarantees to banks/aircraft lessors, some of which have been invoked. Such invocations are being contested in court. The Management is reasonably confident that none of the guarantees would eventually devolve upon the Company. The ultimate diminution of investments and non-recovery of loans and advances are not presently quantifiable and hence no provision has been considered in the accounts.

17. The Company has accrued interest ofRs. 83.756 million (Pr yearRs. 44.733 million) on loans to Kingfisher Airlines Limited (KFA) as per loan agreement signed with them. Taking into account the financial position of KFA and pending its recapitalisation, interest has not been accrued on the outstanding loans with effect from 1st October 2012.

18. In view of Kingfisher Airlines Limited (KFA) being precluded by its bankers from making payment of any guarantee commission arising out of the corporate guarantee given and security commission arising out of security pledged in favour of lenders of KFA and in view of the stand taken by the Company and other Plaintiffs in the Suit, before the Hon'' ble Bombay High Court, 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 accounted for, in the current financial year.

19. The Company''s Rupee loan from HDFC Limited was converted into a "Dollar Denominated Loan" at concessional rate of interest in 2011-12. A portion of the foreign currency translation difference has been recognised as interest in terms of AS 16 – ‘Borrowing costs'', and the balance is kept in Foreign Currency Monetary Item Translation Difference Account which is amortised over the life of the loan but not beyond March 2020, as provided in Government of India Notification No G.S.R.913 (E) (F.No. 17/133/208-CL. Vj, Dated 29-12-2011). Accordingly an amount of Rs. 339.415 million is charged to the Statement of Profit and Loss and the Balance of Rs. 214.043 million is carried in Foreign Currency Monetary Item Translation Difference Account.

20. Remuneration to Chairman, Managing Director and Managerial Personnel

i) The Chairman of the Company has received remuneration from two subsidiaries, amounting to USD 120,000 (Pr year USD 120,000) and GBP 89,600 (Pr year GBP 89,600) during the year 2012-13.

ii) The Company has not paid any remuneration to the Managing Director. However, he has received remuneration of Rs. 14.985 million as an executive of an associate company.

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

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

Based on the response received by the Company, there are no outstanding as at March 31, 2013 to suppliers, as defined under the Micro, Small & Medium Enterprises Development Act, 2006.

22. The Company has recognized the rent from cancellable operating leases in accordance with the terms of the lease deed.

In respect of the non- cancellable operating leases, the Company recognizes the rent on a straight line basis over the non- cancellable lease term.

Future minimum lease payments receivable under non-cancellable operating lease Rs. nil (Pr year Rs. nil)

23. Related Party Transactions:

Key Management Personnel: Dr. Vijay Mallya - Chairman

Mr. A. Harish Bhat - Managing Director

i) Name of the Related Parties and description of relationship

Subsidiaries

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

Associates

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

Subsidiary of an Associate

SW Finance Co. Limited* (formerly Shaw Wallace Breweries Limited), Royal Challengers Sports Private Limited*. * With which there have been transactions during the year.

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

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

26. Previous years'' figures have been regrouped wherever necessary.


Mar 31, 2012

1. UB City Luxury residential Project

The Company has executed a Joint Development Agreement with a Developer on 26th April, 2010 for development of a luxury residential building named as "Kingfisher Towers - Residences at UB City" in the available land in UB City. The super built up area of the building would be 767,870 sq ft. The super built up area falling to the share of the Company would be 418,388 sq. ft. The construction is in progress.

The Company has issued allotment letters in respect of five residential units measuring 41,605 sq ft. in Kingfisher Towers by collecting booking amounts of Rs. 826.925 million.

2. Estimated amount of contracts remaining to be executed on capital account as at 31st March 2012 and not provided for is Rs. 5.357 million (net of advances) (Pr year Rs. 23.550 million).

3. Contingent liabilities: As at As at

March 31, 2012 March 31, 2011

a) Guarantees given by the Company on behalf of subsidiaries to banks, 1500.000 1500.000 financial institutions and others

b) Guarantees given by the Company on behalf of associates to banks, 77,228.600 74,099.400 financial institutions and others

c) Demands raised by Income Tax authorities against which the Company 234.210 127.700 has preferred appeals

Certain beneficiaries have invoked the corporate guarantees given by the company on behalf of Kingfisher Airlines Limited, an associate company. The total amount invoked and outstanding as on June 30, 2012 is Rs. 8,357.700 million and Kingfisher Airlines Limited is under negotiation with the beneficiaries. There has been no financial loss on this count to the company.

4. Fixed Assets

a) The Company's land in Bangalore was revalued in August 2001, based on an independent valuer's report. Accordingly, the value of the land was restated atRs. 1,707 million, with a corresponding adjustment to the Fixed Assets Revaluation Reserve.

b) The Company owns certain valuable trademarks which are carried at NIL value. Some of these trademarks/ logo have been licenced to Group companies.

c) The Company's UB City property is under charge in favour of HDFC Ltd for facilities granted to the Company.

d) The Company's property in Goa is under charge in favour of a bank for facilities granted to an associate.

5. Investments:

a) The Company has pledged 10,310,382 shares held in United Spirits Limited, 11,207,729 shares held in Mangalore Chemicals & Fertilisers Limited, 769,728 shares in UB Engineering Limited, 197,433,555 shares in Kingfisher Airlines Limited and 3,903,209 shares held in McDowell Holdings Limited to secure the borrowings of subsidiary companies and associate companies.

b) 900,000 shares of Kingfisher Airlines Limited held by the Company and pledged with a bank for credit facilities extended to an associate company, have been sold by the bank, subsequent to the Balance Sheet date, resulting in a loss of Rs. 30.333 million to the company.

c) An existing pledge of 1,310,472 shares of United Spirits Limited to a bank have been further extended, subsequent to Balance Sheet date, to secure the borrowings of associate companies.

d) Investments include 1,765,000 shares of Kingfisher Airlines Limited and 197 shares of United Spirits Limited held in custody account of lenders.

e) The Company's investment of Rs. 26.512 million in IDFC Mutual Fund is given as a lien to secure the borrowings of an associate company.

f) The investment in subsidiaries (including step down subsidiaries) have been considered as long term strategic investments and diminution in their market value / net worth, though significant is considered temporary and hence no provision is considered necessary.

g) The Preference Shares issued by a wholly owned overseas subsidiary, UB Overseas Limited, are to be redeemed anytime at the option of the shareholder or at end of 10 years from the date of allotment of the shares. The Preference shareholder also has the option for partial / full conversion into equity shares of the Company, at the rate of one equity share for one preference share held, at face value of USD 1 each, to be determined and issued by the Issuer. During the year, 47 million preference shares of USD 1 each have been redeemed.

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

7. The Company, over the years has advanced significant amounts to subsidiaries including overseas subsidiaries aggregating to Rs. 1,627.300 million which have not yet been repaid. Even though there is erosion in the net worth of these subsidiaries, the Management of the view that all the amounts are ultimately recoverable, taking into consideration their business plans and growth strategies.

8. The Company has accrued interest of Rs. 1,285.272 million for the year on loans to associate/ subsidiaries, including overseas subsidiaries as per loan agreements signed with them. Considering the income stream of those companies, realisability of this interest could possibly take protracted period of time beyond those stipulated in the loan agreements.

9. During the year UB Ajanta Breweries Private Limited and UB Nizam Breweries Private Limited (collectively referred to as "APB India") have been merged with United Breweries Limited pursuant to the scheme of amalgamation approved by the Hon'ble High Court of Karnataka. As a result, 427,740 shares in United Breweries Limited has been allotted to the wholly owned overseas subsidiary, UB Overseas Limited.

10. Cash in hand includes foreign currency notes.

11. As required under Section 205C of the Companies Act, 1956, the Company has transferred Rs. 0.132. million (Pr year Rs. 0.367 million) to the Investor Education and Protection Fund (IEPF) during the year. As on March 31, 2012, no amount was due to be transferred to the IEPF.

12. Guarantee Commission represents the commission charged by the Company for the corporate guarantees provided on behalf of subsidiaries and certain associate companies. Security Commission represents the commission charged by the Company for the securities pledged on behalf of a subsidiary and an associate company.

Guarantee commission of Rs. 521.143 million has been accrued during the year based on contractual obligation although the recovery could take a longer period of time than anticipated since the associate company for whom these guarantees were given is presently precluded by its bankers consortium to honour the obligation aggregating to Rs. 646.770 million upto 31st March, 2012.

13. The company along with its subsidiaries has significant financial exposure on various counts to Kingfisher Airlines Limited. Kingfisher Airlines Limited has ceased to be a subsidiary of the company with effect from 18th February, 2012 and has become an associate company thereafter. As at March 31, 2012, such exposure include equity investment of Rs 21,142.800 million, loans and advances Rs. 10,486.984 million and other receivables Rs. 2,090.837 million, and corporate guarantees to banks/aircraft lessors Rs. 89,258.600 million. Certain corporate guarantees have been invoked and Kingfisher Airlines Limited is under negotiation in this regard with the beneficiaries. The Management is reasonably confident that none of the guarantees would eventually devolve upon the Company. The ultimate impairment of investments and non-recovery of loans and advances are not presently quantifiable and hence no provision has been considered in the accounts.

14. During the year, the company converted an existing Rupee Loan of Rs.5,369.816 million from HDFC Limited (secured against future sale proceeds from the luxury residential building - Kingfisher Towers) into a "Dollar Denominated Loan" at concessional rate of interest. The repayment of Principal and interest payments, under the terms of this loan are with reference to the dollar rate prevailing on the due dates. The company has recognized part of the exchange difference as interest in terms of AS 16 - Borrowing Costs and the balance difference is kept in the Foreign Currency Monetary Item Translation Difference Account which is amortised over the life of the loan but not beyond March 2020, as provided in Government of India Notification no G.S.R.913(E) (F.No.17/133/208-CL.Vj, Dated 29-12-2011). Accordingly an amount of Rs.13.032 million is charged to the Statement of Profit and Loss and the Balance of Rs. 219.631 million is carried in Foreign Currency Monetary Item Translation Difference Account.

15. Remuneration to Chairman, Managing Director and Managerial Personnel

i) The Chairman of the Company has received remuneration from two subsidiaries, amounting to USD 120,000 (Pr year USD 120,000) and GBP 89,600 (Pr year GBP 89,600) during the year 2011 -12.

ii) The Company has not paid any remuneration to the Managing Director. However, he has received remuneration of Rs. 13.086 million as an executive of an associate company.

iii) Subsidiaries have paid sitting fees of Rs. 0.090 million (Pr year Rs. 0.100 million) to Directors including the Managing Director.

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

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

Based on the response received by the Company, there are no outstanding as at March 31, 2012 to suppliers, as defined under the Micro, Small & Medium Enterprises Development Act, 2006.

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

17. The Company has recognized the rent from cancellable operating leases in accordance with the terms of the lease deed.

In respect of the non- cancellable operating leases, the Company recognises the rent on a straight line basis over the non- cancellable lease term.

Future minimum lease payments receivable under non-cancellable operating lease Rs. Nil (Pr year nil)

18. Related Party Transactions:

Key Management Personnel: Mr. A. Harish Bhat - Managing Director

i) Name of the Related Parties and description of relationship

Subsidiaries

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

Associates

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

Subsidiary of an Associate

Shaw Wallace Breweries Limited, Royal Challenger Sports Private Limited.

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

20. Previous year's figures have been regrouped to conform to Schedule VI (as amended) of the Companies Act, 1956.


Mar 31, 2011

1. UB City Luxury residential Project

The Company has executed a Joint Development Agreement with a Developer on 26th April, 2010 for development of a luxury residential building named as "Kingfisher Towers - Residences at UB City" in the available land in UB City. The super built up area of the building would be 767,870 sq ft. The super built up area falling to the share of the Company would be 418,388 sq. ft.

The Company has issued allotment letters in respect of two residential units in Kingfisher Towers by collecting booking amounts of Rs. 20 million.

2. Estimated amount of contracts remaining to be executed on capital account as at 31st March 2011 and not provided for is Rs. 23.550 million (net of advances) (Pr year Rs. 85.699 million).

3. Secured Loans:

i) Details of securities provided for loans availed from banks :

a) Loan from The Lakshmi Vilas Bank Limited amounting to Rs. 323.228 million (Pr year Rs. 362.902 million) is secured by assignment of future receivables for use of Pegasus logo by Group Companies. An amount of Rs. 45.198 million is repayable within one year.

b) Loan from State Bank of India amounting to Rs. 107.401 million is secured by the pledge of 395,000 shares in United Spirits Limited held by the Company. The entire amount of Rs. 107.401 million has been since repaid.

c) Loan from Yes Bank Limited amounting to Rs. 2,001.429 million is secured by subservient charge on all current assets and movable fixed assets of the Company, both present and future, deposit in Debt Service Reserve Account equal to a total amount of scheduled interest payment due for one month and assignment of 4,434,000 shares in United Breweries Limited and 1,285,000 shares in United Spirits Limited held by the Company. No amount is repayable within one year.

d) Overdraft facility from HDFC Bank Limited amounting to Rs. 33.679 million is secured by pledge of 297,103 shares in United Spirits Limited, 4,753,881 shares in Mangalore Chemicals & Fertilisers Limited held by the Company, first charge on movable fixed assets ie. plant and machinery, furniture & fixtures valued at Rs. 370 million and a lien marked on a fixed deposit of Rs. 6.400 million.

e) Packing credit facility availed from Federal Bank Limited amounting to Rs. 114.762 million is secured by hypothecation of current assets of the Company.

ii) Details of securities provided for loans availed from others :

a) Loans from HDFC, amounting to Rs. 6,854.515 million (Pr year Rs. 1,943.242 million) are secured by the pledge of 1,585,154 shares in United Spirits Limited, 317,030 shares in McDowell Holdings Limited held by the Company, mortgage by deposit of title deeds of the Company's land in Bangalore, the super structure thereon and assignment of the rent receivable from the property let out, securitisation of future sale proceeds from the luxury residential building "Kingfisher Towers - Residences in UB City" and pledge of 5,000,000 shares in United Spirits Limited and 35,222,231 shares in Kingfisher Airlines Limited held by a subsidiary company. An amount of Rs. 563.645 million is repayable within one year.

b) Loan from IL&FS Financial Services Limited amounting to Rs. 1,000 million (Pr year Rs. 1,500.410 million) is secured by the pledge of 1,000,000 shares in United Spirits Limited held by the Company and pledge of 875,647 shares in United Spirits Limited held by a subsidiary company. No amount is repayable within one year.

c) Loan from IFCI Limited amounting to Rs. 2,514.671 million (Pr year Rs.2,512.937 million) is secured by the pledge of 1,237,477 shares in United Spirits Limited and 7,673,422 shares in United Breweries Limited held by the Company and pledge of 1,467,523 shares in United Spirits Limited held by a subsidiary company. No amount is repayable within one year.

4. Contingent liabilities:

2010-11 2009-10

a Guarantees given by the Company on behalf of subsidiaries to banks and 72,321.000 72,897.227 financial institutions and others

b Guarantees given by the Company on behalf of associates to banks 1,778.400 2,578.400

c Demand raised by Income Tax authorities against which the Company has 127.700 - Nil - preferred appeals

d) Loan from SICOM Limited amounting toRs. 540 million (Pr yearRs. 430 million) is secured by pledge of 400,000 shares in Kingfisher Airlines Limited and 250,000 shares in United Spirits Limited held by the Company and pledge of 17,600,000 shares in Kingfisher Airlines Limited held by a subsidiary company. The facility has been availed for revolving period of 3 years, renewable every year on a put-call option.

e) Loan from Future Capital Holdings Limited amounting to Rs. 1,009.321 million (Pr year nil) is secured by the pledge of 10,93,688 shares in United Spirits Limited held by the Company and 363,312 shares in United Spirits Limited held by a subsidiary company and a non-disposable undertaking of 86,000 shares in United Spirits Limited held by the Company and 667,000 shares in United Spirits Limited held by a subsidiary company. No amount is repayable within one year.

f) Loan from L&T Finance Limited amounting to Rs. 33.578 million (Pr year 41.999 million) is secured by the fixed assets for which the loan was taken. An amount of Rs. 9.669 million is repayable within one year.

g) Loan from ECL Finance Limited amounting to Rs. 500 million (Pr year Rs. 500 million) is secured by the pledge of 1,115,000 shares in United Spirits Limited held by the Company. The entire amount of Rs. 500 million has been since repaid.

h) Loan from Quant Capital and Investment Private Limited amounting to Rs. 500 million (Pr year nil) is secured by the pledge of 870,000 shares in United Spirits Limited held by the Company. The entire amount of Rs. 500 million is repayable within one year.

i) Loan from Religare Finvest Limited amounting to Rs. 1,000 million (Pr year nil) is secured by the pledge of

2,052,683 shares in United Spirits Limited held by the Company. No amount is repayable within one year.

4. Unsecured Loans

The Company, during the year has accepted fixed deposits from the Public amounting to Rs. 62.355 million (Pr year Rs. 1,287.902 million). An amount of Rs. 983.100 million is repayable within one year.

5. Events occurring after the Balance Sheet date

After the Balance Sheet date, the Company has issued the following corporate guarantees :

a) Guarantees for Rs. 2,815.400 million in favour of lenders on behalf of a subsidiary

b) Guarantees for Rs. 140.000 million in favour of others on behalf of an associate.

6. Fixed Assets

a) The Company's land in Bangalore was revalued in August 2001, based on an independent valuer's report. Accordingly, the value of the land was restated at Rs. 1,707 million, with a corresponding adjustment to the Fixed Assets Revaluation Reserve.

b) The Company owns certain valuable trademarks which are carried at NIL value. Some of these trademarks / logo have been licenced to Group companies.

c) The Company's UB City property is under charge in favour of HDFC for facility granted to the Company.

d) The Company's property in Goa is under charge in favour of a bank for facilities granted to a subsidiary.

7. Investments:

a) The Company has pledged 10,193,910 shares held in United Spirits Limited, 10,000,000 shares held in Mangalore Chemicals & Fertilisers Limited, 769,728 shares held in UB Engineering Limited, 85,985,156 shares held in Kingfisher Airlines Limited and 2,700,000 shares held in McDowell Holdings Limited to secure the borrowings of subsidiary companies and associate companies.

Subsequent to the Master Debt Recast Agreement [MDRA], executed by the Company's Subsidiary, Kingfisher Airlines Limited with its Bankers, the Company was allotted 113,213,399 equity shares of Kingfisher Airlines Limited, which is since pledged to secure the borrowings of the subsidiary company.

In addition to the above, the Company has given negative lien of shares in United Breweries Limited amounting Rs. 1,250 million in favour of ICICI Bank Limited to secure the borrowings of a subsidiary company.

b) The Company has given a letter of undertaking in favour of ICICI Bank Limited, undertaking not to dispose of its investments in Kingfisher Airlines Limited, till such time as there are borrowings from ICICI Bank Limited to Kingfisher Airlines Limited.

c) The Company's investment of Rs. 160.000 million with IDFC Mutual Fund is given as a lien to secure the borrowings of a subsidiary company.

d) The investment in subsidiaries (including step down subsidiaries) have been considered as long term strategic investments and diminution in their market value / net worth, though significant is considered temporary and hence no provision is considered necessary.

e) The Redemption of the Preference Shares issued by a wholly owned overseas subsidiary, UB Overseas Limited will be made at the end of 10 years from the date of allotment of the shares. The Preference shareholder will have the option for partial / full conversion into equity shares of the subsidiary, at the rate of one equity share for one preference share held, at face value of USD 1 each to be determined and issued by the Issuer.

8. A major subsidiary of the Company, Kingfisher Airlines Limited has entered into a Master Debt Recast Agreement [MDRA] with its Bankers. The terms of the MDRA include inter-alia:

a) Conversion of part of the outstanding loan into Compulsorily Convertible Preference Shares [CCPS] and part into Cumulative Redeemable Preference Shares [CRPS] redeemable at par after twelve years.

b) The remnant loans will be repayable over a nine year period including a two year moratorium and a graduated schedule over seven subsequent years.

c) Interest for the period from July 2010 to March 2011 was converted into a term loan repayable over five years.

d) The interest rate has been reduced by over 300 bps.

e) Sanction of additional loan of Rs. 7,680 million

The Company is a signatory to the MDRA

Simultaneously the Company has converted its existing loan of Rs. 6,330 million as well as Non Convertible Preference Shares [NCPS] of Rs. 970 million into Compulsorily Convertible Preference Shares [CCPS].

The Company's existing guarantees and pledge to secure the KFA debt have been extended for the period of outstanding.

The Master Debt Recast Agreement [MDRA] executed by the Company's Subsidiary, Kingfisher Airlines Limited [KFA] with its Banks has been implemented in totality. The Company has exercised its option to convert all its 730,000,000 Compulsorily Convertible Preference Shares [CCPS] acquired at a cost of Rs. 7,300 million and KFA has allotted 113,213,399 equity shares to the Company. The shareholding of the Company in KFA now stands at 40.09%. Along with the holding with its Subsidiaries, the shareholding of the Company in KFA now stands at 55.57%. In terms of the MDRA, the entire share holding of the company in KFA is pledged with the Security Trustee acting on behalf of consortium of lenders.

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

10. The Company, over the years has advanced significant amounts to subsidiaries including overseas subsidiaries aggregating Rs. 19,236.010 million (including Rs. 10,556.250 million advanced during the year). Interest has not been charged on loans advanced aggregating Rs. 10,387.428 million. Considering, the income stream of those companies, the repayment of loans could possibly take protracted period of time beyond those stipulated in the Loan Agreements. The Directors are of the view that all the amounts are ultimately recoverable with interest wherever applicable taking into consideration their business plans and growth strategies. Accordingly the advances to subsidiaries are considered presently good and recoverable except to the extent of Rs. 20 million.

11. Strategic investment in APB India

During the year under review, your Company through its wholly owned overseas subsidiary, UB Overseas Limited has acquired strategic interest by way of acquisition of 50% of the issued and paid up capital of UB Ajanta Breweries Private Limited and UB Nizam Breweries Private Limited (collectively referred to as "APB India") from Heineken International B.V., Netherlands.

12. Cash in hand includes foreign currency notes.

13. As required under Section 205C of the Companies Act, 1956, the Company has transferred Rs 0.367 million (Pr year Rs.0.134 million) to the Investor Education and Protection Fund (IEPF) during the year. As on March 31, 2011, no amount was due to be transferred to the IEPF.

14. Guarantee Commission represents the commission charged by the Company for the corporate guarantees provided on behalf of subsidiaries and certain associate companies. Security Commission represents the commission charged by the Company for the securities pledged on behalf of a subsidiary and an associate company.

The Company has significant guarantee exposure on behalf of subsidiaries and other associated companies. Wherever any guarantee has been invoked, the guaranteed amount has been paid by the beneficiaries. The Management is reasonably confident that none of the other guarantees would eventually devolve upon the Company.

15. Given the nature of the Company's cash flow, the Company has been borrowing from time to time. Management has comprehensive plans including additional borrowings to ensure liquidity besides accelerated sale of residential and/ or office space in the UB City. Accordingly the accounts have been prepared on principles applicable to going concern.

16. Remuneration to Chairman, Managing Director and Managerial Personnel

i) The Chairman of the Company has received remuneration from two subsidiaries, amounting to USD 120,000 (Pr year USD 120,000) and GBP 89,600 (Pr year GBP 89,600) for the year 2010-11.

ii) The Company as a policy does not pay any remuneration to the Managing Director.

Mr. R.N. Pillai, who was the Managing Director of the Company up to the close of business hours of August 20, 2010 did not draw any remuneration and perquisites from the Company. However, he has received remuneration of Rs. 1.455 million till August 2010 as an executive of an associate company.

Mr. A. Harish Bhat was appointed as Managing Director of the Company with effect from the close of business hours of August 20, 2010 in place of Mr. R.N. Pillai without payment of any remuneration. However, he has received remuneration of Rs. 6.015 million from September 2010 to March 2011 as an executive of an associate company.

iii) Subsidiaries have paid sitting fees of Rs. 0.100 million (Pr year Rs. 0.155 million) to Directors including the Managing Director.

17. Details of outstanding to Micro, Small and Medium Enterprises and Small Scale Industries.

Based on the response received by the Company, there are no outstanding as at March 31, 2011 to suppliers, as defined under the Micro, Small & Medium Enterprises Development Act, 2006.

Amount due to Small Scale Industries (SSI) is nil to the extent of information disclosed by creditors.

18. The Company has recognised the rent from cancellable operating leases in accordance with the terms of the lease deed.

In respect of the non- cancellable operating leases, the Company has recognised the rent on a straight line basis over the non- cancellable lease term.

Future minimum lease payments receivable under non-cancellable operating lease up to one year Rs. Nil (Pr year nil)

3 Segment results represents profit/(loss) before finance expenses, interest income and tax.

4 Capital expenditure represents the gross additions made to fixed assets during the year.

5 Segment assets include Fixed Assets, Investments, Current Assets, Loans & Advances except income tax assets.

6 Segment Liabilities include Secured and Unsecured Loans, Current Liabilities and Provisions except provision for tax and dividend.

19. Related Party Transactions:

Key Management Personnel: Mr. R.N. Pillai - Managing Director up to 20.10.2010

Mr. A. Harish Bhat - Managing Director wef 21.10.2010

i) Name of the Related Parties and description of relationship

Subsidiaries

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

Associates

United Spirits Limited *, Mangalore Chemicals & Fertilizer Limited *, UB Engineering Limited*, WIE Engineering Limited (Under Liquidation), McDowell Holdings Limited*, Pixray India Limited, UB Pharma (Kenya) Limited, DCL Holdings Private Limited and UB Ajantha Breweries Private Limited & UB Nizam Breweries Private Limited.

Subsidiary of an Associate

Shaw Wallace Breweries Limited*

* With which there have been transactions during the year.

20. With a view to facilitating the smooth business operation of its subsidiary, Kingfisher Airlines Limited, the Company, as part of its obligation as Holding Company has expressed its intention to honour the financial obligations to the lending institutions on the due dates.

21. The Board of Directors have proposed a dividend of Re.1/- per share (10%) for the year ended March 31, 2011 (previous year Re.1/- per share).

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

23. Previous year's figures have been regrouped wherever necessary to conform with the current year's classification/ presentation.


Mar 31, 2010

1. On cancellation of 4,415,999 equity warrants due to non-exercise of option by a promoter group Rs. 490.165 million being 10% advance amount was credited to Capital Reserve Account.

2. UB City Luxury Residential Project

The Company has executed a Joint Development Agreement with a Developer on 26th April, 2010 for development of a luxury residential building in the available land in UB City. The super built area of the building would be not less than 5,00,000 sft. and shall be shared in the ratio of 55% for the Company and 45% for the Developer.

3. Estimated amount of contracts remaining to be executed on capital account as at March 31, 2010 and not provided for is Rs. 85.699 million (net of advances) (Pr year Rs.328.782 million).

4. Secured Loans:

Details of the securities provided for loans availed from banks :

i) Loan from The Lakshmi Vilas Bank Limited amounting to Rs. 362.902 million is secured by assignment of future receivables for use of Pegasus logo by group companies. An amount of Rs. 40.618 million is repayable within one year.

ii) Details of securities provided for loans availed from others :

a) Loans from HDFC, amounting to Rs. 1,943.242 million (Pr year Rs. 4,675.015 million) are secured by the pledge of 1,585,154 shares in United Spirits Limited, mortgage by deposit of title deeds of the Companys land in Bangalore, the super structure thereon and assignment of the rent receivable from the property let out. An amount of Rs. 636.376 million is repayable within one year.

b) Vehicle loans from others amounting to Rs. 0.114 million (Pr year Rs. 0.483 million) are secured by the hypothecation of vehicles. An amount of Rs.0.114 million is repayable within one year.

c) Loan from IL&FS Financial Services Limited amounting to Rs. 1,500.410 million (Pr year Rs. 1,500 million) is secured by the pledge of 2,223,000 shares in United Spirits Limited held by the Company and pledge of 1,050,000 shares in United Spirits Limited held by a subsidiary company. Entire amount of Rs. 1,500.410 million is since repaid.

d) Loan from IFCI Limited amounting to Rs. 2,512.937 million (Pr year Rs.1,006.124 million) is secured by the pledge of 1,237,477 shares in United Spirits Limited held by the company, 7,673,422 shares in United Breweries Limited held by the Company and pledge of 1,467,523 shares in United Spirits Limited held by a subsidiary company. No amount is repayable within one year.

e) Loan from SICOM Limited amounting to Rs. 430 million (Pr year Rs. 440 million) is secured by the pledge of 400,000 shares in Kingfisher Airlines Limited held by the Company and pledge of 20,800,000 shares in Kingfisher Airlines Limited held by a subsidiary company. Entire amount of Rs. 430 million is repayable within one year.

f) Loan from L&T Finance Limited amounting to Rs.41.999 million (Pr year 49.985 million) are secured by the fixed assets for which the loan was taken. An amount of Rs. 8.421 million is repayable within one year.

g) Loan from ECL Finance Limited amounting to Rs. 500 million (Pr year nil) is secured by the pledge of 850,000 shares in United Spirits Limited.

h) Loan from Multiflow Financial Services Limited amounting to Rs. 500.178 million (Pr year nil) is secured by pledge of 931,092 shares in United Spirits Limited. Entire amount of Rs. 500.178 million is since repaid.

5. Unsecured Loan

The Company, during the year accepted fixed deposits from the Public amounting to Rs. 1,287.902 million. No amount is repayable within one year.

6. Contingent liabilities:

2009-10 2008-09

1) Guarantees given by the Company on behalf of subsidiaries to banks, 72,897.227 50,045.380 financial institutions and others

2) Guarantees given by the Company on behalf of associates to banks 2,578.400 1,628.400

3> Claims against the Company not acknowledged as debt -Nil- 23.329

4) Demands raised by Income Tax authorities which the Company has preferred -Nil- 32.997 appeals

7. Events occurring after the Balance Sheet date

After the Balance Sheet date, the Company has issued the following further corporate guarantees :

a) Guarantees for Rs. 670.000 million in favour of banks on behalf of a subsidiary.

b) Guarantees for Rs. 2,372.100 million in favour of lenders on behalf of subsidiaries

c) Guarantees for Rs. 300.000 million in favour of banks on behalf of an associate.

8. Fixed Assets

i) The Companys land in Bangalore was revalued during August 2001, based on an independent valuers report. Accordingly, the value of the land was restated at Rs.1,707 million, with a corresponding adjustment to the Fixed Assets Revaluation Reserve.

ii) The Company owns certain valuable trademarks/logo which are carried at nil value. Some of these trademarks /logo have been licenced to Group companies.

iii) The Companys UB City property is under charge in favour of a Financial Institution for facility granted to the Company and its wholly owned subsidiary.

iv) The Companys property in Goa is under charge in favour of a bank for facilities granted to a subsidiary.

9. Investments:

i) The Company has pledged 16,699,402 shares held in United Spirits Limited, 10,000,000 shares held in Mangalore Chemicals & Fertilisers Limited, 769,728 shares held in UB Engineering Ltd., 64,252,041 shares in Kingfisher Airlines Limited and 4,305,030 shares held in McDowell Holdings Limited to secure the borrowings of subsidiary companies and associate companies.

In addition to the above, the Company has given negative lien of shares of United Breweries Limited amounting Rs. 1,250 million in favour of ICICI Bank Limited to secure the borrowings of a subsidiary company.

ii) The Company has given a letter of undertaking in favour of ICICI Bank Limited, undertaking not to dispose of its investments in Kingfisher Airlines Ltd., till such time as there are borrowings from ICICI Bank Limited to Kingfisher Airlines Limited.

iii) The investment in subsidiaries (including step down subsidiaries) have been considered as long term strategic investments and diminution in their market value/net worth, though significant is considered temporary and hence no provision is considered necessary.

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

11. The Company, over the years has advanced significant amounts to subsidiaries including overseas subsidiaries aggregating Rs. 13,151.541 million (including Rs.3,302.755 million advanced during the year) which have not yet been repaid. Interest has not been charged on loans advanced aggregating Rs. 8,250.279 million. The net worth of an overseas subsidiary has been fully eroded. Considering, the income stream of those companies, the repayment of loans could possibly take protracted period of time beyond those stipulated in the Loan Agreements. The Directors are of the view that all the amounts are ultimately recoverable with interest wherever applicable taking into consideration their business plans and growth strategies. Accordingly the advances to subsidiaries are considered presently good and recoverable except to the extent of Rs. 20 million.

12. As required under Section 205C of the Companies Act, 1956, the Company has transferred Rs. 0.134 million (Pr year Rs. 1.129 million) to the Investor Education and Protection Fund (IEPF) during the year. On March 31, 2010, no amount was due to be transferred to the IEPF.

13. Guarantee Commission represents the commission charged by the Company for the corporate guarantees provided on behalf of subsidiaries and certain associate companies. Security Commission represents the commission charged by the Company for the securities pledged on behalf of a subsidiary and an associate company.

The Company has significant guarantee exposure on behalf of subsidiaries and other associated companies. Wherever any guarantee has been invoked, the guaranteed amount has been paid by the beneficiaries. The Management is reasonably confident that none of the other guarantees would eventually devolve upon the Company.

14. Deposit amounting to Rs. 500 million with The Lakhmi Vilas Bank Limited is pledged for facilities granted to a subsidiary company.

15. Advertisement and sales promotion expenses include Rs. 227.318 million paid to an overseas company for promotion of the Companys logo.

16. Remuneration to Chairman, Managing Director and Managerial Personnel

i) The Chairman of the Company has received remuneration from two subsidiaries, amounting to USD 120,000 (Pr year USD 120,000) and GBP 89,600 (Pr year GBP 89,600) for the year 2009-10.

ii) The Company has not paid any remuneration to the Managing Director. However, he has received remuneration of Rs. 3.882 million (Pr year 3.861 million) as an executive of an associate company. The Managing Director of the Company has not received sitting fees from any subsidiary company. The reappointment of Mr. R. N. Pillai as Managing Director with effect from 18th March, 2010, without remuneration requires approval of the shareholders at the ensuing Annual General meeting.

iii) Subsidiaries have paid sitting fees of Rs.0.155 million (Pr year Rs. 0.240 million) to Directors other than the Managing Director.

17. Details of outstanding to Micro, Small and Medium Enterprises and Small Scale Industries Based on the response received by the Company, there are no amount outstanding as at March 31, 2010 to suppliers, as defined under the Micro, Small & Medium Enterprises Development Act, 2006.

Amount due to Small Scale Industries (SSI) is nil to the extent of information disclosed by creditors.

18. The Company has recognized the rent from cancellable operating leases in accordance with the terms of the lease deed.

In respect of the non- cancellable operating leases, the Company has recognized the rent on a straight line basis over the non-cancellable lease term.

Future minimum lease payments receivable under non-cancellable operating leases up to one year Rs. Nil (Pr year Rs. 20.476 million)

19. Related Party Transactions:

Key Management Personnel: Mr. R. N. Pillai - Managing Director

i) Name of the Related Parties and description of relationship

Subsidiaries

UB Electronic Instruments Limited *, UB Infrastructure Projects Limited *, UB International Trading Limited *, Kingfisher Finvest India Limited (Formerly known as Kingfisher Radio Limited) *, Kingfisher Airlines Limited (Formerly known as Deccan Aviation Limited) * , Kingfisher Training and Aviation Services Limited (Formerly known as Kingfisher Airlines Limited) *, Kingfisher Aviation Training Limited (Formerly known as Kingfisher Training Academy Limited)

* , City Properties Maintenance Company Bangalore Limited *,Bangalore Beverages Limited *, Vitae India Spirits Limited, Rigby International Corp., United Breweries of America Inc, Delaware, Inversiones Mirabel, S.A, Mendocino Brewing Co. Inc, USA, United Breweries International [UK] Limited , UBSN Limited, Rubic Technologies, Inc, Releta Brewing Company LLC, UB Overseas Limited *and UBHL (BVI) Limited *

Associates

United Spirits Limited *, Mangalore Chemicals & Fertilizer Limited *, UB Engineering Limited* WIE Engineering Limited (Under Liquidation), McDowell Holdings Limited , Pixray India Limited , UB Pharma (Kenya) Limited and DCL Holdings Private Limited

* with which there have been transactions during the year

20. With a view to facilitating the smooth business operation of its subsidiary, Kingfisher Airlines Limited, the Company, as part of its obligation as Holding Company has expressed its intention to honour the financial obligations to the lending institutions on the due dates.

21. Exceptional income represents the amount received from Heineken Group (net of expenditure) in connection with the closure of all pending disputes and settling the matters out of Court and ceding certain management rights in United Breweries Limited in terms of the settlement.

22. Given the time and nature of the Companys cash flow, the Company has borrowed to meet immediate needs from time to time. Management has initiated steps to improve the liquidity inter alia through sale of luxury residential property being developed in the UB City. Accordingly the annual accounts have been prepared on the basis of going concern.

23. The Board of Directors have proposed a dividend of Re. 1/- per share (10%) for the year ended March 31, 2010.

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

25. Previous years figures have been regrouped wherever necessary to conform with the current years classification/ presentation.

 
Subscribe now to get personal finance updates in your inbox!