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Notes to Accounts of United Breweries Ltd.

Mar 31, 2016

1. Corporate Information

United Breweries Limited ("UBI" Or "The Company") Is A PUBLIC Limited Company Domiciled In India And Incorporated Under The Provisions Of The Indian Companies Act. Its Shares Are Listed On Bombay Stock Exchange (BSE) And National Stock Exchange (NSE). The Company Is Engaged Primarily In The Manufacture And Sale Of Beer. The Company Has Manufacturing Facilities In India.

2. Basis Of Preparation Of Financial Statements

The Financial Statements Of The Company Have Been Prepared In Accordance With Generally Accepted Accounting Principles In India ("Indian GAAP"). The Company Has Prepared These Financial Statements To Comply In All Material Respects With The Accounting Standards Specifed Under Section 133 Of The Companies Act, 2013, Read Together With Rule 7 Of The Companies (Accounts) Rules 2014. The Financial Statements Have Been Prepared On An Accrual Basis And Under The Historical Cost Convention.

The Accounting Policies Adopted In The Preparation Of Financial Statements Are Consistent With Those Of Previous Year.

3. Operating Lease

The Company Has Entered Into Operating Lease Arrangements For Vehicles, Computers, Equipments, Office Premises And Employee Residential Premises. These Leases Are For A Period Of 11 To 60 Months With Options Of Renewal And Premature Termination With Notice Period, Except In Certain Leases With Lock-In Period Of 12 To 60 Months. There Are Certain Sub-Lease Restrictions Placed Upon The Company By Entering Into These Leases. The Total Lease Rentals Expense For The Year Is Rs. 2,706 Lakhs (Previous Year: Rs. 2,419 Lakhs). Future Minimum Rentals Payable Under Non- Cancellable Operating Leases Are As Follows:

4. Subsequent Event

The Bihar State Government Vide Its Notification Dated April 5, 2016 Has Imposed Ban On Trade And Consumption Of Foreign Liquor In The State Of Bihar With Immediate Effect. Pursuant To Such Notification, The Company Has Fled A Writ Petition With The Honourable High Court At Patna, Requesting To Set Aside The Said Notification Or To Defer Its Implementation Or To Direct The Authorities To Make Payment For Beer Supplied Till The Date Of Aforesaid Notification, Refund All Advance Duties And Taxes Paid By The Company And Compensate For Losses Incurred On Account Of Such Abrupt Notification.

As At March 31, 2016, The Company Has Fixed Assets Of Rs. 25,801 Lakhs, Inventories Of Rs. 2,317 Lakhs, Trade Receivables Of Rs. 2,517 Lakhs And Advances Of Rs. 1,863 Lakhs At Its Units In Bihar. The Honourable High Court At Patna Has Passed An Interim Order, Which Is Subject To The Final Order, Confirming Payment Obligation Of Bihar State Beverages Corporation Limited (BSBCL) In Respect Of The Supplies Made By The Manufacturers. Further, Vide Notification Dated April 9, 2016, The Bihar State Government Has Allowed Production Of Beer In The State Of Bihar For Export To Outside States.

Considering The Favourable Interim Order Passed By The Honourable High Court At Patna And Permission To Produce And Export Beer To Other States, The Management Is Confident Of Utilization Of Aforesaid Assets And Recovery Of Aforesaid Balances. Pending Outcome Of The Writ Petition, No Provision Has Been Considered Necessary By The Management In This Regard.

5. Acquisition OF Assets OF Pacific Spirits Private Limited

During The Year Ended March 31, 2015, Pursuant To The Approval Of The Board Of Directors In Its Meeting Held On August 13, 2013, The Company Had Acquired Certain Assets Of Pacific Spirits Private Limited On September 1, 2014 For An Aggregate Consideration Of Rs. 10,500 Lakhs. Accordingly, These Assets Including Cost Of Such Acquisition Had Been Recorded By The Company At Their Respective Values, Determined By An Independent Valuer, As Detailed Below:

6. Pursuant To Merger Of Empee Breweries Limited (EBL), With The Company During The Year Ended March 31, 2011, The Company Is In The Process Of Getting The Name Of This Merged Entity Changed In The Records Of State Excise And Other Regulatory Authorities. Pending Completion Of These Formalities, The Name Of Merged Entity Is Continued To Be Used In Various Documents And Records Of The Company.

7. Capitalization OF Expenditure

During The Year, The Company Has Capitalized The Following Expenses To The Cost Of Fixed Asset/Capital Work-In- Progress. Consequently, Expenses Disclosed Under The Respective Notes Are Net Of Amounts Capitalized By The Company.

8. Segment Reporting

The Company''s Business Activity Falls Within A Single Business Segment I.E. Manufacture And Sale Of Beer Including Licensing Of Brands. Also, The Company''s Operations Are Predominantly In India. Hence, There Are No Material Additional Disclosures To Be Provided Under Accounting Standard 17 - Segment Reporting, Other Than Those Already Provided In The Financial Statements.

9. Previous Year Figures

The Previous Year''s Figures Have Been Regrouped Where Necessary To Conform To This Year''s Classification.


Mar 31, 2015

1. Corporate information

United Breweries Limited ('UBL' or 'the Company') is a public limited company domiciled in India and incorporated under the provisions of the Indian Companies Act. Its shares are listed on Bombay Stock Exchange (BSE), Bangalore Stock Exchange (BgSE) and National Stock Exchange (NSE). The Company is engaged primarily in the manufacture and sale of beer. The Company has manufacturing facilities in India.

2. Basis of preparation of financial statements

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India ('Indian GAAP'). The Company has prepared these financial statements to comply in all material respects with the accounting standards specified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy as explained below.

3. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Re. 1 per share. Each holder of equity share is eligible for one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year ended March 31,2015, the amount of dividend recognised as distributions to equity shareholders is Rs. 2,644 Lakhs (Previous year: Rs. 2,380 Lakhs).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

4. Terms of redemption of preference shares

74,07,000, 3% cumulative redeemable preference shares-Series B of Rs. 100 each were issued in April 2005 to Scottish & Newcastle India Limited. The preference shares carried dividend @3% per annum. Each holder of preference share were entitled to one vote per share only on resolutions placed before the Company which directly affects the rights attached to these shares.

In the event of liquidation of the Company before redemption of preference shares, the holders of preference shares had priority over equity shares in the payment of dividend and repayment of capital. These shares have been fully redeemed at par on March 31, 2015.

5. Aggregate number of shares issued for consideration other than cash during period of 5 years immediately preceding the reporting date:

2012-13: 84,89,270 equity shares issued on amalgamation of Scottish and Newcastle India Private Limited.

201 1-12: 98,60,21 1 equity shares issued on amalgamation of Chennai Breweries Private Limited, UB Nizam Breweries Private Limited, Millennium Beer Industries Limited and UB Ajanta Breweries Private Limited.

2010-11: 1,44,96,683 equity shares issued on amalgamation of Millennium Alcobev Private Limited and Empee Breweries Limited.

Unsecured borrowings

Deferred payment liability of Rs. 4,160 Lakhs (Previous year: Rs. 4,385 Lakhs) pertains to sales tax payable to the Government of Maharashtra by virtue of being eligible for deferred payment after having established a manufacturing unit in a notified backward area. This amount is repayable in five equal annual installments on completion of 10 years from the end of respective year to which sales tax liability relates.

Secured borrowings

Cash credit facilities/working capital demand loans from banks are secured by first pari-passu charge on all current assets of the Company namely stock of raw materials, semi-finished and finished goods, stores and spares not relating to plant and machinery (consumable stores and spares), bills receivable and book debts both present and future. These are repayable on demand and carries interest in the range of 10.75% to 13.00% p.a.

Unsecured borrowings

a) Commercial papers are repayable after a term of 60 days from issue and carry interest rate of 9.20% p.a.

b) Short-term loans from banks were repayable after 30-90 days from the date of respective loan and carried interest in the range of 9.50% to 11.00% p.a. These loans have been fully repaid during the year.

c) Bank overdraft were repayable on demand and carried interest in the range of 9.92% to 10.05% p.a.

6. CONTINGENT LIABILITIES

Bank guarantees 2,690 2,615

Letter of credit 1,111 1,386

Demands under appeal for following matters*

- Income tax 14,064 13,181

- Service tax 22,929 34,437

- Water charges 3,737 3,317

- Sales tax 7,050 356

- Excise duty 66 66

- Employee state insurance 16 16 /provident fund

Claims against the company not 1,121 1,058 acknowledged as debts*

Total 53,059 56,657

* The Company is contesting these demands and the management, with the advise of its advisors, believes that its position will likely be upheld in the appellate process. No expense has been accrued in the financial statements for these demands raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company's financial position and results of operations. The Company does not expect any reimbursements in respect of the above contingent liabilities.

In addition, the Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The Company's management reasonably does not expect that these legal actions, when ultimately concluded and determined, will have material effect on the Company's results of operations or financial condition.

7. Pursuant to merger of Empee Breweries Limited (EBL), with the Company during the year ended March 31, 2011, the Company is in the process of getting the name of this merged entity changed in the records of state excise and other regulatory authorities. Pending completion of these formalities, the name of merged entity is continued to be used in various documents and records of the Company.

8. RELATED PARTY DISCLOSURES

A. Name of related parties and related party relationships

Related party where control exists:

Subsidiary : Maltex Malsters Limited ('MML')

Related parties under AS-18 with whom transactions have taken place during the year:

Associate : Kingfisher East Bengal Football Team Private Limited ('KEBFTPL') (Formerly, United East Bengal Football Team Private Limited)

Enterprises having : Scottish & Newcastle India significant influence Limited, UK ('SNIL') United Breweries (Holdings) Limited ('UBHL')

Key management personnel(KMP) : Mr. Kalyan Ganguly, Managing Director

Mr. Henricus Petrus van Zon, Director, CFO

Relative of KMP : Mrs. Suparna Bakshi Ganguly (Wife of Mr. Kalyan Ganguly)

Enterprises over which : Heineken UK Limited ('HUL'), investing parties or KMP holding company of SNIL Heineken have significant influence International B.V. ('HIBV') Heineken Brouwerijen B.V. ('HBBV') Heineken Supply Chain B.V. ('HSCBV') Heineken Asia Pacific Pte. Ltd. ('HAPPL') Asia Pacific Breweries (Singapore) Pte. Ltd. ('APBS') Heineken Ceska Republika ('HCR') Force India F1 Team Limited, UK ('Force India')

Additional related parties as per the Companies Act, 2013 with whom transactions have taken place during the year:

Directors : Dr. Vijay Mallya, Chairman

Mr. A K Ravi Nedungadi

Mr. Duco Reinout Hooft Graafland

Mr. Roland Pirmez

Mr. Stephan Gerlich

Mrs. Kiran Majumdar Shaw

Mr. Madhav Bhatkuly

Mr. Chugh Yoginder Pal

Mr. Chhaganlal Jain

Mr. Sunil Alagh

Key management personnel (KMP): : Mr. Govind Iyenger, Company Secretary

Relative of director or KMP : Mr. Umesh Hingorani

Mrs. Jenbagalakshmi Iyenger (Wife of Mr. Govind Iyenger)

Private companies in which a : Royal Challengers Sports Private director is a director Limited ('RCSPL') (included in 'Others' below)

Body corporate/Private : United Breweries International companies whose (UK) Limited, UK ('UBIUK') Board of directors is Mandwa Farms Private accustomed to act Limited('MFPL') in accordance with advise, Blitz Publications Private directions or h. Parson Limited ('BPPL') Private Limited ('HPPL') Blitz Multimedia Private instructions of a director Limited ('BMPL') (included in UB Air United Spirits Limited ('USL') Private Limited ('UBAPL') Others below)

9. SEGMENT REPORTING

The Company's business activity falls within a single business segment i.e. manufacture and sale of beer including licensing of brands. Also, the Company's operations are predominantly in India. Hence, there are no material additional disclosures to be provided under Accounting Standard 17 - Segment Reporting, other than those already provided in the financial statements.

10. PREVIOUS YEAR FIGURES

The previous year's figures have been regrouped where necessary to conform to this year's classification.


Mar 31, 2014

1. Corporate information

United Breweries Limited (''UBL'' or ''the Company'') is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange (BSE), Bangalore Stock Exchange (BgSE) and National Stock Exchange (NSE). The Company is engaged primarily in the manufacture and sale of beer. The Company has manufacturing facilities in India.

2. Basis of preparation of financial statements

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (''Indian GAAP''). The Company has prepared these financial statements to comply in all material respects with the accounting standards notifed under the Companies Act, 1956, read with General Circular 8/2014 dated April 4, 2014 issued by the Ministry of Corporate Affairs and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention, except for derivative financial instruments on which mark to market loss, if any is recognized.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

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

3. CONTINGENT LIABILITIES

Bank guarantees 2,615 2,797

Letter of credit 1,386 1,529

Demands under appeal for following matters*

- Income tax 13,181 12,441

- Service tax 34,437 13,800

- Water charges 3,317 3,086

- Sales tax 356 307

- Excise duty 66 66

- Employee state insurance/provident fund 16 16 Claims against the company not acknowledged as debts* 1,058 1,397

Total 56,432 35,439

*The Company is contesting these demands and the management, with the advise of its advisors, believes that its position will likely be upheld in the appellate process. No expense has been accrued in the financial statements for these demands raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations. The Company does not expect any reimbursements in respect of the above contingent liabilities.

4. AMALGAMATION ACCOUNTING

a) The Board of Directors in its meeting held on February 7, 2012 had approved the scheme of amalgamation (''the scheme'') under section 391 to 394 of the Companies Act 1956, in respect of merger of Scottish and Newcastle India Private Limited (''SNIPL'') into the Company with effect from April 1, 2012. SNIPL was incorporated to provide technical consultancy for the manufacture, marketing and distribution of beer and allied products in India and to form strategic partnership with the Company. The Honorable High Court of Karnataka and the Honorable High Court of Maharashtra had passed orders approving the scheme on January 17, 2013 and November 2, 2012 respectively. Upon fling of the orders of the Honorable High Court of Karnataka and the Honorable High Court of Maharashtra with the Registrar of Companies on April 18, 2013 and November 30, 2012 respectively, the scheme had become effective and accordingly, the Company had given effect to the merger in the previous year financial statements with effect from April 1, 2012.

Further, in terms of the approved scheme:

(i) The authorized share capital of the Company had been increased by Rs. 4,558 Lakhs in respect of equity shares of Re. 1 each.

(ii) The investments held by SNIPL in 84,89,270 equity shares of Re. 1 each of the Company with carrying value of Rs. 22,683 Lakhs had been cancelled and the corresponding issued, subscribed and paid up equity share capital of the Company had been reduced by Rs. 85 Lakhs representing 8,489,270 equity shares of Re. 1 each. Also, other inter-company balances and transactions had been cancelled.

(iii) 84,89,270 fully paid up equity share of Re. 1 each of the Company had been issued and allotted to the shareholders of SNIPL against 3,22,23,912 equity shares of Rs. 10 each held by them in SNIPL.

(iv) The difference of Rs. 22,598 Lakhs on cancellation of investments held by SNIPL in equity shares of the Company, as discussed in (ii) above and the difference of Rs. 3,137 Lakhs between the amount of shares issued by the Company and the amount of share capital of SNIPL as discussed in (iii) above had been adjusted from capital reserve and securities premium account of the Company by Rs. 1,286 Lakhs and Rs. 18,175 Lakhs respectively.

(v) Dividend income of Rs. 59 Lakhs recognized by SNIPL during the year and expenses incurred in connection with the scheme amounting to Rs. 687 Lakhs, had been adjusted against securities premium account.

No Specific accounting treatment has been prescribed under AS-14 in respect of adjustment, to capital reserve and securities premium account, arising on account of the difference on cancellation of investments held by SNIPL in equity shares of the Company and the difference between the amount of shares issued by the Company and the amount of share capital of SNIPL and adjustment of dividend income and expenses incurred in connection with the merger. Hence, the Company had followed aforesaid treatment as stated in (iv) and (v) above, which was as per the approved scheme.

b) Pursuant to mergers of Empee Breweries Limited (EBL) and Chennai Breweries Private Limited (CBPL), with the Company during the year ended March 31, 2011, the Company is in the process of getting the name of these merged entities changed in the records of state excise and other regulatory authorities. Pending completion of these formalities, the names of these merged entities are continued to be used in various documents and records of the Company. Effective April 1, 2014, the name of CBPL has been changed in the statutory records.

5. Tax expense for the year ended March 31, 2014 is net of reversal of Rs. Nil (Previous year: 1,733 Lakhs) and Rs. Nil (Previous year: Rs. 809 Lakhs) relating to current tax (MAT) and deferred tax asset, respectively, for earlier years.

6. CAPITALIZATION OF EXPENDITURE

During the year, the Company has capitalized the following expenses to the cost of fixed asset/capital work-in- progress. Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the Company.

7. RELATED PARTY DISCLOSURES

A. Name of related parties and related party relationships Related party where control exists:

Subsidiary: Maltex Malsters Limited (''MML'')

Related parties with whom transactions have taken place during the year:

Associate:

Kingfisher East Bengal Football Team Private Limited (''KEBFTPL'') (Formerly United East Bengal Football Team Private Limited)

Enterprises having significant influence:

Scottish & Newcastle India Limited, UK (''SNIL'') United Breweries (Holdings) Limited (''UBHL'')

Key management personnel (KMP):

Mr. Kalyan Ganguly, Managing Director

Mr. Henricus Petrus van Zon, Director, CFO (effective from January 1, 2013)

Mr. Guido de Boer, Director, CFO (till December 31, 2012)

Relative of KMP: Mrs. Suparna Bakshi Ganguly (Wife of Mr. Kalyan Ganguly)

Enterprises over which investing parties or KMP have significant infuence:

Heineken UK Limited (''HUL''), holding company of SNIL

Heineken International B.V. (''HIBV'')

Heineken Brouwerijen B.V. (''HBBV'')

Heineken Supply Chain B.V. (''HSCBV'')

Heineken N.V. (''HNV'')

Force India F1 Team Limited, UK (''Force India'')

8. SEGMENT REPORTING

The Company''s business activity falls within a single business segment i.e. manufacture and sale of beer including licensing of brands. Also, the Company''s operations are predominantly in India. Hence, there are no material additional disclosures to be provided under Accounting Standard 17 – Segment Reporting, other than those already provided in the financial statements.

9. PREVIOUS YEAR FIGURES

The previous year''s figures have been regrouped where necessary to conform to this year''s classification. Further in view of the amalgamation described in note 37(a) above, the figures for the current year are not strictly comparable with those of previous year.


Mar 31, 2013

1. Corporate information

United Breweries Limited (''UBL'' or ''the Company'') is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange (BSE), Bangalore Stock Exchange (BgSE) and National Stock Exchange (NSE). The Company is engaged primarily in the manufacture and sale of beer. The Company has manufacturing facilities in India.

2. Basis of preparation of financial statements

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (''Indian GAAP''). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention, except for certain assets acquired on amalgamation which are carried at revalued amounts and derivative financial instruments on which mark to market loss, if any is recognized.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3. OPERATING LEASE

The Company has entered into operating lease arrangements for vehicles, computers, equipments, office premises and employee residential premises. These leases are for a period of 11 to 60 months with options of renewal and premature termination with notice period, except in certain leases with lock-in period of 12 to 60 months. There are certain sub-lease restrictions placed upon the Company by entering into these leases. The total lease rentals expense for the year is Rs.2,014 Lakhs (Previous year: Rs.1,410 Lakhs). Future minimum rentals payable under non-cancellable operating leases are as follows:

4. AMALGAMATION ACCOUNTING

a) The scheme of amalgamation (''the scheme'') under sections 391 to 394 of the Companies Act, 1956 between UB Ajanta Breweries Private Limited (''UBA'') and the Company with appointed date as April 1, 2011 was approved by the Honorable BIFR Court, Delhi vide its order dated February 13, 2012. UBA was engaged in the brewing business. Upon necessary fling with the Registrar of Companies on February 21, 2012, the scheme had become effective and the effect thereof was given during the previous year ended March 31, 2012. In respect of the merger of UBA with the Company:

(i) The entire business and the whole of the undertaking of UBA, as a going concern was transferred to and vested in the Company with effect from April 1, 2011.

(ii) In consideration of the amalgamation of UBA with the Company, the Company issued 709,578 equity shares of Re. 1 each aggregating to Rs. 7 Lakhs in the ratio of 135:1.

(iii) The authorized share capital of the Company was increased by Rs. 540 Lakhs in respect of equity shares of Re. 1 each and by Rs.9,460 Lakhs in respect of preference shares of Rs. 100 each.

(iv) The amalgamation was accounted for on the basis of the pooling of interest method as per Accounting Standard (AS) 14 on Accounting for Amalgamations notified by the Companies (Accounting Standard) Rules 2006 (as amended) (''AS-14'') and in terms of the scheme, as below:

- All asset and liabilities of UBA were accounted at their respective book values under the respective heads of the Company.

- The difference amounting to Rs.28 Lakhs between the values of net assets of the UBA transferred to the Company and the carrying value of the Company''s investment was adjusted to Capital Reserve.

- The intercompany balances and the transactions were cancelled.

b) The Board of Directors in its meeting held on February 7, 2012 had approved the scheme of amalgamation (''the scheme'') under section 391 to 394 of the Companies Act 1956, in respect of merger of Scottish and Newcastle India Private Limited (''SNIPL'') into the Company with effect from April 1, 2012. SNIPL was incorporated to provide technical consultancy for the manufacture, marketing and distribution of beer and allied products in India and to form strategic partnership with the Company. The Honorable High Court of Karnataka and the Honorable High Court of Maharashtra have passed orders approving the scheme on January 17, 2013 and November 2, 2012 respectively. Upon fling of the orders of the Honorable High Court of Karnataka and the Honorable High Court of Maharashtra with the Registrar of Companies on April 18, 2013 and November 30, 2012 respectively, the scheme has become effective and accordingly, the Company has given effect to the merger in these financial statements with effect from April 1, 2012.

In terms of the scheme, the amalgamation has been accounted for under the pooling of interest method as per AS-14. Accordingly, all the assets, liabilities and reserves recorded in the books of SNIPL as at March 31, 2012 have been recorded by the Company at their respective book values as follows:

Further, in terms of the approved scheme:

(i) The authorized share capital of the Company has been increased by Rs.4,558 Lakhs in respect of equity shares of Re. 1 each.

(ii) The investments held by SNIPL in 84,89,270 equity shares of Re. 1 each of the Company with carrying value of Rs.22,683 Lakhs have been cancelled and the corresponding issued, subscribed and paid up equity share capital of the Company has been reduced by Rs.85 Lakhs representing 8,489,270 equity shares of Re. 1 each. Also, other inter-company balances and transactions have been cancelled.

(iii) 84,89,270 fully paid up equity share of Re. 1 each of the Company have been issued and allotted to the shareholders of SNIPL against 3,22,23,912 equity shares of Rs.10 each held by them in SNIPL.

(iv) The difference of Rs.22,598 Lakhs on cancellation of investments held by SNIPL in equity shares of the Company, as discussed in (ii) above and the difference of Rs.3,137 Lakhs between the amount of shares issued by the Company and the amount of share capital of SNIPL as discussed in (iii) above have been adjusted from capital reserve and securities premium account of the Company by Rs.1,286 Lakhs and Rs.18,175 Lakhs respectively.

(v) Dividend income of Rs.59 Lakhs recognized by SNIPL during the year and expenses incurred in connection with the scheme amounting to Rs.687 Lakhs, have been adjusted against securities premium account.

No specific accounting treatment has been prescribed under AS-14 in respect of adjustment, to capital reserve and securities premium account, arising on account of the difference on cancellation of investments held by SNIPL in equity shares of the Company and the difference between the amount of shares issued by the Company and the amount of share capital of SNIPL and adjustment of dividend income and expenses incurred in connection with the merger. Hence, the Company has followed aforesaid treatment as stated in (iv) and (v) above, which is as per the approved scheme.

c) Pursuant to mergers of Empee Breweries Limited (EBL) and Chennai Breweries Private Limited (CBPL), with the Company during the year ended March 31, 2011, the Company is in the process of getting the name of these merged entities changed in the records of state excise and other regulatory authorities. Pending completion of these formalities, the names of these merged entities are continued to be used in various documents and records of the Company.

5. Tax expense for the year ended March 31, 2013 is net of reversal of Rs.1,733 Lakhs (Previous year: Nil) and Rs.809 Lakhs (Previous year: Nil) relating to current tax (MAT) and deferred tax asset, respectively, for earlier years.

6. CAPITALIZATION OF EXPENDITURE

During the year, the Company has capitalized the following expenses to the cost of fixed asset/capital work-in- progress. Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the Company.

7. RELATED PARTY DISCLOSURES

A. Name of related parties and related party relationships Related party where control exists:

Subsidiary: Maltex Malsters Limited (''MML'')

Related parties with whom transactions have taken place during the year:

Associate: United East Bengal Football Team Private Limited (''UEBFTPL'')

Enterprises having significant influence: Scottish & Newcastle India Limited, UK (''SNIL'')

United Breweries (Holdings) Limited (''UBHL'')

Key management personnel (KMP): Mr. Kalyan Ganguly, Managing Director

Mr. Henricus Petrus van Zon, Director, CFO (effective from January 1, 2013)*

Mr. Guido de Boer, Director, CFO (till December 31, 2012)

Relative of KMP: Mrs. Suparna Bakshi Ganguly (Wife of Mr. Kalyan Ganguly)

Enterprises over which investing parties or Scottish and Newcastle India Private Limited (''SNIPL''), subsidiary of KMP have significant influence: HUL (merged with the Company effective April 1, 2012)

Heineken UK Limited (''HUL''), holding company of SNIL Heineken International B.V. (''HIBV'')

Heineken Brouwerijen B.V. (''HBBV'')

Heineken Supply Chain B.V. (''HSCBV'')

Heineken N.V. (''HNV'')

Force India F1 Team Limited, UK (''Force India'')

*As required by schedule XIII of the Companies Act 1956, the Company has applied for approval of the central government for appointment of Mr. Henricus Petrus van Zon, non-resident whole-time director, which is pending for approval. Further the terms of his appointment are subject to approval of shareholders of the Company in the Annual General Meeting.

8. SEGMENT REPORTING

The Company''s business activity falls within a single business segment i.e. manufacture and sale of beer including licensing of brands. Also, the Company''s operations are predominantly in India. Hence, there are no material additional disclosures to be provided under Accounting Standard 17 - Segment Reporting, other than those already provided in the financial statements.

9. PREVIOUS YEAR FIGURES

The figures of previous year were audited by a firm of chartered accountants other than S.R. Batliboi & Associates LLP. The previous year''s figures have been regrouped where necessary to conform to this year''s classification. Further in view of the amalgamations described in note 37 above, the figures for the current year are not strictly comparable with those of previous year.


Mar 31, 2012

1. General Information:

United Breweries Limited (UBL) is engaged primarily in the manufacture and sale of beer. The Company has manufacturing plants in India and sells its product only in India. The Company is a public limited Company and is listed on the Bombay Stock Exchange (BSE), Bangalore Stock Exchange (BgSE) and the National Stock Exchange (NSE).

(All amounts in Rs.lacs, unless otherwise stated)

As at As at March 31, 2012 March 31, 2011

2. CONTINGENT LIABILITIES

a) Sales Tax / other taxes demands under appeal# 1,349 1,304

b) Employees state insurance / Provident Fund demand# 19 23

c) Demand towards water charges under appeal# 2,694 1,825

d) Excise Duty / Customs Duty demands under appeal# 392 413

e) Income Tax demands under appeal# 10,238 4,038

f) Service Tax demands under appeal# 7,513 2,446

g) Claims against the company not acknowledged as debt# 1,002 413

h) Letter of undertaking to distributors towards countervailing duty for -- 385 imports from Nepal

23,207 10,847

# It is not practicable for the company to estimate the timing of cashflows if any, in respect of the above, pending resolution of the respective proceedings. The company does not expect any reimbursements in respect of the above contingent liabilities.

3. AMALGAMATIONS

I. 2011-12

A. The scheme of amalgamation under sections 391 to 394 of the Companies Act, 1956 between UB Ajanta Breweries Private Limited (UBA) and the Company (the Scheme) and their respective shareholders and creditors with April 1, 2011 as the appointed date has been approved by the Honorable BIFR court, Delhi vide their order dated February 13, 2012. Upon necessary filing with the Registrar of Companies on February 21, 2012, the scheme has become effective and the effect thereof has been given in these accounts. Consequently,

In respect of the merger of UBA with the Company -

a) In terms of the scheme, the entire business and the whole of the undertaking of UBA, as a going concern stands transferred to and vested in the Company with effect from April 1, 2011, being the Merger Appointed Date.

b) In consideration of the amalgamation of UBA with the company, the company has issued 709,578 equity shares of Re.1/- each aggregating to Rs.7 in the ratio of 135:1.

c) Accounting for Amalgamation:

The amalgamation of UBA with the Company is accounted for on the basis of the pooling of interest Method as envisaged in the Accounting Standard (AS)-14 on Accounting for Amalgamations specified in the Companies (Accounting Standard) Rules 2006 and in terms of the scheme, as below,

- All asset and liabilities of the UBA at their respective Book Values under the respective heads of the company.

- Rs.28 being the difference between the value of net assets of the UBA transferred to the Company (determined as stated above) and the carrying value of the Company's investment (cancelled as above) has been adjusted to Capital/General Reserve of the Company.

- The intercompany balances and the transactions stood cancelled.

UBA was engaged in brewing business.

[The Authorised Share capital of the Company stands increased by Rs.540 of Equity Share Capital of Re.1/- each and enhanced by Rs.9,460 of Rs.100/- each in Preference Share Capital. This increase is arising on account of amalgamation of UBA with United Breweries Limited.]

B. UBL Benefit Trust

Arising out of the Amalgamation of EBL into UBL [Refer II A(iii) below], UBL Benefit Trust held 6,007,413 equity shares in UBL constituting 2.36% of UBL's paid up equity capital. The Trust has sold its entire shareholding and remitted the entire proceeds aggregating Rs.28,357 to UBL. The entire proceeds has been used in reducing the Debt of the Company. In the absence of any specific accounting treatment being prescribed in the Accounting Standards notified pursuant to the Companies (Accounting Standards) Rules, 2006 as per section 211(3C), the gain on sale of these shares held by UBL Benefit Trust (of which the Company is the sole beneficiary) aggregating to Rs.14,049 has been credited to the General Reserve.

II. 2010-11

A. The scheme of amalgamation under sections 391 to 394 of the Companies Act, 1956 between Associated Breweries and Distilleries Limited (ABDL), Millennium Alcobev Private Limited (MAPL), Empee Breweries Limited (EBL) and the Company (the Scheme) and their respective shareholders and creditors with April 1, 2010 as the appointed date has been approved by the Honorable High Courts of Karnataka and Madras respectively vide their orders dated January 21, 2011 and February 1, 2011 respectively. Upon necessary filing with the Registrar of Companies on March 10, 2011, the scheme has become effective and the effect thereof has been given in these accounts. Consequently,

(i) In respect of the merger of ABDL with the Company -

a) In terms of the Scheme, the entire business and the whole of the undertaking of ABDL, as a going concern stands transferred to and vested in the Company with effect from April 1, 2010, being the Merger Appointed Date.

b) As ABDL was a wholly owned subsidiary of the Company, no consideration was payable pursuant to amalgamation of ABDL.

c) Accounting for Amalgamation:

The amalgamation of ABDL with the Company is accounted for on the basis of the Purchase Method as envisaged in the Accounting Standard (AS)-14 on Accounting for Amalgamations specified in the Companies (Accounting Standard) Rules, 2006 and in terms of the scheme, as below,

- All asset and liabilities of the ABDL at their respective Fair Values.

- Rs. 44,986 being the difference between the value of net assets of the ABDL transferred to the Company (determined as stated above) and the carrying value of the Company's investment in MAPL (cancelled as above) has been adjusted to Capital/General Reserve of the Company. This accounting treatment of the reserve has been prescribed in the Scheme and approved by the High Court(s). Had the scheme not prescribed this treatment, this amount would have been debited to Goodwill, which would have been set-off against the Capital Reserve/General Reserve arising on the merger of other companies.

ABDL was an investment company which was 100% subsidiary of the Company.

(ii) In respect of the merger of MAPL with the Company -

a) In terms of the Scheme the entire business and the whole of the undertaking of MAPL, as a going concern stands transferred to and vested in the Company with effect from April 1, 2010 being the Merger Appointed Date.

b) In consideration of the amalgamation of MAPL with the Company, the Company has issued 8,489,270 equity shares of Re.1/- each aggregating to Rs.85 in the ratio of 6 fully paid up Equity shares of the face value of Re.1/- each of the Company for every 31 fully paid up equity shares of Rs.10/- each held in MAPL. The Company's investment in MAPL aggregating to Rs.5,895 comprising of 61,40,000 equity shares (with voting rights) and 65,99,312 equity shares (without voting rights) of Rs.10/- each stood cancelled.

c) Accounting for Amalgamation:

The amalgamation of MAPL with the Company is accounted for on the basis of the Purchase Method as envisaged in the Accounting Standard (AS)-14 on Accounting for Amalgamations specified in the Companies (Accounting Standard) Rules, 2006 and in terms of the scheme, as below.

- All asset and liabilities of the MAPL were recorded at their respective Fair Values.

- Rs.40,373 being the difference between the value of net assets of the MAPL transferred to the Company (determined as stated above) and the carrying value of the Company's investment in MAPL (cancelled as above) has been adjusted to Capital/General Reserve of the Company. This accounting treatment of the reserve has been prescribed in the Scheme and approved by the High Court(s). Had the scheme not prescribed this treatment, this amount would have been credited to Capital Reserve.

MAPL was a Joint Venture between the Company and Scottish & Newcastle India Private Limited, which had 3 subsidiaries engaged in the brewing business. One subsidiary of MAPL, i.e. Empee Breweries Ltd., was also merged into UBL simultaneously along with MAPL. Subsequent to the merger of MAPL into UBL, the other 2 subsidiaries of MAPL, namely Millennium Beer Industries Limited (MBIL) and United Millennium Breweries Limited (UMBL) became the subsidiaries of the Company and all of them have been since amalgamated with the Company.

(iii) In respect of the merger of Empee Breweries Limited with the Company -

a) In terms of the Scheme, the entire business and the whole of the undertaking of EBL, as a going concern stands transferred to and vested in the Company with effect from April 1, 2010, being the Merger Appointed Date.

b) On the amalgamation of EBL with the Company, 50% of the holding stood cancelled and for the balance 50% of the holding, the Company issued 6,007,413 equity shares of Re.1/- each aggregating to Rs.60 in the ratio of 33 fully paid up Equity shares of the face value of Re.1/- each of the Company for every 16 fully paid up equity shares of Rs.10/- of EBL to UBL Benefit Trust. UBL Benefit Trust has subsequent to the Balance Sheet date sold these shares and remitted the proceeds to the Company.

c) Accounting for Amalgamation:

The amalgamation of EBL with the Company is accounted for on the basis of the Pooling of Interest Method as envisaged in the Accounting Standard (AS) -14 on Accounting for Amalgamations specified in the Companies (Accounting Standard) Rules, 2006 and in terms of the scheme, as below,

- All asset and liabilities of the EBL were recorded at their respective book values under the respective accounting heads of the Company.

- Rs.13,645 being the difference between the value of net assets of the EBL transferred to the Company (determined as stated above) and the carrying value of the Company's investment has been adjusted to Capital/General Reserve of the Company.

- The Shares issued to UBL Benefit Trust appears as a separate line item in the Balance Sheet of the Company as Interest in UBL Benefit Trust.

- The inter company balances and transactions stood cancelled. EBL was engaged in the brewing business.

B. The scheme of amalgamation under sections 391 to 394 of the Companies Act, 1956 between UB Nizam Breweries Private Limited (UBNPL) and the Company (the Scheme) and their respective shareholders and creditors, with April 1, 2010 as the appointed date, has been approved by the Honorable High Court of Karnataka vide its order dated August 26, 2011. Upon necessary filing with the Registrar of Companies, the scheme has become effective on November 8, 2011 and the effect thereof has been given in these accounts. Consequently, in respect of the merger of UB Nizam Breweries Private Limited (UBNPL) with the Company -

a) In terms of the Scheme, the entire business and the whole of the undertaking of UBNPL, as a going concern stands transferred to and vested in the Company with effect from April 1, 2010, being the Merger Appointed Date.

b) In consideration of the amalgamation of UBNPL with the Company, the Company had issued 145,902 equity shares of Re.1/- each aggregating to Re.1 in the ratio of 1 fully paid up equity shares of the face value of Re.1/- each of the Company for every 454 fully paid up equity shares of Rs.10/- each held in UBNPL and in the ratio of 1 fully paid up Equity Shares of the face value of Re.1/- each of the Company for every 454 fully paid preference shares of Rs.10/- each in UBNPL.

c) Accounting for Amalgamation:

The amalgamation of UBNPL with the Company is accounted for on the basis of the Pooling of Interest Method as envisaged in the Accounting Standard (AS) -14 on Accounting for Amalgamations specified in the Companies (Accounting Standard) Rules, 2006 and in terms of the scheme, as below,

- All asset and liabilities of UBNPL were recorded at their respective book values under the respective accounting heads of the Company.

- Rs.488 being the difference between the value of net assets of UBNPL transferred to the Company (determined as stated above) and the carrying value of the Company's investment has been adjusted to Capital/General Reserve of the Company.

- The inter company balances and the transactions stood cancelled. UBNPL was engaged in the brewing business.

C. The scheme of amalgamation under sections 391 to 394 of the Companies Act, 1956 between Chennai Breweries Private Limited (CBPL) and the Company (the Scheme) and their respective shareholders and creditors with March 31, 2011 as the appointed date has been approved by the Honorable High Court of Karnataka and Honorable High Court of Madras, vide its order dated August 26, 2011 and October 11, 2011 respectively. Upon necessary filing with the Registrar of Companies, the scheme has become effective on November 12, 2011 and the effect thereof has been given in these accounts. Consequently, in respect of the merger of Chennai Breweries Private Limited (CBPL) with the Company -

a) In terms of the Scheme, the entire business and the whole of the undertaking of CBPL, as a going concern stands transferred to and vested in the Company with effect from the closing hours of March 31, 2011, being the Merger Appointed Date.

b) In consideration of the amalgamation of CBPL with the Company, the Company has issued 8,500,000 equity shares of Re.1/- each aggregating to Rs.85 in the ratio of 17 fully paid up Equity shares of the face value of Re.1/- each of the Company for every 30 fully paid up equity shares of Rs.10/- each held in CBPL which is pending allotment.

c) Accounting for Amalgamation:

The amalgamation of CBPL with the Company is accounted for on the basis of the Pooling of Interest Method as envisaged in the Accounting Standard (AS) -14 on Accounting for Amalgamations specified in the Companies (Accounting Standard) Rules, 2006 and in terms of the scheme, as below,

- All asset and liabilities of CBPL were recorded at their respective book values under the respective accounting heads of the Company.

- Rs.1,645 being the difference between the value of net assets of CBPL transferred to the Company (determined as stated above) and the carrying value of the Company's investment has been adjusted to Capital/General Reserve of the Company.

- The inter company balances stood cancelled. CBPL was engaged in the brewing business.

D. The scheme of amalgamation between Millennium Beer Industries Limited (MBIL) and the Company (the Scheme) and their respective shareholders and creditors with April 1, 2010 as the appointed date has been approved by the Honorable BIFR Court, Delhi vide its order dated November 11, 2011. Upon necessary filing with the Registrar of Companies, the scheme has become effective on November 16, 2011 and the effect thereof has been given in these accounts. Consequently, in respect of the merger of Millennium Beer Industries Limited (MBIL) with the Company.

a) In terms of the Scheme, approved by the BIFR Court, the entire business and the whole of the undertaking of MBIL, as a going concern stands transferred to and vested in the Company with effect from April 1, 2010, being the Merger Appointed Date.

b) On the amalgamation of MBIL with the Company, the Company's holding stands cancelled and for the rest the Company has issued 504,731 equity shares of Re.1/- each aggregating to Rs.5 in the ratio of 1 fully paid up Equity shares of the face value of Re.1/- each of the Company for every 12 fully paid up equity shares of Re.1/- of MBIL allotment. a

c) Accounting for Amalgamation:

The amalgamation of MBIL with the Company is accounted for on the basis of the Pooling of Interest Method as envisaged in the Accounting Standard (AS) -14 on Accounting for Amalgamations specified in the Companies (Accounting Standard) Rules, 2006 and in terms of the scheme, as below,

- All asset and liabilities of MBIL were recorded at their respective book values under the respective accounting heads of the Company.

- Rs.30,514 being the difference between the value of net assets of MBIL transferred to the Company (determined as stated above) and the carrying value of the Company's investment has been adjusted to Capital/General Reserve of the Company.

- The inter company balances and transactions stood cancelled. MBIL was engaged in the brewing business.

E. The scheme of amalgamation between United Millennium Breweries Limited (UMBL) and the Company (the Scheme) and their respective shareholder and creditors with April 1, 2010 as the appointed date has been approved by the Honorable BIFR Court, Delhi vide its order dated November 21, 2011. Upon necessary filing with the Registrar of Companies, the scheme has become effective on November 21, 2011 and the effect there of have been given in these accounts. Consequently, in respect of the merger of United Millennium Breweries Limited (UMBL) with the Company

a) In terms of the Scheme approved by the BIFR Court, the entire business and the whole of the undertaking of UMBL, as a going concern stands transferred to and vested in the Company with effect from April 1, 2010 being the Merger Appointed Date.

b) As UMBL was a wholly owned subsidiary of the Company, no consideration was payable pursuant to amalgamation of UMBL with the Company.

c) Accounting for Amalgamation:

The amalgamation of UMBL with the Company is accounted for on the basis of the Pooling of Interest Method as envisaged in the Accounting Standard (AS) -14 on Accounting for Amalgamations specified in the Companies (Accounting Standard) Rules, 2006 and in terms of the scheme, as below,

- All asset and liabilities of UMBL were recorded at their respective book values under the respective accounting heads of the Company.

- Rs.4,668 being the difference between the value of net assets of UMBL transferred to the Company (determined as stated above) and the carrying value of the Company's investment has been adjusted to Capital/General Reserve of the Company.

- The inter company balances and transactions stood cancelled. UMBL was engaged in the brewing business.

Pursuant to all the schemes referred to in A to E above, the bank accounts, agreements, licences and certain mmovable properties of the transferor companies are in the process of being transferred in the name of the Company.

Pursuant to the schemes referred to in II A to E above, the Authorized Share Capital of the Company stands ncreased and reclassified, without any further act or deed on the part of the company, including payment of stamp duty and Registrar of Companies fees, by Rs.57,340 comprising of 3,320,000,000 Equity Shares of Re.1 each and 24,140,000 Preference Shares of Rs.100 each, being the authorized share capital of the transferor company, and Memorandum of Association and Articles of Association of the Company stand amended accordingly without any further act or deed on the part of the company.

4. RELATED PARTY DISCLOSURES

A. Related parties with whom transactions have taken place during the year

Subsidiary: Maltex Malsters Limited (MML)

Associate: United East Bengal Football Team Private Limited (UEBFTPL)

Entity which has significant influence: a) Scottish & Newcastle India Limited (SNIL)

b) United Breweries (Holdings) Limited (UBHL) Others: a) Scottish & Newcastle Limited (S&N)

b) Heineken UK Limited, holding company of SNIL and subsidiary of Scottish & Newcastle Limited

c) Scottish & Newcastle UK Limited (SNUK), Subsidiary of Scottish & Newcastle Limited

d) Scottish & Newcastle India Private Limited (SNIPL), subsidiary of Heineken UK Limited

e) Heineken International B.V.

f) Heineken Romania S.A.

g) Heineken Brouwerijen B.V. h) Heineken Supply Chain B.V.

i) Force India F1 Team Limited (Force India)

Key Management Personnel (KMP): Mr. Kalyan Ganguly

Mr. Guido de Boer

Relative of KMP Mrs. Suparna Bakshi Ganguly (Wife of Mr. Kalyan Ganguly)

5. ADVANCE MADE TO STAR INVESTMENTS

The Company had entered into an agreement with the promoters of Balaji Distilleries Limited (BDL) with a view to secure perpetual usage of its brewery and grant of first right of refusal in case of sale or disposal of its brewery unit in any manner by BDL, towards which the Company had made a refundable facility advance of Rs.15,500 to Star Investments Private Ltd. (Star Investments), one of the Promoter Companies of BDL, acting for itself and on behalf of the other Promoters.

Subsequently, BDL filed a scheme of arrangement for amalgamation of its distillery into United Spirits Limited (USL) and de-merger of its brewery into Chennai Breweries Private Limited (CBPL) and the said Scheme was approved by Appellate Authority for Industrial & Financial Reconstruction in November 2010. The Brewery assets proposed to be acquired by the Company from the Promoters of BDL eventually vested in CBPL which was a 100% subsidiary of USL. A Scheme for Amalgamation of CBPL into the Company was then filed. Upon amalgamation of CBPL into the Company, USL has been allotted equity shares in terms of the approved Scheme.

On November 22, 2011, the Company has entered into an agreement extending the repayment of principal and interest outstanding till March 2012, and obtained a pledge of securities from associate companies of Star to secure the outstanding amounts. Commitment has been received from Star Investments for accruing of interest on the outstanding till the same is fully repaid.

6. SEGMENT REPORTING

The company is engaged in manufacture, purchase and sale of beer including licensing of brands which constitutes a single business segment. The company operates only in India. Accordinlgy, primary and secondary reporting disclosures for business and geographical segment as envisaged in AS-17 are not applicable to the company.

7. PREVIOUS YEAR FIGURES

a) The previous year's figures have been regrouped to conform to current year's classification. Further in view of the amalgamations described in Note 38 above, the figures for the current year are not comparable with those of previous year.

b) The financial statements for year ended March 31, 2011 had been prepared as per the then applicable, pre- revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI for the previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.

 
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