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Directors Report of McDowell Holdings Ltd.

Mar 31, 2018

TO THE MEMBERS,

The Directors have pleasure in presenting the Fourteenth Annual Report of the Company along with Audited Accounts for the year ended March 31, 2018.

Financial Performance for the year ended March 31, 2018:

Particulars	For the Financial Year Ended
Particulars	31.03.2018	31.03.2017
	(Rs.)	(Rs.)
Income	1,03,69,082	1,07,64,190
Less : Expenditure	2,64,80,221	5,10,10,143
Loss before Provisions, write off and diminution	(1,60,84,139)	(4,02,45,953)
in value of investments	-
Less : Provision for doubtful advances	-	4,92,52,995
Less : Advances no longer recoverable	-	158,77,10,261
Loss before tax and exceptional item	(1,60,84,139)	(167,72,09,209)
Exceptional item : Profit on sale of pledged shares	-	146,61,41,592
Profit/(Loss) before Tax	(1,60,84,139)	(21,10,67,618)
Tax Expense (Earlier year)	(9,668)	3,35,064
Profit/(Loss) after Tax	(1,60,74,471)	(21,14,02,683)
Surplus/(Deficit) carried to Balance Sheet	(1,60,74,471)	(21,14,02,682)

Dividend

In view of the losses during the financial year, no dividend has been recommended for the financial year ended March 31, 2018.

Operations of the Company

The total income of the Company during the financial year under review was Rs. 1,03,69,082 as against Rs. 1,07,64,190 in the previous financial year. The reduction in income was primarily due to the reduced dividend income.

The total expenditure during the year was Rs. 2,64,80,221 as against â 5,10,10,143 in the previous financial year. The decrease in expenditure was primarily due to decrease in finance costs. The net loss is Rs. 1,60,74,471 as against the loss of Rs. 21,14,02,682 in the previous year.

The Honâble High Court of Karnataka on February 07, 2017 had passed an order of winding-up of a Promoter Company, in which the Company also holds 52,60,002 equity shares. The Promoter Company has filed an appeal against the said order which is pending adjudication, before the Honâble Divisional Bench of the High Court of Karnataka.

The Honâble National Company Law Tribunal, Mumbai on December 05, 2017 had passed an order for Liquidation of a Promotee Company, in which the Company holds 4,52,243 equity shares.

The Company has already provided for these investments and the impact of these orders on the shareholding in these Companies are being assessed.

The Companyâs investment of 16,71,344 shares in United Breweries Limited was unilaterally transferred from the demat account of the Company to the demat account of the Deputy Director, Enforcement Directorate, Mumbai on May 03, 2018. On the same day a total of 22,00,360 shares held in the Company by three Promoters were also transferred from their respective demat account to the demat account of the Deputy Director, Enforcement Directorate, Mumbai. These shares includes the shares held by two promoters, which were also attached by an Order of Attachment dated June 21, 2018 by the Recovery Officer, Debt Recovery Tribunal, Bangalore.

The Companyâs investments include 45,51,000 shares in United Breweries Limited (hereinafter referred to as UBL) which were pledged in favour of erstwhile lenders. As on date no dues are outstanding to these lenders but the pledge on these shares have not been released consequent to the direction of Enforcement Directorate. Further, 1,22,667 shares of UBL, being the balance pledged shares, consequent to invocation by the erstwhile lenders and after liquidation of their dues, are lying in the demat accounts of the said lenders. The lenders have communicated to the Company that consequent to the direction of Enforcement Directorate these shares, dividend thereon and the excess sum recovered by them cannot be released.

Two investee companies in which the Company holds strategic investments, have received an order from Enforcement Directorate (hereinafter referred to as ED) directing them not to allow the Company to sell / alienate / create third party mortgage rights in any manner on the shares of such investee companies. Against one of these investee company, the Honâble High Court of Karnataka on February 07, 2017 had passed an order of winding-up and the appeal against the said order in pending adjudication before the Honâble Divisional Bench of the High Court of Karnataka.

Market Value of Companyâs investment

The Companyâs net worth taking into account the market value of the Companyâs investment stocks, would be more than adequate to meet its liabilities and to continue its operations in future.

Future Prospects

Your Company continues to hold strategic investments in various companies and dividend distribution by the investee companies would enhance its revenue progressively.

Based on the advice of the Reserve Bank of India (RBI) the Company had made an application to RBI for re-classification of the Company as a Core Investment Company. The RBI vide its letter dated 11th December, 2017 has informed that the existing Certificate of Registration as NBFC-ND stands cancelled and the Company now falls in the category of NBFC-CIC, exempted category.

In order to strengthen the prospects of the Company, your Directors are evaluating different options to enter into additional activities. Should such opportunities prove to be attractive, your Company would consider them during the current year.

Directors and Key Managerial Personnel

Since the last Annual General Meeting, the following changes have taken place in the Board of Directors:

Mr. Anil Pisharody (DIN02500666) a Non-executive Non-Independent Director resigned as director of the Company w.e.f. October 31, 2017.

Mrs. Tushita Patel (DIN 07017591) Non-executive Director is liable to retire by rotation at the ensuing Annual General Meeting and, being eligible, offers herself for re-appointment. The Nomination and Remuneration Committee has recommended the re-appointment of Mrs. Tushita Patel as a Director of the Company.

Mr. Arindam Ash, was appointed as the Chief Financial Officer of the Company w.e.f. March 23, 2018.

The Company presently does not have a Managing Director. The Key Managerial Personnel of the Company are the Company Secretary and the Chief Financial Officer. The affairs of the Company are conducted under the supervision and guidance of the Board of Directors of the Company and the Group Chairman.

None of the Directors of the Company are disqualified under Section 164 (2) of the Companies Act, 2013. Your Directors have made necessary disclosures as required under the provisions of the Companies Act, 2013.

Directorsâ Responsibility Statement

The Board of Directors of the Company hereby state that:

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

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

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

(d) the Annual Accounts have been prepared on a going concern basis;

(e) Internal Financial Controls have been laid down to be followed by the Company and that such Internal Financial Controls are adequate and operating effectively and

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

Statutory Auditors

(a) Appointment of Statutory Auditors:

The members of the Company have appointed M/s. BVC & Co., Chartered Accountants, (Firm Registration No. 008154S) as the Statutory Auditors of the Company for a period of five years commencing from the conclusion of the Thirteenth Annual General Meeting to the conclusion of the Eighteenth Annual General Meeting of the Company. As per the provisions of Section 136 of the Companies Act, 2013 as amended by the Companies (Amendment) Act, 2017 notified on May 07, 2018 appointment of the Statutory Auditors need not be retified at every Annual General Meeting. Therefore, the Notice convening the ensuing AGM does not carry any resolution for ratification of appointment of Statutory Auditors. The Auditors have confirmed that they continue to fulfil the criteria for appointment as Auditor of the Company as prescribed under the Act and the Rules framed thereunder.

(b) Auditorâs Qualifications and Board responses:

Certain issues relating to Companyâs income streams and its effect on the going concern aspects, Companyâs investments in a promoter company which is under winding up proceedings in Karnataka High Court and Companyâs investments in a promotee company which is in liquidation as per the order of National Company Law Tribunal, Mumbai are the subject matter of Qualification in the audit report. These Qualifications have been explained in Note no. 25, 19 and 32 of the financial statements.

Corporate Governance & Management Discussion and Analysis Reports

Pursuant to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (SEBILODR) a report on Corporate Governance and Management Discussion and Analysis Report are attached to this Report.

The Auditorâs Certificate confirming compliance of conditions of Corporate Governance is appended to this report. CEO/ CFO Certificate as required under Regulation 17 of the SEBILODR has been signed by the CFO of the Company, as the Company does not presently have a CEO.

DISCLOSURES :

Board and its Committees

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

Declarations by Independent Directors

The Company has received declarations from all Independent Directors that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013.

Performance Evaluation of the Board and Committees

The details of annual evaluation made by the Board of its own performance and that of its committees, individual Directors individually and performance criteria for Independent Directors laid down by the Nomination and Remuneration Committee are enclosed as Annexure - A to this Report. The Company has formulated a policy for performance evaluation of the Independent Directors and Board of Directors which is available on the Companyâs website www.mcdowellholdings.co.in.

Particulars of Employees and Related Disclosures

Disclosures required to be made under Section 197(12) of the Companies Act, 2013 read with Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 do not apply to Company for the year under review.

The Company had not offered any shares to its employees or Key Managerial Personnel under any scheme of Employees Stock Option and has also not issued any sweat equity at any time.

Deposits

During the year under review, your Company did not accept any deposits within the meaning of provisions of Chapter-V, (Acceptance of Deposits by Companies) of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

Corporate Social Responsibility (CSR)

The Company has constituted a Corporate Social Responsibility Committee as required under Section 135 of the Companies Act, 2013. The average net profit of the Company in the preceding three financial years was negative. Hence, the Company was not required to incur any CSR expenditure during the year under review.

Secretarial Audit

(a) Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed , M/S. I B Harikrishna & Co. (C. P. No. 5302/Membership No. F 5829 Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Report furnished by Auditor in the format prescribed is enclosed as Annexure - B to this report.

(b) Qualifications in Secretarial Audit Report and Board responses

Responses to qualifications in the Secretarial Auditor Report are given herein below:

i. Efforts are still on for the appointment of a Managing Director.

ii. In the absence of a Chief Executive Officer/Managing Director, the requirement of providing the Certificate to the Board was possible only by obtaining of the same from Chief Financial Officer of the Company.

Internal Control System

The Company has a robust system of internal control, the effectiveness of which is tested by the process of internal audit under the supervision of Audit committee.

Your Company through internal audit under the supervision of the Audit Committee reviews the risk management process, risk mitigation plans and risk reporting.

The adequacy and effectiveness of Internal Financial Controls have been endorsed by the Internal Auditor and the Statutory Auditors. The report of the Independent Statutory Auditors in the annexure to their Audit Report does not contain any adverse observations.

Vigil Mechanism

The Company has implemented a vigil mechanism to provide a framework for the Companyâs employees and Directors to promote responsible and secure whistle blowing. It protects the employees who raise concern about serious irregularities within the Company. A brief summary of the vigil mechanism implemented by the Company is set out in Annexure - C to this report.

Your Company hereby affirms that no Director/employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.

The Whistle Blower Policy is available in the Company website, www. mcdowellholdings.co.in.

Listing Requirements

Your Companyâs Equity Shares are listed on the BSE Limited (formerly Bombay Stock Exchange Limited) and National Stock Exchange of India Limited. The listing fees have been paid to both the Stock Exchanges for the year 2018-2019.

Extract of Annual Return

An extract of Annual Return in Form MGT-9 as on March 31, 2018 is available on website of the Company www. mcdowellholdings. co.in and is available through the link http://mcdowellholdings.co.in/investors/others.

Nomination and Remuneration Policy

The Board on the recommendation of the Nomination and Remuneration Committee has approved and adopted the Companyâs Nomination and Remuneration Policy for the appointment and remuneration of the Directors, Key Managerial Personnel and Senior Executives of the Company. The same is set out in Annexure - D to this report.

Particulars of Loans, Guarantees or investments

Details of loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 are given in Note 8 & 11 of the Notes to the Financial Statements.

Related Party Transactions

There were no related party transactions within the purview of Section 186 of the Companies Act, 2013. The Board had approved a policy on Related Party Transactions, which is displayed on the Companyâs website: www.mcdowellholdings. co.in.

Familiarisation Programme for Independent Directors

The detailed programme for familiarisation of the Independent Directors, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters have been displayed on the Companyâs website: www.mcdowellholdings.co.in.

The Board comprises of independent and Non- executive Directors and they have been familiarized with the Company, its business their role, rights and responsibility.

Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo

The provisions under Section 134 of the Companies Act, 2013 and rules made there under relating to energy conservation, technology absorption do not apply to the Company, as the Company is not engaged in the manufacturing activities. There were no foreign exchange earnings or outgo during the year under review.

Significant and material orders passed by the regulators

The following activities have been undertaken by the regulators:

i. The Companyâs investment of 16,71,344 shares in UBL have been unilaterally transferred by the Dy. Director, Investment Directorate, Mumbai on May 03, 2018 to their own Demat account, from the Companyâs Demat account.

ii. The certain investment of the Companyâs which were pledged in favour of erstwhile lenders, have not been released consequent to the direction of Enforcement Directorate.

iii. Two investee companies in which the Company holds strategic investments, have received an order from Enforcement Directorate (hereinafter referred to as ED) directing them not to allow the Company to sell / alienate / create third party mortgage rights in any manner on the shares of such investee companies.

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

There were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Acknowledgement

Your Directors wish to acknowledge the co-operation and support extended by the employees and the shareholders of the Company.

By Order of the Board

M S Kapur

Place: Noida Chairman

Date: August 07, 2018 [DIN 00703815]

Mar 31, 2016

TO THE MEMBERS,

The Directors have pleasure in presenting the Twelfth Annual Report of the Company along with Audited Accounts for the year ended 31^st March, 2016.

Financial Performance for the year ended 31^st March, 2016:

	For the Financial Year Ended
Particulars	31.03.2016 (?)	31.03.2015 (?)
Income	1066,00,154	1408,85,782
Less : Expenditure	1746,49,169	1508,11,143
Loss before Provisions, write off and diminution in value of investments	(680,49,015)	(99,25,361)
Less : Provision for doubtful advances	1509,26,605	1097,82,640
Less : Advances no longer recoverable	16572,77,723	-
Less : Diminution in value of investments	1980,73,525	-
Loss before tax and exceptional item	(20743,26,868)	(1197,08,001)
Exceptional item : Profit on sale of pledged shares	18973,86,112	1742,87,937
Profit / (Loss) before Tax	(169,40,756)	545,79,936
Tax Expense (MAT)	370,00,000	Nil
Profit / (Loss) After Tax	(2139,40,756)	545,79,936
Less : Transfer to statutory reserve	-	109,15,987
Surplus / (Deficit) carried to Balance Sheet	(2139,40,756)	436,63,949

Dividend

In view of the losses during the financial year, no dividend has been recommended for the financial year ended 31^st March, 2016.

Operations of the Company

The total income of the Company during the financial year under review has decreased to Rs. 10,66,00,154 against Rs. 14,08,85,782 in the previous financial year. The total expenditure during the year was Rs. 17,46,49,169 against Rs. 15,08,11,146 in the previous financial year resulting in a loss of Rs. 6,80,49,015 as compared to loss of Rs. 99,25,361 during the previous year.

In a significant development during the year under review, one of the lender bank, in whose favour one of the Company''s investment was pledged, had sold the pledged shares resulting in a profit of Rs. 1,89,73,86,112. The Directors after critical review of the recoverability of certain loans & advances have written off Rs. 1,65,72,77,723 and provided for accrued interest and other dues amounting to Rs. 15,09,26,605. The Directors have also provided for the diminution in the value of investment amounts to Rs. 19,80,73,525 in a group company, which has been registered with the Board of Industrial and Financial Reconstruction under Section 15 of Sick Industrial Companies (SP) Act, 1985. The net effect of these is a net loss of Rs. 21,39,40,756.

Pursuant to the corporate guarantee given by the Company on behalf of the group companies borrowings, the lender bank has invoked the corporate guarantee and has demanded repayment of such dues to it by the borrowing group companies amounting to Rs. 208 Cr. The borrower group companies are in negotiation with the lender bank for restoration of facilities and in meanwhile they are servicing their obligation.

Market Value of Companyâs Investment

The market value of the Companyâs investment stocks is at Rs. 710 Cr., which is significantly higher than that of any potential financial exposure of the Company in future.

Future Prospects

Your Company continues to hold strategic investments in the UB Group Companies and dividend distribution by such investee companies would enhance its revenue progressively.

As the Company does not have minimum prescribed net owned fund, capital risk adequacy ratio etc. The Reserve Bank of India has advised the Company to apply for reclassification of the Company as a Core Investment Company, which is being addressed.

In order to strengthen the prospects of the Company, your Directors are evaluating to enter into some additional activities. Should such opportunities prove to be attractive, your Company would consider these during the current year.

Registration with Reserve Bank of India (RBI) as Non-banking Financial Company

Your Company continues to be a Non-banking (non-deposit taking) Financial Company (NBFC-ND), duly registered with Reserve Bank of India under the provisions of Section 45-IA of the Reserve Bank of India Act, 1934.

Certain regulatory financial requirements prescribed under the said Act and Regulations made there under, could not be met by the Company. The matter is being addressed by the Board of Directors.

Directors and Key Managerial Personnel

Since the last Annual General Meeting, the following changes have taken place in the Board of Directors:

i. Mr. M S Kapur (DIN: 00703815) was appointed as the Additional Director designated as Independent Director on the Board of the Company with effect from 16^th May 2016. He holds office up to the date of the ensuing Annual General Meeting. A Notice has been received from a member pursuant to Section 160 of the Companies Act, 2013 proposing Mr. M S Kapur as a candidate for the office of Independent Director of the Company.

ii. Mr. M S Reddy, Director resigned from the Board of the Company w.e.f. 7^th April, 2016. The Board records its appreciation for the service rendered by him during his tenure as Director.

Mr. Ritesh Shah,Company Secretary, resigned as Company Secretary and Compliance Officer w.e.f 12^th June, 2015. Mr. Manoj Kumar was appointed as a Company Secretary and Compliance Officer of the Company w.e.f., 14^th August, 2015.

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

The affairs of the Company for the year under review were monitored by the Group Chairman under the guidance of the Group Chief Financial Officer.

None of the directors of the Company are disqualified under Section 164 (2) of the Companies Act, 2013. Your Directors have made necessary disclosures as required under various provisions of the Companies Act, 2013.

Directorsâ Responsibility Statement

The Board of Directors of the Company hereby states that:

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

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

(d) the Annual Accounts have been prepared on a going concern basis;

(e) Internal Financial Controls have been laid down to be followed by the Company and that such Internal Financial Controls are adequate and operating effectively;

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

Statutory Auditors

(a) Ratification of appointment of Statutory Auditors.

M/s. Vishnu Ram & Co., Chartered Accountants (Firm Registration No. 004742S), the Statutory Auditors of the Company in terms of the provisions contained in the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 were appointed for a period of three financial years commencing from 2014-2015 to hold office from the conclusion of the Tenth Annual General Meeting till the conclusion of the Thirteenth Annual General Meeting subject to ratification by the Members at each subsequent Annual General Meetings. The Company has received a letter from them to the effect that ratification, if made at the ensuing Annual General Meeting would be within the prescribed limits under Section 139 of the Companies Act, 2013.

(b) Auditors Qualifications and Board responses

Certain matters relating to invocation of corporate guarantee and pledge of securities by a lender bank against borrowing of group companies and preparation of the financial statements on going concern basis are subject matter of qualification in the Audit Report - all these have been explained in the relevant Notes to Accounts.

Corporate Governance & Management Discussion and Analysis Report

Pursuant to the erstwhile Clause 49 of the Listing Agreement with the Stock Exchanges and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (âListing Regulationsâ) a report on Corporate Governance and Management Discussion and Analysis Report is attached to this Report.

The Auditorsâ Certificate confirming compliance of conditions of Corporate Governance is appended to this report and CEO/ CFO Certificate as required under Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 signed by a Director of the Company is obtained.

DISCLOSURES :

Board and its Committees

Declaration by Independent Directors

The Company has received declaration from all Independent Director(s) that they meet the criteria of independence as provided in Sub-section (6) of Section 149 of the Companies Act, 2013.

Performance Evaluation of the Board and Committees

The details of annual evaluation made by the Board of its own performance and that of its committees, individual Directors individually and performance criteria for Independent Directors laid down by the Nomination and Remuneration Committee are enclosed as Annexure - A to this Report. The Company has formulated a policy for performance evaluation of the Independent Directors, Board of Directors and is available on the Company ''s website www.mcdowellholdings.co.in . Particulars of Employees and Related Disclosures

Disclosures required to be made under Section 197(12) of the Companies Act, 2013 read with Rule 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 do not apply to Company for the period under review. The Company had not offered any shares to its employees or Key Managerial Personnel under any scheme of Employees Stock Option and has also not issued any sweat equity at any time.

Deposits

During the year under review, your Company did not accept any deposits within the meaning of provisions of Chapter-V, Acceptance of Deposits by Companies of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

Corporate Social Responsibility (CSR)

The Company has constituted a Corporate Social Responsibility Committee to assume and execute responsibility as a corporate citizen towards the society at large. Since the average net profit of the Company in the preceding three financial years was negative, the Company has not carried out any CSR expenditure during the period under review.

Secretarial Audit

(a) Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Sudhir Hulyalkar, Company Secretary in Practice having Certificate of Practice No. 6137 to undertake the Secretarial Audit of the Company. The Report furnished by Auditor in the format prescribed is enclosed as Annexure - B to this report.

(b) Qualifications and Board response

i. Efforts are still on for appointment of a suitable candidate for the position of the Managing Director and Chief Financial Officer.

ii. Mesures for compliance of the provisions under Section 117 of the Companies Act, 2013 are being taken.

iii. In the absence of a Chief Executive Officer/Managing Director and Chief Financial Officer, the requirement of providing the Certificate to the Board was possible only by issue of the same from a Director of the Company.

iv. The matters relating to the non fulfillment of certain regulatory financial requirements prescribed under the Reserve Bank of India Act are being addressed by the Board of Directors.

Internal Control System

The Internal Control System is effectively done by the Sr. Vice President - Finance & Accounts of the Group Company, who is also a Director in the Company. The Internal Auditor of the Company, on regular basis reviews the Internal Control System.

Your Company through internal audit under the supervision of the Audit Committee reviews the risk management process, risk mitigation plans and risk reporting.

The adequacy and effectiveness of Internal Financial Control have been endorsed by the Internal Auditor and the Statutory

Auditors. The report of the Independent Statutory Auditors in the annexure to their Audit Report does not ascertain any adverse observation.

Vigil Mechanism

Your Company hereby affirms that no Director/ employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year. The said policy is available in the Company website, http://www. mcdowellholdings.co.in

Listing Requirements

Your Company''s Equity Shares are listed on the BSE Limited (formerly Bombay Stock Exchange Limited) and National Stock Exchange of India Limited. The listing fees have been paid to both the Stock Exchanges for the year 2016-2017. The Bangalore Stock Exchange has been derecognized under the relevant provisions of the Securities and Exchange Board of India Act, 1992 and the Securities Contracts (Regulation) Act, 1956.

Extract of Annual Return

An extract of Annual Return in Form MGT-9 as on March 31, 2016 is enclosed as Annexure - D to this Report. Nomination and Remuneration Policy

Particulars of Loans, Guarantees or Investments

Details of loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 are given in Note 9 of the Notes to the Financial Statements.

Related Party Transactions

There has been no related party transaction during the year under review, except for certain transaction exempted under Section 186 of the Companies Act, 2013. The Board had approved policy on Related Party Transactions. The policy has been uploaded on the Companyâs website: http://www.mcdowellholdings.co.in.

Familiarization Programme for Independent Directors

The detail programme for familiarization of the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company :www.mcdowellholdings.co.in. The Board comprises of independent and Nonexecutive Directors and they have been familiarized with the Company, their role, rights , responsibility in the Company''s, business, etc.

Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo

The provisions under Section 134 of the Companies Act, 2013 and rules made there under relating to energy conservation, technology absorption do not apply to the Company, as the Company is not engaged in the manufacturing activities. Further there has not been any foreign exchange earnings or outgo during the period under review.

Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status of the Company

There were no material orders passed by the regulators or courts or tribunals which may impact the going concern status of the Company

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

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

Acknowledgement

Your Directors wish to acknowledge the co-operation and support extended by the employees and the shareholders of the Company.

By order of the Board

Place : Bengaluru N Srinivasan

Date : 04-07-2016 Chairman

[DIN: 00004195]

Mar 31, 2014

Dear Members,

The Directors present the Tenth Annual Report of your Company and the audited accounts for the year ended March 31, 2014.

Since this Report pertains to financial year that commenced prior to April 01, 2014, the contents therein are governed by the relevant provisions/schedules/rules of the Companies Act, 1956, in compliance with General Circular No. 08/2014 dated April 04, 2014, issued by the Ministry of Corporate Affairs.

FINANCIAL RESULTS

For the Financial Year Ended Particulars 31.03.2014 31.03.2013

(Rs.) (Rs.)

Income 128,588,029 112,532,252

Less : Expenditure 131,860,727 70,839,934

Less : Provision for doubtful loans and advance 205,070,767 Nil

Profit / (Loss) before taxation (208,343,465) 41,692,319

Less: Provision for tax Nil 5,420,000

Profit / (Loss) after tax (208,343,465) 36,272,319

Less: Transfer to Statutory Reserve Fund Nil 7,254,464

Balance brought forward from previous year 58,346,328 29,328,473

Balance carried forward (149,997,136) 58,346,328

DIVIDEND

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

REVIEW OF OPERATIONS

The total income of the Company during the financial year under review has marginally increased to Rs. 128,588,029 against Rs. 112,532,252 in the previous financial year. The total expenditure during the year was Rs. 131,860,727 against Rs. 70,839,934 in the previous financial year. After providing for Rs. 205,070,767 in respect of amounts due from an entity, which is considered by the Board as doubtful of recovery, the Company has recorded a net loss of Rs. 208,343,465 for the year under review against net profit of Rs. 36,272,319 in the previous financial year.

The Company has provided corporate guarantee and created pledge on 6.3 million shares of United Breweries Limited, held by it as investments, in favour of a lender to secure their lendings to certain group companies and the total amount outstanding as on March 31, 2014 is Rs. 496 crores. Three of such borrowers have defaulted and the lender has demanded repayment of a sum of Rs. 337.52 crores due from them. Simultaneously, the lender has invoked the corporate guarantee and exercised its right of pledge provided by the Company to realize the above dues. The Company is in negotiation with the lender to restore the facility made available to the defaulting borrowers. No adverse action has been taken against the Company. Pending final outcome of the negotiations, the Company continues to recognize its obligations as contingent liabilities.

FUTURE PROSPECTS

Your Company continues to hold strategic investments in the UB Group Companies. As the performance of the major investee companies is on the growth path, it is expected that the dividend distribution by such investee companies would increase progressively.

In order to strengthen the prospects of the Company, your Directors are in the process of evaluating entering into some additional activities such as trading etc. Should such opportunities prove to be attractive, your Company would consider these during the current year.

CAPITAL

During the year under review the Authorised Capital of your Company remained unchanged at Rs. 150,000,000 divided into 15,000,000 equity shares of Rs. 10 each.

The issued, subscribed and paid-up equity share capital of your Company stood at Rs. 139,922,580 divided into 13,992,258 equity shares of Rs. 10 each fully paid-up.

DIRECTORS

Mr. N Srinivasan, Independent Director, is liable to retire by rotation under the erstwhile applicable provisions of the Companies Act, 1956. However, in terms of Section 149 and other applicable provisions of the Companies Act, 2013, Independent Directors can hold office for two terms of five consecutive years. Accordingly, Mr. N Srinivasan has offered himself for appointment as an Independent Director for three consecutive years for a term upto the conclusion of the thirteenth Annual General Meeting of the Company in the calendar year 2017.

Mr. M. Srinivasulu Reddy and Mr. Anil Pisharody were appointed as Additional Directors of the Company, in the meeting of the Board held on July 16, 2014, to hold office upto the date of the ensuing Annual General Meeting (AGM) of the Company.

Pursuant to the provisions of the Companies Act, 2013 which have been enacted with effect from 1 April 2014, Mr. M Srinivasulu Reddy, if appointed at the forthcoming AGM shall be an ''independent director'' under the said Act for a period of five years with effect from the date of the AGM.

The proposal regarding their appointment/re-appointment as Directors is placed for your approval.

Mr. M R Doraiswamy Iyengar and Mr. S N Prasad resigned from the Board with effect from August 14, 2013. Mr. A Harish Bhat and Mr. R N Pillai resigned from the Board with effect from May 12, 2014 and May 31, 2014 respectively.

AUDITORS

Messrs. Vishnu Ram & Co., Chartered Accountants, retire as Auditors of the Company at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. In terms of the provisions contained in the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 the appointment of Statutory Auditors is proposed for a period of three financial years commencing from 2014-2015 to hold office from the conclusion of the Tenth Annual General Meeting till the conclusion of the Thirteenth Annual General Meeting. Their appointment during the aforesaid term of three financial years shall be subject to ratification by the Members at subsequent Annual General Meetings.

With reference to observations in the Auditors Report regarding invocation of guarantee and pledge by a lender, diminution in the carrying value of certain long term investments, appropriateness of treating certain loans as good and appropriateness of preparation of financial statements on going concern basis, the relevant notes to the accounts comprehensively explain the management''s views on such matters.

REGISTRATION WITH RESERVE BANK OF INDIA AS NON BANKING FINANCIAL COMPANY

Your Company continues to be a Non-Banking (non-deposit taking) Financial Company, duly registered with Reserve Bank of India under the provisions of Section 45-IA of the Reserve Bank of India Act, 1934. In terms of the provisions of Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007, the Company is categorised as a ''Systemically Important Non-Deposit taking Non-Banking Financial Company.

Certain regulatory requirements prescribed by the Reserve Bank of India under the NBFC regulations could not be met by the Company. The matter is being addressed by the Board of Directors to find a suitable solution.

OPEN OFFER

The Company along with other constituents of the UB Group is a party to an agreement entered into between the UB Group and Adventz Group in respect of their respective shareholding in Mangalore Chemicals and Fertilizers Limited. Further, the Company has also joined Zuari Fertilizers and Chemicals Limited, a part of Adventz Group, in making a competing offer under Regulation 20 of the SEBI (SAST) Regulations, 2011, as amended, for acquisition of up to 3,08,13,939 equity shares of Rs. 10 each from the public shareholders of Mangalore Chemicals and Fertilizers Limited by Zuari Fertilisers and Chemicals Limited at a price of Rs. 68.55 per equity share. In terms of the agreement, Zuari Fertilisers and Chemicals Limited has agreed to acquire 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 SEBI Regulations will be borne by Zuari Fertilisers and Chemicals Limited alone. SEBI has issued its ''No objection'' for the open offer subject to receipt of approval from the Competition Commission of India.

LISTING OF EQUITY SHARES OF THE COMPANY

The equity shares of your Company continue to be listed on Bangalore Stock Exchange Limited (Regional Exchange), BSE Limited and National Stock Exchange of India Limited. The Annual Listing fees for the year 2014-15 have been paid.

SHIFTING OF REGISTERED OFFICE

Pursuant to the decision taken by the Board of Directors, the Registered Office of your Company will be shifted from Canberra, Level 9, UB City, #24, Vittal Mallya Road, Bangalore - 560 001 to UB Tower, Level 12, UB City, 24, Vittal Mallya Road, Bangalore - 560 001 with effect from August 01, 2014.

DEPOSITORY SYSTEM

The trading in the equity shares of your Company is under compulsory dematerialisation mode. As on July 25, 2014 (i.e. date of last benpos), equity shares representing 96.67% of the equity share capital are held in dematerialised form.

CORPORATE GOVERNANCE

A report on Corporate Governance is annexed separately as part of the Annual Report along with a certificate of compliance from the Auditors.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Clause 49 of the listing agreement with the stock exchanges, Management Discussion and Analysis Report is annexed and forms an integral part of the Annual Report.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION ETC.

Your Company has not undertaken any activity relating to conservation of energy and technology absorption and hence there is nothing to be disclosed pursuant to Section 217 (1) (e) of the Companies Act, 1956.

During the year under review, the Company had no transactions in foreign exchange and no expenditure was incurred on Research & Development.

PARTICULARS OF EMPLOYEES

The Company has no employee in respect of whom Statement under Section 217 (2A) of the Companies Act, 1956, is required to be annexed.

FIXED DEPOSITS

The Company has not accepted any deposits from public during the year.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required in terms of Section 217 (2AA) of the Companies Act, 1956, your Directors state and confirm that -

a. in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

b. the Accounting Policies have been selected and applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that year;

c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. the Annual Accounts have been prepared on a going concern basis.

E-VOTING

In terms of Section 108 of the Companies Act, 2013, Rules framed thereunder and Clause 35B of the Listing Agreement, the Company is providing e-voting facility to its shareholders in respect of all shareholders'' resolutions proposed to be passed at this Annual General Meeting.

ACKNOWLEDGEMENT

Your Directors wish to acknowledge the co-operation, understanding and support extended by the Group Companies, Employees, Regulatory bodies, Shareholders and Bankers.

By Authority of the Board

July 30, 2014 N Srinivasan Bangalore Chairman

Mar 31, 2013

The Directors present the Ninth Annual Report of your Company and the audited accounts for the year ended March 31, 2013.

FINANCIAL RESULTS

For the Financial Year Ended Particulars 31.03.2013 31.03.2012 (Rs.) (Rs.)

Profit from operations 41,692,319 16,411,234

Less : Provision for tax 5,420,000 1,235,866

Profit after tax 36,272,319 15,175,368

Less : Transfer to Statutory Reserve Fund 7,254,464 3,035,074

Balance brought forward from previous year 29,328,473 17,188,179

Surplus carried to Balance Sheet 58,346,328 29,328,473

DIVIDEND

Your Directors have deemed it prudent not to recomend any dividend on equity shares for the year ended March 31, 2013, in order to conserve the resources for the business.

REVIEW OF OPERATIONS

Your Company has recorded good performance during the year under review. Inclusive of profit on sale of investments, the total income of your Company during the financial year was Rs. 112,532,252 compared to Rs. 33,077,102 in the previous financial year. The total expenditure during the year was Rs. 70,839,934 against Rs. 16,665,868 in the previous financial year. Your Company has recorded a net profit of Rs. 36,272,319 for the year under review compared to Rs. 15,175,368 in the previous financial year.

A sum of Rs. 7,254,464 (previous year: Rs. 3,035,074), has been transferred to Statutory Reserve Fund, pursuant to the provisions of Section 45-IC of the Reserve Bank of India Act, 1934. The provision of Rs. 1,714,722 for Standard Assets has been made during the financial year in terms of the Notification issued by Reserve Bank of India.

FUTURE PROSPECTS

Your Company continues to hold strategic investments in the UB Group Companies. As the performance of the major investee companies is on the growth path, it is expected that the dividend distribution by such investee companies would increase progressively.

The Company will continue to focus on making long-term strategic investments in various existing/new ventures, besides consolidating the existing investments, as and when opportunities and resources are available.

CAPITAL

The Authorised Capital of your Company remained unchanged at Rs. 150,000,000 divided into 15,000,000 equity shares of Rs. 10 each.

During the year under review, Kingfisher Finvest India Limited, one of the promoters of your Company had exercised the option to convert 297,909 10% Optionally Convertible Debentures of the face value of Rs. 100 ("OCDs") each and was allotted 607,977 equity shares of Rs. 10 each, fully paid-up, on a preferential basis, as per SEBI Regulations.

The issued, subscribed and paid-up equity share capital of your Company has increased from Rs. 133,842,810 divided into 13,384,281 equity shares of Rs. 10 each fully paid-up to Rs. 139,922,580 divided into 13,992,258 equity shares of Rs. 10 each fully paid-up, consequent to the allotment of 607,977 equity shares of Rs. 10 each fully paid-up to Kingfisher Finvest India Limited, on a preferential basis, on April 17, 2012.

DIRECTORS

Mr. N Srinivasan, Director, retires by rotation and being eligible, offers himself for re-appointment.

Mr. A. Harish Bhat was re-appointed as the Managing Director of the Company without remuneration for a further period of three years from November 06, 2012, with the approval of the shareholders of the Company at the last Annual General Meeting held on September 25, 2012.

Mr. S G Ruparel ceased to be a Director of the Company, consequent upon his demise on February 11, 2013. Dr. Vijay Mallya resigned from the Board with effect from February 28, 2013. The Board places on record its appreciation of the valuable services rendered by Mr. S G Ruparel and Dr. Vijay Mallya during their tenure of office as Directors of your Company.

Mr. R N Pillai (Mr. Pillai) was appointed as an Additional Director of the Company with effect from March 26, 2013, pursuant to the provisions of Section 260 of the Companies Act, 1956, and holds office as a Director upto the date of this Annual General Meeting. A notice under Section 257 of the Companies Act, 1956, has been received from a member specifying his intention to propose the appointment of Mr. Pillai at this Annual General Meeting.

AUDITORS

M/s. Vishnu Ram & Co., Chartered Accountants, the retiring Auditors, are eligible for re-appointment at the ensuing Annual General Meeting and it is necessary to fix their remuneration.

REGISTRATION WITH RESERVE BANK OF INDIA AS NON BANKING FINANCIAL COMPANY

Your Company continues to be a Non-Banking (non-deposit taking) Financial Company, duly registered with Reserve Bank of India under the provisions of Section 45-IA of the Reserve Bank of India Act, 1934. In terms of the provisions of Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007, the Company is categorised as a ''Systemically Important Non-Deposit taking Non-Banking Financial Company''.

LISTING OF EQUITY SHARES OF THE COMPANY

The equity shares of your Company continue to be listed on Bangalore Stock Exchange Limited (Regional Exchange), Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Annual Listing fees for the year 2013-14 have been paid to these Stock Exchanges.

DEPOSITORY SYSTEM

The trading in the equity shares of your Company is under compulsory dematerialisation mode. As on May 24, 2013 (i.e. date of last benpos), equity shares representing 96.50% of the equity share capital are held in dematerialised form.

CORPORATE GOVERNANCE

A report on Corporate Governance is annexed separately as part of the Annual Report along with a certificate of compliance from the Auditors. Necessary requirements of obtaining certifications / declarations in terms of Clause 49 of the listing agreement with the stock exchanges have been complied with.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Clause 49 of the listing agreement with the stock exchanges, Management Discussion and Analysis Report is annexed and forms an integral part of the Annual Report.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION ETC.

Your Company has not undertaken any manufacturing activity during the year under review. Hence the disclosure relating to conservation of energy and technology absorption pursuant to Section 217 (1) (e) of the Companies Act, 1956 is not applicable.

During the year under review, the Company had no transactions in foreign exchange and no expenditure was incurred on Research & Development.

EMPLOYEES

The Company has no employee in respect of whom Statement under Section 217 (2A) of the Companies Act, 1956, is required to be annexed.

FIXED DEPOSITS

The Company has not accepted any deposits from public during the year.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required in terms of Section 217 (2AA) of the Companies Act, 1956, your Directors state and confirm that -

a. in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

b. they have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that year;

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. they have prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENT

Your Directors wish to acknowledge the co-operation, understanding and support extended by the Group Companies, Shareholders and Bankers.

By Authority of the Board

May 30, 2013 N Srinivasan

Mumbai Chairman

Mar 31, 2012

The Directors present the Eighth Annual Report of your Company and the audited accounts for the year ended March 31, 2012.

FINANCIAL RESULTS

For the Financial Year Ended

Particulars 31.03.2012 31.03.2011

(Rs.) (Rs.)

Income 33,077,102 23,016,474

Less : Expenditure 16,665,868 33,056,294

Profit / (Loss) before taxation 16,411,234 (10,039,820)

Less : Provision for tax 1,235,866 1,484,240

Profit / (Loss) after tax 15,175,368 (11,524,060)

Less : Transfer to Statutory Reserve Fund 3,035,074 Nil Balance brought forward from previous year 17,188,180 28,712,239

Balance carried forward 29,328,473 17,188,180

DIVIDEND

In order to conserve the resources for operations, your Directors do not recommend any dividend on equity shares for the year ended March 31, 2012.

REVIEW OF OPERATIONS

Your Company has recorded good performance during the year under review. Inclusive of income by way of dividend, interest and security commission, the total income of your Company during the financial year was Rs. 33,077,102 compared to Rs. 23,016,474 in the previous financial year. The total expenditure during the year was Rs. 16,665,868 against Rs. 33,056,294 in the previous financial year. Your Company has recorded a net profit of Rs. 15,175,368 for the year versus net loss of Rs. 11,524,060 in the previous financial year.

A sum of Rs. 3,035,074 (previous year: Nil), has been transferred to Statutory Reserve Fund, pursuant to the provisions of Section 45-IC of the Reserve Bank of India Act, 1934.

FUTURE PROSPECTS

Your Company continues to hold strategic investments in the UB Group Companies. As the performance of the investee companies is on the growth path, it is expected that the dividend distribution by the investee companies would increase in the years to come.

The Company will continue to focus on making long-term strategic investments in various existing/new ventures, besides consolidating the existing investments, as and when opportunities and resources are available.

CONVERSION OF OPTIONALLY CONVERTIBLE DEBENTURES INTO EQUITY SHARES OF THE COMPANY

During the year under review, Kingfisher Finvest India Limited, one of the promoters of your Company had exercised the option to convert 641,350 10% Optionally Convertible Debentures of the face value of Rs. 100 ("OCDs") each and was allotted 635,000 equity shares of Rs. 10 each fully paid-up, on a preferential basis, at a price of Rs. 101.00 per equity share as per SEBI guidelines.

Subsequent to the balance sheet date, Kingfisher Finvest India Limited, further exercised the option to convert the balance 297,909 OCDs and was allotted 607,977 equity shares of Rs. 10 each fully paid-up, on a preferential basis, at a price of Rs. 49.00 per equity share as per SEBI guidelines.

CAPITAL

During the year under review the Authorized Capital of your Company remained unchanged at Rs. 150,000,000 divided into 15,000,000 equity shares of Rs. 10 each.

The issued, subscribed and paid-up equity share capital of your Company has increased from Rs. 127,492,810 divided into 12,749,281 equity shares of Rs. 10 each fully paid-up to Rs. 139,922,580 divided into 13,992,258 equity shares of Rs. 10 each fully paid-up, consequent to the allotment of 1,242,977 equity shares of Rs. 10 each fully paid- up to Kingfisher Finevest India Limited, on a preferential basis, on August 08, 2011 and April 17, 2012.

DIRECTORS

Mr. S Narasimha Prasad and Mr. M R Doraiswamy Iyengar, Directors, retire by rotation and being eligible, offer themselves for re-appointment.

The Board of Directors of the Company, at its Meeting held on August 08, 2012, has re-appointed Mr. A Harish Bhat as Managing Director of the Company in terms of Section 269 of the Companies Act, 1956, for a further period of three years, with effect from November 6, 2012, without remuneration, subject to the approval of the Shareholders at the Annual General Meeting.

As per the declarations received, none of the Directors of the Company is disqualified to be appointed as a Director of any Public Limited Company in terms of Section 274 (1) (g) of the Companies Act, 1956.

AUDITORS

M/s. Vishnu Ram & Co., Chartered Accountants, the retiring Auditors, are eligible for re-appointment at the ensuing Annual General Meeting and it is necessary to fix their remuneration.

REGISTRATION WITH RESERVE BANK OF INDIA AS NON BANKING FINANCIAL COMPANY

Your Company continues to be a Non-Banking (non deposit taking) Financial Company, duly registered, with Reserve Bank of India under the provisions of Section 45-IA of the Reserve Bank of India Act, 1934.

LISTING OF EQUITY SHARES OF THE COMPANY

The equity shares of your Company continue to be listed on Bangalore Stock Exchange Limited (Regional Exchange), Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Annual Listing fees for the year 2012-13 have been paid to these Stock Exchanges.

DEPOSITORY SYSTEM

The trading in the equity shares of your Company is under compulsory dematerialization mode. As on August 03, 2012 (i.e. date of last benpos), equity shares representing 96.38% of the equity share capital are held in dematerialized form.

CORPORATE GOVERNANCE

A report on Corporate Governance is annexed separately as part of the Annual Report along with a certificate of compliance from the Auditors. Necessary requirements of obtaining certifications / declarations in terms of Clause 49 of the listing agreement with the stock exchanges have been complied with.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Clause 49 of the listing agreement with the stock exchanges, Management Discussion and Analysis Report is annexed and forms an integral part of the Annual Report.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION ETC.

Your Company has not undertaken any activity relating to conservation of energy and technology absorption and hence there is nothing to be disclosed pursuant to Section 217 (1) (e) of the Companies Act, 1956.

During the year under review, the Company had no transactions in foreign exchange and no expenditure was incurred on Research & Development.

EMPLOYEES

The Company has no employee in respect of whom Statement under Section 217 (2A) of the Companies Act, 1956, is required to be annexed.

FIXED DEPOSITS

The Company has not accepted any deposits from public during the year.

DIRECTORS' RESPONSIBILITY STATEMENT

As required in terms of Section 217 (2AA) of the Companies Act, 1956, your Directors state and confirm that -

a. in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

b. they have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that year;

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. they have prepared the Annual Accounts on a going concern basis

ACKNOWLEDGEMENT

Your Directors wish to acknowledge the co-operation, understanding and support extended by the Group Companies, Regulatory bodies, Shareholders and Bankers.

By Authority of the Board

August 08, 2012 Dr. Vijay Mallya

New Delhi Chairman

Mar 31, 2011

Dear Members,

The Directors present the Seventh Annual Report of your Company and the audited accounts for the year ended March 31, 2011.

FINANCIAL RESULTS

For the Financial Year Ended Particulars 31.03.2011 31.03.2010 (Rs.) (Rs.)

Income 23,016,474 66,177,272

Less : Expenditure 5,266,711 4,236,877

Profit for the year 17,749,763 61,940,395 before interest & tax

Less : Interest 27,789,583 31,350,001

(Loss) / Profit for (10,039,820) 30,590,394 the year before tax

Less: Provision for tax 1,484,240 4,335,000

(Loss) / Profit after tax (11,524,060) 26,255,394

Less: Transfer to - 5,251,079 Statutory Reserve Fund

Balance brought forward 28,712,239 7,707,924 from previous year

Balance carried forward 17,188,179 28,712,239 to the Balance Sheet

DIVIDEND

In view of the loss, your Directors do not propose any Dividend on the equity shares for the year ended March 31, 2011.

REVIEW OF OPERATIONS

The total income of your Company during the financial year under review was Rs. 23,016,474 against Rs. 66,177,272 in the previous financial year (inclusive of profit on sale of non-core investments amounting to Rs. 51,849,790). The total expenditure during the year includes Rs. 287,883 (previous year : Nil), towards interest on debentures. Your Company has incurred net loss of Rs. 11,524,060 for the year under review against net profit of Rs. 26,255,394 in the previous financial year.

During the year under review, your Company issued 1,751,290 10% Optionally Convertible Debentures of the face value of Rs. 100 (ÃOCDÃ) each to Kingfisher Finvest India Limited in consideration of the extinguishment of the amount due to Kingfisher Finvest India Limited, on account of the principal debt amount and accrued interest thereon, till the date of the allotment of the OCDs.

FUTURE PROSPECTS

Your Company continues to hold strategic investments in the UB Group Companies. As the performance of the investee companies is on the growth path, it is expected that the dividend yield would increase in the years to come.

During the year under review, your Company has been able to mitigate the burden of interest on the inter-corporate deposit by conversion of the same into OCDs. The Company will continue to focus on making long-term strategic investments in various existing/new ventures, besides consolidating the existing investments, as and when opportunities and resources are available.

ISSUE OF OPTIONALLY CONVERTIBLE DEBENTURES ON A PREFERENTIAL BASIS

Pursuant to the decisions taken in the Board Meeting held on February 22, 2011 and Extraordinary General Meeting held on March 25, 2011, the Committee of Directors, at its meeting held on March 25, 2011, allotted 1,751,290 10% Optionally Convertible Debentures of the face value of Rs. 100 (ÃOCDÃ) each to Kingfisher Finvest India Limited, one of the Promoters of your Company, on a preferential basis, in consideration of the extinguishment of the amount due to Kingfisher Finvest India Limited, on account of the principal debt amount and accrued interest thereon, till the date of the allotment of the OCDs.

The holder is entitled to exercise the option to convert the OCDs into equity share(s) of the face value of Rs. 10 each, at any time, within eighteen months from the date of allotment of the OCDs at a conversion price, to be determined in accordance with the provisions of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

During the year under review, Kingfisher Finvest India Limited had exercised the option to convert 8,12,031 OCDs and was allotted 605,000 equity shares of Rs. 10 each fully paid-up, on a preferential basis, at a price of Rs.134.22 per equity share.

CAPITAL

During the year under review the Authorised Capital of your Company remained unchanged at Rs. 150,000,000 divided into 15,000,000 equity shares of Rs. 10 each.

The issued subscribed and paid-up equity share capital of your Company has increased from Rs. 121,442,810 divided into 12,144,281 equity shares of Rs. 10 each fully paid-up to Rs. 127,492,810 divided into 12,749,281 equity shares of Rs. 10 each fully paid-up, consequent to the allotment of 605,000 equity shares of Rs. 10 each fully paid-up to Kingfisher Finvest India Limited, on a preferential basis, at a price of Rs. 134.22 per equity share.

INVESTMENT PORTFOLIO

Your Directors are pleased to report that due to appreciation in the market value of the quoted investments, the Net Asset Value of the Company`s equity share as on March 31, 2011, works out to Rs. 494.03 per equity share compared to Rs. 307.70 as at the end of the previous year.

DIRECTORS

Dr. Vijay Mallya and Mr. N Srinivasan, Directors, retire by rotation and being eligible, offer themselves for re-appointment.

As per the declarations received, none of the Directors of the Company is disqualified to be appointed as a Director of any Public Limited Company in terms of Section 274 (1) (g) of the Companies Act, 1956.

AUDITORS

M/s. Vishnu Ram & Co., Chartered Accountants, the retiring Auditors, are eligible for re-appointment at the ensuing Annual General Meeting and it is necessary to fix their remuneration.

LISTING OF EQUITY SHARES OF THE COMPANY

The equity shares of your Company continue to be listed on Bangalore Stock Exchange Limited, Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Annual Listing fees for the year 2011-12 have been paid to these Stock Exchanges.

DEPOSITORY SYSTEM

The trading in the equity shares of your Company is under compulsory dematerialisation mode. As on July 29, 2011 (i.e. date of last benpos), equity shares representing 90.71% of the equity share capital are in dematerialised form.

CORPORATE GOVERNANCE

A report on Corporate Governance is annexed separately as part of the Annual Report along with a certificate of compliance from the Auditors. Necessary requirements of obtaining certifications / declarations in terms of Clause 49 of the listing agreement with the stock exchanges have been complied with.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Clause 49 of the listing agreement with the stock exchanges, Management Discussion and Analysis Report is annexed and forms an integral part of the Annual Report.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION ETC.

Your Company has not undertaken any activity relating to conservation of energy and technology absorption and hence there is nothing to be disclosed pursuant to Section 217 (1) (e) of the Companies Act, 1956.

During the year under review, the Company had no transactions in foreign exchange and no expenditure was incurred on Research & Development.

EMPLOYEES

The Company has no employee in respect of whom Statement under Section 217 (2A) of the Companies Act, 1956, is required to be annexed.

FIXED DEPOSITS

The Company has not accepted any deposits from public during the year.

DIRECTORS` RESPONSIBILITY STATEMENT

As required in terms of Section 217 (2AA) of the Companies Act, 1956, your Directors state and confirm that -

a. in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

b. they have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that year;

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. they have prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENT

Your Directors wish to acknowledge the co-operation, understanding and support extended by the Group Companies, Regulatory bodies, Shareholders and Bankers.

By Authority of the Board

Dr. Vijay Mallya Chairman

August 02, 2011 New Delhi

Mar 31, 2010

The Directors present the Sixth Annual Report of your Company and the audited accounts for the year ended March 31, 2010.

FINANCIAL RESULTS

For the Financial Year Ended

Particulars 31.03.2010 31.03.2009

(Rs.) (Rs.)

Income 66,177,272 18,898,901

Less : Expenditure 4,236,877 4,133,362

Profit for the year

before interest & tax 61,940,395 14,765,539

Less : Interest 31,350,001 24,931,645

Profit / (Loss) for the

year before tax 30,590,394 (10,166,106)

Less: Provision for tax 4,335,000 800,000

Profit / (Loss) after tax 26,255,394 (10,966,106)

Less: Transfer to Statutory

Reserve Fund 5,251,079 -

Balance brought forward from previous year 7,707,924 18,674,030

Balance carried forward to the Balance Sheet 28,712,239 7,707,924

DIVIDEND

In order to conserve the resources for operations, your Directors do not recommend any dividend on equity shares for the year ended March 31, 2010.

REVIEW OF OPERATIONS

The total income of the Company during the financial year under review has increased to Rs. 66,177,272 against Rs. 18,898,901 in the previous financial year. The income from operations includes profit on sale of non-core investments amounting to Rs. 51,849,790. The total expenditure during the year was Rs. 4,236,877 against Rs. 4,133,362 in the previous financial year. After providing for a sum of Rs. 31,350,001 towards interest on inter corporate deposit (previous year : Rs. 24,931,645) and Rs. 4,335,000 towards Provision for tax (previous year : Rs. 800,000), the Company has recorded net profit of Rs. 26,255,394 for the year under review against net loss of Rs. 10,966,106 in the previous financial year.

A sum of Rs. 5,251,079 (previous year : Nil), has been transferred to Statutory Reserve Fund, pursuant to the provisions of Section 45-IC of the Reserve Bank of India Act, 1934.

FUTURE PROSPECTS

Your Company continues to hold significant investments in the UB Group companies. The financial year under review saw the economy recovering from the recession witnessed in the earlier years. The Performance of the Investee Companies is expected to improve in the current financial year, which would result in higher dividend yield in the coming year.

During the year under review, the Company sold its entire non-core investments and utilised the sale proceeds towards part payment of the inter-corporate deposit alongwith accrued interest.

The Company will continue to focus on making long-term strategic investments in various new ventures promoted by the UB group, besides consolidating the existing investments through further investments in the existing Companies as and when opportunities and resources are available.

INVESTMENT PORTFOLIO

Your Directors are pleased to report that due to appreciation in the market value of the quoted investments, the Net Asset Value (NAV) of the Company`s equity share as on March 31, 2010, works out to Rs. 307.70 per equity share compared to Rs. 197.90 as at the end of the previous year.

DIRECTORS

Mr. M R Doraiswamy Iyengar and Mr. S G Ruparel, Directors, retire by rotation and being eligible, offer themselves for re-appointment.

As per the declarations received, none of the Directors of the Company is disqualified to be appointed as a Director of any Public Limited Company in terms of Section 274 (1) (g) of the Companies Act, 1956.

AUDITORS

M/s. Vishnu Ram & Co., Chartered Accountants, the retiring Auditors, are eligible for re-appointment at the ensuing Annual General Meeting and it is necessary to fix their remuneration.

LISTING OF EQUITY SHARES OF THE COMPANY

The equity shares of your Company continue to be listed on Bangalore Stock Exchange Limited (Regional Exchange), Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Annual Listing fees for the year 2010-11 have been paid to these Stock Exchanges.

DEPOSITORY SYSTEM

The trading in the equity shares of your Company is under compulsory dematerialisation mode. As on August 13, 2010 (i.e. date of last benpos), equity shares representing 95.02 % of the equity share capital are in dematerialised form.

REGISTRATION WITH RESERVE BANK OF INDIA AS NON BANKING FINANCIAL COMPANY

The approval of Reserve Bank of India, registering your Company as Non-Banking (non deposit taking) Financial Company, has been granted on August 12, 2010.

SHIFTING OF REGISTERED OFFICE

Pursuant to the decision taken by the Board of Directors of the Company, the Registered Office of your Company will be shifted from 20/2, Vittal Mallya Road, Bangalore - 560 001 to Canberra, Level 9, UB City, #24, Vittal Mallya Road, Bangalore - 560 001, with effect from September 01, 2010.

CORPORATE GOVERNANCE

A report on Corporate Governance is annexed separately as part of the Annual Report along with a certificate of compliance from the Auditors. Necessary requirements of obtaining certifications / declarations in terms of Clause 49 of the listing agreement with the stock exchanges have been complied with.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Clause 49 of the listing agreement with the stock exchanges, Management Discussion and Analysis Report is annexed and forms an integral part of the Annual Report.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION ETC.

Your Company has not undertaken any activity relating to conservation of energy and technology absorption and hence there is nothing to be disclosed pursuant to Section 217 (1) (e) of the Companies Act, 1956, during the year under review.

During the year under review, the Company had no transactions in foreign exchange and no expenditure was incurred on Research & Development.

EMPLOYEES

The Company has no employee in respect of whom Statement under Section 217 (2A) of the Companies Act, 1956, is required to be annexed.

FIXED DEPOSITS

The Company has not accepted any deposits from public during the year.

DIRECTORS` RESPONSIBILITY STATEMENT

As required in terms of Section 217 (2AA) of the Companies Act, 1956, your Directors wish to state as under -

a. That in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

b. That the Directors have selected such Accounting Policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that year;

c. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. That the Directors have prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENT

Your Directors wish to acknowledge the co-operation, understanding and support extended by the Group Companies, Regulatory bodies, Shareholders and Bankers.

By Authority of the Board

August 20, 2010 Dr. Vijay Mallya

Bangalore Chairman

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