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Directors Report of United Breweries Ltd.

Mar 31, 2023

Your Company''s Directors are pleased to present this Annual Report on the business performance and operations of the Company along with the audited financial statements of United Breweries Limited (''UBL'' or ''your Company'' or ''the Company'') for the financial year ended March 31, 2023 (''the year under review'', ''the year'' or ''FY23'').

Management Summary

In FY23 our business saw a strong recovery post-Covid, and we are delighted to present the following highlights:

â¢ Your Company reached all-time high full year volumes signaling continued category growth in India. Our flagship brand Kingfisher connected strongly with consumers after 2 years of Covid with an aspirational & iconic campaign ''Spread the Cheer'' to bring positivity and cheer in consumers life. Kingfisher Ultra spearheaded the premiumisation agenda for the Kingfisher brand through its domestic premium mild, strong and wheat beer propositions, expanding its footprint and growing its brand equity and awareness with its consumers.

â¢ From September 2022 onwards, your Company launched Fleineken Silver in the India market. Fleineken Silver is a sessionable, easy-to-drink premium lager that fits well in social occasions and appeals to the new generation of beer drinkers in India. The innovation was supported with the ''Unexpectedly Smooth'' campaign and has successfully been introduced through disruptive launch events in Bangalore, Mumbai, and Goa.

â¢ With sustainability at the heart of our business, your Company has launched its refreshed Sustainability strategy -''Brew a Better India'' (BaBI) aligning it to FIEINEKEN''s strategy of ''Brew a Better World'' (BaBW). Our Sustainability report annexed to this report, will give a comprehensive overview of this strategy, our performance, and the strides we have made in driving a positive change in this year. Your Company has also introduced long-term incentive targets linked to sustainability progress for all our leaders.

Below you can find other highlights for the period:

â¢ Volume growth of 31% with strong growth across most markets cycling Covid lockdowns. The Premium segment grew close to 60%.

â¢ Net sales grew 28% with volume growth further supported by around 6% pricing though offset by negative state-mix effects.

â¢ Gross Margin declined close to 700 bps driven by inflationary pressure on raw and packaging materials & EBIT declined 11% or around 260 bps as fixed cost leverage is partially mitigating the negative gross margin development.

â¢ The change in the route to market operating models in the states of Tamil Nadu and Andhra Pradesh has seen volume decline which triggered the need for recording an impairment provision of Rs. 33 Crores. Subsequent to the financial year end close, Tamil Nadu has seen volume recovery.

â¢ Capex investment of Rs.156 Crore in breweries and commercial assets to meet volume growth.

â¢ The Board proposes a dividend of Rs. 7.50 per Equity Share, representing circa 65% pay out of profit after tax.

Our future depends on how we shoulder our present responsibilities and your Company, a responsible corporate citizen, aims to build an organisation that not just delivers value to shareholders but also works together to brew a better world with responsibility and sustainability at the heart of its agenda. Our glide path on freshwater reduction started in the year 2006 with 7.4 hl/hl and for this year we were at 3.4 hl/hl which we will drop down to our target of 2.6 hl/hl for water stressed area and 2.9 hl/hl for other region by 2030. We are gradually moving to renewable energy sources to support our carbon footprint reduction in addition to recycling our packaging materials. Renewable energy usage for the year has reached 82.4% of our total energy consumption.

We laid strong foundations for a modern Digital & Technology (D&T) strategy. Your Company created a future-fit D&T organisation with a clear ambition of being The Best-Connected Brewer. The foundational capabilities laid over the past year would help accelerate our Big Bets creating value through Growth, Efficiency, Resilience & Compliance.

Your Company will accelerate focus on robust innovations to solidify its market leadership and will further strive for appropriate price increase approvals in combination with other revenue management initiatives. Overall, your Company continues to remain optimistic on the long-term growth potential of the industry, driven by increasing disposable income, favorable demographics and premiumisation. Together with HEINEKEN we are well poised to shape the future of the Indian beer market.

UBL & HEINEKEN: ACCELERATING TOGETHER!

FINANCIAL SUMMARY
Financial performance for the year ended March 31, 2023 is below:
	(Amount in Rupees million)
STANDALONE FINANCIAL RESULTS	Year ended March 31
STANDALONE FINANCIAL RESULTS	2023	2022
Gross Turnover	166,429	131,174
Net Turnover	74,917	58,319
Other Income	493	297
EBITDA	6,635	7,246
Exceptional Items	331	â
Depreciation and amortization	(2,103)	(2,169)
EBIT	4,201	5,077
Interest	(46)	(148)
Profit before Taxation	4,155	4,929
Provision for Taxation	(1,120)	(1,279)
Profit after Tax available for appropriation	3,035	3,650
Appropriations:
Dividend on Equity Shares (including taxes thereon)	(2,776)	(132)
Transfer to the General Reserve	â	â
Other Comprehensive Income/(Loss)	34	6
Balance carried to the Balance Sheet	293	3,524

The financial statements for the year ended March 31, 2023 have been prepared under Indian Accounting Standards ("Ind AS") pursuant to notification by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015, as amended.

The Company generated strong Net turnover growth vs last year of 28%. However, margins were heavily impacted by increase in prices of raw and packing material. Despite the strong sales volumes, profits declined due to high prices of input materials and an impairment recorded in Q3. The Gross turnover for FY23 stood at Rs.166,429 million which grew by 27%. Your Company achieved a Net turnover of Rs. 74,917 million during FY23 as against Rs. 58,319 million during FY22. Interest cost was contained with effective working capital management. EBITDA for the year under review stood at Rs. 6,635 million as compared to Rs. 7,246 million in the previous year, declined by 8% over the previous year.

Profit before taxation for the year stood at Rs. 4,155 million. Profit after taxation stood at Rs. 3,035 million. Working capital increased due to higher inventories, particularly barley and receivables from higher revenue growth, however, overall, the working capital turnover ratio improved. As of March 31, 2023, the company continues to show a healthy net debt position.

_DIVIDEND_

We take pleasure in proposing a dividend of Rs. 7.50 per Equity Share of Re.1/- each for the year ended March 31, 2023. The dividend declared for the previous year was Rs. 10.50/- per Equity Share of Re.1/- each. The total dividend is Rs. 1,983 million, which amounts to about 65% of the Profit after Tax.

_RESERVES_

The Company does not propose to transfer any amount to General Reserve.

_CAPITAL_

The Authorized Share Capital of the Company stands at Rs. 9,990 million, comprising Equity Share Capital of Rs. 4,130 million and Preference Share Capital of Rs. 5,860 million. The Issued, Subscribed and Paid-up Equity Share Capital of the Company as on March 31, 2023 remains unchanged at Rs. 264.4 million comprising 26,44,05,149 Equity Shares of Re.1/- each.

_MANAGEMENT DISCUSSION AND ANALYSIS_

Industry Overview

Beer is one of the world''s oldest beverage, possibly dating back to the 6^th millennium BC. It''s a drink which has brought people together for centuries and is immensely popular across the world. In India too, it is one of the key alcoholic beverages of choice. This in a situation where, unlike other emerging economies, the beer industry is highly regulated with high taxation.

Beer comprises around 10% of total alcohol consumed in India* Compared to the global average of around 30 liters of beer consumption per capita (PCC), the PCC in India still hovers at only around 2 liters. However, the scope for growth in India continues to remain positive driven by increasing disposable income and favorable demographics, amongst others.

Beer in India can be categorized into Strong and Mild Beers. Also, like many other categories in India, with rising disposable income and aspiration there is a strong trend towards premiumisation. Premium beer is expected to grow at a faster pace than the overall category.*

Overall, the beer category continues to be in a strong place and your Company with its powerful brands and market leading position is well poised to not only take advantage of the opportunity but also to shape the overall category.

Sales and Marketing

In 2022, our business saw a strong recovery post-Covid, and we supported our mainstream and premium brand portfolio with a wide range of exciting brand communication and activation platforms, as well as bringing new innovations to Indian consumers.

Our flagship brand Kingfisher connected strongly with consumers after 2 years of Covid with an aspirational and iconic campaign ''Spread the Cheer'' to bring positivity and cheer in consumer lives. The brand roped in 2 of the most iconic youth stars - Varun Dhawan and Rashmika Mandanna. The brand effectively utilised youth centric platforms (Insta, Moj, Takatak) and engaged with young consumers in a meaningful way through a ''hookstep challenge''.

In 2022, our association with IPL continued with 3 of biggest teams Royal Challengers Bangalore, Mumbai Indians and Lucknow Super Giants, where we extended our ''Spread the Cheer'' campaign with India''s most loved cricketers. The IPL integrated communication helped drive positive consumer connections and improve brand health metrics. In the minds of our consumers, Kingfisher remained one of the top recalled brands with respect to the IPL.

Kingfisher expanded its new packaging throughout the country. The new contemporary look which was launched with a brand-new campaign ''Good Times Never Looked So Good'' garnered an encouraging response from our trade partners and consumers.

Kingfisher partnered with India''s largest gaming platform to launch its new initiative to drive connect with GenZs by tapping into their passion towards gaming. Kingfisher India Premiership helped the brand engage youth in a more contemporary way.

From September 2022 onwards, UBL launched Fleineken Silver in the India market. Fleineken Silver is a sessionable, easy-to-drink premium lager that fits well in social occasions and appeals to the new generation of beer drinkers in India. The innovation was supported with the ''Unexpectedly Smooth'' campaign and has successfully been introduced through disruptive launch events in Bangalore, Mumbai, and Goa, featuring well-known international music artists, AR & VR gaming experiences, and innovative technology including a full projection mapping at the iconic UB Tower in Bangalore. The launch campaign included the disappearance and reappearance of celebrities at ''The Smoothest Mega Party'' and received national news coverage.

In the on and off trade channels in the launch regions, Fleineken Silver was introduced with a high-quality in-store visibility program and consumer trial activations at scale. The unique launch activities successfully introduced Fleineken Silver to its target audience, generating trial and awareness among younger premium beer consumers.

Kingfisher Ultra spearheaded the premiumisation agenda for the Kingfisher brand through its domestic premium mild, strong and wheat beer propositions, expanding its footprint and growing its brand equity and awareness with its consumers.

The brand expanded its draught portfolio by launching Ultra MAX Draught in Punjab and Chandigarh to cater to the growing premium strong beer segment.

Ultra Witbier, the brand''s craft-styled beer, expanded its presence into key market Telangana with a full-fledged launch supported with on-ground activations at retail and premium institutions. In addition, the Ultra Witbier Draught innovation in Karnataka was a notable achievement, achieving promising consumer acceptance.

Kingfisher Ultra ran digital media campaigns during peak consumption periods, and being anchored in the Celebration occasion, the brand activated festive campaigns during Diwali, end-of-year celebrations, and Holi. Ultra partnered with several top influencers in the lifestyle space and amplified these campaigns building stronger brand affinity with its consumers. Over the year, the brand hosted 30 on-ground events across the country including festivals like Indie-Gaga, Alan Walker World Tour, Satellite Beachside music festival, and the Zomaland food and music festival, which saw a footfall of more than 1 lac in total.

Beyond this, Ultra launched its own Music IP ''Ultra Soulflyp'', an immersive celebration of music tapping into the growing alternative music space. Following the launch in four metro cities with top international and domestic artists, Ultra Soulflyp is set to further expand its experiential music fest across the country with 50 events lined up.

Lastly, Ultra Witbier was activated through the Welcome the Summer campaign to build brand awareness and relevance to seasonal occasions. The campaign was supported by digital media and scaled on-ground with impactful visibility and special consumer promotions. Experiential brunches were activated at premium institutions to increase brand trial.

Amstel beer''s ''Taste Amsterdam in Every Sip'' campaign utilised digital and social media to drive awareness and sampling in key markets. The ''Amstel Army'' sales competition generated over 20,000 entries resulting in increased sales, visibility, and brand uplift.

Supply Chain

Manufacturing expenses for FY 23 amounted to Rs. 42,743 million, representing 57% of net sales, a substantial increase as against Rs. 29,327 million, in the previous financial year, which constituted 50% of net sales. The year volume was planned cautiously, informed by the immediate past Covid trends. Your company was, however, confronted with a

ENABLING A DIVERSE WORKFORCE

UBL strives to strengthen its diversity and inclusivity by creating a fair and respectful workplace for all employees. As an organization, we have been focusing on building more inclusive teams, developing infrastructure, and creating enabling policies that support our endeavour of brewing a better world.

Our focus is on crafting policies and practices that give precedence to the well-being of our employees, their work, and their families, and it also aligns with our fundamental value of ''care''. We recognise that a strong support system at home can positively impact an employee''s performance and overall well-being. In this regard, we have the paternity leave policy which allows employees the time they need to bond with their new child and support their partner during this important phase in life. We understand that menstruation can be a challenging and often painful experience, which can affect not only physical health but also mental and emotional well-being. By introducing menstrual leave, we aim to provide a supportive and inclusive workplace environment that acknowledges and addresses the unique needs of our women employees.

UBL strives to have a diverse and inclusive workplace that helps us foster a positive culture that promotes creativity, innovation, and collaboration. The Inclusion and Diversity Council ensures a gender-balanced workplace through Queenfisher spotlighting, curated leadership programs, and a safe working environment. Our hiring practices are fair and compliant. We train our leaders on Inclusion, reducing unconscious bias, and on approach to acquire talent from a diverse pool purely based on aptitude and attitude. The unconscious bias workshops have helped employees mitigate their biases in hiring, promotion decisions, team dynamics, and for creating a more diverse and equitable organizational culture. We have enabled the ''Up! Surge'' program to inspire, enable, and support women leaders to propel themselves into the C-Suite.

At UBL, we are committed to providing our employees with the tools and resources needed to succeed in their roles and develop their skills for long-term career growth. The learning programs are tailored to the individual needs of employees so that they can focus on the specific skills and knowledge relevant to their role and progress at their own pace.

Our online learning channel UBrew - Brewing a Better You provides employees with all the resources they need for brewing a better version of themselves. This platform includes functional learning resources, Linkedln Learning, mandatory trainings, replays

of past training sessions and a Leaderboard with the week''s Super Learners. Employees are provided with the flexibility to access resources anytime and anywhere and embark on a continuous learning journey.

UBL believes that passionate, talented, remarkable people on our teams can and will continue to elevate our organization. We nurture young talent and groom them as future leaders for developing and engaging them. We approach the best minds on college campuses and provide them with a learning opportunity through a comprehensive development programme for Graduate Engineer Trainees (GETs) and Brewer Trainees (BTs), called Brewing Young Minds. This 9-month learning journey aims to provide the perfect blend of theoretical knowledge and practical experience on the shop floor to develop young leaders. The programme

ensures an overall understanding of each function in manufacturing and overlaps to deliver value to the customer and contribute to the organizational goals at the same time. 20 Graduate Engineer Trainees and Brewer Trainees who joined us in 2022 were the first group of BYM programme members.

People Managers play a pivotal role in how our organization hires, develops, supports, and grows our people. To equip all managers with capabilities needed for essaying these responsibilities well, we have co-created a dedicated development programme for managers. Brewing Great Managers. The programme enables each people manager to align the efforts of their teams, develop and encourage them to give their personal best, getting them to work cohesively as a well-knit high performing team. This programme is a

5-month journey including a 1-day in-person workshop, followed by online learning and action planning, and pre- and post-program 270-degree feedback surveys. We have ~240 people managers participating in the programme.

A culture of learning can foster a more innovative and adaptable workforce, leading to improved organizational performance. Our leaders, by investing in their own learning, set an example for the employees for engaging in continuous learning and development. UBL provides opportunities for leaders to be part of the global programs at HEINEKEN such as HIMAC, WIN, and MTFT and facilitates their learning visits to other Operating Companies as part of these programs. The learning journeys are built around acceleration projects and business cases designed to allow for deep reflection on leadership challenges. These programmes engage the leaders in a virtual discovery expedition to get a fresh, disruptive, outside-in perspective on different organizations and business models.

We had the successful completion of the 1^st batch of capability building training for our colleagues in operator roles at one of our breweries. The programme was spread across six months with a purpose of improving the technical skills of our operators that included permanent workmen. The programme witnessed great participation, engagement, and commitment that serves as a model for the subsequent batches.

LEVERAGING TECHNOLOGY TO IMPROVE PEOPLE PROCESSES: INTEGRATION OF MYHR INTO UBL SYSTEMS

With the rapidly evolving digital landscape, UBL ensures that our workforce is equipped with the necessary skills and resources. UBL has implemented MyHR as a global solution to connect all employees and permanent workmen covering the complete employee lifecycle on a single digital platform.

MyHR, with its intuitive self-service access, delivers a digital employee experience for our people and serves as a single source of truth for global people data for our business. The platform has also enabled a chatbot for employees and line managers to assist them with to-do items and actions.

Using MyEIR, the users can manage their personal details, explore e-learning, manage their goals and performance, request time off, and apply for opportunities internally and in other Operating Companies. The line managers have comprehensive information on the employment information and the talent profile for their team members enabling them to have a meaningful performance and developmental conversation.

MyEIR roll out was a huge success with an overall adoption rate of 91% (above 98% for the white collared employees). This could be made possible through reaching out to the entire workforce by setting up kiosks at all locations and comprehensive awareness sessions in local languages.

SPEAK-UP: GRIEVANCES AND FEEDBACK MECHANISM

UBL is committed to conducting business with integrity and fairness, respecting the law of the land, and upholding our values at the same time. We value the help of employees who identify and speak up about potential concerns that need to be addressed. The Speak Up policy helps raise concerns about suspected misconduct within the company,

which is any violation of our Code of Business Conduct or the policies under which UBL operates. The organization has appointed trusted representatives as points of contact to raise concerns about suspected misconduct and ensure

that the confidentiality of conversations is maintained. We also capture employee feedback through various interventions including CEO Connect, Townhalls, and one-on-one employee connects.

We champion a culture of belonging where all perspectives are heard, valued, and acted upon. The 2022 climate survey helped us capture valuable insight into the overall morale of the workforce and identifying opportunities for enhancing productivity, motivation, and retention of the employees at UBL.

The survey results revealed that our employees feel strongly connected to one another, and they are confident in their ability to work together effectively. This is a testament to our company''s commitment to fostering a culture of collaboration, where everyone''s input is valued, and diverse perspectives are welcomed.

Furthermore, the survey showed that our employees are highly conscious of safety risks and are dedicated to promoting a safe work environment. The results also indicated that our employees have a clear understanding of our company''s objectives and are aligned with our purpose and values. This is a critical factor in our company''s success, as it ensures that everyone is working towards the same goals and is committed to achieving them.

INDUSTRIAL RELATIONS

Industrial relations continue to be harmonious and peaceful at all locations of the company. The organization has adopted a business imperatives-driven approach with a focus on upskilling and engaging the workmen to achieve a collaborative and motivated workforce. To keep the workmen motivated and improve efficiency in work, we have introduced the productivity-linked incentive schemes. We recognise the workmen as business partners rather than unionized employees and hence timely communications are shared with them on the performance of the company.

EMPLOYEE HEALTH AND SAFETY

Employees and workers are the backbone of our organisation, and their health, happiness, and safety at work are our utmost priorities. We stand by our motto of, "Safety first, Safety always."

Our primary aim is to enhance safety measures by concentrating on the aspects that we consider pose a high risk to safety because of the nature of the processes. These aspects include occupational safety, process safety, and in-plant traffic safety. We are committed to reducing and controlling risks through regular risk assessments. We have a robust system of controls in place for high-risk activities and have observed their effectiveness. Furthermore, we have implemented an operational risk reduction program to ensure the longevity of these controls.

We are persistent in performing a Process Hazard Analysis (PHA) as part of process risk reduction for new or expanded projects exclusively in the brew houses, package halls, and utility systems. The corporate safety team ensures conducting a prestart safety review (PSSR) before commissioning and handing over the system to the operation team in the breweries.

We made a significant improvement in managing the traffic system within the facilities. We performed a hazard identification (HAZID) analysis on the traffic flow and emergency evacuation procedures to facilitate the movement of the emergency response team in the event of an emergency at the breweries. Using the insights gained from

the study, we have begun implementing measures such as separating pedestrians, implementing dock-level parking, and reducing risks associated with the operation of powered truck trolleys (forklifts). These measures have reduced high-risk situations by 50%. Moving forward, we will continue to collaborate with our technological partner to develop advanced and reliable systems to further reduce risks.

In 2023, we introduced a new measure to report on our personal safety performance for reporting incidents across the sales and marketing functions. To benchmark our safety performance, we have

modified our two KPIs (accident frequency rate and accident severity rate) in line with OSHA''s (Occupational Safety and Health Administration) performance. A new term, "Hi-potential Near-miss," was recently introduced to draw attention to potentially life-altering injuries and to guide leaders on proper response protocols. This updated safety approach is built upon a consistent emphasis on human performance, which refers to the interaction between people, culture, equipment, work systems, and processes.

UBL aims to prevent incidents by maintaining safety barriers and providing training, including the introduction of the Life Saving Commitment (LSC). The LSC sets safety rules, acknowledging that mistakes happen, but we work on controls to fail safely and enhance safeguards, reducing the chance of serious injuries.

The organisation values people as key to solving problems. We use an open platform called Safety Committee to share lessons and enhance capabilities. Our 5Rs (Regularly, Recognize, Reward, Rarely, and Reprimand) of safety behavior encourage open communication.

We work with a large portfolio of contractors and suppliers and help them understand our safety requirements. Together, we seek to improve safety performance by building skills and expertise and creating an inclusive and safe work environment. We continue to strengthen the safety culture and leadership among our employees at all levels, including the contractor team. Multiple initiatives are taken across units to keep our employees and workers safe, happy, and healthy. These practices also cover the families of our workforce to ensure sustenance beyond the workplace.

UBL has 2,737 employees on its rolls across all locations as on March 31, 2023.

Total employee benefit expenses for the year stood at Rs. 5,914 million, as compared to Rs. 5,194 million in the previous year. This constituted 3.54% of gross revenue from operations. Your Directors place on record their sincere appreciation to all employees for their contribution towards the continued success of the organization.

Significant changes in Key Financial Ratios

Following are the Key Financial Ratios, where variance of more than 25% is noticed as compared to the previous financial year, along with detailed explanations therefor, including.

Debt service coverage ratio: Improvement in Debt service coverage ratio from 2.21 to 50.26 because of no debts other than lease liabilities and thereby no interest pay out.

Debtors Turnover: Improvement in Debtors Turnover ratio from 9.90 to 12.51 due to increase in sales as compared to previous year and Improvement in average collection period.

Net Profit Ratio: Net profit ratio decreased from 2.78% in 2021-2022 to 1.82% in FY23, primarily on account of increase in prices of Barley and bottles.

Working Capital Turnover Ratio: Improvement in working capital turnover ratio from 9.36 to 11.83 due to optimum utilization of funds.

CORPORATE SOCIAL RESPONSIBILITY & BUSINESS RESPONSIBILITY, AND _SUSTAINABILITY REPORT_

UBL strives to brew a better India and firmly believes in growing the business in a sustainable and responsible way that benefits both people and planet. At UBL, we are determined to meet the interests of all our stakeholders. Our key priorities are improving the lives of the community and reducing the impact of our operations on the environment we draw our resources from.

Thus, over the last year, we consistently continued to focus our core Corporate Social Responsibility (CSR) programs on water conservation, safe drinking water, women empowerment, community development initiatives, and responsible consumption of alcohol. Through partnerships with credible implementation partners, we aim to build a more resilient, equitable and sustainable future for our co-communities.

UBL is committed to water stewardship and makes conscious efforts to conserve and replenish water. Last year, we spent more than 70% of our CSR funds on water initiatives through ten large water conservation projects and one safe drinking water project. In addition to implementing large rainwater harvesting and watershed management projects in the vicinity of our breweries for water conservation, we also make extensive efforts to generate awareness in the communities on adopting rainwater harvesting practices, promoting climate resilient practices for agriculture, and incorporating necessary infrastructure to enable access for clean drinking water. We undertook these projects in Rajasthan, Punjab, Haryana, Karnataka, Telangana, Tamil Nadu, and Odisha.

Under our Community Development focus area, we initiated the second phase of our project to develop an Urban Dense Forest in the Waluj MIDC area in Aurangabad, Maharashtra. The first phase was initiated in FY21 and got completed last year. Under this phase, we planted 75,000 trees of 75 native species in an area of 5 acres and improved the biodiversity in this region using the Miyawaki technique of afforestation. Through phase two we are trying to replicate our efforts by planting 50,000 trees of 80 native species in an area of 4.94 acres. During the year, we also carried out relief and rehabilitation program near our Odisha brewery to support our co-communities during severe floods. We distributed ration and hygiene kits impacting 2,000 households.

UBL is also conscious of creating a more equal world, and this can only be achieved when women are given equal opportunities. During the year, under project Pragati - our scholarship program for girl students; we awarded scholarships to 516 meritorious female students across India to support their dreams and aspirations of a promising career. The awardees ranged from students of 9^th grade to students pursuing under graduation. Under women empowerment we also implemented project Tarang, where we worked with 30 women farmers from Aurangabad district and trained them on agroforestry. Through this initiative we could encourage and have enabled a secondary source of livelihood for these women and have also improved the biodiversity in this area.

The Business Responsibility and Sustainability Report on the framework of the National Guidelines on Responsible Business Conduct (NGRBC) which are based on ESG parameters, compelling organizations to holistically engage with stakeholders and go beyond regulatory compliances in terms of business measures and their reporting in the format prescribed under the Securities and Exchange Board of India ("SEBI") (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations") is annexed as Annexure - A. Annual Report on CSR activities in terms of the Companies Act, 2013 ("the Act") and the Companies (Corporate Social Responsibility) Rules, 2014, is annexed as Annexure - B.

Environment and Sustainability

Weaving sustainability and responsibility into the fabric of our balanced growth strategy, we have aligned our Sustainability roadmap to HEINEKEN''s sustainability strategy - Brew a Better World (BaBW), through which we have raised the bar across three pillars (Environmental, Social and Responsible), and nine ambition areas. We are building execution and operational momentum through various initiatives to bring our ambitions to life and Brew a Better India.

The BaBI strategy has had a profound impact on our business and the foundation on which we deliver the Sustainable Development Goals (SDGs). We continue to steer our focus on reducing carbon emissions, leading water stewardship initiatives, building circularity and enhancing our transparent reporting. From addressing climate change to water scarcity and creating a more equal and fair society, we are determined to play a part in addressing these challenges.

As part of the BaBI strategy, one of our most important ambitions is to reach Net Zero for all our production sites by 2030 and in our entire value chain by 2040. UBL has been consistently marching ahead in its journey of maximizing the usage of renewable energy. This journey demonstrates the organizational vision to lead the initiative by being proactive and contributing to environment protection.

For FY23, the Company sourced 33.3% of its electrical energy from renewable source. For the year ahead strategies have been put in place to make a significant leap forward. On the renewable sources of fuel for thermal energy UBL sourced 97% of its thermal energy from renewable sources. With these steps we have been able to reduce carbon emissions by 31,895 metric tons in production over the previous FY.

We strive to reduce freshwater consumption by consistently working on water efficiency projects and maximising reuse and recycle. Our glide path on reduction of freshwater use started in the year 2006 with 7.42 hl/hl and while in FY23 we are already at 3.4 hl/hl. Overall we have set our ambition to reduce our freshwater intake to 2.6 hl/hl in breweries in water stressed areas and 2.9 hl/hl in the remaining breweries by 2030. We will combine our drive for water efficiency with water recharge projects in water stressed areas to achieve complete water balancing in areas around our breweries.

On circularity, our sustainable waste management program aims to reuse and recycle to the maximum possible extent and balance solid waste is disposed of in landfill or through incineration. For the financial year, we have achieved 94.3% landfill free, and we aim to be 100% landfill free by 2025. We are persistent in recovering the used bottles from the market and keep the up usage of recycled bottles which is currently at ~60%. We continue to send all our by-products - spent grain and surplus drier yeast, for animal feed & poultry stock. Our packaging team is working tirelessly for sustainable packaging like carton box made from kraft paper, 80% recycle paper, improved glass bottle to withstand harsh environment and fully recyclable aluminium cans. As a socially responsible organization, we collectively ensure equivalent quantity of plastic used as part of our packaging materials are recycled through EPR (Extended Producer Responsibilities) and whatever plastics entered in our premises along with the raw materials are collected in-house and send to authorized recyclers.

While our ambitions inspire us, our actions define us. To raise the bar here too, we continuously evaluate and improve our ways of working, governance, and transparent reporting. We have refreshed our areas of focus for creating value - we call it our ''Green Diamond'' - which now reflects sustainability and responsibility next to organic growth, profit, and capital efficiency.

Awards

1) Legal and Compliance:

â¢ Our Legal Team was awarded "Alco-Bev Legal Team of the Year" at the 12^th Annual Legal Era Indian Legal Awards 2022-2023.

â¢ Ms. Shelly Kohli, Director Legal & Compliance, was awarded "Compliance Lawyer of the Year" at the 12^th Annual Legal Era Indian Legal Awards 2022-2023.

2) Confederation of Indian Industry (CII) Environment, Health and Safety (EHS) Excellence Awards:

â¢ Our brewery at Ellora, Aurangabad were awarded Jury Champion Award and Platinum Award (Muda-Waste Kaizen Category) at 13^th CII National 3M Competition and Champion Trophy for 2022.

â¢ Our brewery at Nelamangala, Karnataka was awarded Gold Award (Muri-Overburden Kaizen Category) at 13^th CII National 3M Competition.

â¢ Our brewery at Empee, Chennai was awarded Gold Award (Innovation and Renovation Kaizen Category) at 44^th Cll National Kaizen Competition.

â¢ Our brewery at Balaji, Chennai was awarded Silver Award (Renovation Kaizen Category) at 44^th Cll National Kaizen Competition.

3) Corporate Social Responsibility:

â¢ UBL received the Best CSR Impact Award organized by UBS Forums in recognition of Haritha Samruddhi Project implemented in Puducherry Gram Panchayat, Palakkad at Kerala.

â¢ UBL was honored with the Leadership Award 2022 organized by India CSR in recognition of Water Conservation Project implemented in four villages of Thiruvallur at TamilNadu.

â¢ UBL received a Special Commendation in the Agriculture and Rural Development Category at the CSR Journal Excellences Awards 2022 in recognition of Haritha Samruddhi Project implemented in Puducherry Gram Panchayat, Palakkad at Kerala.

_OPPORTUNITIES, THREATS, RISKS & CONCERNS_

India is soon expected to surpass China as the most populous country in the world with over 1.4 billion people, i.e., more than a sixth of the world''s population. Over 50% of its population is below the age of 25 and more than 65% below the age of 35, as per statistics from the United Nations, Department of Economic and Social Affairs. The sheer size of India''s population and the resultant consumer base provides a massive opportunity for growth.

Rapid urbanization, rising incomes, change in societal perspective, the launch of new brands and technological advancements are a few factors that will propel market growth. Rise in celebratory occasions, substantial population entering the legal drinking age, higher domestic as well as international tourism and State''s focus on keeping the Excise revenues buoyant would help in growing the market in a sustainable manner. The introduction of online order and ease of doorstep delivery in certain states could further drive the market. Should more State Governments proactively open and regulate the online sale of alcohol/home delivery, it would be favorable for the beer industry in the long term. India has all the necessary infrastructure required to further develop online sale of beer.

The consumption of alcoholic beverages is becoming more acceptable to consumers who are developing an interest for beer, which is a low alcoholic beverage and emerging as a social beverage in metros and tier two cities. Beer is gradually becoming a perfect after-work companion for corporate India as well.

Compared to various international markets including markets in Asia, beer penetration is very low in India. Beer accounts for a very low share of consumption compared to other alcohol beverage products and along with the current cultural evolution, higher disposable income and demographics, there is a great long-term opportunity for your Company to shape the beer industry in India. Focus on the availability of new and innovative products in line with consumer trends can further stimulate consumption and contribute to the growth of the Beer market.

Threats, Risks and Concerns

Competition is getting stronger through the introduction of new brands in various segments like craft and premium beer, and whilst this is good for the beer category, your Company is well poised to compete with its innovative brand offerings, product quality, distribution network and brand value. Together with HEINEKEN and its international brand portfolio, your Company is well positioned to compete and win with strong brand equity. Your Company continues to grow in the premium segment with an impressive 58% growth. New products like Heineken Silver have been launched in key markets like Karnataka, Maharashtra & Goa and have been very well accepted by the discerning customer.

A variety of taxes and levies are imposed on beer during and after production, transport, and sale by each state. Pricing regulations, inadequate market infrastructure and restrictions as well as additional taxes on inter-state movement of beer continue to pose a challenge to the industry. The regulatory pressure and constant changes in the political climate

in the country, is also present. Your Company is proactively engaged with various state bodies in order to work together to ensure an optimal business climate.

Inflationary pressure on the cost base is expected to continue in the near term, and the ability to increase prices to compensate for inflation is challenging in the regulated environment. Your Company is seeking appropriate action to further mitigate the impact, evident from the strategic price revisions received in key States through active engagement with the Government along with strategic saving initiatives.

Changes in the availability, quality or price of raw and packaging materials, commodities, transportation, or monopolistic supply situations could result in shortage of sources and/or increased costs. Barley being a key ingredient is subject to market forces volatility. Your Company is exploring the option of collaborating farming. New Glass availability is constrained in India. Your Company is developing a strategic action plan to address long term supply risk of bottles. Discussion with incumbent & alternate suppliers is being pursued.

The effects of social and economic cataclysms in the market often make it difficult to predict demand cycles. To overcome these challenges, your company continue to remain cost conscious at all levels of operations, and work with a high level of agility and efficiency. Your company continues to invest in and expand the brand portfolio while continuing to be cost-efficient and quality focused. Your company continues to upgrade and adopt modern technologies and solutions to be able to respond with agility to current market demands, without losing focus on quality.

To cater to new consumers, capture market opportunities, compete with new launches by competitors and in continuous endeavor to offer new product ranges and cater to new occasions, your Company has expanded its "Kingfisher Ultra Draft" offering in the lighthouse market of Maharashtra and has received an encouraging response from consumers. Your Company plans to launch this offering in other relevant Northern markets in a phased manner.

The labour market in India is becoming more competitive. Your Company has taken various initiatives to be able to continue to attract the right talent, build a diverse and inclusive culture including the top management positions and continue to create an engaging place to work.

Non-availability of water, rationing of its supply and restrictions on withdrawal of ground water also pose major threat. Your company has built infrastructure which helps in reduction of water consumption in breweries as a sustainability initiative. Your Company has pro-actively managed sustainability under "3R" policy to reduce, recycle and recharge as well as look at opportunities for water conservation through Rainwater Harvesting to achieve a positive or at least neutral water balance. Your Company''s focus on sustainability is poised to increase many folds, which would help in addressing Environmental, Social, and responsible concerns. Adoption of HEINEKEN Evergreen strategy would help meet short-term challenges and will ensure the long-term sustainability of our business to create lasting value for stakeholders.

Your Company also focuses on securing its IT operations and addresses associated risks of cyber security. This includes risks from IT security lapses, malware and ransomware attacks, disruptions in key Enterprise Processes and hacking, which could lead to disruptions in business operations and loss and/or leakage of confidential data. Your company now has a focused approach towards IT (Data & Technology) and has adopted Best-In-Class technology solutions to become the best-connected Brewer.

Prospects

The growth outlook for the Indian beer industry is optimistic and promising. The Indian Beer industry''s growth rate in 2022 has been significantly high compared to the global beer industry average, growth rate, which can be attributed to several factors such as favorable climatic conditions, preference for low alcohol beverages and a younger population, which bode well for its future. Moreover, with the projected GDP growth rate of over 6%, an increase in disposable income, a growing middle and upper class, and shifts in consumer behavior, the Indian beer market is expected to continue expanding at a healthy pace. The instances of liberalization in retail and distribution further bolster the industry''s growth prospects. Being a heavily underpenetrated market, the outlook for the Indian beer industry appears to be bright and full of potential.

Your Company''s established brand equity provides a significant competitive advantage over other domestic and international brands. Your Company has built its position as the undisputed market leader in India with a strong network of breweries across the country and a fantastic portfolio with presence in rural as well as urban markets led by its iconic Kingfisher brand family, complemented by a strong HEINEKEN international brand portfolio. With such a competitive advantage, the company is poised for significant growth going forward.

The competitive environment is expected to remain intense, and your Company shall continue to focus on robust innovations to solidify its market leadership. Though a challenging commodity inflation environment will have an impact on costs, your Company shall continually strive for appropriate price increase approvals and achieve high operational efficiencies, and innovative long-term procurement strategies to offset the increase in costs. Augmenting capacities and strategic tie-ups in critical markets will continue to be a priority investment in the future too.

Your Company has a proven track record of managing its business efficiently, with a focus on delivering sustainable growth and strong financial performance. Your Company seeks to drive beer category penetration, drive further premiumization, reinforce the iconicity of Kingfisher while building the overall brand in addition to continued focus on efficiency & compliance, execution of the sustainability agenda, digitalization, and people development to build a highly motivated and skilled workforce.

Through these actions, we are confident that your Company will continue its leadership position, drive growth of the overall market and expand profit margins in the years to come.

Growth in premium retail trade and on-premises outlets in metropolitan cities has increased the range of beers and improved the retail environment. In a few States, the Government has issued additional licenses for the sale of beer which signals good growth prospects for the industry. Innovative introductions also help in penetrating untapped markets and consumer segments and your Company''s new introductions have fared well.

Risk Management

Backed by strong internal control systems, the current Risk Management Framework consists of key elements laying down the roles and responsibilities in relation to risk management covering a range of responsibilities, from strategic to operational. These role definitions, inter alia, provide the foundation for appropriate risk management procedures, their effective implementation across your Company and independent monitoring and reporting.

The Risk Management Committee, constituted by the Board, monitors, and reviews the strategic risk management plans of your Company as a whole and provides necessary directions on the same.

The Corporate Risk Team, through focused interactions with businesses, facilitates the identification and prioritization of strategic and operational risks, development of appropriate mitigation strategies and conducts periodic reviews of the progress on the management of identified risks.

Heightened safety protocols were implemented at all units that resumed operations, with end-to-end solutions from transportation of workmen, screening, regular deep cleaning and sanitisation, innovations to ensure safe distancing and strict adherence to hygiene standards and use of personal protective equipment where required.

The Company also focuses on IT Operational Resilience and management of cyber security risks in an increasingly connected world. The risks include external cyber attacks, security lapses, data privacy breaches which could lead to disruptions in business operations & loss of confidential data. We mitigate this through a ''Secure by culture'' mindset replete with activations to drive user awareness, preventive controls, proactive threat monitoring and periodic business continuity & disaster recovery drills. Complementing this is Security Assurance discipline to drive up the scores against the action standards.

Your Company places high emphasis on regulatory compliance especially in the frequent evolving regulatory set-up and ensures that its operations are compliant line with relevant and applicable laws. Your Company has raised bar

on its regulatory compliance and is committed to maintaining the highest standards of compliance by aligning the performance objectives with regulatory compliance requirements. The Company considers regulatory compliance crucial to build trust among its stakeholders, including investors, customers, employees, and the public at large. The Company has implemented effective controls, systems, policies, and procedures to ensures to identify, assess, and manage compliance risks on an ongoing basis. The Company also imparts regular training and guidance on compliance matters to its employees to ensure that they understand their responsibilities and obligations.

Your Company undertakes a comprehensive review of its compliance obligations periodically and takes effective steps to ensure that it is fully compliant with all relevant laws and regulations.

Through these actions, your Directors are confident that your Company would sustain its leadership position, grow ahead of the market, and realize improved profitability in the years to come.

Internal Control System

Your Company has established a robust system of Internal Controls to ensure that assets are safeguarded, and transactions are appropriately authorized, recorded and reported. With the introduction of Internal Controls over Financial Reporting (ICFR) in the Act, we have made an evaluation of functioning and quality of internal controls and Corporate Governance Policy that guides the conduct of affairs of your Company and clearly delineates the roles, responsibilities, and authorities at each level of its governance structure and key functionaries involved in governance.

The Internal Financial Control framework of your Company is established in accordance with COSO (Committee of Sponsoring Organizations) framework and is commensurate with the size and operations of your Company''s business. In addition to statutory mandate, Internal Audit evaluates and provides assurance of its adequacy and effectiveness through periodic reporting. Controls in place are routinely evaluated and audited by the Internal and Statutory Auditors and gaps are identified by the Auditors through a detailed testing exercise. The process of internal control ensures orderly and efficient conduct of business, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. Financial Statements are prepared based on Significant Accounting Policies that are carefully selected by management. The Accounting Policies are reviewed and updated from time to time.

These, in turn are supported by a set of Standard Operating Procedures (SOPs) that have been established for the business. Internal Control evaluates adequacy of segregation of duties, transparency in authorization of transactions, adequacy of records and documents, accountability & safeguarding of assets and reliability of the management information system. The systems, SOPs and controls are reviewed and audited by Internal Audit periodically for identification of control deficiencies and opportunities, whose findings and recommendations are reviewed by the Audit Committee and tracked through till implementation.

Your Company believes that the overall internal control system is dynamic and reflects the current requirements at all times, thereby ensuring that appropriate procedures and operating and monitoring practices are in place by regular audit and review processes to ensure that such systems are reinforced on an ongoing basis.

_OTHER INFORMATION_

Cash Flow Statement

A Cash Flow Statement for the year ended March 31, 2023 is appended.

Particulars of Loans, Guarantees or Investments

which provisions of Section 185 of the Act apply and has not given loans/guarantees/provided security to which provisions of Section 186 of the Act apply.

Depository System

The trading in the Equity Shares of the Company is under compulsory dematerialization mode. The Company has entered into an agreement with National Securities Depository Limited and Central Depository Services (India) Limited in accordance with the provisions of the Depositories Act, 1996 and as per the directions issued by the Securities and Exchange Board of India. As the depository system offers numerous advantages. Members are requested to take advantage of the same and avail the facility of dematerialization of the Company''s Shares.

Fixed Deposits

There were no outstanding deposits at the end of the previous financial year. The Company has not invited any deposits during the year.

Material changes and commitments

There have been no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements related and the date of this report.

Subsidiary

During the year, the Board of Directors reviewed the affairs of the subsidiary. In accordance with Section 129(3) of the Act, we have prepared the Consolidated financial statements of the Company, which forms part of this Report. Further, a statement containing the salient features of the financial statements of our subsidiary in the prescribed format AOC-1 is annexed as Annexure - C to the Report. The statement also provides details of the performance and financial position of each of the subsidiary, along with the changes that occurred, during FY23.

In accordance with Section 136 of the Act, the audited financial statements, including the Consolidated financial statements and related information of the Company and audited accounts of its subsidiary, are available on our website, at www.unitedbreweries.com.

Particulars of Employees

In terms of sub-section(1) of Section 136 of the Act, the Company has opted to provide full version of financial statements including consolidated financial statements, auditor''s report and other documents required to be annexed to such financial statements along with the details relating to ratio of the remuneration of each Director and Key Managerial Personnel (KMP) as required under the Act to the median of employees'' remuneration, excluding the remuneration drawn by certain employees over the threshold etc., as required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The details provided by the Company are in compliance with Section 136(1) of the Act and includes salient features of Form AOC-3A which is annexed as Annexure - D to this report.

Also, in terms of second proviso to this Section, the Company shall keep open for inspection for all Members, statement relating to above details at its registered office. Any Member interested in inspection of the documents pertaining to above information or desires a copy thereof may write to the Company Secretary. The above details be treated as part of this Report.

Cautionary Statement

Statements in this Report, particularly those which relate to ''Management Discussion and Analysis'' and ''Opportunities, Threats, Risks and Concerns'', describing the Company''s objectives, projections, estimates and expectations, may constitute ''forward looking statements'' within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied.

Employees Stock Option Scheme

The Company has offered Shares to its eligible employees under HEINEKEN Senior Management Reward Programme.

Related Party Transactions

Details of transactions with related parties as defined in the Act and the Rules framed thereunder, the Listing Regulations and Accounting Standard 18 of the Companies (Accounting Standards) Rules, 2006, have been reported in the Notes to financial statements. Approval of the Audit Committee and the Board of Directors as required under the Listing Regulations has been obtained for such transactions.

The Company has formulated a policy on Materiality of Related Party Transactions and also on dealing with Related Party Transactions which is placed on the website of the Company www.unitedbreweries.com and is available through the webpage: https://www.unitedbreweries.com/pdf/policvandcodes/Policv%20on%20Related%20Partv%20Transactions.pdf.

All transactions entered by the Company during FY23 with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company has not entered into any transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

Whistle Blower Policy

The Company has adopted vigil mechanism which is a channel for receiving and redressing of complaints about any misconduct, actualorsuspectedfraud, actual orpotentialviolationsoftheCompany''scodeofconductandanyotherunethical, unlawful, or improper practices, acts, or activities within the Company. The Company has formulated a Whistle Blower Policy for Employees and Directors and has ensured adequate safeguards against victimization of whistle blowers. The details of establishment of the vigil mechanism are disclosed on the website of the Company and is available through the webpage: https://www.unitedbreweries.com/pdf/policyandcodes/English (US) HEINEKEN Speak Up Policy UB.pdf.

None of the Employees and Directors have been denied access to the Chairman of the Audit Committee. There are no whistle blowing complaints leading to material fraud or which have an impact on the financials of the Company.

Internal Complaints Committee

UBL''s goal has always been to create an open an safe workplace for every employee to feel empowered, irrespective of gender, sexual preference, and other factors, and contribute to the best of their abilities. Towards, this, the Company has constituted an Internal Complaints Committee (ICC) at its Corporate/Registered Office and at all its breweries/Regional Offices to consider and deal with all reported sexual harassment complaints. The constitution of the ICC is as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the committee includes external members from NGOs or with relevant experience. Investigations are conducted, and decision made by the ICC at the respective locations, and the constitution is as prescribed. The details of complaints pertaining to sexual harassment filed, disposed of, and pending during the financial year are provided in the Corporate Governance and Business Responsibility and Sustainability Report of this Report.

Conservation of Energy

The Company is taking continuous steps to conserve energy. Its "Sustainability" initiatives are disclosed separately as part of this Report.

The information on conservation of energy, technology absorption, foreign exchange earnings and outgo, as stipulated under clause (m) of sub-section (3) of Section 134 of the Act read with the Companies (Accounts) Rules, 2014 is set out herewith as Annexure - E to this Report.

Code of Business Conduct and Ethics

The Board of Directors of UBL have adopted a Code of Business Conduct and Ethics in terms of the Listing Regulations which has been posted on the Company''s website:

https://www.unitedbreweries.com/pdf/policyandcodes/Policy on Code of Business Conduct.pdf Code for Prevention of Insider Trading

Your Company has adopted a comprehensive ''Code of Conduct to Regulate, Monitor and Report of Trading by Insiders''

and also a ''Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information'' relating to the Company, under the provisions of the Securities Exchange Board of India (Prohibition of Insider Trading) Regulations, 201 5.

The Board of Directors have approved and adopted the ''Code of Conduct to Regulate, Monitor and Report of Trading by Insiders'' and a ''Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information''.

Directors

The Board of Directors currently comprises of eight Directors with a balanced combination of Executive, Non-Executive, and Independent Directors.

Mr. Christiaan AJ Van Steenbergen, a Non-Executive Director retires by rotation at this Annual General Meeting (AGM), and being eligible, has offered himself for re-appointment. Resolution for re-appointment of Mr. Christiaan A J Van Steenbergen is proposed at this AGM.

Ms. Geetu Gidwani Verma and Mr. Manu Anand were appointed as Additional Directors (in the capacity of Independent Directors) of the Company with effect from May 29, 2022 and their appointment was regularized and approved by the members of the Company at the AGM held on August 10, 2022.

Mr. Radovan Sikorsky was appointed as Director & Chief Financial Officer of the Company with effect from August 15, 2022.

Mr. Sunil Alagh and Mr. Stephen Gerlich, Independent Directors of the Company were voluntarily resigned with effect from June 13, 2022.

Mr. Anand Kripalu was appointed as an Additional Director (In the capacity of Independent Director) of the Company with effect from February 22, 2023 and the Resolution for regularization of his appointment has been approved by the Members of the Company through Postal Ballot process on May 16, 2023.

Mr. Madhav Bhatkuly, Independent Director of the Company has voluntarily resigned with effect from March 01, 2023.

Mr. Rishi Pardal, Managing Director & Chief Executive Officer of the Company has resigned with effect from close of business hours on May 04, 2023.

The Board of Directors place on record, its appreciation for Mr. Sunil Alagh, Mr. Stephen Gerlich and Mr. Madhav Bhatkuly for their invaluable contribution, guidance, and support provided by them during their tenure as Independent Directors of your Company.

Meetings of the Board of Directors and Committees of the Board

The Meetings of the Board and Committees are pre-scheduled, and a tentative calendar of the meetings finalized in consultation with the Directors is circulated to them in advance to facilitate them to plan their schedule. In case of special and urgent business needs, approval is taken by passing resolutions through circulation. The Board met eight (8) times during the financial year. Other details including the composition of the Board and various Committees and Meetings thereof held in FY23 are given in the Corporate Governance Report forming part of this Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed by the Act.

Declaration by the Independent Directors

During the year, one (1) Meeting of Independent Directors was held on October 14, 2022. The Company has received necessary declaration from each Independent Director under Section 149(7) of the Act, that they meet the criteria of independent laid down in Section 149(6), Code for Independent Directors of the Act, and the Listing Regulations.

Audit Committee

The Audit Committee of the Board of Directors is constituted to act in accordance with the terms of reference and

perform roles, as prescribed under the Act and Listing Regulations. The composition of the Audit Committee, its terms of reference, roles and details of Meetings convened and held during the year under review are given in the Corporate Governance Report forming part of this Report.

During the year under review, all the recommendations of the Audit Committee were accepted by the Board. Nomination and Remuneration Committee

The Nomination and Remuneration Committee is constituted to act in accordance with the terms of reference and perform roles, as prescribed under the Act and Listing Regulations. The composition of the Nomination and Remuneration Committee, its terms of reference, roles and details of Meetings convened and held during the year under review are given in the Corporate Governance Report forming part of this Report.

Dividend Distribution Policy

As required under Regulation 43A of the Listing Regulations, the Company has formulated a Dividend Distribution Policy. This policy can be viewed on the Company''s website and is available through the webpage: https://www.unitedbreweries.com/pdf/policyandcodes/Dividend%20Distribution%20Policy%202016.pdf

Foreign Exchange Earnings and Outgo

During FY23 total foreign exchange earnings of the Company stood at Rs.1,723 million (Previous Year: Rs.1,684 million) and foreign exchange outgo stood at Rs.7,207 million (Previous Year: Rs.1,117 million).

Corporate Governance Report

Report on Corporate Governance forms a part of this Report along with Certificate from Company Secretary in Practice. Annual Return

As required under sub-section (3) of Section 92 of the Act as amended by the Companies (Amendment) Act, 2017, the Company has placed a copy of the Annual Return in Form MGT-9 on its website www.unitedbreweries.com and is available through the webpage: https://www.unitedbreweries.com/pdf/AGM/Annual%20Return%20MGT-7-2022-2023.pdf.

Internal financial control and its adequacy

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, safeguarding of its assets, prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures. For more details, refer to the ''Internal control system'' section in the Opportunities, Threats, Risks & Concerns, which forms part of this Report.

Auditors and the Audit Report

Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration Number 008072S), was appointed as the Statutory Auditors of the Company by the Members at the 23^rd AGM held on August 10, 2022, to hold office for a first term of five consecutive years till the conclusion of the 28^th AGM to be held in 2027. In terms of Section 139 of the Act, as amended by the Companies (Amendment) Act, 2017 notified on May 07, 2018, appointment of Auditors need not be ratified at every AGM. Accordingly, 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 fulfill the criteria for appointment as Auditors of the Company as prescribed under the Act and the Rules framed thereunder.

There are no qualifications or adverse remarks in the Auditor''s Report which require any clarification or explanation. Reporting of frauds by auditors

During the year under review, under Section 143(12) of the Act, neither the statutory auditors nor the secretarial auditor have reported to the audit committee, any instance of fraud committed against the Company by its officers or

employees, the details of which would be required to be mentioned in this Report.

Significant and Material Orders

No order/s have been passed or stringent action taken by any Regulator or Court or Tribunal impacting the going concern status of the Company. However, we bring to your attention the following developments/orders for sake of transparency.

i) Competition Commission of India (CCI):

On September 24, 2021, the CCI passed an order under Section 27 of the Competition Act, 2002 ("Competition Act") in Suo Motu Case No. 06 of 2017 and imposed penalty on three beer companies, including the Company for alleged contravention of Section 3 of the Act ("CCI Order"). Penalty imposed on the Company is Rs.751.83 Crores ("the Penalty"). The Company and other appellants filed appeals challenging the CCI Order before the National Company Law Appellate Tribunal ("NCLAT"). The NCLAT stayed CCI Order including recovery of the penalty amount imposed by the CCI, subject to deposit of 10% of the Penalty, by the Company. The NCLAT dismissed the appeals vide order dated December 23, 2022 ("NCLAT Order"). The Company and other appellants have filed appeals against NCLAT Order in Supreme Court of India ("Supreme Court"). The Supreme Court admitted the appeals vide order dated February 17, 2023 ("SC Order"), stayed the NCLAT Order and consequently, the CCI Order, subject to a deposit of additional 10% of the Penalty, over and above the amount already deposited with NCLAT. The Company has already deposited 20% of the Penalty by way of fixed deposits in favour of Registrar, NCLAT in pursuance of NCLAT Order and SC Order.

ii) Bihar Industrial Area Development Authority (BIADA):

BIADA had allotted 42 Acres land ("the Land") to the Company on June 3, 2011 in Kopakalan Industrial Area, Naubatpur, District Patna on lease basis for establishing brewery. The Company had established brewery over the Land which was closed from April 1, 2017 upon imposition of prohibition by the Bihar State Government. The Company restarted the unit over the Land and commenced production of non-alcoholic beverages in the unit in October 2018 after obtaining approvals from all statutory authorities. On June 25, 2022, BIADA issued a show cause notice for cancellation of allotment/lease of the Land due to non-operation of the unit. The Company replied that the production was temporarily stopped since it has sufficient stocks to meet demand of its products and sought extension to restart production. BIADA cancelled allotment of the Land vide order dated December 16, 2022 against which the Company filed a writ before the High Court of Patna. The High Court vide order dated January 25, 2023 directed BIADA to maintain status quo and directed the Company to file undertaking that it will commence commercial production in the unit. The Company has filed undertaking in High Court that it will start commercial production in the unit with BIADA recalling the order of cancellation. Subsequently, on February 8, 2023 the High Court directed BIADA to take a policy decision to deal with the situation arising out of the action of BIADA in present petition and identical matters. The matter is pending in High Court.

The orders /proceedings mentioned above do not have any impact on going concern status of the Company.

Directors'' Responsibility Statement

The financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS) and the provisions of the Act and guidelines issued by the SEBI. The Ind AS are prescribed under Section 133 of the Act, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto is use.

Pursuant to clause (c) of sub-section (3) of Section 134 of the Act, the Directors confirm that:

(a) In preparation of the annual accounts for the financial year ended March 31, 2023, the applicable accounting standards have been followed and there are no 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 period;

(c) They have taken proper and sufficient care towards 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.

(d) They have prepared the annual accounts on a going concern basis;

(e) They have laid down internal financial controls, which are adequate and are operating effectively.

(f) They have devised proper systems to ensure compliance with the provisions of all applicable laws, and such system are adequate and operating effectively.

All Annexures referred to in the Directors'' Report have been disclosed under the Statutory Information forming part of this Report.

_ACKNOWLEDGEMENT AND APPRECIATION_

We thank our clients, customers, vendors, investors, shareholders, suppliers, bankers, business partners and associates, financial institutions, employee volunteers, central and state governments for their continued support and encouragement to the Company during the year. We place on record our appreciation for the contribution made by our employee at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation, and support.

By Authority of the Board

Rishi Pardal Radovan Sikorsky

May 04, 2023 Managing Director & CEO Director & CFO

Bengaluru DIN: 02470061 DIN: 09684447

Mar 31, 2022

Your Company''s Directors are pleased to present this Annual Report on the business performance and operations of the Company and the audited accounts of United Breweries Limited (''UBL'' or ''your Company'' or ''the Company'') for the financial year ended March 31, 2022 (''the year under review'', ''the year'' or ''FY22'').

Management Summary

The year 2021-22 was characterized by two high impact events - the second wave of COVID and the integration with HEINEKEN - which have reshaped your Company and ultimately made it stronger, more resilient and better prepared for the future.

â¢ The Delta wave, a virulent incarnation of COVID, that swept the country in April and May 2021, had a devastating impact on companies and communities alike. Amidst the nation-wide spike in infections that brought us all to the grips of a public health emergency, your Company stood by two guiding principles - first, ensuring the health and safety of our colleagues, consumers and other stakeholders and second, extending support and relief to communities which were most impacted by the pandemic by means of medical support, donations and local aid. The resilience and commitment demonstrated by our colleagues and stakeholders was crucial for your Company to sail through these tough months. Your Company continued to engage its consumers and also practiced tight cost control measures to preserve cash. The work done during this period in terms of zero based cost management will stand your Company in good stead for the future.

â¢ Your Company''s integration with HEINEKEN seeks to capitalize on our collective strengths to win in the market. With HEINEKEN having been a UBL Shareholder and an active member of the board for over a decade, there is continuity in business strategy and confidence in UBL''s market leadership, expertise and the growth potential of the beer market in India. Your Company is stronger together with HEINEKEN and well-poised to accelerate penetration, drive premiumization, unlock future growth and shape the Indian beer industry.

During the period, your Company delivered some strong results:

â¢ Volumes in the December quarter recovered to pre-COVID levels thanks to continuous engagement with consumers and the opening of markets. The month of March saw a record sales volume with early onset of summer.

â¢ The Company expanded its market share during the financial year, thereby solidifying its market leadership.

â¢ With progressively recovering volumes throughout the year, financial results showed recovery vs prior year with net sales up 38% and EBIT up 157%.

â¢ Robust underlying free operating cash flows at Rs.721 crores due to continued improvement in working capital and optimised investment levels.

(Given the strong liquidity position, the Board proposes a dividend significantly up to Rs. 10.50 per Share, representing circa 76.06% pay out of profit after tax.)

During the year, your Company continued to invest in future growth drivers mapped to our strategic priorities. With an eye on driving category penetration and creating new opportunities for growth, your Company launched a new campaign to boost at-home beer consumption. The new and refreshed packaging for Kingfisher received a positive response from customers and consumers and is a significant step in our journey to retain the iconicity of our flagship brand. We continued to strengthen the premium portfolio by expanding our craft style Belgian wheat beer Ultra Witbier.

The pandemic also reinforced the importance of working together as a collective force and during the year, your Company conducted trainings and workshops for colleagues and launched best-in-class inclusion and diversity policies with the objective of building a diverse, empowered and engaged workforce with the right culture and capabilities.

Your Company strives to relentlessly drive productivity and capital efficiency and during the year implemented a combination of productivity and cost control measures. As a result, EBIT margin improved by 404 basis points to 8.7%. Strict cash and

working capital management enabled the pre-payment of the remaining debt and year end bank balances are more than Rs. 850 Crores. We also continued to engage with external stakeholders to enable a fair regulatory environment for beer in India.

Our future depends on how we shoulder our present responsibilities and your Company, a responsible corporate citizen, aims to build an organization that not just delivers value to Shareholders but also works together to brew a better world with responsibility and sustainability at the heart of its agenda. During the year, we continued to work towards reducing our overall water consumption needs for the business and improve water stressed areas, with consumption per hl reducing by 5% to 3.4 hl/hl. In a phased manner, we are gradually moving to renewable energy sources to support our carbon footprint reduction in addition to recycling our packaging materials. Renewable energy usage for the year has reached 81%. We are pleased to share a comprehensive report on ESG as part of this annual report.

Overall, your Company is optimistic about the long-term growth drivers of the industry on the basis of GDP growth, climatic conditions, rapid urbanization, rising incomes and evolving consumer trends, and is brimming with renewed vigour to shape the future of Indian beer market together with HEINEKEN.

UBL & HEINEKEN: STRONGER TOGETHER!

FINANCIAL SUMMARY

Financial performance for the year ended March 31,2022 is summarized below:	(Amount in Rupees million)
STANDALONE FINANCIAL RESULTS	Year ended March 31
	2022	2021
Gross Turnover	131,174	101,834
Net Turnover	58,319	42,407
Other Income	297	502
EBITDA	7,246	4,298
Exceptional Items	â	(72)
Depreciation and amortization	(2,169)	(2,319)
EBIT	5,077	1,907
Interest	(148)	(227)
Profit before Taxation	4,929	1,680
Provision for Taxation	(1,279)	(551)
Profit after Tax available for appropriation	3,650	1,129
Appropriations: Dividend on Equity Shares (including taxes thereon)	(132)	(661)
Transfer to the General Reserve	â	(113)
Other Comprehensive Income/(Loss)	6	149
Balance carried to the Balance Sheet	3,524	504

The financial statements for the year ended March 31, 2022 have been prepared under Indian Accounting Standards ("Ind AS") pursuant to notification by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015 as amended.

In a year, where the beer industry was again under pressure due to the second and third wave of COVID with consequent impact across businesses, your Company was able to increase its sales volumes and profits. The Gross turnover for

FY22 stood at Rs. 131,174 million which grew by 29%. Your Company achieved a Net turnover (net of excise duty) of Rs.58,319 million during FY22 as against Rs.42,407 million during FY21. Despite two waves of COVID during FY22, your Company could achieve improved performance. Interest cost was contained with effective working capital management. EBITDA for the year under review stood at Rs.7,246 million as compared to Rs.4,298 million in the previous year, an increase of 68.6% over the previous year.

Profit before taxation for the year stood at Rs.4,929 million. Profit after taxation stood at Rs.3,650 million. Increased volumes, better operational management, and efficiently controlled costs resulted in higher sales and profits.

DIVIDEND

We take pleasure in proposing a dividend of Rs.10.50 per Equity Share of Re. 1/- each for the year ended March 31, 2022. The dividend declared for the previous year was Re.0.50/- per Equity Share of Re.1/- each. The total dividend is Rs. 2776.3 million, which amounts to about 76.06 % of the Profit after Tax.

RESERVES

The Company does not propose to transfer any amount to General Reserve.

CAPITAL

The Authorized Share Capital of the Company stands at Rs. 9,990 million, comprising Equity Share Capital of Rs. 4,130 million and Preference Share Capital of Rs. 5,860 million. The Issued, Subscribed and Paid-up Equity Share Capital of the Company as on March 31,2022 remains unchanged at Rs. 264.4 million comprising 26,44,05,149 Equity Shares of Re.1/- each.

On June 23, 2021, Heineken International B.V. acquired an additional 3,96,44,346 Equity Shares of the Company being 14.99% of the Equity Share Capital from the Recovery Officer, DRT (under sale proclamation) through a block deal taking Heineken Group Shareholding in the Company from 46.52% to 61.52%. Heineken Group has therefore become a majority promoter shareholder.

MANAGEMENT DISCUSSION AND ANALYSIS

Industry Overview

Beer has been bringing people together for many years. In India, we believe our best days are ahead of us as young people continue to choose beer as a social lubricant. The beer market is gaining prominence owing to rising disposable incomes, preference for differentiated and immersive consumer experiences, the popularity of low-alcohol beverages and growing social acceptance.

During the FY22, business commenced in April 2021 on a good trend. However, government restrictions towards the last week of April following the spike in infection resulted in challenging market conditions. The next two months of the quarter witnessed muted volumes with some recovery towards the end of June as markets opened up gradually. Restrictions in the June quarter were less stringent compared to the previous year''s period, with almost all the markets partially functional in some form.

The second quarter saw volumes stabilize, with a number of markets achieving volumes comparable to or ahead of pre-COVID levels by September. The third quarter witnessed robust growth, resulting in quarterly volumes back to pre-COVID levels. January 2022 was impacted negatively by the third COVID wave, whereby market demand recovered during February, followed by a strong performance in March at the start of the peak season.

The industry''s potential is yet to be fully unlocked owing to factors such as a relatively limited outlet universe, various government regulations and high taxation policies in most states across India. Rapid urbanization, rising middle class, and change in societal perspective, along with the launch of new low-and no-alcohol variants of beer and technological advancements, are poised to propel market growth. The introduction of online ordering and ease of doorstep delivery in certain states could further enable wider distribution towards end consumers. Overall, the industry fundamentals remain very strong and your Company is convinced that with the current strategies in place, it can drive, lead and shape the beer market in India.

Sales and Marketing

The rise of the Delta variant, which led to the second wave of lockdowns throughout the summer and beyond, impacted business. Despite this, we continued to communicate with our consumers.

Our flagship brand Kingfisher engaged with consumers with relevant messaging on COVID-appropriate behavior anchored on optimism and hope. Our digital initiatives helped build linkages to at-home consumption and ensured relevant communication for our consumers. During the second half of the year, Kingfisher engaged with its consumers on the need to socialize responsibly in addition to topical messaging around festivities.

In 2021, our association with IPL continued, and our integrated communication helped drive positive consumer connections and improve brand health metrics. In the minds of our consumers, Kingfisher remained one of the top recalled brands with respect to the IPL.

Kingfisher also unveiled its new packaging in Goa in December 2021 and in multiple markets later. The new packaging has garnered an encouraging response from our trade partners and consumers.

The global sponsors of UEFA Champions League and Euro 2020, Heineken also brought the #SocialiseResponsibly and #BetterTogether campaigns for Euro 2020 and Champion''s League to Indian consumers. Heineken was also the official sponsor for the much-awaited offering from the James Bond franchise -''No Time to Die.'' The new Bond movie release was amplified through release on the digital medium along with engaging James Bond and Heineken co-branded memorabilia. Heineken also activated Live Your Music (LYM) through its property ''Krank'' in India and brought high-energy music sessions leading up to our signature New Year festival in Goa.

Amstel International Strong Beer continued its footprint expansion despite the operational challenges of navigating through a difficult year. Haryana, Telangana and Maharashtra were added to the list of Amstel markets post the gradual unlocking of markets last year.

Kingfisher Ultra led the premiumization agenda for brand Kingfisher and the brand was active on TV and digital media, with the versatile actor Farhan Akhtar anchoring the "Live the Ultra Life" thematic campaign. Kingfisher Ultra extended its offering in draught format in the Maharashtra market and promoted the new offering with an influencer-led campaign - ''Smoothest Brew on Tap.'' The new format has gained a lot of appreciation, and we intend to expand it to other key metros in the coming year.

On-ground, Ultra continued its association with two prestigious Derby events in Bombay and Bangalore. With COVID restrictions being eased, the events operated with limited seating capacity and were aired live on Facebook and YouTube.

Kingfisher Ultra accelerated to activate the main brand pillar of music with its music IP ''Ultra Access,'' with a series of 13 events bringing in Indian and international artists across eight metros and creating a superlative experience. The brand also continued its partnership with the Satellite Beachside music festival during the year-end celebrations. The festival executed five pre-events, two mini festivals and a four-day main event, connecting with over 6,000 consumers across major metros.

Ultra Witbier, our craft-style beer brand, expanded its presence into nine markets across the country, covering most of the key markets. The brand introduction has largely been supported by digital media and has built good overall awareness.

London Pilsner went live with its ''Taste of London in every sip'' campaign with cricketer Ben Stokes in the key markets. The campaign on digital and OOH generated good brand recall and association.

UB Export continued to build on its franchise and awareness in Karnataka with its ''Innoba Star'' campaign with superstar - Rakshit Shetty.

Supply Chain

Manufacturing expenses for FY22 amounted to Rs.29,327 million, representing 50% of net sales, as against Rs.20,363 million in the previous financial year, which constituted 48% of net sales. The year was marred by two COVID waves. The supply chain team focused primarily on the safety of our colleagues in addition to ensuring that production and delivery of volumes were done safely and within the strict guidelines as per the Ministry of Home Affairs and relevant local authorities. The supply chain has delivered well against the set targets despite a challenging environment due to disrupted global supply chain, material shortages, and partial lockdowns. Tight cost control measures, planning, and initiation for material supply security for the 2022 season have remained top priorities.

The supply chain has also focused on expanding its specialty footprint to drive premiumization across key markets. In line with this strategy, we continued to expand the production of premium brands at various breweries to ensure product availability via Witbier capacity at Chamundi Brewery (Karnataka). The commercial supplies are expected by the second half of 2022.

With sustainability at the heart of our business, your Company initiated the commissioning of the "New Water" project in our brewery in Chopanki (Rajasthan). This is the first of its kind project in the alcobev space in India and will help breweries reach Zero Liquid Discharge (ZLD), significantly reducing our fresh consumption through recovery and reuse. More such projects are planned across other breweries in line with our ESG roadmap in the coming years. This is well on track to meeting the key deliverables and should be streamlined by the second half of 2022.

Your Company''s renewable energy usage for FY22 stands at 80.8%. UBL''s own units consumed 32.4% of electricity generated from renewable sources. In addition, 96% of thermal energy comes from renewable sources. This has led to a reduction of carbon footprint by 32,350 tons of Co₂, equivalent to 1.59 Mio trees'' annual absorption capacity, a forward step towards our carbon emission goals.

Input material costs and availability have remained under stress during the entire year.

â¢ Barley-malt has seen extremely high prices due to the reasons listed below.

â¢ Competitive crops are trading at prices that are significantly higher vs. barley. This has led to more farmers shifting to alternative crops and hence a drop in area under barley cultivation. There is enhanced demand for barley by other industries which are looking for cheaper grain alternatives combined with global commodity inflation.

â¢ Unseasonal showers impacted 2022 harvest quality in March, leading to lower-than-expected arrivals of malting barley in the market.

â¢ Prices of all major packaging commodities like aluminum, paper, and steel continued to remain high globally, adversely impacting our packaging cost for cans, cartons, crowns, and labels.

â¢ The biggest material cost element, ''Bottles'' remained under stress as the recycled bottle supply chain was disrupted by COVID waves and higher cullet prices in certain states.

â¢ There was higher focus on localization and value engineering for cost optimization

â¢ Increased proportion of localized malt from imported barley with an equivalent reduction in direct usage of imported malt for some of our brands.

â¢ Shifting to Kraft cartons in some of the premium brands.

Research and Development

Your Company''s Research and Development function continues to support its growth strategy with a focus on new capabilities, development of new products, enhancement of existing products, productivity improvement and cost reduction.

Human Resources

Human Resources (HR) develops UBL''s most important asset - our people. Your Company recognizes that the long-term success and sustainable growth of our organization depends on our capacity to attract, retain and develop our

employees. We are committed to providing our employees across the country with a safe and healthy work environment and helping them realize their full potential. The organization fosters an open and transparent work culture that drives innovation and nurtures entrepreneurial spirit among all employees. Your Company believes in celebrating milestones, both big and small, and encourages people to connect, communicate and collaborate through various forums.

UBL has an inclusive culture and takes pride in being an equal opportunity employer. We encourage all forms of diversity and believe that it adds to building a more engaged workforce, thereby contributing to better business performance. In addition to the mandated policies to develop a conducive work environment, we have an Inclusion and Diversity Council that plays an active role in realizing our goal of nurturing an empowered workforce.

Learning is ingrained in our culture and employees are constantly encouraged and given ample opportunities to upgrade their knowledge and skill. On the job training is the principal source of learning in addition to curated initiatives to build talent and leadership with an aim to enhance the organizational capability to compete and win in the market. Apart from our mandatory programs, customized learning modules are also offered to build specific capabilities at various levels of the organization. The UBL Competency Framework helps in assessing the current and future talent capability. It also helps highlight the specific strengths to be further developed and flags critical skills that can be sharpened.

Your Company believes in ethical governance and abides by the robust policies laid down under the Code of Business Conduct. The guidelines laid down in the Code help our employees navigate difficult situations related to the business. Our employees and vendors can report any violation of the Code via an online platform named Speak-Up. The platform is managed by a third party to ensure that the identity of the whistleblower is protected.

UBL uses technology effectively in all stages of the employee life cycle from onboarding to retirement. This has resulted in standardized automated processes, improved productivity, and enhanced employee experience.

The inputs from our annual employee engagement survey help in continuous improvement of our people practices, policies and programs and lends an ear to the ground in terms of employee expectations.

Industrial Relations continue to be harmonious and peaceful at all levels and at all locations of the Company.

All the wage agreements have been renewed in a timely manner and are valid and subsisting. Workers and unions support the implementation of reforms that impact quality, cost, and improvements in productivity across all locations, which is commendable.

UBL has 2,837 employees on its rolls across all locations. The Company has not offered any stock options to the employees during the year under review.

Total employee benefit expenses for the year stood at Rs. 5,194 million, as compared to Rs. 4,823 million in the previous year. This constituted 3.96% of gross revenue from operations. Your Directors place on record their sincere appreciation to all employees for their contribution towards the continued success of the organization.

Significant changes in Key Financial Ratios

Following are the Key Financial Ratios, where variance of more than 25% is noticed as compared to the previous financial year, along with detailed explanations therefor, including.

Debtors Turnover: Improvement in Debtors Turnover ratio from 7.42 to 9.90 due to increase in sales as compared to previous year which was impacted by the pandemic and recoveries as per credit terms.

Inventory Turnover: Improvement in Inventory turnover ratio from 7.16 to 9.87 due to increase in sales as compared to previous year which was impacted by the pandemic and reduction in inventory levels in certain categories considering the timing of purchases.

Debt Service Coverage Ratio: Improvement in debt service coverage ratio from 1.61 to 2.21 due to increase in sales leading to increase in profits as compared to previous years which was impacted by the pandemic and repayment of debt in the current year.

Debt Equity Ratio: No debts at year end March 31, 2022 compared to 2,502 million as on March 31,2021.

Net Profit Ratio: Net profit ratio increased from 1.11 % in 2020-2021 to 2.78% in 2021-2022, primarily on account of increase in sales leading to increase in profits as compared to previous year which was impacted by the pandemic.

Return on Equity: Return on Equity increases from 3% in 2020-2021 to 10% in 2021-2022 due to increase in sales leading to increase in profits as compared to previous year which was impacted by the pandemic.

Impact of COVID

The FY22 continued to be impacted following the second wave of COVID in April-May 2021. The human, social and economic impact from COVID has been severe, especially for the beer industry where volumes were lower compared to previous years. The third wave of COVID in January 2022 was fortunately less impactful.

The Company continues to place the health and safety of its stakeholders as the top priority, while also extending support to various communities in which it operates by means of medical support and relief.

Despite a challenging business environment, your Company remained focused on key strategic pillars: increasing category penetration, building a strong brand portfolio, managing costs and cash, ensuring further improvements on sustainability, while fostering a highly engaged and inclusive workforce that is supported by best-in-class processes.

Although the trajectory of COVID is unknown, the Company is confident in successfully navigating such uncertainties with its leadership position, strong brand portfolio, and healthy financial position. The Company expanded its market share during the financial year thereby solidifying its leadership.

CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY

United Breweries aims to brew a better world and firmly believes in growing the business in a socially and environmentally responsible and sustainable way while meeting the interests of all its stakeholders. Your Company is committed to improving the lives of the community it works with and reducing the impact of its operations on the environment it draws its resources from.

Thus, over the last year, we continued to support our core Corporate Social Responsibility (CSR) programs on water conservation, safe drinking water and community development initiatives while also focusing on the health and safety of our communities by responding to the COVID crisis. Through partnerships with credible implementation partners, we aim to build a more equitable and sustainable future for our co-communities.

UBL is committed to water stewardship and makes conscious efforts to conserve and replenish water. Last year, we spent more than 60% of our CSR funds on water initiatives through six large water conservation projects. In the next five years, we are focused on increasing this commitment to 75%. In addition to implementing large rainwater harvesting and watershed management projects in the vicinity of our breweries for water conservation, we also make extensive efforts to generate awareness in the communities on adopting rainwater harvesting practices, promoting climate-resilient practices for agriculture, and incorporating necessary infrastructure for water preservation. We undertook these projects in Tamil Nadu, Punjab, Rajasthan, Haryana, Telangana, Karnataka, and Kerala.

Our project to develop an Urban Dense Forest in the Waluj MIDC area in Aurangabad, Maharashtra, which was initiated in FY21, got completed last year. Under this project, we planted 75,000 trees in 75 native species in an area of 5 acres and improved the biodiversity in this region using the Miyawaki technique of afforestation.

The COVID pandemic has impacted lives and livelihoods. As a responsible corporate citizen, our first response was to stand with our communities and ensure the supply of basic necessities during the lockdown. By initiating discussions with the Panchayat and the people on the ground, UBL galvanized its NGO partners to conduct a rapid needs assessment to find out the requirement of the community. With the help of our NGO partners, we made provisions for ambulances, oxygen cylinders, ICU beds, oxygen plants and ventilators for various locations. We also partnered with the NRAI (National Restaurant Association of India) under the H.E.A.L program to launch a country-wide vaccination program for essential workers of the restaurant industry. Over 2500 people were vaccinated through this initiative.

Your Company is committed to creating a more equal world, and this can only be achieved when women are given equal opportunities. During the year, we launched Pragati - our scholarship program to support meritorious female students across India in realizing their dreams of a fulfilling career. We provided scholarships from standard 9^th to under-graduation as part of this project.

The Business Responsibility and Sustainability Report in the format prescribed under the Securities and Exchange Board of India ("SEBI") (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations") is annexed as Annexure-A. Annual Report on CSR activities in terms of the Companies Act, 2013 ("the Act") and the Companies (Corporate Social Responsibility) Rules, 2014, is annexed as Annexure-B.

Sustainability

Your Company aims to brew a better world with responsibility and sustainability at the heart of its agenda. United Breweries has framed long-term Environment, Social and Governance (ESG) sustainability goals on various Materiality Indices in order to make its place among the responsible organizations across the globe.

Water has been the focus of our business, and we are continuously working towards reducing our overall water consumption at the organization. We also monitor and work towards improving water-stressed areas.

Our energy consumption is gradually shifting to renewable sources, in a planned and phased manner, in both electricity and thermal, and these initiatives are supporting our carbon footprint reduction.

We continue to focus on recycling our packaging materials. More than 60% of bottles used by us are recycled by us and the remaining are also recycled by bottle manufacturers and others.

Our secondary packaging like carton is made by using more than 80% recycled paper. We have tied up with CPCB-approved plastic waste recyclers through Extended Producer Responsibility (EPR) guidelines to recycle 100% equivalent of the low-density polyethylene used in our manufacturing process.

Green Energy

Your Company has been consistently marching ahead in its journey of maximizing the usage of Green Energy. This journey demonstrates the organizational vision to lead the initiative by being proactive and contributing to environment protection. This is aligned with our long-term Sustainability Goals as part of ESG Roadmap. Total renewable energy usage for FY22 stood at 80.7%. UBL''s own units consumed 32.4% electricity generated from renewable sources. To supplement this, 96% of thermal energy came from use of renewable sources. The renewable electrical energy usage is equivalent to carbon footprint of 32,350 tons of Co₂ which is equivalent to 1.37 Mio trees. Our breweries in Karnataka and Tamil Nadu are leading the Renewable Energy drive with Total Renewable energy usage of more than 80%.

Awards

1) Pollution Control Board:

Our brewery at Palakkad, Kerala won the Best Innovative Water Technology Industry.

2) Confederation of Indian Industry (CII) Environment, Health and Safety (EHS) Excellence Awards:

Our breweries at Palakkad, Kerala received EHS Bronze Category award for 2021.

3) Total Productive Management (TPM):

In our journey of operational excellence through process of TPM, we are on a continual improvement path and in FY22, we bagged 4 prestigious national level awards.

â¢ Our Brewery at Taloja, Mumbai was awarded with Platinum award (Innovative Kaizen Category) at 40^th CII National Level Competition.

â¢ Our Brewery at Chopanki, Rajasthan was awarded with 2 Gold awards at Challengers Trophy (Innovative Kaizen Category) organized by CII Institute of Quality.

â¢ Our Brewery at Palakkad, Kerala was awarded with 1 Gold award at C hallengers Trophy (Autonomous Management Category) organized by CII Institute of Quality.

OPPORTUNITIES, THREATS, RISKS & CONCERNS

India is the second-most populous country in the world with over 1.3 billion people, i.e., more than a sixth of the world''s population. Over 50% of its population is below the age of 25 and more than 65% below the age of 35, as per statistics from the United Nations, Department of Economic and Social Affairs. The sheer size of India''s population provides a massive opportunity for growth.

Rapid urbanization, rising incomes, change in societal perspective, the launch of new low-and no-alcohol variant beer and technological advancements are a few factors that will propel market growth. The introduction of online order and ease of doorstep delivery in certain states could further drive the market. Should certain State Governments proactively open up and regulate the online sale of alcohol / home delivery, it would be favorable for the beer industry in the long term. India has all the necessary infrastructure required to further develop online sale of beer.

The consumption of alcoholic beverages is becoming more acceptable particularly among youth, working women and urban residents who are developing an appetite for beer, which is emerging as a social beverage in metros and tier two cities. Beer is gradually becoming a perfect after-work companion for corporate India as well.

Threats, Risks and Concerns

But for the short-term impact due to COVID, the beer industry has been modestly flourishing, with both new and old brands catering to a growing pool of beer enthusiasts across the country. As exciting as this is, there are also several challenges.

There is a perennial threat of competition introducing new brands in various segments like craft and premium beers. However, we compete fearlessly and healthily based on brand variants, product quality, distribution network, brand value and promotion strategies.

A variety of taxes & levies are imposed on beer during and after production, transport, and sale by each state. Pricing regulations, inadequate market infrastructure and restrictions as well as additional taxes on inter-state movement of beer continue to pose a challenge to the industry. Government intervention in distribution, ever increasing taxation, restricted communication, and increased cost of raw materials prices (glass, barley malt, other packaging material, etc.) and government restrictions applied on advertising also pose challenges to industry growth.

The threat of prohibitive actions, which stems from constant changes in the political climate in the country, is also present.

The distribution of beer in India is still largely controlled by the state-or state-owned corporations resulting in stricter regulations across various states so as to have better control over prices, consumption, and excise duty.

The market for beer is characterized by pricing and competitive pressures. The effects of social and economic cataclysms in the market often make it difficult to predict demand cycles. To overcome these challenges, we continue to remain cost conscious at all levels of operations, and work with a high level of agility and efficiency.

We continue to invest in and expand the brand portfolio while continuing to be cost-efficient and quality-focussed. We upgrade and adopt modern technologies and solutions to be able to respond with agility to current market demands, without losing focus on quality.

In order to cater to new consumers, capture market opportunities, compete with new launches by competitors and in continuous endeavor to offer new product ranges and cater to new occasions, your Company has expanded its

"Kingfisher Ultra Draft" offering in the lighthouse market of Maharashtra and has received an encouraging response from consumers. Your Company plans to launch this offering in other relevant Northern markets in a phased manner.

The labor market in India is becoming more competitive. Your Company has taken various initiatives to be able to continue to attract the right talent, build a diverse and inclusive culture and continue to create an engaging place to work.

Non-availability of water, rationing of its supply and restrictions on withdrawal of ground water also pose major threat. We have built infrastructure which helps in reduction of water consumption in breweries as a sustainability initiative. We have pro-actively managed sustainability under our "3R" policy to reduce, recycle and recharge as well as look at opportunities for water conservation through Rainwater Harvesting to achieve a positive or at least neutral water balance.

The Company also focuses on secure IT operations and addressing risks of cyber security. This includes risks from IT security lapses, malware and ransomware attacks, disruptions in key Enterprise Processes and hacking, which could lead to disruptions in business operations and loss and/or leakage of confidential data.

Prospects

The growth rates of Indian beer industry compare favorably to the global beer industry average. Factors such as climatic conditions and younger population make the future more promising for the beer industry in India. With growth in GDP estimated beyond 5%, higher disposable income and growth in the middle and upper class, change in consumer behavior and examples of liberalization in retail / distribution, the beer market is expected to grow at a healthy pace.

Your Company''s established brand equity provides a significant competitive advantage over other domestic and international brands. Your Company has the benefit of a strong distribution network across the length and breadth of the country and rapid growth can be expected year on year.

The competitive environment is expected to remain intense, and your Company shall continue to focus on robust innovations to solidify its market leadership. Though a challenging commodity inflation environment will have an impact on costs, your Company shall continually strive for appropriate price increase approvals and achieve high operational efficiencies to offset the increase in costs. Augmenting capacities in critical markets will continue to be a priority investment in the future too.

The Company seeks to drive beer category penetration, drive further premiumization, reinforce the iconicity of Kingfisher while building the overall brand in addition to continued focus on efficiency & compliance, execution of the ESG agenda, digitalization and people development to build a highly motivated and skilled workforce.

Through these actions, we are confident that your Company would continue its leadership position, drive growth of the overall market and expand profit margins in the years to come.

Growth in premium retail trade and on-premises outlets in metropolitan cities has increased the range of beers and improved the retail environment. In a few States, the Government has issued additional licenses for sale of beer which signals good growth prospects for the industry. Innovative introductions also help in penetrating untapped markets and consumer segments and your Company''s new introductions have fared well.

Risk Management

Though already established efficiency programmes apply to all aspects of our business, there is a constant drive for further efficiencies and reducing cost. Backed by strong internal control systems, the current Risk Management Framework consists of key elements laying down the roles and responsibilities in relation to risk management covering a range of responsibilities, from strategic to operational. These role definitions, inter alia, provide the foundation for appropriate risk management procedures, their effective implementation across your Company and independent monitoring and reporting. The Risk Management Committee, constituted by the Board, monitors, and reviews the strategic risk management plans of your Company as a whole and provides necessary directions on the same.

The Corporate Risk Management Cell, through focused interactions with businesses, facilitates the identification and prioritization of strategic and operational risks, development of appropriate mitigation strategies and conducts periodic reviews of the progress on the management of identified risks.

The competitive environment is expected to remain intense. Your Company''s strategy and focus remains consistent to robustly strengthen its leadership and thereby maintain its position as the clear leader in the Indian Beer Market. In line herewith, your Company endeavours to continually sharpen its Risk Management systems and processes in line with a rapidly changing business environment.

The COVID pandemic has triggered new risks in business operations. While the impact of the pandemic continues to unfold, your Company pro-actively put in place Crisis / Contingency Management Teams, both at the breweries as well as at the Corporate office. These cross-functional teams, represented by senior management, continually review strategic, operational, financial matters as well as measures relating to employee well-being health and safety.

Detailed advisories have been issued to employees on how to safeguard themselves, their colleagues and associates, and their families both at the workplace as well as at their homes. These guidelines also provide details on social distancing norms and the organisational support system. Heightened safety protocols were implemented at all units that resumed operations, with end-to-end solutions from transportation of workmen, screening, regular deep cleaning and sanitisation, innovations to ensure safe distancing and strict adherence to hygiene standards and use of personal protective equipment where required.

Through these actions, your Directors are confident that your Company would sustain its leadership position, grow ahead of the market, and realize improved profitability in the years to come.

Internal Control System

OTHER INFORMATION

Subsidiary Company

Maltex Malsters Limited is the only subsidiary in which your Company holds 51% of its Equity Share Capital. Maltex Malsters Limited is a non-listed entity and is not a material non-listed subsidiary as defined in Regulation 16(1)(c) of the Listing Regulations.

UBL has formulated a policy for determining material subsidiaries which is placed on the website of the Company www.unitedbreweries.com and is available through the webpage:

https://www.unitedbreweries.com/pdf/policvandcodes/Policv%20for%20Determining%20Material%20Subsidiaries-PDF.pdf

The consolidated financial statements of the Company including the financial statements of its subsidiary forms part of this Report in terms of the Act and the Listing Regulations. A statement containing the salient features of the financial statements of the subsidiary and associate is attached as Annexure-C to this Report.

Cash Flow Statement

A Cash Flow Statement for the year ended March 31, 2022 is appended.

Particulars of Loans, Guarantees or Investments

Details of loans, guarantees and investments covered under Section 186 of the Act are given in the notes to the Financial Statements. The Company has not advanced loans to Directors / to a Company in which the Director is interested to which provisions of Section 185 of the Act apply and has not given loans / guarantees /provided security to which provisions of Section 186 of the Act apply.

Listing requirements

Your Company''s Equity Shares are listed on the BSE Limited and National Stock Exchange of India Limited. Listing fees have been paid to these Stock Exchanges for the year 2022-2023.

Depository System

The trading in the Equity Shares of the Company is under compulsory dematerialization mode. The Company has entered into an agreement with National Securities Depository Limited and Central Depository Services (India) Limited in accordance with the provisions of the Depositories Act, 1996 and as per the directions issued by the Securities and Exchange Board of India. As the depository system offers numerous advantages, Members are requested to take advantage of the same and avail the facility of dematerialization of the Company''s Shares.

Deposits

There were no outstanding deposits at the end of the previous financial year. The Company has not invited any deposits during the year.

Ratio of Remuneration and Particulars of Employees

In terms of sub-section(1) of Section 136 of the Act, the Company has opted to provide full version of financial statements including consolidated financial statements, auditor''s report and other documents required to be annexed to such financial statements excluding the details relating to ratio of the remuneration of each Director to the median employee''s remuneration and remuneration drawn by certain employees over the threshold etc. as provided in sub-section(12) of Section 197 of the Act read with Rule 5(1) & 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The details provided by the Company are in compliance with Section 136(1) of the Act and includes salient features of Form AOC-3A.

above information or desires a copy thereof may write to the Company Secretary. The above details be treated as part of this Annual Report.

Cautionary Statement

Employees Stock Option Scheme and Sweat Equity Share

The Company has not offered any Shares to its employees or Key Managerial Personnel under a scheme of Employees'' Stock Option and has also not issued any Sweat Equity Shares at any time.

Related Party Transactions

The Company has formulated a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions which is placed on the website of the Company www.unitedbreweries.com and is available through the webpage http://unitedbreweries.com/pdf/policyandcodes/Policy%20on%20Related%20Party%20Transactions.pdf.

All transactions entered by the Company during FY22 with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company has not entered into any transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

Familiarization programme for Independent Directors

During the last financial year, the Company has not appointed any new Independent Director. The Company has inducted Ms. Geetu Gidwani Verma and Mr. Manu Anand with effect from May 29, 2022 as Independent Directors of the Company. The existing Board comprises Executive, Non-Executive, and Independent Directors who have been at the helm of Management of the Company for several years and are fully conversant with the business and operations of the Company. The Familiarization programme for new Independent Directors upon induction shall aim to familiarize them with the Company, their roles, rights, responsibility in the Company, business model of the Company etc. The Board of Directors has complete access to requisite information within the Company.

Familiarization will be undertaken during the year for new Independent Directors. Also, at the Board Meeting itself business is discussed at length along with Industry dynamics, Strategic planning, and other relevant information. Presentations are regularly made to the Board of Directors /Audit Committee / Nomination & Remuneration Committee and other Committees on various related matters, where Directors get an opportunity to interact with Senior Management. The Company has issued appointment letters to the Independent Directors which also incorporates their role, duties, and responsibilities. The details of the Familiarization Programme for Independent Directors are disclosed on the Company''s website at the webpage: https://www.unitedbreweries.com/pdf/policyandcodes/Familiarisation-Programme-2022.pdf

For new Independent Directors, the Company will issue appointment letters effective their date of appointment. Whistle Blower Policy

The Company has adopted vigil mechanism which is a channel for receiving and redressing of complaints about any misconduct, actual or suspected fraud, actual or potential violations of the Company''s code of conduct and any other unethical, unlawful, or improper practices, acts, or activities within the Company. The Company has formulated a Whistle Blower Policy for Employees and Directors and has ensured adequate safeguards against victimization of whistle blowers. The details of establishment of the vigil mechanism are disclosed on the Website of the Company.

Internal Complaints Committee

UBL has constituted an Internal Complaints Committee (ICC) at its Corporate / Registered Office and at all its breweries/ Regional Offices to consider and deal with all reported sexual harassment complaints. The constitution of the ICC is as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Investigations are conducted, and decision made by the ICC at the respective locations, and the constitution is as prescribed. Details of complaints pertaining to sexual harassment filed, disposed of, and pending during the financial year are provided in the Corporate Governance and Business Responsibility and Sustainability Report of this Annual Report.

Conservation of Energy

The Company is taking continuous steps to conserve energy. Its "Sustainability" initiatives are disclosed separately as part of this Report.

Code of Business Conduct and Ethics

The Board of Directors of UBL have adopted a Code of Business Conduct and Ethics in terms of the Listing Regulations which has been posted on the website of the Company viz., www.unitedbreweries.com.

Code for Prevention of Insider Trading

Your Company has adopted a comprehensive ''Code of Conduct to Regulate, Monitor and Report of Trading by Insiders'' and also a ''Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information'' relating to the Company, under the provisions of the Securities Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.

Directors

The Board of Directors of UBL currently comprises of eight Directors with a balanced combination of Executive, Non-Executive, and Independent Directors.

Mr. Jan Cornelis van der Linden, a Non-Executive Director retires by rotation at this Annual General Meeting (AGM), and being eligible, has offered himself for re-appointment. Resolution for re-appointment of Mr. Jan Cornelis van der Linden is proposed at this AGM.

The Committee members expressed their grief over the sad demise of Mr. Ravi Nedungadi and Mr. C Y Pal, erstwhile Directors of the Company, and conveyed their heartfelt condolences to their families for their loss. Their contribution to the Board and the Company were acknowledged.

Mr. Berend Odink is a Director with effect from June 29, 2021.

Ms. Geetu Gidwani Verma and Mr. Manu Anand were appointed as an Additional Directors with effect from May 29, 2022 and the Resolutions for regularization of their appointment have been proposed for approval of Members at this AGM. Mr. Sunil Alagh and Mr. Stephan Gerlich, Independent Directors of the Company voluntarily resigned with effect from June 13, 2022.

The Board of Directors place on record, its appreciation for Mr. Sunil Alagh and Mr. Stephan Gerlich for their invaluable contribution, guidance, and support provided by them during their tenure as Independent Directors of your Company.

Chief Financial Officer

Mr. Berend Odink, Director is also the Chief Financial Officer of the Company.

Meetings of the Board of Directors and Committees of the Board

The Meetings of the Board and Committees are pre-scheduled, and a tentative calendar of the meetings finalized in consultation with the Directors is circulated to them in advance to facilitate them to plan their schedule. In case of special and urgent business needs, approval is taken by passing resolutions through circulation. During FY22, seven (7) Board Meetings were held. Other details including the composition of the Board and various Committees and Meetings thereof held in FY22 are given in the Corporate Governance Report forming part of this Report.

Meeting of the Independent Directors

During the year, one (1) Meeting of Independent Directors was held on November 08, 2021. All Independent Directors have given a declaration that they meet the criteria of Independence and in the opinion of the Board, the Independent Directors fulfill the condition of Independence as laid down under the Act and Listing Regulations.

Audit Committee

The Audit Committee of the Board of Directors is constituted to act in accordance with the terms of reference and perform roles, as prescribed under the Act and Listing Regulations. The composition of the Audit Committee, its terms of reference, roles and details of Meetings convened and held during the year under review are given in the Corporate Governance Report forming part of this Report.

During the year under review, all the recommendations of the Audit Committee were accepted by the Board. Nomination and Remuneration Committee

Policy on Performance Evaluation

UBL has formulated a Performance Evaluation Policy inter-alia prescribing evaluation criteria for Independent Directors and the Board of Directors of the Company. The Policy is posted on the website of the Company and is available through the webpage http://unitedbreweries.com/pdf/policyandcodes/Directors%20Performance%20Evaluation%20Policy.pdf.

Performance Evaluation of Directors

Performance evaluation of Non-Executive Directors including Independent Directors, the Board as a whole and Committees of the Board is being carried out in accordance with the statutory provisions as contained in the Act and Listing Regulations.

To ensure an effective evaluation process, the Nomination and Remuneration Committee has put in place a robust framework for conducting the exercise with key steps and practices defined clearly. Performance of the Board is evaluated on various parameters such as composition, strategy, tone at the top, risk and controls and diversity. Also, a questionnaire for Committees is framed on parameters such as adherence to the terms of reference and adequate reporting to the Board. Parameters for the Directors, including intellectual independence of the Director, participation in formulation of business plans, constructive engagement with colleagues and understanding of the risk profile of the Company.

Keeping in view the sensitivity, confidentiality is ensured. As part of this process, customized questionnaires, were circulated to all Directors of the Company. Each Director is required to undertake a self-assessment. Additionally, the effectiveness of the Board and Committees is also evaluated by each Member of the Board and Committee through an electronic platform and kept confidential.

Summary of responses received from Directors was placed at a Board Meeting.

Remuneration Policy

The Company carries out periodic reviews of comparable Companies and through commissioned survey ascertains the remuneration level prevailing in these Companies. The Company''s Remuneration Policy is designed to ensure that the remuneration applicable to Managers in the Company is comparable with multinational Companies operating in Brewing or similar industry in India. In line with statutory requirements, the Board of Directors has adopted a Remuneration Policy for Directors, Key Managerial Personnel (KMP) and other employees of the Company. The Remuneration Policy lays down the criteria for appointment and removal of Directors, KMP and Senior Management. The Policy also prescribes the criteria and manner for fixation and approval of remuneration payable to Directors, KMP and other employees. The Policy is posted on the website of the Company www.unitedbreweries.com.

Dividend Distribution Policy

As required under Regulation 43A of the Listing Regulations, the Company has formulated a Dividend Distribution Policy. This policy can be viewed on the Company''s website at www.unitedbreweries.com.

Foreign Exchange Earnings and Outgo

During FY22 total foreign exchange earnings of the Company stood at Rs. 1,684 million (Previous Year: Rs. 768 million) and foreign exchange outgo stood at Rs. 1,117 million (Previous Year: Rs.1,641 million).

Corporate Governance Report

Report on Corporate Governance forms a part of this Report along with the Certificate from the Company Secretary in Practice.

Annual Return

Auditors and the Auditor''s Report

Messrs S.R. Batliboi & Associates LLP., Chartered Accountants (Firm Registration Number 101049W/E300004), the current Statutory Auditors of the Company have completed their two terms of five consecutive years from 2012. They are statutorily not eligible for re-appointment and therefore they cannot continue as Statutory Auditors of the Company after the conclusion of this AGM. Your Board of Directors place on record their appreciation for the valuable services rendered by them during their tenure as Statutory Auditors of your Company.

It is proposed to appoint Messrs Deloitte Haskins & Sells, Chartered Accountants (Firm Registration Number 008072S), as the Statutory Auditors of your Company to hold office from the conclusion of this AGM till the conclusion of the 28^th AGM.

Messrs Deloitte Haskins & Sells, Chartered Accountants, have consented to be the Statutory Auditors of your Company, if appointed by the Members at the AGM and have also confirmed that their appointment would be within the limits specified under Section 139 of the Act.

There are no qualifications or adverse remarks in the Auditor''s Report which require any clarification or explanation. Secretarial Audit

Pursuant to Section 204 of the Act and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Sudhir Hulyalkar, Company Secretary in Practice, to undertake Secretarial Audit of the Company for the FY22. The Secretarial Audit Report forms part of this Report and is annexed as Annexure-E.

There are no qualifications or adverse remarks in the Secretarial Audit Report.

Reporting of frauds by auditors

Details of Significant and Material Orders

(i) It is in public domain that United Breweries (Holdings) Limited {UBHL}, a promoter of UBL was ordered to be wound up by Hon''ble High Court of Karnataka vide dated February 07, 2017. Appeal filed by UBHL against the said winding up order was dismissed by the Hon''ble Karnataka High Court on March 06, 2020. Against this dismissal, a special leave petition has been filed by UBHL before the Hon''ble Supreme Court of India. The Supreme Court on October 2, 2020 had also allowed the winding-up of UBHL. However, UBL has not received any confirmation from UBHL in terms of Supreme Court order of Winding-up.

(ii) As per disclosures received by UBL in May 2018 under SEBI (Prohibition of Insider Trading) Regulations, 2015 and SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 from a few Promoter Companies controlled by Dr. Vijay Mallya, we notice that 4,13,15,690 Equity Shares held by such entities in UBL constituting 15.63% of the total paid up capital had been transferred to the demat account of Enforcement Directorate (ED), Mumbai, Government of India. Earlier, in August 2017, 13,89,068 Equity Shares constituting 0.52% of the total paid-up capital were also transferred to the demat account of ED. The ED thereby held 4,27,04,758 Equity Shares constituting 16.15% of the total paid-up capital in the Company. UBL did not receive any communication from the ED in this regard. These Equity Shares were later on transferred by ED to Recovery Officer-I, DRT-II, Bengaluru.

Recovery Officer-I, DRT-II, Bengaluru had transferred 74,04,932 Equity Shares comprising 2.80% of the total paid-up Equity Share capital of the Company in its name from the demat account of UBHL which is under liquidation. However, UBL did not receive any disclosure from UBHL in terms of SEBI (Prohibition of Insider Trading) Regulations, 2015 and SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011. The Recovery Officer-I, DRT-II, pursuant to a block deal through BSE / NSE on March 27, 2019 has transferred 74,04,932 constituting 2.80% Equity Shares of the Company to Heineken International B.V

On June 23, 2021, the Recovery Officer-I, DRT-II, Bengaluru, had sold 3,96,44,346 (14.99%) Equity Shares out of 4,27,04,758 (16.15%) Equity Shares of the Company through the block deal window of the BSE Ltd. These Shares were purchased by the Heineken International B.V. a promoters'' Shareholder of the Company, in accordance with the terms of the proclamation issued by the Recovery officer and all applicable laws. As a result, the Heineken Group shareholding in the Company has been increased substantially from 46.52% to 61.52% of the total Equity Share capital of the Company.

We understand, as on date, the Recovery Officer-I, DRT-II, Bengaluru holds 30,60,412 Equity Shares constituting 1. 16% of the total paid-up capital of the Company comprising 13,89,068 (0.53%) Equity Shares of United Breweries (Holdings) Limited and 16,71,344 (0.63%) Equity Shares of McDowell Holdings Limited, promoters of the Company.

(iii) Pursuant to Order of Debt Recovery Tribunal, Karnataka, Bengaluru dated September 30, 2015, dividend for the financial years 2015-2016 onwards payable to Dr. Vijay Mallya and United Breweries (Holdings) Limited (UBHL) have been withheld till disposal of the O.A. The Recovery Officer-I, DRT-II, Bengaluru vide letter dated October 11, 2018 directed the Company to make payment of dividend for the financial year 2017-2018 on Equity Shares held by UBHL in the Company to the account of Recovery Officer-I, DRT-II. Thereafter, the Official Liquidator, vide letter dated October 26, 2018 informed the Company that the Hon''ble High Court of Karnataka has directed the Official Liquidator by Order dated August 29, 2018 to collect rent and other income due to UBHL, the Company which is in liquidation. The Official Liquidator also directed the Company to remit the dividend aggregating to Rs.7,83,89,631.10

for the financial years 2015-2016, 2016-2017 and 2017-2018 payable to UBHL to the account of Official Liquidator. Accordingly, the Company has remitted the aforesaid dividend amounts to the account of Official Liquidator.

Further, pursuant to letter dated October 12, 2021 from office of Official Liquidator, High Court of Karnataka for payment of dividend on shareholding of UBHL in United Breweries Limited, the Company has remitted Rs.13,66,19,990.70 toward dividend accrued on the shareholding of UBHL for the financial years 2017-2018 to 2020-2021 to the account of Official Liquidator.

(iv) Effective April 05, 2016, the State Government of Bihar had imposed a ban on sale and consumption of alcoholic beverages in Bihar though it had permitted manufacture of alcoholic beverages for export out of the State vide Notification dated April 05, 2016. The said Notification of Bihar Government imposing ban was struck down by Patna High Court vide Judgement dated September 30, 2016. The State Government of Bihar has challenged the Judgement of Patna High Court in Supreme Court which is pending. Subsequently, effective April 01, 2017, total prohibition (including export out of state) has been imposed in Bihar State and production of beer at the Company''s brewery at Kopakalan, Naubatpur, Patna was discontinued. The Company had then commenced manufacture of non-alcoholic beverages (NAB) at its above facility. Considering the economies in scale of operation in NAB products, and consequent impact, the Management has decided to close the operations of NAB manufactured out of Company''s unit in Naubatpur effective May 01, 2022. The Management has made alternate arrangements to manufacture NAB products by entering into a contract manufacturing arrangement.

(v) Pursuant to enquiry initiated by Competition Commission of India ("CCI") on October 10, 2018 in relation to allegations of price-fixation and cartelization, the office of the Director General, Competition Commission of India had completed its investigation in November 2019 and filed its investigation report (DG Report) with the CCI. UBL and other parties to the enquiry, filed their comments / objections to the DG Report and appeared for an oral hearing in the matter. Hearings were held on February 11, 2021 and March 12, 2021 respectively. UBL filed its response and argued during the oral hearings countering the DG report. Subsequently written submissions were filed with the CCI. Thereafter CCI issued an Order dated September 24, 2021 levying a penalty of Rs.75,183 lakhs for the contravention of provision of Section 3 of the Competition Act, 2002. UBL and individuals connected to UBL filed their Appeal before the NCLAT. After hearing the Company''s Interlocutory application, the NCLAT vide its order dated December 22, 2021 granted a stay of the CCI order subject to payment of deposit of 10% of penalty amount during the pendency of the appeal and the Company has deposited the said amount by way of Fixed Deposit Receipt (FDR).

Based on the advice of the external legal experts, the Management is of the view that the Director General and the CCI have not considered all aspects of its submissions particularly considering the nature of the regulations governing the manufacture, distribution, and sale of beer in India. As advised by the Company''s external legal experts, the Company has a strong case on merits, there exists uncertainty relating to the final outcome in this matter, which is dependent on judicial proceedings; and that it is not in a position to reliably estimate the final obligation relating to penalties, if any.

The orders / proceedings mentioned above do not have any impact on going concern status of the Company.

Directors'' Responsibility Statement

Pursuant to clause (c) of sub-section (3) of Section 134 of the Act, 2013, the Board of Directors report that:

(a) in the preparation of the annual accounts for the financial year ended March 31, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the Directors 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 period;

(c) 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.

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) the Directors have laid down internal financial controls to be followed by the Company and ensured that such internal financial controls are adequate and were operating effectively, and

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and ensured that such systems were adequate and operating effectively.

All Annexures referred to in the Directors'' Report have been disclosed under the Statutory Information forming part of this Annual Report.

ACKNOWLEDGEMENT AND APPRECIATION

Your Directors take this opportunity to thank UBL''s customers, Shareholders, suppliers, bankers, business partners and associates, financial institutions and central and state governments for their consistent support and encouragement to the Company. Finally, your Directors would like to convey sincere appreciation to all the employees of the Company for their hard work and commitment.

By Authority of the Board

Rishi Pardal Berend Odink

April 26, 2022. Managing Director Director & CFO

Bengaluru DIN: 02470061 DIN: 09138421

Mar 31, 2021

Your Company''s Directors have pleasure in presenting this Annual Report on the business and operations of the Company and the audited accounts of United Breweries Limited (''UBL'' or ''your Company'' or ''the Company'') for the financial year ended March 31, 2021 (''the year under review'', ''the year'' or ''FY21'').

FINANCIAL SUMMARY
Financial performance for the year ended March 31, 2021 is summarized below:
	(Amount in Rupees Million)
STANDALONE FINANCIAL RESULTS	Year ended March 31
	2021	2020
Gross Turnover	101,834	146,465
Net Turnover	42,407	65,046
Other Income	502	91
EBITDA	4,298	8,835
Exceptional Items	(72)	â
Depreciation and amortization	(2,319)	(2,850)
EBIT	1,907	5,985
Interest	(227)	(311)
Profit before Taxation	1,680	5,674
Provision for Taxation	(551)	(1,402)
Profit after Tax available for appropriation	1,129	4,272
Appropriations:
Dividend on Equity Shares (including taxes thereon)	(661)	(796)
Transfer to the General Reserve	(113)	(427)
Other Comprehensive Income/(Loss)	149	(115)
Balance your Directors propose to carry to the Balance Sheet	504	2,934

The financial statements for the year ended March 31, 2021 have been prepared under Indian Accounting Standards ("Ind AS") pursuant to notification by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015 as amended.

From March 2020 India saw a rapid spread of COVID and as a consequence, Industry slowed down and effectively stopped functioning till first week of May 2020. Business opened up gradually only over the next few months with different levels of restrictions in off and on trade channels. Particularly on trade restrictions were lifted gradually only by October onwards. A number of States introduced higher COVID related excise taxation, which were in most cases fully or partly rolled back in the course of the financial year. These factors combined had adverse impact on despatches, sales performance as well as margins. In a year where industry remained sluggish due to COVID and other economic factors, your Company achieved a Net turnover of Rs. 42,407 Million. Being an exceptional year, like to like comparison of financial numbers is less meaningful. The Gross turnover of UBL stood at Rs.101,834 Million. Interest cost was contained with effective working capital management. EBITDA for the year under review stood at Rs. 4,298 Million as compared to Rs. 8,835 Million in the previous year. Increased input cost and increase in price of beer to consumers due to increases in duties and COVID induced reduction in volumes, not only dampened the demand but were also instrumental in putting pressure on margins.

Profit before Taxation for the year stood at Rs.1,680 Million. Profit after Taxation stood at Rs.1,129 Million.

_DIVIDEND_

We take pleasure in proposing a dividend of Re.0.50 per Equity Share of Re.1/- each for the year ended March 31,2021. The dividend declared for the previous year was Rs. 2.50/- per Equity Share of Re.1/- each. The total dividend is Rs.132 Million, which amounts to about 11.7% of the Profit after Tax.

_RESERVES_

UBL proposes to transfer Rs.113 Million to the General Reserve.

_CAPITAL_

The Authorized Share Capital of the Company stands at Rs.9,990 Million, comprising Equity Share Capital of Rs.4,130 Million and Preference Share Capital of Rs.5,860 Million. The Issued, Subscribed and Paid-up Equity Share Capital of the Company as on March 31, 2021 remains unchanged at Rs.264.4 Million comprising 26,44,05,149 Equity Shares of Re.1/- each.

_MANAGEMENT DISCUSSION AND ANALYSIS_

Management Summary

The financial year 20/21 has seen unprecedented circumstances due to the impact of COVID. This resulted in adverse circumstances for the Company due to lock downs, introduction by various States of COVID related additional taxation and prolonged closure of trade channels, including various restrictions on opening hours. Throughout the year, management focus has been on health & safety of employees and stakeholders, the introduction of socially distanced safe ways of working, reviving demand & keeping consumers engaged, while reducing costs and preserving cash. The Company would like to convey its heartfelt appreciation to its employees and stakeholders for showing resilience and dedication under the challenging circumstances. The Company has also actively supported the communities in which we operate through dedicated COVID relief and on-going CSR programmes.

In an extremely challenging year, we continued to engage our consumers both at home and away from home, we renewed our portfolio to provide a wider choice set and re-energized both our internal and external stakeholders by continuous engagement and inspiration. The ''Ghar pe Kingfisher'' campaign, the expansion of our geographic footprint with Amstel, Ultra WitBier, Heineken 0.0 etc. and the integration with our partner ecosystem via the "Back to the Bars" program are cases in point. Our focus on our people was of paramount importance; not only were we able to operate within the strictest safety guidelines but were also able to keep the channels of communication seamless so that we could re-energize everyone and keep the good times going in an unprecedented period of difficulty.

During the financial year, the Company witnessed strong progressive demand recovery quarter by quarter. The various measures taken by management resulted in recovery of market shares in the second half of the year, improved underlying profitability and strong free operating cash flow results. With the onset of a second COVID wave at the start of financial year 21/22, the beer industry is again negatively impacted, and the outlook is volatile. The Company continues to put health & safety first and actively manages costs and cash flows. Although the trajectory of COVID is unknown, confidence is derived from the trends after the first COVID wave, whereby consumer behavior towards beer consumption remained intact.

While the Company navigates the near term challenging circumstances, the strategy is to remain focused on increasing category penetration, building a strong brand portfolio, managing costs and cash, ensuring further improvements on sustainability, while fostering a highly engaged workforce that is supported by best in class processes.

Industry Overview

Unlike other emerging economies, beer Industry in India continues to remain quite traditional and is controlled by State Governments. It remains highly regulated with high taxation, restrictions on cross border movements, constraints on

production, retailing and other barriers. In many parts of the country, wholesale and/or retail distribution is controlled by State Government monopolies. Also, in over 60% of the markets, State Governments directly dictate the price at which beer can be sold. These State controlled regulations are in addition to all other Central legislations that govern any other Industry.

Beer has become one of the most popular alcoholic beverages in the country over the past two decades. Beer industry has registered a robust growth during the last one and half decades. From a total industry consumption of about 100 Million cases in 2005, the industry consumption crossed 300 Million cases per annum in 2019 prior to the impact of COVID. Three leading players contribute over 85% of the total industry sales with our Company maintaining its leadership in the Indian beer market. Beer comprises about 12% of the total alcohol consumed in India. While the alcohol beverages industry in India has been dominated by spirits, beer is emerging as the preferred alcoholic beverage for young Indians.

Compared to the global average per capita consumption of about 30 litres, the per capita consumption in India still hovers around 2 litres. However, the scope for growth in India continues to remain positive given the climate, young demographics and increasing disposable income.

Due to COVID, retail was completely shut from March 23, 2020 causing a considerable drop in sales for beer. Till first week of May 2020, dispatches could not be made due to lockdown. The initial months of the new financial year remained very challenging as retail reopened gradually in many states in India only after the 1^st week of May. Demand was also negatively impacted due to increased taxation and other regulatory and logistical impediments. Generally, high-end consumer prices due to statutory levies inhibited the sales during the year.

On basis of alcohol content, beer in India can be categorized into Strong and Mild Beers. Strong beer which has an alcohol content between 6% and 8% dominates the beer market accounting for over 80% of the total beer consumed in India. The Super Premium beer segment within both the Strong and Mild beer categories has been growing faster than the overall beer industry. Industry volumes grew at a CAGR of about 7% during 2015 to 2020. However, during 2020-21, the Indian beer market shrunk for force majeure reasons of COVID.

The Industry has evolved from manufacturing standard beers such as strong and lager beer to flavoured and variety beers in line with trends in other developed countries. A plethora of beer brands are available in India to address the palate of various consumer segments. Majority of beer market growth is driven by young consumers, who consider beer a trendy drink, compared to traditional spirits.

Brew pubs have emerged in large cities such as Bengaluru, Pune and Gurgaon over the last few years. These outlets have introduced consumers to new types of beers for example ''wheat beer''. Our competitors too, have introduced brands from their international portfolio. UBL has been successful in addressing these new consumer trends and has introduced its own ''Kingfisher Witbier'' thereby continuing to strengthen its position in the market.

Sales and Marketing

During FY21, UBL sales volume declined 38% due to COVID induced depressed market conditions. UBL continues to satisfy its customers with a wide range of quality products and innovative strategies with the ultimate objective of remaining at the fore-front of the highly competitive Indian beer market.

In 2020, the unprecedented extended periods of lockdown in India due to COVID, led our flagship brand Kingfisher to engage with consumers through interactive engagement in the digital medium. We ensured that the brand remained the primary preference among a shared beer audience. The messaging to encourage in-home consumption -''Ghar pe Kingfisher'' - was driven through a series of highly enjoyable and integrated communication pieces. We received multiple industry awards and accolades for the consumer connect we were able to create. The special AR-filter and AI-powered "Build Your Own Beat" campaign; and the "Kingfisher Bird Game"- where one needed to confine the bird within the walls of the home to drive the ''stay at home'' message, are cases in point.

Staying agile in rapidly evolving times, Kingfisher launched a campaign when bars started opening up, to help them recover from the lockdown. We focused on three parameters - standing in solidarity with our trade partners; helping them create appropriate ''social distancing'' and safety protocols in their establishments; and, in driving footfalls as the lockdown eased. We provided safety equipment including sneeze guards, sanitization stands, masks and gloves and sanitizers to more than 5000 outlets. Footfalls to outlets were driven through targeted digital campaigns. NRAI & INCA recognized UBL''s effort with the ''Back to the Bars'' campaign and felicitated us with an award.

The 2020 IPL presented a huge opportunity for brands to show consumers they were an authentic part of their real-time experiences during the lockdown, and Kingfisher contextualized and integrated it''s highly successful "Kya Plan Hai" proposition with a backdrop of one''s home, through a multitude of communication touchpoints. A series of short, digital-first video modules were effectively utilized to build consumption occasions for the brand. We also launched ''Home Packs'' in the market, enabling consumer to stock up and enjoy responsibly in the safety of their homes.

The iconic Kingfisher Calendar continues to maintain its aspirational value, this time conceptualized and creatively manifested in the brand''s own country, shot against the magical and scenic backdrop of Kerala. The brand drove buzz around this property and leveraged it on digital platforms in a large way, socializing it actively with its digital savvy patrons.

Tapping into the highly-engaged football cohort, Kingfisher created a unique campaign with FC Goa wherein it leveraged the reach of digital media. Fans were asked to cheer for their favourite team and lucky winners were given a chance to have their images on hoardings across Goa. This ''spectacular'' opportunity saw high engagement and recall.

Ultra Witbier, UBL''s foray into the craft & variety segment, launched in December 2019 in two markets, further expanded its presence into four new markets during the year. Despite the COVID-induced impediments, Ultra Witbier has created an enviable fan following among category consumers. The brand focused on driving awareness through product differentiation and occasion-led communication, engaging with the consumer through topical campaigns apropos to brand tenets. On-ground, at point-of-sale the brand focused on driving clutter-breaking visibility and product trials.

Kingfisher Ultra, our premium segment offering, launched its TVC featuring brand ambassador Farhan Akhtar on Digital and OTTs in March. Farhan Akhtar''s versatility, suave demeanor and sophistication resonated with Ultra''s brand ethos and values.

On-ground, Ultra continued its association with two prestigious Derby events in Bombay and Bangalore. The events were closed-door & limited capacity ones given COVID guidelines. However, impact was ensured through broad-reaching live-stream features on Facebook and YouTube and through our digital partners.

Music festivals at the end of 2020, the ubiquitous backdrops of year-end celebrations, were cancelled or permitted only for limited audiences. Kingfisher Ultra continued its association with the Satellite beachside music festival and provided its patrons with a safe and premium branded experience, very central to the brand''s experiential leg. The 4-day festival in Goa connected both on-ground and digitally with 4000 consumers.

Kingfisher Ultra revived its music IP Soul Flyp with a series of 10 metro city-based music events. Keeping in mind the prevailing situation, all events were limited capacity events with adherence to COVID appropriate behaviour.

Kingfisher Storm, a smooth, strong beer with bold blue packaging, continued engagement with young consumers with the well-received WOOFER campaign. The brand also extended its footprint entering the Northern markets of Delhi & Rajasthan. In spite of the challenges during this year, Kingfisher Storm was back in off-trade retail outlets with impactful instore promotions & visibility initiatives.

Heineken, one of the flagship brands in the portfolio, aimed to garner traction by amplifying its association with the UEFA Champions League Football via #The Kickoff Campaign, to celebrate the return of the pandemic-deferred tournament, commemorating this with an 8-hour live-streamed virtual festival with the world''s biggest house music community - Defected Records - drawing attention from aficionados due to the brand''s aspirational value and the talent it is associated with. This online event featured DJs from across the world in unique locations, headlined by global star Idris Elba & supported by the likes of Bob Sinclair and Purple Disco Machine.

Heineken went live with its first ingredient-centric campaign to propagate the message of purity and quality, indexing on the presence of pure malt in its brew. On-ground, the brand sponsored Krank & Sisterhood events under its ''Live Your Music'' vertical, co-creating limited capacity events with partner-outlets, driving brand recall through platform associations and placement, in a difficult year. The events were amplified through digital channels. All events adhered to social distancing norms under the #SocialiseResponsibly initiative.

Heineken partnered with INCA & NRAI to reunite all stakeholders of the F&B community, to recognize the heroes who supported the industry during the pandemic, celebrating the human spirit, and discussing best practices for a better future in the new normal.

Owned social media channels, with broad reach capacity, acted as the platform for Heineken to broadcast its stance on ''Back to the Bars'' behaviour. The global campaign was repurposed to help bars during their re-opening by encouraging consumers to #SocialiseResponsibly while providing awareness and visibility to help drive traffic to outlets.

Amstel International Strong Beer continued its footprint expansion despite the operational challenges of navigating through a difficult year. Haryana, Telangana & Maharashtra were added to the list of Amstel markets post the gradual unlock of last year.

In a year which posed significant challenges to the country, our organization focused on keeping our employees safe in the face of the raging pandemic and continued to engage with our consumers in a meaningful manner.

Supply Chain

Manufacturing expenses for the FY21 amounted to Rs.20,363 Million, representing 48% of net sales, as against Rs.31,603 Million in the previous financial year, which constituted 49% of net sales. UBL has focused primarily on following COVID safety guidelines at all our breweries prescribed by Ministry of Home Affairs and local administrations. Delivering volumes as per market demand post national lockdown coupled with tight cost control measures, expanding footprint for premium brands and cost-saving initiatives which have helped us achieve this in an environment impacted by uncertainty, lockdowns and disrupted supply chains for bottles and commodities.

Capacity expansion was carried out in our breweries in Telangana, Karnataka & Rajasthan. Our Telangana Brewery (UBGD) post expansion is the largest brewery in India with capacity of 3 mio HL/annum. Karnataka Brewery (UB Chamundi) is the largest Brewery (2.0 Million HL) in the state. Expansion of our Unit in Rajasthan with addition of Heineken footprint provides a hub for supply of premium brands in North India.

In our quest for sustainability, our total renewable energy usage for FY21 stood at 79.6%. UBL''s own units consumed 30.0% electricity generated from renewable sources. To supplement this, 96% of thermal energy came from use of renewable sources. The renewable energy usage is equivalent to carbon footprint of 25,304 tons of CO₂ which is equivalent to 1.24 Million trees.

Bottles remain our biggest cost element. Due to constrained domestic capacity prior to start of 2020-21, imports were planned to bridge the gap and cover peak requirement. Volume drop due to COVID resulted in reduction of about 1,00,000 metric tons equivalent of Glass buying 38% which was mitigated by proportionately reducing contracted volumes with all suppliers without any financial impact. Volume drop in CANs by 47% was mitigated by extending hedge coverage into 2021-22 without any penalty on similar terms & conditions. Strategic long-term contracts are in place for new glass & cans which secures our requirement for coming year.

Recycled bottle collection continues to remain key focus area. Old bottle returns were impacted on account of COVID during 2020-21 due to disturbance in the old return supply chain & loss of bottles in few states due to higher cullet prices.

Value Engineering related to lower gauge cans, light weight ends and additional source from Ceylon Cans-Sri Lanka established during the year.

Barley-malt, the basic raw material in the manufacture of beer, has seen lower prices due to pandemic which lead to reduced demand from brewing as well as cattle feed sector. The prices of the competitive crops grown in the barley area however were trading at all time high prices. This led to a significant drop in barley acreages and farmers shifted their acreages towards those rewarding competitive crops.

We were also able to get the extension of delayed shipments on our imported malt contracts from Australia as well as Europe without any penalty.

In order to make inputs/raw material requirement simplistic across breweries, use of rice flakes was replaced with broken rice. Freight negotiations were routed through auction to contain price push in line with diesel prices.

Research and Development

UBL''s Research and Development function continues to support its growth strategy with a focus on new capabilities, development of new products, enhancement of existing products, productivity improvement and cost reduction.

Human Resources

Human Resources (HR) develops UBL''s most important asset - our people - by engaging and empowering them. At UBL, we recognize that the long-term success and sustainable growth of our organisation depends on our capacity to attract, retain and develop our employees. We are committed to provide our employees all over the country with a safe and healthy work environment and extend our support to ensure a balance of personal and professional life. The organisation fosters an open and transparent culture which drives ownership and nurtures entrepreneurial spirit amongst the employees. The Company believes in celebrating milestones, both big and small and encourages its people to connect, communicate and collaborate through various forums.

UBL has an inclusive culture and takes pride in being an equal opportunity employer. We encourage all forms of Diversity and believe that it adds to building a more engaged workforce thereby contributing to our business performance. Besides the mandated policies to develop a conducive work environment we have a Diversity and Inclusion Council that plays an active role in creating various platforms, opportunities and transparency.

Learning is ingrained in the UBL culture and employees are constantly encouraged and given ample opportunities to upgrade their knowledge and skill. We follow an integrated learning approach where on-the-job is the principal source of learning. The learning initiatives are also curated to build the talent and leadership pipeline to enhance organisational capability to compete and win in the market. Apart from our essential programmes, tailor made customised programmes are also offered to address the specific needs expressed by businesses, aimed at building specific capabilities at various levels of the organisation. The UBL Competency Framework helps in assessing the current and future talent capability. It also helps in highlighting the specific strengths to be further developed and flag critical skills for mitigation.

The organisation believes in ethical governance and abides by the robust policies laid down under Code of Business Conduct. The guidelines laid down in the Code help our employees in handling dilemmas and difficult ethical situations related to the business. Our employees and vendors can report any violation of the code via an online platform named Speak-Up. The platform is managed by a third party to ensure that the identity of the whistle blower is protected.

UBL uses technology effectively in all stages of employee life cycle from hire to retire. Instrumenting such technology has resulted in standardized automated processes, improved productivity and enhanced employee experience.

The inputs from our annual employee engagement survey help us in continuously improving our people practices, policies and programs and stay in touch with the expectations of our employees.

Industrial Relations continue to be harmonious and peaceful at all levels and at all locations of the Company. Timely Long-Term Settlements are done to ensure continuity in healthy industrial relations.

All the wage agreements have been renewed in a timely manner and are valid and subsisting. Workers and unions support implementation of reforms that impact quality, cost and improvements in productivity across all locations, which is commendable.

UBL has 3,070 employees on its rolls across all locations. The Company has not offered any stock options to the employees during the year under review.

Total employee benefit expenses for the year stood at Rs. 4,823 Million, as compared to Rs. 4,998 Million in the previous year. This constituted 4.7% of revenue from operations. Your Directors place on record their sincere appreciation to all employees for their contribution towards the continuous success of the organization.

Significant changes in Key Financial Ratios

Following are the Key Financial Ratios, where variance of more than 25% is noticed as compared to the previous financial year:

Interest Coverage Ratio: EBITDA is 28 times of interest in 2019-20, has come down to 19 times in 2020-21, on account of EBITDA degrowth by 49% while interest costs came down by 27%.

Debt Equity Ratio: Net debt at year end March 31,2021 is zero against 6% of Shareholder funds as on March 31,2020.

Net Profit Ratio: Net profit ratio decreased from 2.92% in 2019-20 to 1.11% in 2020-21, primarily on account of reduction in volumes.

Return on Net worth: Return on Net worth decreased from 12% in 2019-20 to 3% in 2020-21.

Impact of COVID

The entire world today is reeling under the threat of the unprecedented COVID pandemic. This had a huge and significant impact on the global businesses all over the world across sectors and economy including India. COVID has impacted businesses globally by disrupting supply chain, travel, production, consumption and services threatening operations and financial markets. Companies find themselves navigating a new reality, addressing issues from crisis response and business continuity to valuations and financial stress.

As a fall out, various state governments have imposed measures which included tax increases negatively impacting the industry. Majority of these tax increases were partly or fully rolled back during the financial year. The nationwide lockdown implemented in March 2020, led to complete closure of all outlets till May 04, 2020. On-trade sale was progressively closed in weeks leading up to March 23, 2020. State by State decisions led to on trade resuming operations from September & October 2020 onwards.

The ripple effect of lockdown will have a key impact on India''s economy as all business sectors get affected, resulting in low revenue generation due to an eventual halt / slump on the sale of products and / or services. UBL is not an exception to this scenario. Given such a scenario, companies will have to operate differently to effectively manage the crisis. COVID has changed the way we live, work and use technology.

Beer companies reeled under pressure as the lockdown came at the onset of summer which comprises the bulk of sales. All these were a dampener, next to partial or full closure of bars & shops in an environment of overall lower economic growth and reduced consumer confidence.

_CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY_

UBL firmly believes in growing the business in a socially and environmentally responsible way while meeting the interests of all its stakeholders. Our Company is committed to improving the lives of the community it works with and reducing impact of its operations on the environment it draws its resources from.

UBL is committed to water stewardship and makes conscious efforts to conserve and replenish water. Last year, we have spent more than 60% of our CSR funds on Water initiatives. In the next 5 years, we are focused to increase this commitment to 75%.

In addition to implementing large rainwater harvesting and watershed management projects in the vicinity of our breweries for water conservation, we also make extensive efforts in generating awareness in the communities on the adoption of rainwater harvesting practices, promoting climate resilient practices for agriculture and incorporating necessary infrastructure for water preservation. We have active water conservation projects running in the states of Rajasthan, Punjab, Haryana, Maharashtra, Telangana, Karnataka and Kerala. Our water projects have touched the lives of lakhs of people till date.

Our safe drinking water projects aim to provide a sustainable solution for clean drinking water and reduce water borne diseases resulting from consumption of contaminated water. The 1,000 lph Community Safe Drinking Water Hub in Tapukara Village, Rajasthan inaugurated last year, targets to give more than 10,000 denizens access to potable drinking water.

We collaborated with Canpack India to implement a unique initiative to develop an Urban Dense forest in Waluj MIDC area in Aurangabad, Maharashtra. We have planted 75,000 trees in 50 native species in an area of 5 acres to develop this forest and improve the biodiversity in this region using the Miyawaki technique of afforestation.

The COVID pandemic has taken innumerable lives and livelihood. As a responsible corporate citizen, our first response was to stand beside our co-communities and supply them with basic necessities during lockdown. Initiating discussions with the Panchayat and the people on the ground, UBL galvanized its NGO partners to carry a rapid needs assessment to find out requirement of the community. With the help of our NGO partners we distributed ration kits and hygiene kits in the villages benefiting more than 12,000 families all over the country. We also made provisions for ambulances and helped government schools conduct board exams safely in some of our co-communities.

Our next step was to support the brave frontline workers who have been risking their lives for the safety of the community. We got in touch with local government hospitals, police departments and donated PPEs, masks, sanitizers, safety overalls, immunity boosters etc. across the country.

The Amphan super cyclone caused widespread damage to life and property in West Bengal specifically in the ecologically sensitive Sunderbans. UBL supported the 1,400 affected families of 20 villages of Sunderbans with dry ration, household essentials, temporary shelter and hygiene essentials.

The Company has also spearheaded some of the critical community interventions to improve the socioeconomic conditions of its co-communities-major ones being infrastructure development of schools, supporting students through happiness boxes as an alternative to mid-day meals and enhancing the scope of digital learning in the pandemic-stricken world.

The Business Responsibility Report in the format prescribed under the Securities and Exchange Board of India ("SEBI") (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations") is annexed as Annexure-A. Annual Report on CSR activities in terms of the Companies Act, 2013 ("the Act") and the Companies (Corporate Social Responsibility) Rules, 2014, is annexed as Annexure-B.

Sustainability

UBL''s sustainability reporting articulates its perspective on the emerging forces in the global sustainability landscape and UBL''s response on multiple dimensions like economic, ecological and social sustainability. We articulate key issues as well as opportunities that emerge and update our engagements. We are continually working towards reducing our water and energy consumption and adopting renewable sources of energy thereby reducing our carbon footprint. We are also continuously focusing on recycling our packaging materials. More than 65% of bottles used by us are recycled by us and the remaining is also recycled by bottle manufacturers and others. Our secondary packaging like carton is made using more than 80% recycled paper and the same is recycled upwards of 90% by trade. We have tied up with Central Pollution Control Board approved plastic waste recyclers to recycle 100% equivalent of the low-density polyethylene used in our manufacturing process.

Green Energy

UBL has been continuously marching ahead in its journey of maximizing usage of Green Energy. This journey demonstrates the organisational vision to lead the initiative by being proactive and thereby contribute to environmental protection. As an organisation, we currently use 78.7% of our total energy from Renewable Energy sources, with Thermal Renewable Energy contributing 95% and Electrical Renewable Energy at 30%. Our breweries in Karnataka and Tamil Nadu are leading the drive with Total Renewable Energy usage of more than 95% & 89% respectively. Electrical Renewable Energy has improved from 23% in FY19-20 to 30% in FY20-21 in our manufacturing facilities.

Awards

1) Pollution Control Board:

â¢ Our brewery at Nanjangud, Mysore won the "20th Annual Greentech Environment Award 2020" for Energy Efficiency.

2) Safety:

â¢ Our brewery at Palakkad received "Safety" award 2020 from Kerala State Department of Factories & Boilers, under Large Factories - Food and Food Product Category.

3) Confederation of Indian Industry (CII) Environment, Health and Safety (EHS) Excellence Awards:

â¢ Our brewery at Sangareddy, Telangana received "EHS 3 star rating" award for 2020 and also received supplement award for Best Hygiene at Work Place Initiatives.

â¢ Our brewery at Palakkad recognized with EHS sectoral award under Manufacturing - Food Process Category and "EHS 5 star rating (top rating)" award from CII.

4) Total Productive Management (TPM):

In our Journey of Operational Excellence through Process of TPM, we are on continual improvement path and in FY 20-21, we bagged 3 Prestigious national level awards in the competition held by various forums like Confederation of Indian Industries etc.

â¢ Our Brewery at Ellora, Aurangabad was awarded at Kaizen Competition organized by Quality Circle forum of India.

â¢ Our Brewery at Palakkad, Kerala was awarded with Platinum award (Restorative Kaizen Category) at Challengers Trophy organized by CII Institute of Quality.

â¢ Our Brewery at Shahjahanpur, Rajasthan was awarded with Gold Medal at 39^th Kaizen Competition organized by CII Institute of Quality (Innovative Kaizen Category).

_OPPORTUNITIES, THREATS, RISKS & CONCERNS_

Beer is an increasingly popular drink in India. However, for a variety of socio economic and religious reasons, India''s current per capita consumption of beer still hovers below 2 litres which is well below the Global average of around 30 litres and Asia average of about 27 litres. We believe, such average low per capita consumption has a lot of room to grow in years to come given our population, climate, evolving attitude, increasing income and demography.

Attitude towards alcohol consumption is evolving particularly amongst youth, working women and other urban population who are gaining an appetite for beer as social drinking has become a more adaptable lifestyle in metros and tier two cities. For the urban youth, beer consumption is increasingly becoming part of their social interactions. Beer is gradually becoming a perfect after-work companion for corporate India as well.

India is the second most populous country in the world, with over 1.3 billion people, i.e. more than a sixth of the world''s population. Over 50% of its population is below the age of 25 and more than 65% below the age of 35 as per United Nations, Department of Economic and Social Affairs statistics. Sheer size of India''s population itself is a huge opportunity which will be continuously tapped for future growth.

During peak lockdown months, while the central government had permitted opening of shops to sell essentials, it had denied sale of alcoholic beverages, though a few states did allow online delivery of alcohol. State governments should encourage licensed retail outlets to set up their own portals to sell alcohol and allow aggregators for home delivery. But for the pandemic, there has been a steady growth of beer consumption in India. Except for the last financial year where sales and revenue may be adversely impacted due to the after effect of this force majeure circumstance, the opportunities for beer growth would stay northbound.

While Excise policies across States do not allow online supply or delivery of alcohol, the COVID pandemic has given the alcohol industry an opportunity to pursue home delivery and online sales which is likely to augment easy availability of beer. Should the Government continue to proactively open-up and regulate online sale of alcohol/home delivery it would be favourable for the beer industry in the long term. India has all the necessary infrastructure required for the successful e-commerce and online sale in beer. Your Company is actively supporting the development of these new initiatives.

Threats, Risks and Concerns

A variety of taxes & levies are imposed on beer during and after production, movement and sale by each state. These taxing impositions, pricing regulations, inadequate market infrastructure and restrictions on interstate movement of beer pose a great challenge to the industry. Despite drivers of growth in place, government intervention in distribution, ever increasing taxation, restricted communication and increased cost of raw material prices (glass, barley malt, other packaging material, etc.) and government restrictions applied on advertising, pose huge challenges to industry growth.

The threat to sales in some territories in the country arises due to changes in government regulations as also the threat of prohibitive actions which stems from constant changes in the political climate in the country.

Though sales have been prohibited in certain states, we have effectively identified avenues for increasing sales in other states. In entirety, the industry also faces the threat of partial or total prohibition based on political manifesto of the ruling party in a State.

There is a perennial threat of competition introducing new products in various segments. This would also include introduction of variety of craft and premium beers. Competition in the country''s beer segment is witnessed amongst 3 major players. These companies compete in a healthy manner, based on product variants, product quality, distribution network, brand value and promotion strategies.

In order to cater to new consumers, capture market opportunities, compete with new launches by competitors and in continuous endeavour to offer new product ranges, UBL has added to its portfolio via "Kingfisher Ultra Witbier" in the premium segment. "Kingfisher Ultra Witbier" has been launched in the profitable markets of Karnataka and Goa and has received an encouraging response from consumers. Your Company plans to launch this brand in other relevant markets in a phased manner.

Non-availability of water, rationing its supply and restrictions on withdrawal of ground water also poses a major threat. We have built infrastructure which helps in reduction of water consumption in breweries as a sustainability initiative. We have pro-actively managed sustainability under our "3R" policy to reduce, recycle and recharge as well as look at opportunities for water conservation through Rain Water Harvesting to achieve a positive or at least neutral water balance.

The Company focuses also on secure IT operations and addressing risks of cyber security. This includes risks from IT security lapses, malware and ransomware attacks, disruptions in key Enterprise Resource Processes and hacking, which could lead to disruptions in business operations and loss and/or leakage of confidential data.

Prospects

Beer has become one of the most popular alcoholic beverages in the country over the past two decades. The majority of beer market growth is driven by youth and consumers who consider beer a trendy drink as compared to traditional spirits. The healthy growth rate during the last one and half decades in the beer industry is an indication of the immense potential for growth open for Indian breweries. Many international brewers around the world have now created a base in India, either in the form of manufacturing or through distributors and joint ventures. As per market intelligence, pub and bar culture in India is escalating significantly, and is becoming more popular in the age group of 20-45. Further, the market is anticipated to grow at a CAGR of 6-8% over the next decade as alcohol consumption is growing in urban areas of the country.

Beer market in India has evolved from manufacturing usual beers such as strong and lager to flavored / craft beers owing to adoption of latest trends and technologies from western markets.

The per capita beer consumption in India is still very low at less than 2 litres compared to other countries in Asia Pacific region and therefore the market could witness huge growth in the coming years owing to factors such as the shift from hard liquor to beer consumption by consumers in India, increase in disposable income, change in societal perspective amongst others.

It is expected that the demand for premium beer will continue to rise in the future with an increase in personal disposable income and higher living standards. Your Company is actively making representations to various state governments for favourable beer taxation and encourage taxation on the basis of alcohol content, paving the way for incremental growth in the market. Barring the COVID impact, both in terms of revenues and sales volume, which may continue to last during the current FY21, the market is expected to further grow going forward.

The market has been growing mainly because of the growth in the younger demography of the population, proportionate increase in disposable income, rising preference for low alcohol beverage and gradual social acceptance. Drinking in bars is fast becoming a social phenomenon in cities such as Delhi, Gurgaon, Mumbai, Pune and Bangalore and with emergence of craft beers, the growth in beer consumption increased rapidly. The rising number of pubs and bars is another factor which increased beer consumption in metropolitan cities increased the range of product availability and improved the retail environment. Some state governments, for instance Maharashtra and Uttar Pradesh, offered separate licenses for beer sale further boosting the prospects for the industry.

For over three years, the Company has been directly exporting to UAE and a few other countries along with its existing licensing arrangements for brewing in UK (including supplies to European market), Australia, New Zealand and Nepal. The market in Singapore is now also served by a license arrangement.

While the Company navigates the near term challenging circumstances due to COVID, the strategy remains focused on increasing category penetration, building a strong brand portfolio, managing costs and cash, ensuring further improvements on sustainability, while fostering a highly engaged workforce that is supported by best in class processes.

We continue to believe in the long term growth potential of the beer market in India which we are convinced has secular tailwinds. While managing the crisis that descended on us, we have also taken the time to Refresh, Renew and Re-energize the business to realize this potential and keep the Good Times going forever.

Risk Management

Though already established efficiency programmes apply to all aspects of our business, there is a constant drive for further efficiencies and reducing cost. Backed by strong internal control systems, the current Risk Management Framework consists of key elements laying down the roles and responsibilities in relation to risk management covering a range of responsibilities, from the strategic to the operational. These role definitions, inter alia, provide the foundation for appropriate risk management procedures, their effective implementation across your Company and independent monitoring and reporting. The Risk Management Committee, constituted by the Board, monitors and reviews the strategic risk management plans of your Company as a whole and provides necessary directions on the same.

The Corporate Risk Management Cell, through focused interactions with businesses, facilitates the identification and prioritisation of strategic and operational risks, development of appropriate mitigation strategies and conducts periodic reviews of the progress on the management of identified risks.

The COVID pandemic has triggered new risks in business operations. While the gravity of the pandemic is still unfolding, your Company pro-actively put in place Crisis /Contingency Management Teams, both at the Breweries as well as at the Corporate levels. These cross-functional teams, represented by senior management, continually review strategic, operational, financial matters as well as measures relating to employee well-being health and safety.

Detailed advisories have been issued to employees on how to safeguard themselves, their colleagues and associates, and their families both at the workplace as well as at their homes. These guidelines also provide details on social distancing norms, how they should seek help on any aspect concerning their health from within the organisational support system. Heightened safety protocols were implemented at all units that resumed operations, with end-to-end solutions from transportation of workmen, screening, regular deep cleaning and sanitisation, innovations to ensure safe distancing and strict adherence to hygiene standards and use of personal protective equipment where required.

Through these actions, your Directors are confident that your Company would sustain its leadership position, grow ahead of the market and realize improved profitability in the years to come.

Internal Control System

UBL has established a robust system of Internal Controls to ensure that assets are safeguarded, and transactions are appropriately authorized, recorded and reported. With the introduction of Internal Controls over Financial Reporting (ICFR) in the Act, we have made an evaluation of functioning and quality of internal controls and Corporate Governance Policy that guides the conduct of affairs of your Company and clearly delineates the roles, responsibilities and authorities at each level of its governance structure and key functionaries involved in governance.

The Internal Financial Control framework of your Company is established in accordance with COSO (Committee of Sponsoring Organizations) framework and is commensurate with the size and operations of your Company''s business. In addition to statutory mandate, Internal Audit evaluates and provides assurance of its adequacy and effectiveness through periodic reporting. Controls in place are routinely evaluated and audited by Internal and Statutory Auditors and gaps are identified by the Auditors through a detailed testing exercise. The process of internal control ensures orderly and efficient conduct of business, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. Financial Statements are prepared based on Significant Accounting Policies that are carefully selected by management. The Accounting Policies are reviewed and updated from time to time.

The Company believes that the overall internal control system is dynamic and reflects the current requirements at all times thereby ensuring that appropriate procedures and operating and monitoring practices are in place by regular audit and review processes to ensure that such systems are reinforced on an ongoing basis.

_OTHER INFORMATION_

Subsidiary Company

UBL has formulated a policy for determining material subsidiaries which is placed on the website of the Company www.unitedbreweries.com and is available through the webpage:

http://unitedbreweries.com/pdf/policyandcodes/Policy%20for%20Determining%20Material%20Subsidiaries-PDF.pdf

The consolidated financial statement of the Company including the financial statement of its subsidiary forms part of this Report in terms of the Act and the Listing Regulations. A statement containing the salient features of the financial statement of the subsidiary and associate is attached as Annexure-C to this Report.

Cash Flow Statement

A Cash Flow Statement for the year ended March 31, 2021 is appended.

Particulars of Loans, Guarantees or Investments

Details of loans, guarantees and investments covered under Section 186 of the Act are given in the notes to the Financial Statements. The Company has not advanced loans to Directors / to a Company in which the Director is interested to which provisions of Section 185 of the Act apply and has not given loans / guarantees / provided security to which provisions of Section 186 of the Act apply.

Listing requirements

Your Company''s Equity Shares are listed on the BSE Limited and National Stock Exchange of India Limited. Listing fees have been paid to these Stock Exchanges for the year 2021-2022.

Depository System

The trading in the Equity Shares of the Company is under compulsory dematerialization mode. The Company has entered into an agreement with National Securities Depository Limited and Central Depository Services (India) Limited in accordance with the provisions of the Depositories Act, 1996 and as per the directions issued by the Securities and Exchange Board of India. As the depository system offers numerous advantages, Members are requested to take advantage of the same and avail the facility of dematerialization of the Company''s shares.

Deposits

There were no outstanding deposits at the end of the previous financial year. The Company has not invited any deposits during the year.

Ratio of Remuneration and Particulars of Employees

In terms of sub-section(1) of Section 136 of the Act, the Company has opted to provide full version of financial statements including consolidated financial statements, auditor''s report and other documents required to be annexed to such financial statements excluding the details relating to ratio of the remuneration of each Director to the median employee''s remuneration and remuneration drawn by certain employees over the threshold etc. as provided in sub-section(12) of Section 197 of the Act read with Rule 5(1) & 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The details provided by the Company are in compliance with Section 136(1) of the Act and includes salient features of Form AOC-3A.

Cautionary Statement

Employees Stock Option Scheme and Sweat Equity Share

The Company has not offered any shares to its employees or Key Managerial Personnel under a scheme of Employees'' Stock Option and has also not issued any Sweat Equity Shares at any time.

Related Party Transactions

Details of transactions with related parties as defined in the Act and the Rules framed thereunder, the Listing Regulations and Accounting Standard 18 of the Companies (Accounting Standards) Rules, 2006, have been reported in the Notes to financial statements. Approval of the Audit Committee and the Board of Directors, as required under the Listing Regulations has been obtained for such transactions.

The Company has formulated a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions which is placed on the website of the Company www.unitedbreweries.com and is available through the webpage: http://unitedbreweries.com/pdf/policvandcodes/Policv%20on%20Related%20Partv%20Transactions.pdf.

All transactions entered by the Company during FY21 with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company has not entered into any transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

Familiarization programme for Independent Directors

During this year the Company has not appointed any new Independent Director. The existing Board comprises Executive, Independent and Non-Executive Directors who have been at the helm of Management of the Company for several years and are fully conversant with the business and operations of the Company. The Familiarization programme for new Independent Directors as and when inducted shall aim to familiarize them with the Company, their roles, rights, responsibility in the Company, market, business model of the Company etc. The Board of Directors has complete access to requisite information within the Company.

Familiarization is done at the Board Meeting itself where business is discussed at length along with Industry dynamics, Strategic planning and other relevant information. Presentations are regularly made to the Board of Directors/Audit Committee/Nomination & Remuneration Committee on various related matters, where Directors get an opportunity to interact with Senior Managers. The Company has issued appointment letters to the Independent Directors which also incorporates their role, duties and responsibilities. The details of the Familiarization Programme for Independent Directors is disclosed on the Company''s website at the webpage: http://unitedbreweries.com/pdf/policyandcodes/Familiarisation%20Programme.pdf

Whistle Blower Policy

The Company has adopted vigil mechanism which is a channel for receiving and redressing of complaints about any misconduct, actual or suspected fraud, actual or potential violations of the Company''s code of conduct and any other unethical, unlawful or improper practices, acts or activities within the Company. The Company has formulated a Whistle Blower Policy for Employees & Directors and has ensured adequate safeguards against victimization of whistle blowers. The details of establishment of the vigil mechanism are disclosed on the website of the Company.

None of the Employees and Directors have been denied access to the Chairman of the Audit Committee.

Internal Complaints Committee

as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Investigations are conducted, and decision made by the ICC at the respective locations, and the constitution is as prescribed. Details of complaints pertaining to sexual harassment filed, disposed of and pending during the financial year are provided in the Corporate Governance and Business Responsibility Reports of this Annual Report.

Conservation of Energy

The Company is taking continuous steps to conserve energy. Its "Sustainability" initiatives are disclosed separately as part of this Report.

The information on conservation of energy, technology absorption, foreign exchange earnings and outgo, as stipulated under Clause (m) of sub-section (3) of Section 134 of the Act read with the Companies (Accounts) Rules, 2014 is set out herewith as Annexure-D to this Report.

Code of Business Conduct and Ethics

The Board of Directors of UBL have adopted a Code of Business Conduct and Ethics in terms of the Listing Regulations which has been posted on the website of the Company viz., www.unitedbreweries.com.

Code for Prevention of Insider Trading

Directors

The Board of Directors of UBL currently comprises of eight Directors with a balanced combination of Executive, Non-Executive and Independent Directors.

Mr. A K Ravi Nedungadi, a Non-Executive Director retires by rotation at this Annual General Meeting (AGM), and being eligible, has offered himself for re-appointment. Resolution for re-appointment of Mr. A K Ravi Nedungadi is proposed at this AGM.

Mr. Rishi Pardal is the Managing Director.

Chief Financial Officer (Key Managerial Personnel)

Mr. Berend Odink is the Chief Financial Officer of the Company.

Meetings of the Board of Directors and Committees of the Board

The Meetings of the Board and Committees are pre-scheduled, and a tentative calendar of the meetings finalized in consultation with the Directors is circulated to them in advance to facilitate them to plan their schedule. In case of special and urgent business needs, approval is taken by passing resolutions through circulation. During FY21, six (6) Board Meetings were held. Other details including the composition of the Board and various Committees and Meetings thereof held in FY21 are given in the Corporate Governance Report forming part of this Report.

Meeting of the Independent Directors

During the year, two Meetings of Independent Directors were held on October 17, 2020 and March 24, 2021. All Independent Directors have given a declaration that they meet the criteria of Independence and in the opinion of the Board, the Independent Directors fulfill the condition of Independence as laid down under the Act and Listing Regulations.

Audit Committee

The Audit Committee of the Board of Directors is constituted to act in accordance with the terms of reference and perform roles, as prescribed under the Act and Listing Regulations. The composition of the Audit Committee, its terms of reference, roles and details of Meetings convened and held during the year under review is given in the Corporate Governance Report forming part of this Report.

During the year under review, all the recommendations of the Audit Committee were accepted by the Board. Nomination and Remuneration Committee

The Nomination and Remuneration Committee is constituted to act in accordance with the terms of reference and perform roles, as prescribed under the Act and Listing Regulations. The composition of the Nomination and Remuneration Committee, its terms of reference, roles and details of Meetings convened and held during the year under review is given in the Corporate Governance Report forming a part of this Report.

Policy on Performance Evaluation

UBL has formulated a Performance Evaluation Policy inter-alia prescribing evaluation criteria for Independent Directors and the Board of Directors of the Company. The Policy is posted on the website of the Company and is available through the webpage: http://unitedbreweries.com/pdf/policyandcodes/Directors%20Performance%20Evaluation%20Policy.pdf.

Performance Evaluation of Directors

To ensure an effective evaluation process, the Nomination and Remuneration Committee has put in place a robust framework for conducting the exercise with key steps and practices defined clearly. Performance of the Board is evaluated on various parameters such as composition, strategy, tone at the top, risk and controls and diversity. Also, a questionnaire for Committees is framed on parameters such as adherence to the terms of reference and adequate reporting to the Board. Parameters for the Directors include intellectual independence of the Director, participation in formulation of business plans, constructive engagement with colleagues and understanding of the risk profile of the Company.

Keeping in view the sensitivity, confidentiality is ensured. As part of this process, customized questionnaires, are circulated to all Directors of the Company. Each Director is required to undertake a self-assessment. Additionally, the effectiveness of the Board and Committees is also evaluated by each Member of the Board and Committee through an electronic platform and kept confidential.

Summary of responses received from Directors is placed at a Board Meeting.

Remuneration Policy

The Company carries out periodic reviews of comparable companies and through commissioned survey ascertains the remuneration level prevailing in these companies. The Company''s Remuneration Policy is designed to ensure that the remuneration applicable to Managers in the Company is comparable with Multi-national Companies operating in Brewing or similar industry in India. In line with statutory requirements, the Board of Directors has adopted a Remuneration Policy for Directors, Key Managerial Personnel (KMP) and other employees of the Company. The Remuneration Policy lays down the criteria for appointment and removal of Directors, KMP and Senior Management. The Policy also prescribes the criteria and manner for fixation and approval of remuneration payable to Directors, KMP and other employees. The Policy is posted on the website of the Company www.unitedbreweries.com.

Dividend Distribution Policy

As required under Regulation 43A of the Listing Regulations, the Company has formulated a Dividend Distribution Policy. This policy can be viewed on the Company''s website at www.unitedbreweries.com.

Foreign Exchange Earnings and Outgo

During FY21, total foreign exchange earnings of the Company stood at Rs. 768 Million (Previous Year: Rs. 1,953 Million) and foreign exchange outgo stood at Rs.1,641 Million (Previous Year: Rs. 3,754 Million).

Corporate Governance Report

Report on Corporate Governance forms a part of this Report along with the Certificate from the Company Secretary in Practice.

Annual Return

http://unitedbreweries.com/pdf/AGM/Annual%20Return%20MGT-9%20-%202020-2021.pdf.

Auditors and the Auditor''s Report

Messrs S. R. Batliboi & Associates LLP, Chartered Accountants (Firm Registration No. 101049W/E300004) were re-appointed as Auditors of the Company by the Members at the AGM held on September 23, 2017 to hold office for a period of five years till the conclusion of the AGM in 2022. In terms of Section 139 of the Act, as amended by the Companies (Amendment) Act, 2017 notified on May 07, 2018, appointment of Auditors need not be ratified at every AGM. Accordingly, 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''s of the Company as prescribed under the Act and the Rules framed thereunder.

There are no qualifications or adverse remarks in the Auditor''s Report.

Secretarial Audit

Pursuant to Section 204 of the Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Sudhir Hulyalkar, Company Secretary in Practice, to undertake Secretarial Audit of the Company for the FY21. The Secretarial Audit Report forms part of this Report and is annexed as Annexure-E.

There are no qualifications or adverse remarks in the Secretarial Audit Report.

Reporting of frauds by auditors

Details of Significant and Material Orders

(ii) As per disclosures received by UBL in May 2018 under SEBI (Prohibition of Insider Trading) Regulations, 2015 and SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 from a few Promoter companies controlled by Dr. Vijay Mallya, we notice that 41,315,690 Equity Shares held by such entities in UBL constituting 15.63% of the total paid up capital have been transferred to the demat account of Enforcement Directorate (ED), Mumbai, Government of India. Earlier, in August 2017, 1,389,068 Equity Shares constituting 0.52% of the total paid up capital were also transferred to the demat account of ED. The ED now holds 42,704,758 Equity Shares constituting 16.15% of the total paid up capital in the Company. UBL has not received any communication from the ED in this regard. As per the legal opinion obtained by the Company with respect to such transfer of shares, the ED has only taken possession of the Equity Shares under the Prevention of Money Laundering Act, 2002 and these Equity Shares have not been confiscated. Transfer of these shares, therefore, may not constitute a transfer of ownership.

Further, the Recovery Officer-I, DRT-II, Bengaluru has transferred 7,404,932 Equity Shares comprising 2.80% of the total paid-up Equity Share capital of the Company in its name from the demat account of UBHL which is under liquidation. However, UBL has not received any disclosure from UBHL in terms of SEBI (Prohibition of Insider Trading) Regulations, 2015 and SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011. The Recovery Officer-I, DRT-II, pursuant to a block deal through BSE/NSE on March 27, 2019 has transferred 7,404,932 constituting 2.80% Equity Shares of the Company to Heineken International B.V

(v) Pursuant to enquiry initiated by Competition Commission of India ("CCI") on October 10, 2018 in relation to allegations of price-fixation and cartelisation, the office of the Director General, Competition Commission of India had completed its investigation in November 2019 and had filed its investigation report (DG Report) with the CCI. The CCI had permitted UBL and other parties to the enquiry, to file their comments/objections to the DG Report and appear for an oral hearing in the matter. Hearings were held on February 1 1, 2021 and March 12, 2021 respectively. UBL filed its response and argued during the oral hearings countering the DG report. Subsequently written submissions were filed with the CCI. The Management, along-with its legal advisors, believe that there are likely mitigating circumstances to counter presumptions made against the Company by the CCI as contained in the Competition Act, 2002. Orders are not yet passed.

The orders/proceedings mentioned above do not have any impact on going concern status of the Company.

Directors'' Responsibility Statement

Pursuant to clause (c) of sub-section (3) of Section 134 of the Act, 2013, the Board of Directors report that:

(a) in the preparation of the annual accounts for the financial year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) the Directors have laid down internal financial controls to be followed by the Company and ensured that such internal financial controls are adequate and were operating effectively, and

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and ensured that such systems were adequate and operating effectively.

All Annexures referred to in the Directors'' Report have been disclosed under the Statutory Information forming part of this Annual Report.

_ACKNOWLEDGEMENT AND APPRECIATION_

Your Directors take this opportunity to thank UBL''s customers, shareholders, suppliers, bankers, business partners and associates, financial institutions and central and state governments for their consistent support and encouragement to the Company. Finally, your Directors would like to convey sincere appreciation to all the employees of the Company for their hard work and commitment.

By Authority of the Board

Rishi Pardal Sunil Kumar Alagh

April 27, 2021 Managing Director Director

Bengaluru DIN: 02470061 DIN: 00103320

Mar 31, 2018

Directors'' Report

The Directors have pleasure in presenting this Annual Report on the business and operations of the Company and the audited accounts of United Breweries Limited (''UBL'' or ''your Company'' or ''the Company'') for the financial year ended March 31, 2018 (''the year under review'', ''the year'' or ''FY18'').

Financial performance for the year ended March 31, 2018 is summarized below:

(Amounts in Rupees million)

FINANCIAL RESULTS	Year ended March 31
	2018	2017
Gross Turnover	124,266	102,282
Net Turnover	56,170	47,341
Other Income	130	516
EBITDA	9,141	6,928
Depreciation and amortization	2,596	2,870
EBIT	6,545	4,058
Interest	477	587
Profit before Taxation	6,068	3,472
Provision for Taxation	(2,128)	(1,178)
Profit after Tax available for appropriation	3,940	2,293
Appropriations:
Dividend on Equity Shares (including taxes thereon)	366	366
Transfer to the General Reserve	394	229
Other Comprehensive Income	31	25
Balance your Directors propose to carry to the Balance Sheet	3,149	1,673
Total appropriations	3,940	2,293

The Gross turnover of UBL grew by 21% on account of increased volume, higher realizations, favorable state and brand mix as well as price increase in certain markets during the year. The Net turnover increased by 19%.

EBITDA for the year under review stood at Rs.9,141 million as compared to Rs.6,928 million in the previous year, reflecting an increase of 32%. Depreciation for the year was Rs.2,596 million as compared to Rs.2,870 million in the previous year. Growth in operating profit was achieved by implementing strict cost control, higher capacity utilization and remedial measures taken to mitigate the negative impact of Goods and Services Tax where possible. Robust cost initiatives helped in eliminating unproductive costs which resulted in better margins. Interest cost decreased by 19% due to better working capital management and lower debt levels, as well as lower interest rates.

Profit before Taxation for the year stood at Rs.6,068 million as compared to Rs.3,471 million in the previous year, reflecting an increase of 75%. Profit after Taxation stood at Rs.3,940 million as against Rs.2,293 million in the previous year.

_DIVIDEND_

We take pleasure in proposing a dividend of Rs.2 per Equity Share of Re.1/- each for the year ended March 31, 2018. The dividend declared for the previous year was Rs.1.15 per Equity Share of Re.1/- each. The total dividend (including dividend tax) is Rs.638 million, which amounts to about 16% of the Profit after Tax.

_RESERVES_

UBL proposes to transfer Rs.394 million to the General Reserve.

_capital_

The Authorized Share Capital of the Company stands at Rs.9,990 million, comprising Equity Share Capital of Rs.4,130 million and Preference Share Capital of Rs.5,860 million. The Issued, Subscribed and Paid-up Share Capital of the Company as on March 31, 2018 remains unchanged at Rs.264.4 million comprising 26,44,05,149 Equity Shares of Re.1/- each.

_management discussion and analysis_

Industry Overview

During FY18 your Company delivered robust financial results despite significant regulatory hurdles and challenges faced by the Industry as a whole. In specific, the ban on sale of liquor on highways, lagging effects of demonetization, as well as increases in excise duties and changes in the route-to-market by certain States were several impediments against growth. Further, implementation of Goods and Services Tax (GST) effective July 01, 2017 contributed to increased input costs.

The most significant regulatory change was the introduction of the highway ban, which came into effect on April 01, 2017 and impacted growth in the first quarter of the year in particular. In the second quarter, some relief came from a Supreme Court clarification that States could de-notify highways passing through city limits, such that the ban would not apply to outlets located within city limits. This clarification resulted in a recovery of the industry and growth in sales volume.

Over the last five years, on an average, the beer industry recorded a steady growth of about 7% in volume terms. The per capita consumption of beer in India has increased by about 30% during that period. Given the favourable demographics in India, higher disposable income and affordability, changing cultural attitudes and a young, increasingly affluent population, consumption of beer is set to continue the steady growth pattern going forward. According to research by CISION, the Indian beer market is projected to grow at a CAGR over 7.6% during the period 2018-2024 driven by these factors.

The beer industry in India remains highly regulated with high taxation and government intervention in trade. In many parts of the country, wholesale and/or retail distribution is controlled by State Government monopolies. Also in over 60% of the markets, the respective State Government dictates the price at which beer can be sold. From time to time, significant regulatory restrictions and changes including prohibition pose a great challenge to the Industry as a whole. Conservative government policies, licensing regulations, restrictions on the sale of alcohol in certain states and a preference towards hard liquor are key reasons for the relatively slow development of India''s beer market.

With about 2 liter per capita, beer consumption is extremely low as compared to above 21 liters in other Asian countries. Spirits like whisky, vodka, brandy and rum are highly preferred by consumers in India. However, a growing segment of consumers is shifting towards beer owing to its lower alcohol content. Whilst the strong beer segment far exceeds the mild beer segment in terms of volume, mild beer is expected to outperform the strong beer segment in terms of growth, driven by health-conscious consumers and moderate drinkers who opt for lower alcohol content.

Off-trade contributes a significant share of the volume of the industry on account of more reasonable pricing as compared to the on-trade. However, on-trade channels are anticipated to exhibit high growth rates in the coming years, owing to rising income levels. Canned beer is gaining momentum as it is easier to handle and can be easily transported from one place to another. Moreover, freshly brewed, on-tap beer is demonstrating healthy growth. There has been a trend of emerging brew pubs in large cities such as Bengaluru, Pune and Gurgaon over the last few years. These outlets have introduced consumers to new types of beers, e.g. wheat beer and India Pale Ale.

During the FY 2017-18 your Company added about 1.5% market share over the previous year volume and grew by 10%. This was the first double-digit volume growth since FY 2010-11. UBL''s sales volume improved in key profitable markets, with strong market share gains in most large states across the country, especially in Telangana, Andhra Pradesh, Rajasthan, Orrisa, Tamil Nadu and Karnataka.

Kingfisher Premium Lager and Kingfisher Strong continued to add market share in their respective categories. Your Company''s super premium brands continued to be among the fastest growing brands in the country, fueled by Ultra, Ultra Max, Heineken and a range of imported beer brands. Benefiting from a strong brand portfolio, established infrastructure, a highly skilled and dedicated workforce and several other factors, your Company continues to outperform the industry.

Impact of Goods and Services Tax

Goods and Services Tax (GST) was made effective on July 01, 2017. GST is a destination based tax on consumption of goods and services levied at all stages right from manufacture up to final consumption with credit of taxes paid at the previous stages available for setoff. The Central GST and the State GST are levied simultaneously on every transaction of supply of goods and services except on exempted goods and services.

The Government has kept alcoholic beverage industry outside the purview of GST. Since input materials used by UBL attract GST, it has resulted in higher tax incidence on input materials pushing up our cost of production with no tax credit availability. This has also resulted in a cascading effect on the profits of your Company.

The Management, however, has actively mitigated the negative impact through better commercial negotiation with the suppliers.

Sales and Marketing

UBL continues to lead in the Indian Beer market, with a volume that is more than twice that of its nearest competitor. Kingfisher Strong continues to be the single largest brand in the Indian beer market with sales recording more than 100 million cases for the first time. Kingfisher Premium continues to be the first choice of mild beer consumers across the country. The super-premium brands in our portfolio viz., Kingfisher Ultra, Kingfisher Ultra Max and Heineken are the top three fastest growing brands in the Indian market. These brands have been established in India as world class super premium beer brands. Kingfisher Ultra and Kingfisher Ultra Max are associated with Fashion and Style platform. Ultra Shorts web series had several stories and episodes released with combined views of over 30 million.

Heineken, one of the fastest growing brands in UBL''s portfolio, has established itself as India''s most premium brand. It leverages the Global marketing platforms of Football (UEFA Champions League), by associating with James Bond and Music. We have also created a highly successful India specific digital film for Heineken which achieved 20 million views across platforms.

The Company continues sustainable investment in brand building activities for Kingfisher in the fields of Sports, Food, Fashion and Music. We have a significant and market leading presence in the Indian Premier League T20 Cricket Tournament, the Indian Super League Football tournament, Kingfisher East Bengal Football Club and the Sunburn EDM festival. Our association with restaurants, bars, pubs, clubs and star hotels is uninterrupted. We have additional digital and television communication around the food platform with three interesting films.

The Kingfisher Calendar continues to maintain its high aspiration value. We have created excitement around this property and leveraged it on digital platforms in a large way. We have also launched Pitchers, India''s leading Nightlife App, in Mumbai, Delhi, Gurugram, Bengaluru, Hyderabad and Pune.

We have also launched a highly differentiated and exciting new beer brand, Kingfisher Storm. The brand has been received very favourably by consumers and has achieved 1 million cases'' sales in its first year. Going ahead, as we roll out to other markets, the prospects for this brand are very promising.

Catering to the growing demand for a premium, strong quality beer in the Indian market, your Company recently launched the iconic Dutch beer brand Amstel, a new International super premium strong beer in the Indian market. Amstel is a slow brewed and extra matured lager, internationally appreciated for its quality and enjoyed in over 100 countries across the globe. This launch brings another major imported brand into the UBL product portfolio. Currently launched in Karnataka, Amstel will be available pan-India in current financial year.

Supply chain

Our manufacturing expenses for the FY18 amounted to Rs.26,412 million, representing 21% of sales, as against Rs.21,942 million in the previous financial year, which also constituted 21% of sales. This has been achieved through tight cost control in the manufacturing process in an environment of relatively high inflation.

Bottles remain our biggest cost element. Our decision to move to dedicated bottles with Trade Mark and design registration has ensured tight control on the cost of recycled bottles. In our endeavour towards reducing our environmental impact, we have adopted NNPB technology (less weight, less energy, less environmental impact) in about two-third of our new bottle purchases, which allows the company to source new bottles with reduced weight, better distribution of glass and with this the Company has got bottles at a reduced price, better stability and lower breakages.

Barley-malt is the basic raw material in the manufacture of beer. Barley prices in India fluctuate widely and availability is also scarce. Apart from procuring Barley-malt locally, your Company also imports barley from other countries to meet the demand.

Key material imports for the Heineken brand (bottles & labels) have now been localized and substituted with Heineken approved local vendors. This has ensured lower procurement cost and greater flexibility of sourcing. Softening of commodity prices coupled with better negotiations have helped us contain prices.

We are continuing our efforts to develop new varieties of barley in association with leading Government Institutes. We work with farmers in helping them cultivate barley and provide them with good quality seeds and offer a package of good practices in order to increase productivity.

Research and Development

UBL''s Research and Development function continues to support our growth strategy with focus on new capabilities, development of new products, enhancement of existing products, productivity improvement and cost reduction.

Human Resources

Employees are your Company''s biggest and most valuable asset. UBL provides a congenial working environment which enables success through ownership, camaraderie, freedom of thought and action. We nurture our human resources through mentoring, coaching, learning & development programs etc. We believe in celebrating milestones, both big and small and encourages its employees to connect, communicate and collaborate through various platforms enabled by the Company. We have employee friendly policies viz., leave, travel, medical etc. which keeps UBL employees happy and productive. The talent pool is refreshed from time to time by infusing new hires from premier colleges of the Country. Industrial Relations continued to be harmonious and peaceful at all levels and at all locations of the Company.

UBL has 2,837 employees on its rolls across all locations. The Company has not offered any stock options to the employees during the year under review. All the wage agreements have been renewed in a timely manner and are valid and subsisting. Workers and unions support implementation of reforms that impact quality, cost and improvements in productivity across all locations, which is commendable.

Total employee benefit expenses for the year stood at Rs.3,946 million, as compared to Rs.3,521 million in the previous year. This constituted 3.18% of revenue from operations. Employee benefit expenses were higher on account of salary increases. Your Directors place on record their sincere appreciation to all employees for their contribution towards the continuous success of the organization.

_corporate social responsibility and sustainability_

Over the years, UBL has striven towards sustainable development. It is interpreted as growing the company in a socially and environmentally responsible manner, while meeting the legitimate interests of the stakeholders. After all, to be truly successful, companies need to have a corporate mission that is bigger than just making profit. Your company and its employees are committed to the community we work with and the environment we extract our resources from.

With a population of 1.3 billion, India, with its diversity, faces multitude of social issues and ecological concerns. Your Company, as part of its Corporate Social Responsibility (CSR), works with the communities residing near its breweries as a starting point. Your Company has integrated CSR in its corporate strategy and intends to drive it with a vision to bring about sustainable social development for its co-communities. The CSR Policy of the Company is posted on the website www.unitedbreweries.com and is available through the link http://unitedbreweries.com/csr.

Under the Safe Drinking Water Programme initiated in 2015, we have covered another 28 villages in the states of Haryana and Odisha, during the year under review. Through this initiative, we have been successful in providing access to safe drinking water to nearly 75,600 individuals in these villages. Another project has been launched in Mysore, Karnataka. Until now, your Company has reached out to 59 villages covering nearly 1.54 lac individuals.

In addition to implementing rainwater harvesting and watershed management projects in and around our breweries, we have also undertaken recycling of the treated waste water within the breweries. With extensive measures, the practice of harvesting rainwater has been extended to the nearby communities by incorporating the necessary infrastructure.

Your Company intends to be a Water Neutral Organization by 2025 and our efforts have been focused in this direction. We initiated new projects in Haryana, Punjab and Karnataka. Ponds have been adopted for rejuvenation in these states and in Karnataka, rooftop rainwater harvesting has been undertaken in several houses in villages around Nandi hills. In our efforts to recharge the freshwater consumed by our breweries, by March 2018, we were able to recharge 53% water. Our water conservation efforts have resulted in the recharge of over 25,61,930 KL water per year.

UBL''s initiatives in the field of education have been in tandem with its endeavors to enhance the educational experience and improve the quality of primary education for children, especially from the underprivileged sections. Our breweries across the country have adopted neighboring Government schools and supported them in meeting their requirements on a regular basis. In addition to this, we have focused education projects being implemented in Rajasthan and Karnataka. Your Company''s efforts in certain backward regions of Alwar, Rajasthan have been concentrated towards giving a facelift to 10 Government Schools in terms of infrastructure and gradually to improve the teaching-learning experience. Last year, we re-built another Government Primary school in Gandharpalya in Karnataka along with the provision of a mini science centre. We established another mini science centre in Aslimpur, Rajasthan, in the Government High School, with 80 running science models. The education initiatives benefit over 11,000 school children.

In the last quarter, your Company, conducted a week long awareness programme on "Responsible Consumption of Alcohol" for truck drivers associated with UBL, at four of our breweries in Karnataka and Telangana. The awareness programme was conducted with a goal to make them aware of the implications of drunk driving on their financial and social wellbeing and received an overwhelming response in terms of positive feedback from the truck drivers.

Your Company continues to provide primary healthcare services to the communities where the need has been expressed. Health camps with the community and in schools have been conducted during the year. Mid-day meals have been supported for 1,666 children in Government schools of Mangalore.

The Business Responsibility Report in the format prescribed under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations") is annexed as Annexure - A. Annual report on CSR activities in terms of the Companies Act, 2013 ("the Act") and the Companies (Corporate Social Responsibility) Rules, 2014, is annexed as Annexure - B.

Sustainability

UBL''s sustainability reporting articulates its perspective on the emerging forces in the global sustainability landscape and UBL''s response on multiple dimensions. For each of the three dimensions i.e. economic, ecological and social sustainability, we articulate key issues as well as opportunities that emerge and update our engagements.

Towards sustainability, UBL has undertaken proactive measures in water consumption, rain water harvesting and reduction in energy consumption thereby reducing the carbon foot print, energy and fuel consumption.

Your Company has adopted various energy saving measures by switching over to renewable sources of energy. During FY18, the Company generated 22,11,539 units of electricity from the roof top solar power plants set up at Mallepally (near Hyderabad), Aurangabad , Mumbai, Srikakulam and Dharuhera (Haryana) breweries. Further, your Company has started utilizing wind power at breweries located at Bengaluru, Mangalore and Mysore to the tune of around 71% of the total power consumption at these breweries. A total of 1,29,55,000 units from wind power was wheeled in to these breweries in this financial year. Your company started utilizing wind power at breweries located near Chennai. A total of 26,67,600 units from wind power was wheeled into these breweries in this financial year. On account of the shift from conventional sources to renewable energy, UBL has achieved a carbon foot print reduction to the tune of 15,159 tonnes of carbon di-oxide.

The overall renewable energy contribution for FY18 out of the total power consumption stands at 15.36% for our own breweries and 12.88% of the total power consumption for own and contract breweries.

UBL is in the process of rolling out its first Sustainability Report in the current financial year and the same will be posted on the website of the Company.

Awards

1) Pollution control Board: Our brewery at Palakkad bagged Kerala State Pollution Control Board Award and ranked in First position under Large Scale Industries category.

2) confederation of Indian Industry (cil): CII has conferred following awards to our brewery at Nanjungud.

i. "Outstanding Performance in Food Safety Excellence" in the Category of ''Large Manufacturing Food Businesses - Alcoholic Beverages'', for the year 2017. For the first time in India, an alcoholic beverage company has been awarded with this prestigious award.

ii. Environment, Health and Safety excellence award and five star rating from Confederation of Indian Industry by standing 1st among 130 companies in South India in Food and agro sector.

3) Kaizen Institute: Our brewery at Aurangbad won second prize in National Operational Excellence conference "Indizen" organized by Kaizen Institute at Pune. We presented a case study on "Power reduction". This is the first time UBL has participated in this event wherein 32 case studies from various FMCG companies were presented.

_opportunities, threats, risks & concerns_

Compared to various International markets and even compared to other markets in Asia, beer penetration is very low in India. In India, beer account for very low share of consumption compared to other alcohol products. Such low consumption along with cultural change, higher disposable income and demographics offers a great opportunity.

While Indian beer industry presents considerable opportunities for growth, the overall growth is slowed down due to heavy regulatory environment, lack of retail formalization, restrictions in trade, negative industry tag, etc. For the States, one of the easiest ways to get higher revenue is to increase tax and duties on liquor products resulting into higher end consumer prices, thereby impacting growth.

Government regulations in particular pose a significant risk to the overall alcohol market in India, including for beer. Examples include the ban imposed by the Supreme Court on sale of liquor within half a kilometre of state and national highways, prohibition imposed in Bihar effective April 2016 followed by ban on exports imposed in April 2017. Higher duties imposed by States on liquor also remains a major concern which is beyond the control of the manufacturers.

Despite these challenges, favourable demographics of India is attracting foreign brewers to invest in beer market in the country. The combination of two international brewers in India recently has the potential to pose stiff competition. However, your Company is adequately protected from these risks and concerns due to its robust brand portfolio and a loyal consumer base.

Emerging Craft Beer Culture - Influenced by trends from Europe and the US, India is rapidly developing its own craft beer culture with brands such as Bira 91 becoming popular among Indian consumers. Although India''s craft beer industry is still nascent, the craft beer segment and demand for premium beer in general is estimated to be growing at a strong double digit rate albeit from a low base. Your Company is preparing a craft and variety beer offering of its own to capture growth in this segment.

Also, the concept of microbreweries is growing rapidly in the country. So far only a few States have issued licenses for microbreweries. However, with tremendously growing consumer demand for craft beer, other States are also planning to allow microbreweries in their regions.

Whilst the beer market continues to expand, your Company is looking at the larger beverage consumption occasions to further drive the growth of the business. For most adults the beverage choices for non-alcoholic occasions are limited. We have been working on tapping into this opportunity with a portfolio of non-alcoholic beers that deliver on refreshment and taste. These new offerings will also enable us to enter a much larger retail universe that is today closed to us. Our new offerings will be produced at our brewery in Bihar and are scheduled to be test marketed commencing the 3^rd quarter of the current financial year.

A separate vertical has been created to drive this business in a focused manner so as to unlock its full potential. We see this business contributing significantly to the company in the years to come.

Whilst these type of products have been introduced by beer companies around the world, your Company will be a pioneer in India.

Prospects

With a market share of about 52%, UBL continues to remain a market leader in the beer industry in India. Young demographics with 50% of the population below 25 years of age and 65% below the age of 35 years, changing culture and very low per capita consumption are key drivers of growth of beer in India. The industry has been expanding regularly and it is expected that the next year too, the Industry will grow by about 6 to 8%. UBL shall continue its focus on innovative and effective marketing to lead the market. Your Company is hopeful of outperforming the industry in 2018-19 as well.

Growth in premium retail trade and on premise outlets in metropolitan cities has increased the range of beers and improved the retail environment. In a few States, the Government has issued separate licenses for sale of beer in super markets which signals good growth prospects for the industry. Innovative introductions also help in penetrating untapped markets and your Company''s new introductions have fared well. Effective marketing strategies have helped us reinforce our position as the clear market leader in the Country. Our flagship brand, Kingfisher is almost synonymous with beer in India.

UBL continues to invest significantly in brand visibility to sustain high recall for its brands amongst consumers. High profile sponsorships and brand activations have ensured that its brands, especially Kingfisher, retain their iconic status. The Company has a strong route-to-market, combined with a portfolio of market leading brands. UBL also continues to invest in both, capacities and brands.

Even in a highly competitive market, your Company has not only successfully overcome the challenges of the industry, but also outpaced several global beer brands that have entered India in the recent past and has constantly maintained its leadership position.

Risk Management

Your Company has in place a robust framework for managing and mitigating various risks. Considering the risks affecting the beer industry, UBL continuously assesses and updates the risk management framework based on changes in the level of risk. To achieve this control, UBL performs risk assessment in which Strategic, Operational, Information Technology, Financial and other Risks are analysed. This is reviewed regularly by the Internal Audit team, Risk Management Committee and the Board. The Management Committee meets regularly to address various risks and mitigation thereof. UBL has evolved a framework for management of business risks. We periodically assess risks in the internal and external environment, along with the potential cost of the risks and incorporate risk management plans in our strategy, business and operational plans.

UBL has explored a variety of avenues to contain the risk of continued increase in basic costs and has entered into a few long term agreements for sourcing vital inputs. There has been a continuous review of the long term strategy for procurement at an economical cost.

As part of our Corporate Social Responsibility initiatives, UBL has committed to availability of safe drinking water for communities residing in the vicinity of each of its 21 owned breweries. We have been continuously working towards water conservation and minimizing water waste by recycling to the extent possible. All our breweries have rainwater harvesting systems in place. From a consumption level of about 6 litres of water per litre of beer produced about a decade ago, we are at a level of about 3.24 litres per litre of beer today. This is lower than the world average of about 4 litres. Some of our newer breweries are at a level of 2.5-2.8 litres of water per litre of beer. This would place your Company amongst the elite of world breweries in the area of water consumption.

UBL has constituted a Risk Management Committee comprising senior Board members. The Committee reviews the risk impact matrix comprising strategic, preventable, external, internal, operational and compliance risks associated with business objectives and the actions taken to address these risks. Mitigation plans for such risks are in place and are reviewed periodically. Further, the Assurance Committee comprising functional Heads, reviews identified risks and takes mitigating actions on a quarterly basis. The Company has formulated a Risk Management Policy and has laid down procedures for risk assessment, identification, minimization and mitigation which are presented to the Audit Committee and the Board of Directors on a periodical basis.

Internal control System

The Internal Financial Control framework of your Company is established in accordance with COSO (Committee of Sponsoring Organizations) framework and is commensurate with the size and operations of your Company''s business. In addition to statutory mandate, Internal Audit evaluates and provides assurance of its adequacy and effectiveness through periodic reporting. Controls in place are routinely evaluated and certified by the Internal and Statutory Auditors and gaps are identified by the Auditors through a detailed testing exercise. The process of internal control ensures orderly and efficient conduct of business, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. Financial Statements are prepared on the basis of the Significant Accounting Policies that are carefully selected by management. The Accounting Policies are reviewed and updated from time to time. These, in turn are supported by a set of Standard Operating Procedures (SOPs) that have been established for the business. The SOPs and controls are reviewed by management and audited periodically.

Internal Control evaluates adequacy of segregation of duties, transparency in authorization of transactions, adequacy of records and documents, accountability & safeguarding of assets and reliability of the management information system. Periodic reviews are carried out for identification of control deficiencies and opportunities for bridging gaps with best practices along with formalization of action plans to minimize risks.

_OTHER INFORMATION_

Subsidiary company

Maltex Malsters Limited is the only subsidiary in which your Company holds 51% of equity capital. Maltex Malsters Limited is a non-listed entity and is not a material non-listed subsidiary as defined in Regulation 16(1)(c) of the Listing Regulations.

UBL has formulated a policy for determining material subsidiaries which is placed on the website of the Company www.unitedbreweries.com and is available through the link http://unitedbreweries.com/pdf/policyandcodes/Policy%20 on%20Determination%20Material%20Subsidiaries-PDF.pdf.

The consolidated financial statement of the Company including the financial statement of its subsidiary forms part of this Report in terms of the Act and the Listing Regulations. A statement containing the salient features of the financial statement of the subsidiary/associate is attached as Annexure - c to this Report.

cash Flow Statement

A Cash Flow Statement for the year ended March 31, 2018 is appended.

Particulars of Loans, Guarantees or Investments

Details of loans, guarantees and investments covered under Section 186 of the Act are given in the notes to the Financial Statements.

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 all these Stock Exchanges for the year 2018-2019.

Depository System

The trading in the Equity Shares of the Company is under compulsory dematerialization mode. The Company has entered into an agreement with National Securities Depository Limited and Central Depository Services (India) Limited in accordance with the provisions of the Depositories Act, 1996 and as per the directions issued by the Securities and Exchange Board of India. As the depository system offers numerous advantages, Members are requested to take advantage of the same and avail the facility of dematerialization of the Company''s shares.

Deposits

There were no outstanding deposits at the end of the previous financial year. The Company has not invited any deposits during the year.

Ratio of Remuneration and Particulars of Employees

In terms of sub-section (1) of Section 136 of the Act, the Company has opted to provide full version of financial statements including consolidated financial statements, auditor''s report and other documents required to be annexed to such financial statements excluding the details relating to ratio of the remuneration of each Director to the median employee''s remuneration and remuneration drawn by certain employees over the threshold etc. as provided in subsection (12) of Section 197 of the Act read with Rule 5(1) & 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The details provided by the Company are in compliance with Section 136(1) of the Act and includes salient features of Form AOC-3A.

cautionary Statement

Employees Stock Option Scheme and Sweat Equity Shares

The Company has not offered any shares to its employees or Key Managerial Personnel under a scheme of Employees'' Stock Option and has also not issued any Sweat Equity Shares at any time.

Related Party Transactions

The Company has formulated a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions which is placed on the website of the Company www.unitedbreweries.com and is available through the link http://unitedbreweries.com/pdf/PolicyandCodes/Policy%20on%20Related%20Party%20Transactions.pdf.

All transactions entered by the Company during FY18 with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company has not entered into any transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

Familiarization programme for Independent Directors

During this year the Company has not appointed any new independent Director. The existing Board comprises Executive, Independent and Non-Executive Directors who have been at the helm of Management of the Company for several years and are fully conversant with the business and operations of the Company. The Familiarization programme for new Independent Directors as and when inducted shall aim to familiarize them with the Company, their roles, rights, responsibility in the Company, market, business model of the Company etc. The Board of Directors has complete access to the information within the Company.

Presentations are regularly made to the Board of Directors/Audit Committee/Nomination & Remuneration Committee on various related matters, where Directors get an opportunity to interact with Senior Managers. The Company has issued appointment letters to the Independent Directors which also incorporates their role, duties and responsibilities.

Whistle Blower Policy

The Company has adopted vigil mechanism which is a channel for receiving and redressing of complaints about any misconduct, actual or suspected fraud, actual or potential violations of the Company''s code of conduct and any other unethical, unlawful or improper practices, acts or activities within the Company. The Company has formulated a Whistle Blower Policy for Employees & Directors and has ensured adequate safeguards against victimization of whistle blowers. The details of establishment of the vigil mechanism are disclosed on the Website of the Company.

None of the Employees & Directors have been denied access to the Chairman of the Audit Committee.

conservation of Energy

The Company is taking continuous steps to conserve energy. Its "Sustainability" initiatives are disclosed separately as part of this Report.

The information on conservation of energy, technology absorption, foreign exchange earnings and outgo, as stipulated under Clause (m) of sub-section (3) of Section 134 of the Act read with The Companies (Accounts) Rules, 2014 is set out herewith as Annexure - D to this Report.

code of Business conduct and Ethics

The Board of Directors of UBL has adopted a Code of Business Conduct and Ethics in terms of the Listing Regulations which has been posted on the website of the Company viz., www.unitedbreweries.com.

code for Prevention of Insider Trading

Your Company has adopted a comprehensive ''Code of Conduct to Regulate, Monitor and Report of Trading by Insiders'' and also a ''Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information'' under the provisions of the Securities Exchange Board of India (Prevention of Insider Trading) Regulations, 2015.

Directors

The Board of Directors (the Board) of UBL comprises two Executive Directors and a balanced combination of Independent and Non-Executive Directors.

03, 2019. During the year, one meeting of Independent Directors was convened on June, 05, 2017. All Independent Directors have given a declaration that they meet the criteria of Independence as laid down under Section 149(6) of the Act.

Mr. Sijbe Hiemstra, a Heineken nominee Director resigned from the Board of the Company w.e.f. November 08, 2017 following his formal retirement from Heineken. In his place Mr. Christiaan A J Steenbergen was appointed as an additional Director on the Board w.e.f. November 08, 2017. Mr. Christiaan holds office of the Director till conclusion of forthcoming Annual General Meeting (AGM). Resolution for his appointment has been proposed for approval of Members in the Notice of AGM to be convened on September 17, 2018. Mr. Frans Erik Eusman, Director retires by rotation at this AGM and, being eligible, offers himself for re-appointment. Mr. Eusman is a Heineken nominee Director. Brief profiles of Mr. Eusman and Mr. Steenbergen form part of the Notice convening AGM.

Vide Order dated 25.01.2017 passed by the Securities and Exchange Board of India (SEBI) Dr. Vijay Mallya was restrained from holding the position as Director or Key Managerial Personnel of any listed company with effect from the date of said Order. Thereafter, Dr. Mallya did not participate in any Board Meetings and was not involved in taking business decisions of the Company.

At its meeting held on August 10, 2017, the Board of Directors of the Company observed that in normal course, Dr. Mallya, as Director would have come up for retirement by rotation at the AGM on September 23, 2017 in terms of Section 152(6)(d) of the Act. In the circumstances that SEBI had restrained Dr. Vijay Mallya from holding position as Director or Key Managerial Personnel of any listed entity, neither could Dr. Mallya offer himself for re-appointment nor could the Board of Directors recommend his re-appointment as Director of the Company at that AGM till such time the restraint imposed by SEBI Order was vacated or disposed off in favour of Dr. Mallya.

Thereafter, the Company filed requisite forms / intimations with the Ministry of Corporate Affairs, BSE Limited, National Stock Exchange of India Limited and other authorities notifying Dr. Mallya''s cessation from holding the position of Director in the Company. The e-form filed by the Company in this regard with the Ministry of Corporate Affairs was approved by the Registrar of Companies, Karnataka.

Meetings of the Board of Directors and committees of the Board

Meetings were held. Other details including composition of the Board and various Committees and Meetings thereof held in FY18 are given in the Corporate Governance Report forming part of this Report.

Audit committee

The Audit Committee of the Board of Directors is constituted to act in accordance with the terms of reference and perform roles, as prescribed under the Act and Listing Regulations. The composition of the Audit Committee, its terms of reference, roles and details of meetings convened and held during the year under review is given in the Corporate Governance Report forming part of this Report.

During the year, all the recommendations of the Audit Committee were accepted by the Board.

Nomination and Remuneration committee

The Nomination and Remuneration Committee is constituted to act in accordance with the terms of reference and perform roles, as prescribed under the Act and Listing Regulations. The composition of the Nomination and Remuneration Committee, its terms of reference, roles and details of meetings convened and held during the year under review is given in the Corporate Governance Report forming part of this Report.

Policy on Performance Evaluation

UBL has formulated a Performance Evaluation Policy inter-alia prescribing evaluation criteria for Independent Directors and the Board of Directors of the Company. The Policy is posted on the website of the Company and is available through the link http://unitedbreweries.com/pdf/policyandcodes/Directors%20Performance%20Evaluation%20Policy.pdf.

Performance Evaluation of Directors

Performance evaluation of non-Independent Directors, Independent Directors, the Board as a whole and Committees of the Board has been carried out in accordance with the statutory provisions as contained in the Act and Listing Regulations.

To ensure an effective evaluation process, the Nomination and Remuneration Committee (NRC) has put in place a robust framework for conducting the exercise with key steps and practices defined clearly. Performance of the Board is evaluated on various parameters such as composition, strategy, tone at the top, risk and controls and diversity. Also a questionnaire for Committees is framed on parameters such as adherence to the terms of reference and adequate reporting to the Board. Parameters for the Directors included intellectual independence of the Director, participation in formulation of business plans, constructive engagement with colleagues and understanding of the risk profile of the Company.

Keeping in view the sensitivity and confidentiality associated with the exercise, an external agency was engaged to anchor the process. As part of this process, customized questionnaires, were circulated to all Directors of the Company. Each Director was required to undertake self-assessment. Additionally, the effectiveness of the Board and Committees was also evaluated by each member of the Board and Committee. Responses from Directors were submitted through an electronic platform and were kept confidential.

In order to maintain confidentiality of the entire process, the exercise was carried out on an anonymous basis and summary of responses received from Directors was placed and discussed at a Board meeting and individual scores circulated to the Director concerned. Discussions on a one-to-one basis with individual Directors were also organized for those Directors who wanted a more in-depth understanding. Recommendations arising from this entire process will be considered to improve overall effectiveness of individual Director, Board and Committees.

Remuneration Policy

UBL has formulated a Remuneration Policy laying down the criteria for appointment and removal of Directors, Key Managerial Personnel (KMP) and Senior Management. The Policy also prescribes the criteria and manner for fixation and approval of remuneration payable to Directors, KMPs and other employees. The Policy is posted on the website of the Company and is available through the link http://unitedbreweries.com/pdf/policyandcodes/Remuneration-Policy.pdf.

Foreign Exchange Earnings and Outgo

During FY18 total foreign exchange earnings of the Company stood at Rs.2,233 million (Previous Year: Rs.48 million) and foreign exchange outgo stood at Rs.2,694 million (Previous Year: Rs.1,488 million).

corporate Governance Report

Report on Corporate Governance forms a part of this Report along with the Certificate from the Company Secretary in Practice.

Annual Return

As required under sub-section (3) of Section 92 of the Act as amended by the Companies (Amendment) Act, 2017, the company has placed a copy of the Annual Return in Form MGT-9 on its website www.unitedbreweries.com and is available through the link http://unitedbreweries.com/investors.

Auditors and the Auditor''s Report

Messrs S. R. Batliboi & Associates LLP, Chartered Accountants (Firm Registration No.101049W/ E300004) were re-appointed as Auditors of the Company by the Members at Annual General Meeting (AGM) held on September 23, 2017 to hold office till the conclusion of the 23^rd AGM. In terms of Section 139 of the Act as amended by the Companies (Amendment) Act, 2017, notified on May 7, 2018, appointment of Auditors need not be ratified at every AGM. 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.

There are no qualifications or adverse remarks in the Auditor''s Report.

Secretarial Audit

Pursuant to the Section 204 of the Act and Rule 9 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Sudhir Hulyalkar, Company Secretaries, to undertake Secretarial Audit of the Company for the FY18. The Secretarial Audit Report forms part of this Report and is annexed as Annexure - E.

There are no qualifications, reservations or adverse remarks in the Secretarial Audit Report.

Details of significant and material Orders

No Order/s have been passed or stringent action taken by any Regulator or Court or Tribunal impacting the going concern status of the Company. However, we bring to your attention the following developments.

(i) It is in public domain that United Breweries (Holdings) Limited (UBHL), a promoter of your Company has been ordered to be wound up by Hon''ble High Court of Karnataka vide dated February 07, 2017. We understand UBHL has since filed an appeal against the said Winding-up Order which is pending.

(ii) As per disclosures received by UBL in May 2018 under SEBI (Prohibition of Insider Trading) Regulations, 2015 and SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 from a few Promoter companies controlled by Dr. Vijay Mallya, we are informed that 41315690 Equity Shares held by such entities in UBL constituting 15.63% of the total paid up capital have been transferred to the demat account of Enforcement Directorate, Mumbai, Government of India. Earlier, in August 2017, 1389068 Equity Shares constituting 0.52% of the total paid up capital were also transferred to the demat account of Enforcement Directorate, Mumbai, Government of India. The Enforcement Directorate now holds 42704758 constituting 16.15% Equity Shares in the Company. However, UBL has not received any communication from the Enforcement Directorate so far in this regard.

As per the legal opinion obtained by the Company, with respect to such transfer of shares, it is opined that, the Enforcement Directorate has only taken possession of the Equity Shares under the provisions of Prevention of Money Laundering Act, 2002 and these Equity Shares have not been confiscated by the Enforcement Directorate. The transfer of shares, therefore, may not constitute a transfer of ownership.

(iii) Pursuant to Order of Debt Recovery Tribunal, Karnataka, Bangalore, dated September 30, 2015, dividend for the financial year 2016-2017 and thereafter, if declared and payable to Dr. Vijay Mallya and United Breweries (Holdings) Limited shall be withheld till further Orders.

The orders/proceedings mentioned in (i), (ii) & (iii) above do not have any impact on going concern status of the

Company. Impact of (iv) has been addressed in the financial statements forming part of this Report.

Directors'' Responsibility Statement

Pursuant to Clause (c) of Sub-section (3) of Section 134 of the Act, the Board of Directors report that:

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

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) the Directors have laid down internal financial controls to be followed by the Company and ensured that such internal financial controls are adequate and were operating effectively, and

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and ensured that such systems were adequate and operating effectively.

_acknowledgements and appreciation_

By Authority of the Board

Shekhar Ramamurthy Steven Bosch

August 10, 2018 Managing Director Director & CFO

Bengaluru DIN: 00504801 DIN: 07573930

Mar 31, 2017

Directors'' Report

The Directors have pleasure in presenting this Annual Report on the business and operations of the Company and the audited accounts of United Breweries Limited (''UBL'' or ''your Company'' or ''the Company'') for the Financial Year ended March 31, 2017 (''the year under review'', ''the year'' or ''FY17'').

_FINANCIAL SUMMARY_

Financial performance for the year ended March 31, 2017 is summarized below:

(Amounts in Rupees million)

FINANCIAL RESULTS	year ended march 31
	2017	2016
Gross Turnover	102,282	96,400
Other income	516	862
EBITDA	6,928	7,780
Depreciation and amortization	2,870	2,435
EBIT	4,058	5,345
Interest	587	811
Profit before Taxation	3,471	4,534
Provision for Taxation	(1,178)	(1,556)
Other Comprehensive Income	(58)	(43)
Profit after Tax available for appropriation	2,235	2,935
Appropriations:
Dividend on Equity Shares (including taxes thereon)	366	318
Transfer to the General Reserve	229	295
Balance your Directors propose to carry to the Balance Sheet	1,640	2,322
Total appropriations	2,235	2,935

The financial statements for the year ended March 31, 2017 have been prepared under Indian Accounting Standards ("Ind AS") pursuant to notification by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015 for implementation with effect from April 01, 2016. The financial statements for the year ended March 31, 2016 have been restated in accordance with Ind AS for comparative information and to conform to Ind AS.

The Gross turnover of UBL grew by 6% on account of increased Sales ahead of industry growth. Interest cost decreased by 28% due to better working capital management. EBITDA for the year under review stood at Rs. 6,928 million as compared to Rs. 7,780 million in the previous year, reflecting decrease of 11%. Depreciation for the year was Rs. 2,870 million as compared to Rs. 2,435 million in the previous year.

Profit before Taxation for the year stood at Rs. 3,471 million as compared to Rs. 4,534 million in the previous year, reflecting a decrease of 23%. Profit after Taxation stood at Rs. 2,235 million as against Rs. 2,935 million in the previous year.

_DIVIDEND_

We take pleasure in proposing a dividend of Rs. 1.15 per Equity Share of Re.1/- each for the year ended March 31, 2017. The dividend declared for the previous year was Rs. 1.15 per Equity Share of Re. 1/- each. The total dividend (including dividend tax) is Rs. 366 million, which amounts to about 16% of the Profit after Tax.

_RESERVES_

UBL proposes to transfer Rs. 229 million to the General Reserve.

_capital_

The Authorized Share Capital of the Company stands at Rs. 9,990 million, comprising Equity Share Capital of Rs. 4,130 million and Preference Share Capital of Rs. 5,860 million. The Issued, Subscribed and Paid-up Share Capital of the Company as on March 31, 2017 remains unchanged at Rs. 264.4 million comprising 26,44,05,149 Equity Shares of Re.1/- each.

_management discussion and analysis_

Industry Overview

In a very difficult year marked by imposition of prohibition in Bihar, Demonetization, political turmoil in Tamil Nadu and the Supreme Court directive on closure of all outlets within 500 meters of all highways across the country, your Company gained close to 1% market share raising its market share to 51% and outperformed its competitors and industry. However, after many years of continuous growth, business during the period under review did not grow at the same pace as in the past. The Management is committed to put the business back on growth path.

On the basis of alcohol content, beer in India can be categorized into Strong and Mild Beers. Strong beer which has an alcohol content between 6% and 8% dominates the beer market accounting for over 85% of the total beer consumed in India. The Super Premium beer segment within both the Strong and Mild beer categories has been growing faster than the overall beer industry and has grown at a Compounded Annual Growth Rate (CAGR) of almost 30 per cent over the last three years. The Indian beer market continues to grow in line with expectations, albeit with some blips. Industry volumes grew at a CAGR of 8% during the last five years.

Though the alcohol industry in India has been dominated by Spirits (IMFL and country liquor) and Beer comprises about 11% of the total alcohol consumed in India, Beer is the preferred alcoholic beverage for young Indians and has a bright future. It has registered robust growth in the last 10 years, with consumption having more than doubled. Two leading players contribute over 70% of the total industry sales, UBL being the market leader with a market share of over 51%.

There has been a trend of emergence of brew pubs in large cities such as Bengaluru, Pune and Gurgaon over the last few years. These outlets have introduced consumers to new types of beers for e.g., wheat beer.

UBL has been successful in meeting all these challenges and is continuing to strengthen its position in the market.

The Industry remains highly regulated with high taxation. In many parts of the country, wholesale and/or retail distribution is controlled by State Government monopolies. Also in 60% of the markets, State Governments dictate the price at which beer can be sold. However, in combination with the young demographics, rising disposal incomes and warm climate of the country, we believe in the long term growth prospects of the beer market notwithstanding the constraints mentioned above.

Goods and Services Tax

Goods and Services Tax (GST) is a landmark reform which will have a long-lasting impact on the Indian economy and businesses which has been rolled out on July 01, 2017. GST is a destination based tax on consumption of goods and services, proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at the previous stages available for setoff. The Central GST and the State GST would be levied simultaneously on every transaction of supply of goods and services except the exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits.

The Government has kept alcoholic beverage industry outside the purview of GST. However, the input/raw materials used by UBL would attract GST. This would result in higher tax incidence on input materials pushing up our cost of production and will have a cascading effect on the profit margin of your Company.

The Management has actively pursued remedial tax planning measures internally and also with the Government in order to mitigate the negative impact of the legislation on our business.

Sales and Marketing

UBL continues to lead in the Indian Beer market, with a volume that is more than twice the size of the nearest competitor.

Kingfisher Strong continues to be the single largest brand in the Indian beer market with sales of over 100 million cases. Kingfisher Premium continues to be the first choice of mild beer consumers across the country. The super-premium brands in our portfolio viz., Kingfisher Ultra, Kingfisher Ultra Max and Heineken Lager continue to be among the fastest growing brands in the Indian market. These brands have been established in India as world class super premium beer brands. Kingfisher Ultra brand is being promoted on the Fashion and Style platform. In addition, we have launched Ultra Shorts, a highly engaging web series for the brand.

Heineken, the fastest growing brand in UBL''s portfolio, has established itself as India''s most premium brand. It is being promoted leveraging the Global marketing platforms of Football (UEFA Champions League), James Bond and Music. We are looking at creating India specific communication for Heineken in the current fiscal.

The Company maintains sustainable investment in brand building activities for Kingfisher in the fields of Sports, Food, Fashion and Music. We have a significant and market leading presence in the Indian Premier League T20 Cricket Tournament, Kingfisher East Bengal Football Club, Sunburn EDM festival and Formula One Racing. Our association with restaurants/bars/pubs/clubs/star hotels/night clubs is uninterrupted.

Supply chain

Our manufacturing expenses for the FY17 amounted to Rs. 21,942 million, representing 21% of sales, as against Rs. 21,389 million in the previous financial year, which constituted 22% of sales. The relative decrease is due to tight cost control in the manufacturing process in an environment of relatively high inflation.

Bottles remain our biggest cost element. Our decision to move to dedicated bottles with Trade Mark and design registration has ensured tight control on the cost of recycled bottles. In our Endeavour towards reducing environmental impact, we have adopted NNPB technology (less weight, less energy, less environmental impact) in almost 50% of our new bottle purchases, which allows the company to source new bottles with reduced weight, better distribution of glass and with this the Company has got bottles at a reduced price, better stability and lower breakages.

Key material imports for Heineken brand have now been localized and substituted with Heineken approved local vendors. This has ensured lower procurement cost and greater flexibility of sourcing. Softening of commodity prices coupled with better negotiations have helped us contain prices.

Research and Development

UBL''s Research and Development function continues to support our growth strategy with a focus on new capabilities, development of new products, enhancement of existing products, productivity improvement and cost reduction.

Human Resources

People are your Company''s biggest and most valuable asset. Your Company provides a congenial working environment which enables success through ownership, camaraderie, freedom of thought and action. Your Company nurtures its human resources through mentoring, coaching, learning & development programs etc. Your Company believes in celebrating milestones, both big and small and encourages its people to connect, communicate and collaborate through various platforms enabled by the Company. Your Company has people friendly policies viz., leave, travel, medical etc. which keeps your employees happy and productive. The talent pool is refreshed from time to time by infusing new hires from premier colleges of the Country. Industrial Relations continued to be harmonious and peaceful at all levels and at all locations of the Company.

UBL has 2758 people on its rolls across all locations. The Company has not offered any stock options to the employees during the year under review. All the wage agreements have been renewed in a timely manner and are valid and subsisting. Operatives and unions support implementation of reforms that impact quality, cost and improvements in productivity across all locations, which is commendable.

Total employee benefit expenses for the year stood at Rs. 3,521 million, as compared to Rs. 3,343 million in the previous year. This constituted 3.4% of sales. Employee benefit expenses were higher on account of salary increases.

Your Directors place on record their sincere appreciation to all employees for their contribution towards the continuous success of the organization.

_corporate social responsibility and sustainability_

UBL firmly believes in sustainable development, which is interpreted as growing the business in a socially and environmentally responsible way while meeting the legitimate interests of the stakeholders. Your Company and its employees are committed to the community it works with and the environment it extracts its resources from.

While India is a very large Country with multitude of social issues and concerns, your Company has decided to focus on the communities residing in the vicinity of its breweries as a starting point for its Corporate Social Responsibility (CSR) interventions. The Company has integrated CSR in its corporate strategy and intends to drive it with a vision to bring about sustainable social development for its co-communities. The CSR Policy of the Company is posted on its website www.unitedbreweries.com and is available through the link http://unitedbreweries.com/csr.

Under the Safe Drinking Water programme initiated last year, 35 villages in the states of Karnataka, Telangana, Haryana and Maharashtra around six of our breweries have been covered. Through this initiative, we have been successful in providing safe drinking water to nearly 110,000 individuals. For regions that have been drought prone or have insufficient water, we have invested our efforts in water conservation so as to supplement the efforts of the communities in meeting the basic water requirements.

Your Company aspires to be a water conservative organization by 2025 and we are constantly working towards achieving this. In addition to implementing rainwater harvesting and watershed management projects in and around our breweries, we also undertake recycling of treated waste water within the breweries. These efforts are not limited to our breweries alone and we make extensive efforts in generating awareness among the communities on the adoption of rainwater harvesting practices and incorporation of the necessary infrastructure. The water conservation efforts are underway in Bihar, Haryana, Karnataka, Kerala, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu and Telangana. By March 2016, we had been successful in recharging 17% of all the freshwater we were consuming. At the end of March 2017, this is at 33%. Our water conservation efforts have resulted in the recharge of over 13,31,220 KL of water per year.

UBL endeavors to improve the education experience and quality for children, especially from the underprivileged sections and the education initiatives are designed for the same. Our breweries across India have adopted neighboring Government schools and support them in meeting their requirements on a regular basis. In addition to this, we have focused education projects being implemented in Rajasthan and Karnataka. Your Company''s efforts in certain backward regions of Alwar, Rajasthan have been concentrated towards giving a facelift to ten Government Schools in terms of infrastructure as well as teaching-learning experience. In Mysore district of Karnataka, we have established seven, first of their kind, mini science centres in Government schools to promote science education among the children. The education initiatives have benefitted over 11,000 school children.

Accessing primary healthcare forms a substantial portion of a rural household''s monthly expenditure and UBL''s healthcare initiative is directed towards reducing this economic burden. A majority of our breweries provide primary healthcare to the neighboring communities in the form of consultations and medicines, free of cost, through a health centre or mobile unit and medical camps. This year we have been able to provide medical care to around 35,000 people.

A detailed Report on various aspects of CSR activities at UBL and the CSR activities undertaken by your Company is included in the Corporate Responsibility Report which is being sent separately. The Business Responsibility Report in the format prescribed under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed as Annexure - A. Annual report on CSR activities in terms of the Companies Act, 2013 and the Companies (Corporate Social Responsibility) Rules, 2014, is annexed as Annexure - B.

Sustainability

Your Company has adopted various energy saving measures by switching over to renewable source of energy. Towards this end your Company has commissioned Photovoltaic Solar System with a capacity of 55.2 KW at Dharuhera brewery. The system consists of 178 solar modules of 310W each. During FY17, the Company generated 80,000 Units of electricity from the solar system. Further, your Company has started utilizing wind power at breweries located at Nelamangala, Mangalore and Nanjangud. Your Company has started receiving Wind Power to the tune of 34,70,000 units from the Installation point. With the wheeling of wind energy, the renewable energy component for these three breweries in Karnataka is 75% of their total power consumption. On account of the shift from conventional sources to renewable energy the Company has achieved carbon foot print reduction to the tune of 3351 tonnes of carbon di-oxide.

Awards

The Company''s breweries at Mallepally, Hyderabad bagged the Frost & Sullivan''s Sustainability Award in the Leaders Award - Large Business Category and brewery at Taloja, Maharashtra bagged the Frost & Sullivan''s Sustainability Award - Certificate of Merit in the Believers Category. The brewery at Rajasthan has been recognized for its contribution through corporate social responsibility by the Alwar District Administration and conferred a Bhama Shah Award for school education initiatives.

Brewery at Palakkad bagged the Excellence Award under medium-large Scale Industries Category. Karnataka State Pollution Control Board Mangalore division has recognized brewery at Mangalore for its "Green Contribution" on the occasion of World Environment day 2016. Brewery at Ludhiana was awarded the environmental award by ''National Green Corps'', an NGO working for bio-diversity towards active involvement in tree plantation and converting a 3 acres of waste land into a lush green park used by the nearby residents for walking, jogging and yoga.

_opportunities, threats, risks & concerns_

In terms of revenue, beer accounts for around 11% of the Indian alcoholic beverage market. Compared to various international markets, such a low penetration in beer consumption offers an opportunity for substantial growth in the future. Your Company views tremendous opportunity in meeting the ever increasing demand, armed with a consistent expansion programme each year.

The main drivers for the growth of beer consumption in India are:

Young, growing middle class: Apart from being the second most populous country in the world, India has over 50% of its population below the age of 25 and more than 65% below the age of 35. This demographic enters the category through beer.

Base effect: Our current per capita consumption of beer at 2 litres is well below the Global average of around 30 litres and can only grow.

Changing cultural mores: Drinking in bars is "fast becoming part of the social milieu" in urban India, though alcohol consumption (predominantly spirits of various kinds) is still frowned upon in rural India.

In order to cater to new consumers, capture market opportunities, compete with new launches by competitors and in its continuous Endeavour to offer new product ranges to its consumers, UBL has added to its portfolio Kingfisher Storm strong beer in the premium segment. Kingfisher Storm which has been launched in the large, profitable markets of Karnataka, Maharashtra and West Bengal, has received an overwhelming response from consumers. Your Company will be launching this brand in other important markets in a phased manner over the next few months.

UBL faces a challenge in the form of consolidation of competition. The world''s largest beer maker AB InBev took over its closest rival, SAB Miller, thereby enhancing its combined presence to control nearly a third of the global market.

There are a variety of taxes & levies in each state. These along with price regulation, inadequate market infrastructure and restrictions in interstate movement of beer, pose a great challenge to the industry. Roughly one-fifth of most state government budgets are funded by the alcoholic beverage category. Despite drivers of growth being in place, government intervention in distribution, high taxation, restricted communication and increased cost of raw materials remain some of the negatives faced by the industry.

The threat to sales in some territories in the country arises due to changes in government regulations and the threat of prohibition which stems from constant changes in the political climate in the country. The industry as a whole faces the threat of drought in a few states resulting in severe shortage of water supply.

prospects

UBL is the leading player in the industry with a market share of about 51%. Effective marketing strategies have helped us reinforce our position as the clear market leader in the Country. Our flagship brand, Kingfisher is almost synonymous with beer in India.

Despite many challenges, the Indian market provides a huge opportunity with its extremely low per capita consumption when compared to other countries in the world like China and US which consume 37 litres and 78 litres of beer respectively per person per annum. We believe that favorable demographics, rising disposable incomes, urbanization and rising acceptability of drinking will bring winds of change to the industry. Beer industry is expected to grow at 6% to 8% p.a. for the next few years.

Also, what augurs well for the Indian beer industry is our Country''s large population and the fact that over 50% of the population is under 25 years of age. As per industry reports India is expected to overtake China to become the most populous nation in the world by 2025. All this will result in India reaping a huge demographic dividend.

Consumer acceptance of beer has led to innovations, such as new products introductions and the success of brew pubs, selling freshly brewed beer in cities like Bengaluru, Gurgaon and Pune. Growth in premium modern trade and on premise outlets in metropolitan cities has increased the range of availability of products and improved the retail environment. In few States, the Government has issued separate licenses for sale of beer which signals good growth prospects for the industry.

UBL has invested significantly in brand visibility to sustain its "top of mind" recall with consumers. High profile sponsorships and brand activations have ensured that its brands, especially Kingfisher, retain their iconic status. The Company has a strong route-to-market, combined with a portfolio of market leading brands.

We have through a series of strategic investments, taken steps to enhance our leadership in the industry in this unfolding scenario. UBL continues to invest in both capacities and brands. Though already established efficiency programmes apply to all aspects of our business, there is a constant drive towards continuous identification of new ways of improving organizational capabilities and speed, whilst reducing cost.

Even in a highly competitive scenario, your Company has not only successfully overcome the challenges of the industry, but also outpaced several global beer brands that have entered India in the recent past and has constantly maintained its leadership position.

Risk Management

Your Company has in place a robust framework for managing and mitigating various risks. Considering the risks affecting our industry, UBL continuously assesses and updates the risk management framework based on changes in the level of risk. To achieve this control, UBL performs risk assessment in which Strategic, Operative, Information Technology, Financial and other Risks are analyzed. This is reviewed regularly by the Internal Audit team, Risk Management Committee and the Board. The Management Committee meets regularly to address various risks and mitigation thereof. UBL has evolved a framework for management of business risk. We periodically assess risks in the internal and external environment, along with the potential cost of the risks and incorporate risk management plans in our strategy, business and operational plans.

In order to mitigate the risk of water shortages, most of our breweries have implemented ground water recharge. As part of our Corporate Social Responsibility initiatives, UBL has committed to availability of safe drinking water for communities residing in the vicinity of each of its 21 owned breweries. We have been continuously working towards water conservation and minimizing water waste by recycling and reutilizing to the extent possible. All our breweries have rainwater harvesting systems in place. From a consumption level of about 6 litres of water per litre of beer produced about a decade ago, we are at a level of about 3.4 litres per litre of beer today. This is lower than the world average of about 4 litres. Some of our newer breweries are even at a level of 2.5 - 2.8 litres of water per litre of beer. This would place your Company amongst the elite of world breweries in the area of water consumption.

UBL has constituted a Risk Management Committee comprising senior Board members. Further, the Assurance Committee comprising functional Heads, periodically reviews the identified risks and takes mitigating actions. The Company has formulated a Risk Management Policy and the management has laid down procedures for risk assessment, identification, minimization and mitigation which are presented to the Audit Committee and the Board of Directors on a periodical basis.

Internal control System

UBL has established a robust system of Internal Controls to ensure that assets are safeguarded and transactions are appropriately authorized, recorded and reported. With the introduction of Internal Controls in Financial Reporting (ICFR) in the Companies Act, 2013, we have made an evaluation of functioning and quality of internal controls. The Internal Financial Control framework of your Company is established in accordance with COSO (Committee of Sponsoring Organizations) framework and is commensurate with the size and operations of your Company''s business. In addition to statutory mandate, Internal Audit evaluates and provides assurance of its adequacy and effectiveness through periodic reporting. Controls in place are routinely evaluated and certified by the Internal and Statutory Auditors and gaps are identified by the Auditors through a detailed testing exercise. The revised process of internal control ensures orderly and efficient conduct of business, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. Financial Statements are prepared on the basis of the Significant Accounting Policies that are carefully selected by management. The Accounting Policies are reviewed and updated from time to time. These, in turn are supported by a set of Standard Operating Procedures (SOPs) that have been established for the business. The SOPs and controls are reviewed by management and audited periodically.

_OTHER INFORMATION_

Subsidiary company

The consolidated financial statement of the company including the financial statement of its subsidiary forms part of this Report in terms of the Companies Act, 2013 and the Listing Regulations. A statement containing the salient features of the financial statement of the subsidiary/associate is attached as Annexure-c to this Report.

cash Flow Statement

A Cash Flow Statement for the year ended March 31, 2017 is appended.

Particulars of Loans, Guarantees or Investments

Details of loans, guarantees and investments covered under section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

Listing requirements

Depository System

The trading in the Equity Shares of the Company is under compulsory dematerialization mode. The Company has entered into an agreement with National Securities Depository Limited and Central Depository Services (India) Limited in accordance with the provisions of the Depositories Act, 1996 and as per the directions issued by the Securities and Exchange Board of India. As the depository system offers numerous advantages, members are requested to take advantage of the same and avail the facility of dematerialization of the Company''s shares.

Deposits

There were no outstanding deposits at the end of the previous financial year. The Company has not invited any deposits during the year.

Additional statutory information

Particulars of Employees & Managerial Remuneration

Information required under sub-section (12) of Section 197 of the Companies Act, 2013 read with Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company, forms part of this Report. Details of remuneration of managerial personnel as required under sub-section (12) of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 also forms part of this Report.

In terms of first proviso to sub-section (1) of Section 136 of the Companies Act, 2013, the reports and accounts are being sent to the shareholders excluding the aforesaid information. Any shareholder interested in inspection of the documents pertaining to above information or desires a copy thereof may write to the Company Secretary.

cautionary Statement

Employees Stock Option Scheme and Sweat Equity Shares

The Company has not offered any shares to its employees or Key Managerial Personnel under a scheme of Employees'' Stock Option and has also not issued any Sweat Equity Shares at any time.

Related Party Transactions

Details of transactions with related parties as defined in the Companies Act, 2013 and the Rules framed there under, the Listing Regulations and Accounting Standard 18 of the Companies (Accounting Standards) Rules, 2006, have been reported in the Notes to financial statements. Approval of the Audit Committee and the Board of Directors as required under the Listing Regulations has been obtained for such transactions.

The Company has formulated a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions which is placed on the website of the Company www.unitedbreweries.com and is available through the link http://unitedbreweries.com/pdf/PolicyandCodes/Policy%20on%20Related%20Party%20Transactions.pdf.

All transactions entered by the Company during FY17 with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company has not entered into any transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

Familiarization programme for Independent Directors

The existing Board comprises Executive, Independent and Non-Executive Directors who have been at the helm of Management of the Company for several years and are fully conversant with the business and operations of the Company. The Familiarization programme for new Independent Directors as and when inducted shall aim to familiarize them with the Company, their roles, rights, responsibility in the Company, market, business model of the Company etc. The Board of Directors has complete access to the information within the Company.

Whistle Blower Policy

The Company has adopted vigil mechanism which is a channel for receiving and redressing of complaints about any misconduct, actual or suspected fraud, actual or potential violations of the Company''s code of conduct and any other unethical, unlawful or improper practices, acts or activities within the Company. The Company has formulated a Whistle Blower Policy for Employees & Directors and has ensured adequate safeguards against victimization of whistle blowers. The details of establishment of the vigil mechanism are disclosed on the Website of the Company.

None of the Employees & Directors have been denied access to the Chairman of the Audit Committee. conservation of Energy

The Company is taking continuous steps to conserve energy. Its "Sustainability" initiatives are disclosed separately as part of this Report.

The information on conservation of energy, technology absorption, foreign exchange earnings and outgo, as stipulated under Clause (m) of sub-section (3) of Section 134 of the Companies Act, 2013 read with The Companies (Accounts) Rules, 2014 is set out herewith as Annexure-D to this Report.

code of Business conduct and Ethics

The Board of Directors of UBL have adopted a Code of Business Conduct and Ethics in terms of the Listing Regulations which has been posted on the website of the Company viz., www.unitedbreweries.com.

code for Prevention of Insider Trading

Your Company has adopted a comprehensive ''Code of Conduct to Regulate, Monitor and Report of Trading by Insiders'' and also a ''Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information'' under the provisions of the Securities Exchange Board of India (Prevention of Insider Trading) Regulations, 2015.

Directors

The Board of Directors of UBL comprises two Executive Directors and a balanced combination of Independent and Non-Executive Directors.

The Securities and Exchange Board of India vide its order dated January 25, 2017 (the "SEBI Order") has restrained Dr. Vijay Mallya from holding position as Director or Key Managerial Person of any listed company. The Company had received (i) emails dated January 25, 2017, January 27, 2017 and January 30, 2017 from the National Stock Exchange advising it to comply with the SEBI Order and take necessary steps; and (ii) email dated January 27, 2017 from Bombay Stock Exchange seeking an update on the action taken or action proposed to be taken by the Company with respect to the SEBI Order. In compliance, on February 6, 2017, the Independent Directors of the Company resolved not to send notices/agendas relating to the Company''s Board meetings and/or other privileged information to Dr. Mallya till such time the SEBI Order remains in force. Subsequently, on February 8, 2017, the Board of Directors took on record the minutes of the meeting of the Independent Directors. Effectively, through these measures, Dr. Mallya was restrained from acting as a Director in the Company, in accordance with the SEBI Order. Further, by a separate communication, Dr. Mallya was requested to step down from the Board with immediate effect until the SEBI Order is stayed or vacated.

As the SEBI Order has not been vacated as on date, Dr. Mallya continues to be restrained from being on the Board of the Company. Pursuant to the decision of the Board at its meeting held on July 4, 2017, the Company has communicated on July 6, 2017 to Dr. Mallya and his associate companies (promoters of the Company) to nominate a director on the Board in his place in terms of the Articles of Association of the Company.

SEBI has issued a letter dated August 4, 2017 to the Company observing that Vijay Mallya has still been disclosed as Non-Executive Director and Chairman of United Breweries Limited (UBL) on the BSE Website and advised the Company to provide information on (a) Whether Vijay Mallya has acted/ i s acting as Director of UBL from the date of passing of SEBI Order, and (b) Steps taken by UBL to comply with the SEBI Order with respect to directions of restraining Vijay Mallya from holding any position as director in any listed company. The steps taken by the Company have been communicated to SEBI on August 10, 2017.

Further, the Board has also unanimously resolved and authorized filing of statutory forms / i intimations to applicable statutory authorities under the Companies Act, 2013, and other relevant statutes notifying Dr. Mallya''s cessation from holding the position of Director in the Company.

The Independent Directors viz., Mr. Chhaganlal Jain, Mr. Chugh Yoginder Pal, Mr. Sunil Alagh, Ms. Kiran Mazumdar Shaw, Mr. Madhav Bhatkuly and Mr. Stephan Gerlich have been appointed for a period of five years till September 03, 2019. During the year, two meetings of Independent Directors were convened on May 30, 2016 and February 06, 2017. All Independent Directors have given a declaration that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013.

Meetings of the Board of Directors and committees of the Board

The meetings of the Board and Committees are pre-scheduled and a tentative calendar of the meetings finalized in consultation of the Directors is circulated to them in advance to facilitate them to plan their schedule. In case of special and urgent business needs, approval is taken by passing resolutions through circulation. During FY17, six (6) Board Meetings were held. Other details including composition of the Board and various Committees and Meetings thereof held in FY17 are given in the Corporate Governance Report forming part of this Report.

Audit committee

The Audit Committee of the Board of Directors is constituted to act in accordance with the terms of reference and perform roles, as prescribed under the Companies Act, 2013 and Listing Regulations. The composition of the Audit Committee, its terms of reference, roles and details of meetings convened and held during the year under review is given in the Corporate Governance Report forming a part of this Report.

During the year, all the recommendations of the Audit Committee were accepted by the Board.

Nomination and Remuneration committee

The Nomination and Remuneration Committee is constituted to act in accordance with the terms of reference and perform roles, as prescribed under the Companies Act, 2013 and Listing Regulations. The composition of the Nomination and Remuneration Committee, its terms of reference, roles and details of meetings convened and held during the year under review is given in the Corporate Governance Report forming a part of this Report.

Performance Evaluation of Directors

Performance evaluation of non-Independent Directors, Independent Directors, Chairman, the Board as a whole and Committees of the Board was carried out in accordance with the statutory provisions as contained in the Act and Listing Regulations. Responses from individual Directors were submitted through an electronic platform and were kept confidential.

To ensure an effective Board evaluation process, the Nomination and Remuneration Committee (NRC) has put in place a robust evaluation framework for conducting the exercise with key steps and practices defined clearly. As part of this process, customized questionnaires, were circulated to all Directors of the Company. Each Director was required to undertake self-assessment and assessment of the Chairman. Additionally, the effectiveness of the Board and Committees was also evaluated by each member of the Board.

Performance of the Board was evaluated on various parameters such as composition, strategy, tone at the top, risk and controls and diversity. Similarly a questionnaire for Committees was framed on parameters such as adherence to the terms of reference and adequate reporting to the Board. Parameters for the Directors included intellectual independence of the Director, participation in formulation of business plans, constructive engagement with colleagues and understanding of the risk profile of the company. Chairman was evaluated on parameters, such as leadership style and motivation of Directors.

In order to maintain confidentiality of the entire process, a summary of responses received from non-Independent Directors were placed and discussed at a meeting of Independent Directors. Further, responses received from Independent Directors were placed before the Board. Recommendations arising from this entire process were considered to improve its overall effectiveness.

Policy on Performance Evaluation

UBL has formulated a Performance Evaluation Policy inter alia prescribing evaluation criteria for Independent Directors and the Board of Directors of the Company. The Policy also lays down criteria for appointment of Directors and the remuneration of Directors/Key Managerial Personnel. The Policy is posted on the website of the Company www.unitedbreweries.com and is available through the link http://unitedbreweries.com/pdf/policyandcodes/ Directors%20Performance%20Evaluation%20Policy.pdf. Criteria for making payment to non-executive Directors is placed on the website of the Company www.unitedbreweries.com.

Foreign Exchange Earnings and Outgo

During FY17 total foreign exchange earnings of the Company stood at Rs.48 million (Previous Year: Rs.44 Lakhs) and foreign exchange outgo stood at Rs.1,488 million (Previous Year: Rs.1,882 million).

corporate Governance Report

Report on Corporate Governance forms a part of this Report along with the Certificate from the Company Secretary in Practice.

Annual Return

As required under sub-section (3) of Section 92 of Companies Act, 2013 and Rule 12(1) of Companies (Management and Administration) Rules, 2014, an extract of the Annual Return in Form MGT-9 is annexed as Annexure-E to this Report.

Auditors and the Auditor''s Report

In terms of the provisions contained in the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, Messrs S.R. Batliboi & Associates LLP, Chartered Accountants were appointed Statutory Auditors of UBL at the 15^th Annual General Meeting held on September 04, 2014 for a period of three years i.e. from the conclusion of 15^th Annual General Meeting till the conclusion of 18^th Annual General Meeting. The Auditors hold office till conclusion of the ensuing AGM and it is proposed to re-appoint them for another term of five years under the provisions of the Companies Act, 2013 and Rules framed there under. The Auditors have given their consent for re-appointment and have also confirmed that their re-appointment, if made, would be within the limits prescribed under the Companies Act, 2013. Their appointment in the office of Statutory Auditors during the staid period shall be subject to ratification by Members at every Annual General Meeting.

There are no qualifications or adverse remarks in the Auditor''s Report.

Secretarial Audit

Pursuant to the Section 204 of the Companies Act, 2013 and Rule 9 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Sudhir Hulyalkar, Company Secretaries, to undertake Secretarial Audit of the Company for the FY17. The Secretarial Audit Report forms part of this Report and is annexed as Annexure - F.

There are no qualifications, reservations or adverse remarks in the Secretarial Audit Report.

Details of Significant and Material Orders

Save and except the following, no order has been passed or stringent action taken by any regulator or court or tribunal impacting the going concern status of the Company. The Company has complied with the requirements of the regulators on matters related to stakeholders, as applicable.

(i) It is in public domain that United Breweries (Holdings) Limited (UBHL), a promoter of your Company which holds 10.72% equity has been ordered to be wound up by Hon''ble Karnataka High Court Order vide dated February 07, 2017. UBHL has since filed an appeal against the said Winding-up Order which is pending.

(ii) In connection with the proceedings under the Prevention of Money Laundering Act, 2002 against Kingfisher Airlines Limited (KFA) and Dr. Vijay Mallya in the capacity of Principal Officer of KFA, it is reported in news-media that the Enforcement Directorate has attached Equity Shares held by certain promoter entities of your Company which are controlled by Dr. Vijay Mallya, directly or indirectly. However, your Company has not received any communication from the Enforcement Directorate in this matter.

(iii) The State Government of Bihar had imposed a ban on sale and consumption of alcoholic beverages in the State and permitted manufacture of alcoholic beverages for export out of the State effective April 05, 2016. The notification of Bihar Government imposing ban was struck down by Patna High Court. The State Government of Bihar has challenged such decision of Patna High Court in Supreme Court which is pending. Subsequently, effective April 01, 2017, total prohibition has been imposed in Bihar State and the commercial production at the Company''s brewery located at Kopakalan, Naubatpur, District Patna has been discontinued.

(iv) Allowing a Special Leave Petition seeking ban on sale of liquor on National and State Highways (the Highways), the Hon''ble Supreme Court has directed to shut all liquor shops, hotels, restaurants, bars, etc. on the Highways and within a distance of 500 or 220 meters from the Highways, as applicable. The Court has directed the States not to renew liquor licenses after April 01, 2017.

The orders/proceedings mentioned in (i) & (ii) above do not have any impact on going concern status of the Company. Impact of (iii) & (iv) has been addressed in the financial statements forming part of this Report.

Directors'' Responsibility Statement

Pursuant to clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, the Board of Directors report that:

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

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) the Directors have laid down internal financial controls to be followed by the Company and ensured that such internal financial controls are adequate and were operating effectively, and

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and ensured that such systems were adequate and operating effectively.

_acknowledgements and appreciation_

By Authority of the Board

Shekhar Ramamurthy Steven Bosch

August 10, 2017 Managing Director Director & CFO

Mumbai DIN: 00504801 DIN: 07573930

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting this Annual Report on the business and operations of the Company and the audited accounts of United Breweries Limited ('UBL' or 'your Company' or 'the Company') for the Financial Year ended March 31, 2015 ('the year under review', 'the year' or 'FY 15').

FINANCIAL SUMMARY

Financial performance for the year ended March 31, 2015 is summarized below:

(Amounts in Rupees million)

FINANCIAL RESULTS Year ended March 31

2015 2014

Net Turnover 47,299 42,506

EBITDA 6,584 6,116

Depreciation and amortization 2,074 1,977

EBIT 4,510 4,139

Interest 730 798

Provision for Dimunition in Â Â investment in Subsidiary

Profit before Taxation 3,780 3,341

Provision for Taxation (1,184) (1,085)

Profit after Tax available 2,596 2,256 for appropriation

Appropriations:

Proposed dividend on Equity 318 278 Shares (including taxes thereon)

Dividend on Preference Shares 27 26 paid (including taxes thereon)

Transfer to the General Reserve 260 226

Transfer to Capital Redemption 741 Â Reserve

Depreciation Adjustment 72 Â

Balance your Directors propose 1,178 1,726 to carry to the Balance Sheet

Total appropriations 2,596 2,256

EBITDA for the year under review stood at Rs.6,584 million as compared to Rs.6,116 million in the previous year, reflecting an increase of 8%. This growth in EBITDA is to a large extent the result of our ability to increase prices in open markets, improve our product mix, volume growth and the effective management of input cost, fixed costs and overheads.

Interest paid during the year amounted to Rs.730 million and was comparable to the amounts paid in the previous year. Depreciation for the year was Rs.2,074 million as compared to Rs.1,977 million in the previous year.

Profit before Taxation for the year stood at Rs.3,780 million as compared to Rs. 3,341 million in the previous year, reflecting an increase/decrease of almost 13%. Profit after Taxation finally resulted in an amount of Rs. 2,596 million as against Rs. 2,256 million in the previous year.

DIVIDEND

We take pleasure in proposing a dividend of Re.1/- per Equity Share of Re.1/- each for the year ended March 31, 2015. The dividend declared for the previous year was Re.0.90 per Equity Share of Re.1/- each.

The Company paid a dividend on Cumulative Redeemable Preference Shares ('CRPS') at the rate of 3% under the terms of the issue of 7.4 million CRPS held by Scottish & Newcastle India Limited, amounting to Rs. 27 million. The outstanding CRPS have been redeemed on March 31, 2015 on its due date.

The total dividend (including dividend tax) is Rs.318 million, which amounts to about 12% of the Profit after Tax.

RESERVES

Your Company proposes to transfer Rs.260 million to the General Reserve. Redemption of CRPS was carried out after transfer of profits to Capital Redemption Reserve in terms of applicable regulations.

CAPITAL

The Authorized Share Capital of the Company stands at Rs.9,990 million, comprising Equity Share Capital of Rs.4,130 million and Preference Share Capital of Rs.5,860 million. The Company has redeemed 74,07,000 Series-B, Cumulative Redeemable Preference Shares of Rs.100 at par on March 31,2015 as per the terms of allotment. Post such redemption, the Issued, Subscribed and Paid-up Share Capital of the Company as on March 31, 2015 stood at Rs.264.4 million comprising 26,44,05,149 Equity Shares of Re.1 each.

Employees Stock Option Scheme and Sweat Equity Share

The Company has not offered any shares to its employees or Key Managerial Personnel under a scheme of Employees' Stock Option and has also not issued any Sweat Equity Shares at any time.

Related Party Transactions

Details of transactions with related parties as specified in the Companies Act, 2013 and the Rules framed thereunder, the Listing Agreement and the Accounting Standard 18 of the Companies (Accounting Standards) Rules, 2006, have been reported in the Notes to financial statements. Approval of the Audit Committee and the Board of Directors as required under the Listing Agreement and the Companies Act, 2013 has been obtained for such transactions.

The Company has formulated a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions which is placed on the Website of the Company and is available through the link www.unitedbreweries.com/investors/policies.

All transactions entered by the Company during the FY15 with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company has not entered into any transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

Familiarization programme for Independent Directors

The existing Board comprises of Executive, Independent and Non-Executive Directors who have been at the helm of Management of the Company for several years and are fully conversant with the business and operations of the Company. The Familiarization program for new Directors as and when inducted shall aim to familiarize them with the company, their roles, rights, responsibility in the Company, market, business model of the Company etc.

The existing Board of Directors have complete access to the information within the Company.

Presentations are regularly made to the Board of Directors/Audit Committee/Nomination & Remuneration Committee on various related matters, where Directors get an opportunity to interact with Senior Managers. The Company has issued appointment letters to the Independent Directors which also incorporates their role, duties and responsibilities.

Whistle Blower Policy

The Company has adopted vigil mechanism which is a channel for receiving and redressing of complaints about any misconduct, actual or suspected fraud, actual or potential violations of the Company's code of conduct and any other unethical, unlawful or improper practices, acts or activities within the Company. The Company has formulated a Whistle Blower Policy for Employees & Directors and has ensured adequate safeguards against victimization of whistleblowers. The details of establishment of vigil mechanism are disclosed on the Website of the Company.

None of the Employees & Directors have been denied access to the Chairman of the Audit Committee.

Conservation of Energy

The company is taking continuous steps to conserve energy. Its "Sustainability" initiatives are disclosed separately as part of this Annual Report.

Details of the conservation of energy, technology absorption, foreign exchange earnings and outgo, as required under Clause (m) of sub-section (3) of Section 134 of the Companies Act, 2013 read with The Companies (Accounts) Rules, 2014 is annexed as Annexure - E to this report.

Code of Business Conduct and Ethics

The Board of Directors of your Company have adopted a Code of Business Conduct and Ethics in terms of Clause 49 of the Listing Agreement which has been posted on the website of the Company i.e. www.unitedbreweries.com.

Code for Prevention of Insider Trading

Your Company has adopted a comprehensive 'Code of Conduct to Regulate, Monitor and Report of Trading by Insiders' and also a 'Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information' under the provisions of the Securities Exchange Board of India (Prevention of Insider Trading) Regulations, 2015.

Directors

The Board of Directors of your Company comprise of twelve Directors, with a balanced combination of Independent and Promoter Directors.

Dr. Vijay Mallya retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Mr. Duco Reinout Hooft Graafland and Mr. Roland Pirmez, Heineken Nominee Directors resigned from the Board and in their place Mr. Sijbe Hiemstra and Mr. Frans Erik Eusman have been appointed as Additional Directors with effect from July 23, 201 5 and August 01,2015 respectively.

Mr. Shekhar Ramamurthy replaces Mr. Kalyan Ganguly as Managing Director effective August 01,2015. The Managing Director, Chief Financial Officer and the Company Secretary are Key Managerial Personnel in terms of the Companies Act, 2013.

Independent Directors viz., Mr. Chhaganlal Jain, Mr. Chugh Yoginder Pal, Mr. Sunil Alagh, Ms. Kiran Mazumdar Shaw, Mr. Madhav Bhatkuly and Mr. Stephan Gerlich have been appointed for a period of five years till September 03, 2019.

Declaration from Independent Director

All Independent Directors have given declaration that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Meetings of the Board of Directors and Committees of the Board

The meetings of the Board and Committees are pre-scheduled and a tentative calendar of the meetings finalized in consultation of the Directors is circulated to them in advance to facilitate them to plan their schedule. In case of special and urgent business needs, approval is taken by passing resolutions through circulation. During FY 15, four (4) Board Meetings were held. Other details including composition of Board and various Committees and Meetings thereof held in FY 15 are given in the Corporate Governance Report forming part of this Report.

Audit Committee

The Audit Committee of the Board of Directors is constituted to act in accordance with the terms of reference and perform roles, as prescribed under the Companies Act, 2013 and Clause 49 of the Listing Agreement. The composition of the Audit Committee, its terms of reference, roles and details of meetings convened and held during the year under review is given in Corporate Governance Report forming part of this Report.

During the year, all the recommendations of the Audit Committee were accepted by the Board.

Nomination and Remuneration Committee

Nomination and Remuneration Committee is constituted to act in accordance with the terms of reference and perform roles, as prescribed under the Companies Act, 2013 and Clause 49 of the Listing Agreement. The composition of the Nomination and Remuneration Committee, its terms of reference, roles and details of meetings convened and held during the year under review is given in Corporate Governance Report forming part of this Report.

Evaluation Mechanism for Directors, Policy on Directors appointment and Remuneration of Directors/Key Managerial Personnel

The Nomination and Remuneration Committee of the Board of Directors has formulated a Performance Evaluation Policy inter alia prescribing an evaluation criteria for the Independent Directors and the Board of Directors of the Company. The Policy also lays down criteria for appointment of Directors and the remuneration of Directors/Key Managerial Personnel. The Policy is available through the web-link: www.unitedbreweries.com/investors/policies.

In line with corporate governance requirement, evaluation of all Board Members is done by the Independent Directors. The evaluation focuses on the performance and effective functioning of the Board, Committees of the Board, participation. The evaluation process also considers the time spent by each of the Board Members, competencies and accomplishment of specific responsibilities and expertise.

Foreign Exchange Earnings and Outgo

During the FY 15 total foreign exchange earnings of the Company stood at Rs.467 Lakhs (Previous Year Rs.271 Lakhs) and foreign exchange outgo stood at Rs.16,808 Lakhs (Previous Year Rs.12,350 Lakhs).

Corporate Governance Report

A Report on Corporate Governance forms part of this Report along with the Certificate from the Company Secretary in Practice.

Annual Return

As required under sub-section (3) of Section 92 of Companies Act, 2013 and Rule 12(1) of Companies (Management and Administration) Rules, 2014, an extract of Annual Return in Form MGT-9 is annexed as Annexure - F to this report.

Auditors and the Auditor's Report

In terms of the provisions contained in the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, Messrs S R Batliboi & Associates LLP, Chartered Accountants were appointed Statutory Auditors of your Company at 15th Annual General Meeting held on September 04, 2014 for a period of three years i.e. from the conclusion of 15th Annual General Meeting till conclusion of 18th Annual General Meeting. Their appointment in the office of Statutory Auditors during the said period is subject to ratification by Members at every Annual General Meeting.

There are no qualifications or adverse remarks in the Auditors' Report which requires any clarification or explanation.

Secretarial Audit

Pursuant to the Section 204 of the Companies Act, 2013 and Rule 9 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Sudhir Hulyalkar, Company Secretaries, to undertake Secretarial Audit of the Company for the FY 15. The Secretarial Audit Report forms part of this Report and is annexed as Annexure - G.

There are no qualifications, reservations or adverse remarks in the Secretarial Audit Report.

Details of significant and material orders

No order has been passed or stringent action taken by any regulator or court or tribunal impacting the going concern status of the Company. The Company has complied with the requirements of the regulators on matters related to stakeholders, as applicable.

Directors' Responsibility Statement

Pursuant to clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, your Board of Directors report 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 Directors 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 period;

(c) 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;

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) the Directors have laid down internal financial controls to be followed by the Company and ensured that such internal financial controls are adequate and were operating effectively, and

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and ensured that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS AND APPRECIATION

Your Directors take this opportunity to thank UBL's customers, shareholders, suppliers, bankers, business partners and associates, financial institutions and central and state Governments for their consistent support and encouragement to the Company. Finally, Your Directors are proud in conveying their sincere appreciation to all employees of the Company for their hard work and commitment.

By Authority of the Board

July 22, 2015 Kalyan Ganguly Henricus Petrus van Zon New Delhi Managing Director Director and CFO

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting this Annual Report and the audited accounts of United Breweries Limited (''UBL'' or ''your Company'' or ''the Company'') for the year ended March 31, 2014 (''the year under review'', ''the year'' or ''FY14'').

FINANCIAL SUMMARY

(Amounts in Rupees million) FINANCIAL RESULTS Year ended March 31

2014 2013

Net Turnover 42,599 39,424

EBITDA 6,116 5,155

Depreciation and amortization 1,977 1,702

EBIT 4,139 3,453

Interest 798 799

Provision for Dimunition in investment in Subsidiary Â Â

profit before Taxation 3,341 2,654

Provision for Taxation (1,085) (932)

profit after Tax available for appropriation 2,256 1,722

Appropriations:

Proposed dividend on Equity Shares (including taxes thereon) 278 217

Dividend on Preference Shares paid (including taxes thereon) 26 26

Transfer to the General Reserve 226 172

Transfer to Capital Redemption Reserve - 1,307

Balance your Directors propose to carry to the Balance Sheet 1,726 -

Total appropriations 2,256 1,722

EBITDA for the year under review stood at Rs.6,116 million as compared to Rs.5,155 million in the previous year, refecting an increase of 18.6%. This is a creditable accomplishment in a stagnating market in which our volume could increase by 1%. This growth in EBITDA is to a large extent the result of our ability to increase prices in open markets, improve our product mix and the effective management of input cost, fixed costs and overheads.

Interest paid during the year amounted to Rs.798 million and was comparable to the amounts paid in the previous year. Depreciation for the year was Rs.1,977 million as compared to Rs.1,702 million in the previous year.

profit before Taxation for the year stood at Rs.3,341 million as compared to Rs.2,654 million in the previous year, refecting an increase of almost 25.9%. profit after Taxation finally resulted in an amount of Rs.2,256 million as against Rs.1,722 million in the previous year.

DIVIDEND

We take pleasure in proposing a dividend of Re. 0.90 per Equity Share for the year ended March 31, 2014. The dividend declared for the previous year was Re. 0.70 per Equity Share.

The Company paid a dividend on Cumulative Redeemable Preference Shares (''CRPS'') at the rate of 3% under the terms of the issue of 7.4 million CRPS held by Scottish & Newcastle India Limited, amounting to Rs.26 million.

The total dividend (including dividend tax) is Rs.304 million, which amounts to about 13.5% of profit after Tax.

CAPITAL

The Authorized Share Capital of the Company stands at Rs.9,990 million, comprising Equity Share Capital of Rs.4,130 million and Preference Share Capital of Rs.5,860 million. The Issued, Subscribed and Paid-up Share Capital remains unchanged at Rs.1,005.1 million, comprising Equity Share Capital of Re.1 each aggregating to Rs.264.4 million and Cumulative Redeemable Preference Shares of Rs.100 each aggregating to Rs.740.7 million.

Directors

The Board of Directors of your company comprises twelve Directors, with a balanced combination of Independent and Promoter Directors.

Mr. A. K. Ravi Nedungadi retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

In compliance of the provisions contained in the Companies Act, 2013, your Company proposes to fix the term of the Independent Directors. Resolutions proposing appointment of Mr. Chugh Yoginder Pal, Mr. Sunil Alagh, Mr. Chhaganlal Jain, Ms. Kiran Mazumdar Shaw, Mr. Stephan Gerlich and Mr. Madhav Bhatkuly as Independent Directors for a term of Five years together with information required to be given under the Companies Act, 2013 and the Listing Agreement form part of the Notice convening Fifteenth Annual General Meeting. In order to comply with the provisions relating to rotation of Directors, your Company is amending the Articles suitably.

The Corporate Governance Report

A Report on Corporate Governance forms part of this Report along with the Certifcate from the Company Secretary in Practice.

Auditors and the Auditors Report

Messrs S.R. Batliboi & Associates LLP, Chartered Accountants, Statutory Auditors of your Company hold office until the conclusion of the ensuring Annual General Meeting and are eligible for re-appointment.

In terms of the provisions contained in the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 the appointment of Statutory Auditors is proposed for a period of three financial years commencing 2014-2015 to hold office from the conclusion of the Fifteenth Annual General Meeting till the conclusion of Eighteenth 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.

There are no qualifications or adverse remarks in the Auditors'' Report which requires any clarifcation or explanation.

Cost Auditors

In terms of the General Circular dated 4th June 2012 issued by Ministry of Corporate Affairs (MCA), the Company had fled its Cost record compliance report for the relevant period with the Central Government. Pursuant to Order dated 6th November 2012 issued by MCA, the Company appointed Messrs K. S. Kamalakara & Co., Cost Accountants, as the Cost Auditors for the financial year 2013-2014. However, their appointment was pending as the requisite E-Form 23C in respect of our industry was not accepted for fling and approval by the Central Government. The MCA has since, in supersession of its earlier Rules, notifed the Companies (Cost Records and Audit) Rules, 2014 inter alia covering Industries to which such Rules apply where the Alcoholic Beverages sector is not covered.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation for the continued support received from shareholders, banks and financial institutions. Your Directors are also grateful to the Company''s business partners and customers for their continued support and patronage. Finally, your Directors wish to acknowledge the support and contribution on the part of all employees who constitute our most valuable asset.

By Authority of the Board,

May 27, 2014 Kalyan Ganguly Henricus Petrus van Zon

London Managing Director Director and CFO

Mar 31, 2013

The Directors have pleasure in presenting this Annual Report and the audited accounts of United Breweries Limited (''UBL'' or ''your Company'') for the year ended March 31, 2013 (''the year under review'', ''the year'' or ''FY13'').

FINANCIAL RESULTS - AN OVERVIEW

(Amounts in Rupees million)

Year ended March 31

2013 2012*

Net Turnover 39,424 36,348

EBITDA 5,155 4,846

Depreciation and amortization 1,702 1,487

EBIT 3,453 3,359

Interest 799 987

Provision for Dimunition in investment in Subsidiary - 196

Profit before Taxation 2,654 2,176

Provision for Taxation (932) (912)

Profit after Tax available for appropriation 1,722 1,264

Appropriations:

Proposed dividend on Equity Shares (including taxes thereon) 217 215

Dividend on Preference Shares paid (including taxes thereon) 26 28

Transfer to the General Reserve 172 150

Balance your Directors propose to carry to the Balance Sheet 1,307 871

Total appropriations 1,722 1,264

*Regrouped/rearranged.

DIVIDEND

Your Board of Directors take pleasure in declaring a dividend of Re.0.70 per Equity Share, including on 8,489,270 Equity Shares of Re.1/- each fully paid up allotted upon amalgamation of Scottish and Newcastle India Private Limited. Your Company paid a dividend on Cumulative Redeemable Preference Shares (''CRPS'') at the rate of 3% under the terms of the issue of 7.4 million CRPS held by Scottish and Newcastle India Limited, amounting to Rs. 26 million.

The total dividend (including dividend tax) is Rs. 242.53 million, which amounts to about 12.57% of the Profit after Tax.

AMALGAMATION

Your Directors are pleased to inform that Scottish and Newcastle India Private Limited (SNIPL) an Indian subsidiary of Heineken UK Limited (Heineken Group), has been amalgamated into your Company by the Order of the Hon''ble High Courts of Karnataka and Bombay with the appointed date of April 01, 2012. The restructuring of various brewing entities of the group including subsidiary and investment holding companies by way of amalgamation into UBL has culminated in optimal administrative, management and synergy benefits and resulted in cost savings, pooling of managerial skills and utilization of valuable resources. It was found strategically necessary and expedient to amalgamate SNIPL also into UBL for enhancing technical synergies in manufacture, marketing and distribution of beer through Heineken and also furthering management expertise.

CAPITAL

The Authorized Share Capital of your Company stands at Rs.9,990 million, comprising of Equity Share Capital of Rs.4,130 million and Preference Share Capital of Rs.5,860 million. The Issued, Subscribed and Paid-up Share Capital remains unchanged at Rs.1,005.1 million, comprising of Equity Share Capital of Re.1 each aggregating to Rs.264.4 million and Cumulative Redeemable Preference Shares of Rs.100 each aggregating to Rs.740.7 million.

Consequent upon amalgamation of SNIPL into your Company the Authorized Share Capital of your Company stands increased to Rs.9,990 million comprising of 4,130 million Equity Shares of Re.1 each and 58.6 million Preference Shares of Rs.100 each. Further, in terms of the Scheme of Amalgamation, 8.49 million Equity Shares have been allotted to Heineken UK Limited simultaneously upon cancellation of equivalent number of Equity Shares held by SNIPL. Therefore, the Issued, Subscribed and Paid up share capital of your Company remains unchanged post amalgamation.

DIRECTORS

The Board of Directors of your Company comprises of twelve Directors, with a balanced combination of Independent and Promoter Directors.

Mr. Chhaganlal Jain, Mr. Duco Reinout Hooft Graafland and Mr. Stephan Gerlich retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

In terms of the provisions contained in the Shareholders'' Agreement dated December 07, 2009 with the Heineken Group Mr. Henricus Petrus van Zon was appointed by Heineken to replace Mr. Guido de Boer as Director with effect from December 07, 2012 and CFO with effect from January 01, 2013.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Board of Directors reports that:

- in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; and

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

- proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

- the annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE

A Report on Corporate Governance forms part of this Report along with the Certificate from the Company Secretary in Practice.

AUDITORS AND AUDITORS'' REPORT

Messrs S.R. Batliboi & Associates LLP, Chartered Accountants, Statutory Auditors of your Company hold office until the conclusion of the ensuring Annual General Meeting and are eligible for re-appointment.

There are no qualifications or adverse remarks in the Auditors'' Report.

With respect to the Auditors'' observation in para (ix) (a) of the Annexure of the Report, your Directors are aware that few delays in payments of certain statutory dues were unintentional and not serious in nature. All undisputed dues have been regularized as on close of the Financial year.

COST AUDITORS

In compliance of Circular No. 52/26/CAB-2010 dated November 06, 2012, issued by the Ministry of Corporate Affairs, Government of India, your Company has appointed Messrs K.S. Kamalakara & Co., as Cost Auditors to audit cost accounting records of your Company for the financial year 2013-2014.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation for the continued support received from shareholders, banks and financial institutions. Your Directors are also grateful to the Company''s business partners and customers for their continued support and patronage. Finally, your Directors wish to acknowledge the support and contribution on the part of all employees who constitute our most valuable asset.

By Authority of the Board,

May 30, 2013 Kalyan Ganguly Henricus Petrus van Zon

Mumbai Managing Director Director, CFO

Mar 31, 2012

Dear Members,

The Directors have pleasure in presenting this Annual Report and the audited accounts of United Breweries Limited ('UBL' or 'your Company') for the year ended March 31, 2012 ('the year under review', 'the year' or 'FY12').

FINANCIAL RESULTS Ã AN OVERVIEW

(Amounts in Rupees million)

Year ended March 31

2012 2011

Net Turnover 37,007 31,048

EBITDA 4,850 4,348

Depreciation and amortization 1,487 1,305

EBIT 3,363 3,043

nterest 991 781

Provision for Dimunition in investment in Subsidiary 196 --

Profit before Taxation 2,176 2,262

Provision for Taxation (912) (789)

Profit after Tax available for appropriation 1,264 1,473 Appropriations:

Proposed dividend on Equity Shares (including taxes thereon) 215 184

Dividend on Preference Shares paid (including taxes thereon) 28 86

Transfer to the General Reserve 150 150

Balance your Directors propose to carry to the Balance Sheet 871 1,053

Total appropriations 1,264 1,473

DIVIDEND

Your Board of Directors take pleasure in declaring a dividend of Re.0.70 per Equity Share, including on 9,860,211 Equity Shares of Re.1/- each fully paid up allotted during the year upon amalgamation of UB Nizam Breweries Private Limited, Chennai Breweries Private Limited, Millennium Beer Industries Limited and UB Ajanta Breweries Private Limited.

Your Company paid a dividend on Cumulative Redeemable Preference Shares ('CRPS') at the rate of 3% under the terms of the issue of 24.7 million CRPS held by Scottish & Newcastle India Limited, amounting to Rs.28 million.

The total dividend (including dividend tax) is Rs.243.25 million, which amounts to about 19.2% of Profit after Tax.

AMALGAMATIONS

Your Directors are pleased to inform that UB Ajanta Breweries Private Limited has been amalgamated into your Company by the Order of the Hon'ble Board for Industrial and Financial Reconstruction with the appointed date of April 1, 2011. The consolidation has ensured creation of a larger combined entity, and synergies in the businesses besides economies of scale. Combining all functions and operations has not only resulted in enhanced financial performance but also has provided benefits in the form of managerial and technical expertise, and financial resources thereby enhancing shareholder value.

As a final step towards consolidation and restructuring of all brewing entities of the Group, the Board of Directors of your Company and of Scottish and Newcastle India Private Limited (SNIPL), an Indian subsidiary of Heineken UK Limited (Heineken Group), have approved amalgamation of SNIPL into your Company under Sections 391 to 394 of the Companies Act, 1956. All requisite regulatory approvals for the said amalgamation have been obtained and an application has been filed with the High Courts of Karnataka and Bombay by your Company and SNIPL respectively.

CAPITAL

In view of the consolidation of share capital through the amalgamation of UB Ajanta Breweries Private Limited, the Authorized Share Capital of your Company now comprises of Equity Share Capital aggregating to Rs.3,674 million and Preference Share Capital of Rs.5,860 million. The Issued, Subscribed and Paid-up Share Capital as on

March 31, 2012 stood at Rs.1,005.1 million, comprising of Equity Share Capital of Re.1 each aggregating to Rs.264.4 million and Cumulative Redeemable Preference Shares of Rs.100 each aggregating to Rs.740.7 million.

DIRECTORS

The Board of Directors of your company comprises of twelve Directors, with a balanced combination of Independent and Promoter Directors.

Mr. A K Ravi Nedungadi, Mr. Chugh Yoginder Pal and Mr. Sunil Alagh retire by rotation at the ensuing Annual Genera Meeting and being eligible, offer themselves for re-appointment.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Board of Directors reports that:

- in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; and

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

- proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

- the annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE

A Report on Corporate Governance forms part of this Report along with the Certificate from the Company Secretary in Practice.

AUDITORS AND AUDITORS' REPORT

Messrs Price Waterhouse, Statutory Auditors of your Company are not seeking re-appointment at the forthcoming Annual General Meeting. Your Directors place on record their appreciation for the valuable services rendered by them during their tenure as Auditors of your Company.

It is proposed to appoint Messrs S.R. Batliboi & Associates, Chartered Accountants, as the Statutory Auditors of your Company to hold office from the conclusion of this Annual General Meeting till the conclusion of the next Annua General Meeting.

Messrs S.R. Batliboi & Associates, Chartered Accountants, have consented to be the Auditors of your Company if appointed by the Members at the Annual General Meeting and have also confirmed that their appointment would be within the limits specified under section 224(1B) of the Companies Act, 1956.

There are no qualifications or adverse remarks in the Auditors' Report which require any clarification or explanation.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation for the continued support received from shareholders, banks and financial institutions. Your Directors are also grateful to the Company's business partners and customers for their continued support and patronage. Finally, your Directors wish to acknowledge the support and contribution on the part of all employees who constitute our most valuable asset.

By Authority of the Board,

June 08, 2012 Kalyan Ganguly Guido de Boer

Bangalore Managing Director Director, CFO

Mar 31, 2010

The Directors have pleasure in presenting this Annual Report on the business and operations with audited accounts of your company for the year ended March 31, 2010.

FINANCIAL RESULTS

Your Companys financial performance for the year ended March 31, 2010 is summarized below:

(Rupees in Million)

Particulars 2009-2010 2008-2009

Net Income 20751.3 17475.7

Profit before Interest & Depreciation 2949.0 2675.2

Interest 555.0 896.4

Depreciation 882.7 762.1

Profit before non-recurring items 1511.3 1016.7

Non-recurring items - -

Profit before Taxation 1511.3 1016.7

Provision for Taxation (541.6) (391.8)

Profit after Tax available for appropriation 969.7 624.9

Appropriation

Dividend on Equity Shares (including Taxes thereon)

Interim dividend paid - 42.1

Final dividend proposed 100.7 42.1 _

Dividend on Preference Shares paid (including Taxes thereon) 86.7 86.7

Transfer to General Reserve 100.0 65.0

Balance your Directors propose to carry to the Balance Sheet 682.3 389.0

DIVIDEND

Your Board of Directors take pleasure in declaring a dividend of 36% for the year ended March 31, 2010.

Your Company paid a dividend on the Cumulative Redeemable Preference Shares (CRPS) at the rate of 3% under the terms of the issue of the 24.69 million CRPS held by Scottish & Newcastle.

CAPITAL

The Authorized Share Capital of the Company remained unchanged at Rs.2,800 million, comprising Equity Share Capital of Rs.300 million and Preference Share Capital of Rs.2,500 million. The Issued, Subscribed and Paid-up Share Capital as on March 31, 2010 stood at Rs.2,709 million, comprising of Equity Share Capital of Re.1 each aggregating to Rs.240 million and Cumulative Redeemable Preference Shares of Rs.100 each aggregating to Rs.2,469 million.

ALLIANCE WITH HEINEKEN N.V.

As a result of the acquisition of Sctottish & Newcastle by Heineken, the effective ownership of 37.49% of Equity holding in your Company now effectively vests in Heineken. Your Company has entered into a new Shareholders Agreement inter alia with Heineken. A comprehensive business partnership with Heineken has been agreed, thereby formalizing their entry into your Company as an equal promoter. The Parties have agreed upon key commercial terms for the production of Heineken in India, which will accelerate the growth of the premium beer segment throughout India. At the same time, your Company will work with Heineken to expand the international presence of the Kingfisher brand through Heinekens global footprint.

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY OVERVIEW

The per capita consumption of beer in India continues to be very low compared to other countries. There has been a steady growth in the Indian Beer Industry of about 15% per year in the last five years, with Industry volumes crossing 200 million cases in financial year 2009-2010 from about 100 million cases in financial year 2003-2004. Considering the Indian demographics, with around 70% of the population below the age of 30 years, growing income and increasing international influence, the industry is expected to maintain if not exceed, its growth at present rate. While the Industry grew by 10% in volume terms during the last financial year your Companys volumes grew by 20%.

The Indian market infrastructure is a barrier to higher growth. In India, alcohol is available in around 65,000 outlets including shops, bars and restaurants which translates to roughly one outlet for every 18,000 residents, whereas the global average for the same is one outlet per 250 residents and the corresponding figure for China is one outlet for every 300 residents. For instance, in urban conglomeration like Greater Mumbai, there are around 2,500 outlets while in Shanghai, which has similar population base, the number of outlets selling alcohol is 18,000. An encouraging development is that in some cities, like Mumbai, the government has started to issue licenses for outlets to sell beer and wine only, delinking it from the sale of spirits. This development should facilitate future growth.

Taxation is another major factor which adversely affects the Indian brewing industry. In India, all alcoholic beverages are taxed uniformly, irrespective of their alcohol content. Consequently, same rate of taxation is applied for spirits, lager beer, strong beer and other alcoholic beverages, resulting in higher price for beer relative to high alcohol beverages. Across the globe, levies on beer are typically at half the rate applicable to spirits, providing an incentive for consumers towards lower alcohol beverages.

Due to the prevalent excise taxation structure, the majority of Indians who consume alcohol prefer to purchase spirits over beer as it contains higher alcohol at a similar price. Therefore in India, unlike most other countries, consumption of spirits is higher than beer. Some States have recently started to delink beer taxation from spirits, thereby promoting a logical growth in the future.

Taxation & Regulation of alcohol being a State subject under the Constitution of India, each State has separate set of regulations, restrictions and taxation structure for alcoholic beverages. Some States also impose high export duties and restrictions on the export of beer outside the State. Even the sales & distribution structure varies from State to State as some markets are open while in most States primary sale is canalized through State controlled corporations.

Over the last 5 years, a plethora of foreign brands have entered the country as 100% Foreign Direct Investment is permitted thereby increasing the choice of brands and competition. All major global brewers are now present in India. Despite this, your Company has been able to extend its market leadership position.

OPERATIONS

Volumes during 2009-2010 were buoyant in the Northern & Western markets, but sales in key Southern States were adversely affected. A change in taxation structure in Karnataka and the voluntary withdrawal of your Companys brands in the first quarter of the year 2009-2010 from Andhra Pradesh, on account of a stand off on pricing between beer producers and the State Government, impacted sales in these key markets.

Your Company has successfully commissioned its largest greenfield brewery with a capacity of 6 Lac HL per annum in the State of Andhra Pradesh which became operational in January 2010. The greenfield brewery has been built to international specifications and has adopted several international standards like HAZOP for safe operation, and HACCP, the worldwide standard for food certification. The brewery has been built with a commitment to the environment and your Company has taken various steps to reduce the overall carbon footprint. The latest equipment has been installed with a vision of productivity and environmental conscience. In keeping with its new mantra, Conserve, Connect & Conquer, your Companys unique environmental initiative on inclusive water management, the plant design aims not just to deliver water consumption levels exceeding world class standards, but also to maintain the water table levels and the greenery around the brewery. In view of production at enhanced capacity at the new greenfield brewery and to achieve economies in scale of operation, the management has discontinued its operations at its Hyderabad brewery.

Your Company received the prestigious Water Digest Award for the year 2009-2010 in the categories of Best Water Conserver - Waste Water Management Company, and Corporate Social Responsibility for water practices supported by UNESCO, PHDCCI and various Government of India agencies. The brewing unit of your Company at Palakkad has been awarded the State First Prize for Pollution Control and Environmental Protection among medium scale industries in Kerala for 2008. This is the third consecutive year that the unit has received this coveted award. It earlier won the second prize in the same category in the year 2006 and the first prize in 2007.

Acquisition of land at Nanjangud, Karnataka through KIADB has been completed and your company will commence setting up of a new brewery in this profitable State.

Your Company has shifted from furnace oil fired boilers to solid fuel boilers in most of its breweries, leading to savings in the cost of fuel. To contain the increase in bottle cost, your Company has introduced dedicated design registered bottles in select markets. We expect the benefits of this initiative materialising from the financial year 2010-2011.

Heineken owns breweries in Andhra Pradesh and Maharashtra. Your Company has now the benefit of utilization of capacity available at these two breweries.

SALES

Your Company continues to lead the beer market with a sale of 101 million cases and combined national market share crossing 50%. The net sales for the year 2009-2010 stood at Rs.19,975 million as against net sales of Rs. 16,983 million in the financial year 2008-2009, registering a growth of 18% over the comparable figure in the previous year. This spectacular result has been achieved despite impasse in supply to the Andhra Pradesh market during peak season and excise increases in Karnataka. Your Company has a market share that now stands at over 50%, and is twice the size of its nearest competitor. Your Company along with its associates controls over 63% of the mild beer market and over 46% of the strong beer market in India. The ubiquitous "Kingfisher" brand continues to be the largest selling beer brand in India while "Kingfisher Strong" has grown by 22%.

Region wise, the Northern market grew by 33% particularly due to growth in the States of Rajasthan and Uttar Pradesh. The Eastern markets grew by 70% on account of high growth in the States of Bihar, Jharkhand, West Bengal, Orissa and North Eastern States. The Southern markets grew by 7% as the growth in the States of Kerala and Tamil Nadu was offset by the de-growth of Karnataka market and halting of sales in Andhra Pradesh. The Western markets grew by 19% riding on growth in the States of Madhya Pradesh and Maharashtra and a decline in Daman & Diu.

Your Company has launched a new super premium brand by the name Kingfisher Ultra which has been widely acclaimed in the markets of its launch. Your Company has also launched an All Season beer by the name Kingfisher Red in the North and East markets. Kingfisher Red is developed following a unique process and can be consumed even at 14 to 17 degrees Celsius, without any change in the taste of beer.

The Brand Kingfisher has been awarded the prestigious Gold Medal in the World Beer Championship 2009.

MANUFACTURING EXPENSES

Manufacturing expenses for the financial year 2009-2010 were Rs.10,088 million constituting 50.5% of the net sales as against Rs. 8,693 million in the previous financial year which constituted 51.2% of the net sales.

A significant increase in price of second hand bottles on account of hoarding by bottle traders has adversely affected manufacturing costs. Your Company has recently introduced patented bottles with a view to gain strategic control of this major item of cost. Since the bottles are patented and the name and logo of your Company are embossed on the bottles, they cannot be used by other brewers and are to be necessarily supplied back to your Company. The cost associated with accelerated investment in new patented bottles is expected to be recovered by a drop in the price of second hand bottles.

Your Company has entered into long term agreements for securing supply of malt & barley thereby minimizing the fluctuation in price of these ingredients.

Most of the units have installed solid fuel boilers which has resulted in a reduction of fuel cost. The breweries are continuously improving efficiencies in the brewing process as well as in packing thereby reducing the manufacturing costs.

PERSONNEL AND OTHER OPERATING EXPENSES

Personnel expenses of your Company stood at Rs.989 million as compared to Rs.871 million in the previous year. This constituted 5% of the net sales as against 5.1% of the net sales in the previous year. Other operating expenses amounted to Rs. 1,094 million constituting 5.5% of the net sales. Personnel and other operating expenses were contained despite increased volumes during the year.

SELLING AND BRAND PROMOTION EXPENSES

During the period under review, your Company has spent 28% of net sales on selling and brand promotion exercise as compared to 25.2% of net sales spent in the previous year.

During the year, your Company continued its investments in brand building, especially behind the Kingfisher Brand. Kingfisher continues its high profile association with five of the eight IPL teams as their Good Times Partner. This association was effectively leveraged both through communication as well as consumer and trade contacts.

Kingfisher further strengthened its association with football by signing on as the title sponsor of the Goa Professional League.

Kingfisher continued to leverage on the excitement and glamour of Formula-1 by being a very visible and prominent sponsor of the Force India team.

Kingfisher also continued its association with large city-based sporting events such as the Mumbai Marathon, Delhi Half Marathon and the World 10K race in Bangalore.

Kingfisher and fashion have been synonymous for over a decade. Kingfisher has strengthened its association with fashion by being a key sponsor to the India Couture Week, Wills Lifestyle India Fashion Week and the Lakme Fashion Week, apart from the fashion weeks in Kolkata, Chennai and Bangalore.

Music has been another significant platform that Kingfisher has used over the years. During the year, the pub-based rock festival - Kingfisher Pubrock Fest was extended to 20 cities and over 75 shows. The Kingfisher Voice of Goa talent hunt has grown from strength to strength and has firmly entrenched Kingfisher extremely close to the hearts of Goans.

* The eighth edition of the much awaited and world acclaimed Kingfisher Swimsuit Calendar was released in January to a tremendous response. Your Companys association with Indias No.1 Lifestyle TV channel NDTV Good Times continued into its third year.

PROFIT BEFORE INTEREST, DEPRECIATION AND TAXATION (PBIDT)

PBIDT for the year under review stood at Rs.2,949 million as compared to Rs.2,675.2 million in the previous year, reflecting an increase of 10.2%. This increase in PBIDT is resulting from strong revenue growth and sustained investment behind your Companys brands.

INTEREST AND DEPRECIATION

Interest paid during the year amounted to Rs.555 million as against Rs.896.4 million in the previous year. Depreciation for the year was Rs.882.7 million as compared to Rs.762.1 million in the previous year.

There has been reduction in the interest cost as compared to the previous year due to exchange gains in the current year compared to losses in the previous year and the payment of a term loan commitment fee in the previous year. Depreciation has increased on account of continued investment in production capacities, including the investment in the greenfield Andhra Pradesh brewery.

PROFIT BEFORE AND AFTER TAXATION

The Profit Before Taxation for the year stood at Rs.1,511.3 million as compared to Rs.1,016.7 million in the previous year reflecting an increase of around 48.6%. The Profit After Taxation stood at Rs.969.7 million as against Rs.624.9 million in the previous year reflecting a growth of 55.2%.

PROSPECTS

While multinational companies are expected to increase competition in the premium beer segment, established domestic brands, particularly those of your Company have the advantage of having an established brand equity. Several international brewers have currently built brand associations and are marketing their brands aggressively through various point-of-sale promotions throughout their distribution networks. Your Company has the benefit of a strong route to market combined with Indias leading brands.

A double digit growth rate is expected for the coming years, resulting from the increase in disposable income and the growth of consumers entering the legal drinking age.

On-trade sales are expected to grow considerably with growing affluence among young consumers together with the culture of frequenting pubs and clubs that is now spreading to second-tier cities. Off-trade sales are meanwhile expected to be boosted by the gradual deregulation of beer retail through supermarkets/hypermarkets and beer & wine licenses.

In order to augment capacities in critical markets, expansion in Karnataka is expected to commence in the next financial year.

ENVIRONMENTAL INITIATIVES

Besides corporate social responsibility, water conservation has been our key focus area. Also, with the expected future growth, its importance has considerably increased. Most of our units have a constraint on disposal of waste water, and therefore, the Company has embarked upon a plan to install sophisticated equipment and modification process so as to reduce consumption of water and its disposal. This will in turn reduce need for acquisition of additional lands for waste water disposal. As an environmental initiative, your Company has installed bottle washers incorporating the latest technology at all units and is encouraging rain water harvesting at these units. Your Company has also collaborated with several agricultural universities for cultivation of identified crops with waste water from the Brewery being used for irrigation on a select basis.

Dry yeast recovery has also been earning revenue as an ingredient for probiotics, as a mixer with spent grain and pesticides. Going ahead, as an environment friendly initiative, your Company is determined to focus on measures for reduction of process loss during production, reduction of pollutants and other wastages and utilization of natural methods of root zone treatments such as usage of duck weed /water hyacinth as an economical method for water purification. This is being done in addition to reducing pollutants which will in turn reduce load on the effluent treatment facility and thereby assist in conservation of the environment.

SOCIAL INITIATIVES

Social responsibility is integrated in the corporate philosophy of your Company and we have been able to positively impact the lives of the communities that we work in. Primary Health, Primary Education and Water are the three key areas for our interventions. Each initiative undertaken is long term and sustainable and addresses a specific need of the local community. These are implemented and monitored in partnership with representatives of the community. Our teams work relentlessly to ensure that each of these meet the needs of the local people. In Education, the objective is to ensure that quality education is imparted to children from the underprivileged strata of the society. Here your Companys representatives work closely with local schools to provide better infrastructure, mid day meals, stationery and uniforms as well as deployment of teachers to enhance the quality of education. In primary health, your Companys endeavour has been to ensure that the community has access to primary healthcare. These are either in the form of Primary Health Centres set up by us or mobile health services where a qualified doctor travels in an ambulance to villages that do not have primary health facilities. Your Companys initiatives in water have been to both conserve as well as provide potable water to the local community. These interventions have earned us the trust and appreciation of the community, local bodies and Governmental agencies. Your Companys initiatives in Primary Health in 7 locations have benefitted over 6000 people. In Education, the interventions have enhanced the quality of education for over 1000 students in 7 locations and we have been able to facilitate access to water for over 13000 locales in 6 locations.

INTERNAL CONTROL SYSTEM

Your Company has established a robust system of internal controls to ensure that assets are safeguarded and transactions are appropriately authorized, recorded and reported. Internal Audit evaluates the functioning and quality of internal controls and provides assurance of its adequacy and effectiveness through periodic reporting. Your Companys internal control systems are adequate and are routinely tested and certified by statutory and internal auditors. The process adopted provides reasonable assurance regarding the effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable laws and regulations.

In order to continuously upgrade the internal control system, to be in line with International best practices and to ensure proper corporate governance, your Company has implemented risk assessment, control self assessment and legal compliance management systems. These have been updated during the year under review.

The internal control system evaluates adequacy of segregation of duties and reliability of management information systems, including controls in the area of authorization procedures and steps for safeguarding assets. Planned periodic reviews are carried out for identification of control deficiencies and opportunities for bridging gaps with best practices along with formalization of action plans to minimize risks.

Your Company believes that the overall internal control system is dynamic, and reflects the current requirements at all times, hence ensuring that appropriate procedures and controls, in operating and monitoring practices are in place.

Internal Audit reports to the Audit Committee and recommends control measures from time to time.

OPPORTUNITIES & THREATS

With growing demand, the domestic production of beer is on the rise. With further investments, your company has been able to upgrade and expand its capacities and also its brands. International brewers have established breweries across India in order to extend their brand presence to more States. With these international brands starting domestic production in India, indigenous brands such as your companys face increasing competition. International premium lager is growing steadily (though on a smaller base) as the companies have expanded their distribution across India, and have launched several new brands during the year under review. Despite this influx of new entrants, Kingfisher Lager continues to not just maintain market share but indeed increased it beyond 50% during the period under report.

India is predominantly a spirits market and beer is a minority preference for those who consume beverage alcohol. The low penetration in beer consumption in comparison to international levels offers the expectation of substantial and sustainable growth in demand for beer in years to come, particularly given the youthful age of Indias populace. It is expected that gradually there will be a deregulation in the Indian beer industry too, giving it a boost.

Foreign brewers have been eyeing the Indian market for some years now as India is widely acknowledged to be the last untapped big growth market. However, consistent investments by your Company, in the product, packaging and communication, along with well established distribution, puts UB in a strong position, as seen by consistent improvements to the Companys national market share.

RISK MANAGEMENT

Your Company has evolved a framework for management of Business Risks. Towards this end the company has identified risk categories under strategic risks, operative risks, information technology risks, financial risks. This is audited regularly by the internal audit team.

Continuity and sustainability of the business is as important to stakeholders as growing and operating the business. Managing risks and protecting the business from the effects of disasters, failures and reputational damage are focal points on the managements agenda.

RISKS AND CONCERNS

The Indian beer industry is plagued with myriad taxes & levies that vary from State to State. These along with price regulation, inadequate market infrastructure and restrictions in interstate movement of beer, pose a great challenge for the industry.

Unlike most developed countries where beer is less regulated and available freely, high level of regulation and higher end consumer price hampers beer sales in India.

Uniform tax regime for beer in all States will be a boon for the industry. If implemented, it will help the beer industry by rationalizing end consumer prices in all States, as is in the case of other consumer goods. Globally, the policy of uniform taxation has been a success because of inherent positive implications on Government revenue. In addition to economic contribution, a uniform tax structure will also create increased agro linkages that are beneficial to a country like India.

It is important to realize that the beer sector can contribute immensely to the agricultural sector, as beer is an agro-based product. Barley farmers particularly stand to benefit from the growth of the beer sector.

Additionally, the continuing control on pricing as exercised by a number of State Governments has resulted in our inability to raise prices on roughly 60% of our sales. This has had a direct bearing upon the Companys profitability. As this challenge continues in the current financial year, it has resulted in a number of key markets becoming unattractive from a financial perspective.

Your Company has explored a variety of avenues to contain the risk of continued increase in basic costs and has entered into a number of long term agreements for sourcing vital inputs. There has been a continuing review of the long term strategy for procurement at an economical cost.

Excessive regulation and further extensions of Government intervention, in the areas of distribution and pricing, is affecting the growth and profitability of the industry as well as restricting Government revenues. In addition, restrictions on advertising and licensing of retail outlets continue to present challenges to the Industry.

Inclusion of alcoholic beverages into Goods and Service Tax (GST), is uncertain. Non-inclusion of alcoholic beverages in purview of GST would be against the fundamental concept of GST and could have a material negative impact. However, even if it is included there may be material negative impact on input cost.

HUMAN RESOURCES

People continue to be the focal point of the organizations development. Your Company believes in building a stimulating, conducive and transparent culture that drives high level of performance. For a high performance organization, it is imperative that it has right people in the right job equipped with the right set of skills. As such, the emphasis this year was in identifying and developing people capability to ensure that we not only maintain but accelerate our rate of growth and performance. With this intent, an in-depth evaluation of role requirement vis a vis the individuals strength was carried out. This was to ensure right deployment of people and also identify their developmental needs that will strengthen and consolidate our leadership pipeline. The organization also completed the succession planning exercise that has also enabled us to fill critical positions internally.

We continued to significantly improve our performance in the areas of productivity and safety by means of focused initiatives. Your Company maintained harmonious employee relations during the year. The transition of workforce from the existing plant to the new greenfield also happened seamlessly.

As on March 31, 2010, the total employee strength at United Breweries Limited stands at 1661. Your Directors place on record their sincere appreciation to all employees for their contribution towards the continuous success of the organization.

SUBSIDIARY COMPANIES

Associated Breweries & Distilleries Limited remains a wholly owned Subsidiary of your Company while your Company holds 51 % of equity in Maltex Masters Limited.

Your Company has received approval from the Central Government exempting your Company from attaching the Accounts etc., of its subsidiaries viz. Associated Breweries & Distilleries Limited and Maltex Malsters Limited with the balance sheet of your Company. In terms of the approval so granted by the Central Government, the Accounts, etc., of the above subsidiaries are not required to be attached with the balance sheet of the holding company. However, these Accounts will be provided on request to any member requiring to have a copy, on receipt of such request by the Company Secretary at the Registered Office of the Company.

Statement pursuant to Section 212 (1) (e) also forms part of the Annual Report.

CONSOLIDATION

As per the Listing Agreement, Consolidated Accounts conforming to applicable Accounting Standards are attached to this Annual Report.

DEPOSITORY SYSTEM

Your Company has entered into Agreement with National Securities Depository Limited and Central Depository Services (India) Limited in accordance with the provisions of the Depositories Act, 1996 and as per the directions issued by Securities and Exchange Board of India.

DIRECTORS

The Board of Directors of your company has been reconstituted and broad based to comprise of 12 Directors with a balanced combination of Promoters and Independent Directors. Mr. John Hunt and Mr. John Nicolson opted out of the Board. Mrs. Kiran Mazumdar Shaw and Mr. Madhav Bhatkuly have been inducted on Board as Independent Directors with effect from October 26, 2009. Mr. Duco Reinout Hooft Graafland, Mr. Sijbe Hiemstra and Mr. Guido de Boer were inducted on Board with effect from December 07, 2009. Mr. Stephan Gerlich was appointed to the board on July 02, 2010.

The Board places on record the contributions of outgoing Directors during their tenure on the Board of your Company.

Mr. Chugh Yoginder Pal, Mr. A K Ravi Nedungadi and Mr. Sunil Alagh retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

AUDITORS AND AUDITORS REPORT

M/s Price Waterhouse, Statutory Auditors hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

There are no qualifications or adverse remarks in the Auditors Report which require any clarification or explanation.

LISTING REQUIREMENTS

Your Companys Equity Shares are presently listed at the Bombay Stock Exchange Limited, National Stock Exchange of India Limited and the Bangalore Stock Exchange Limited. The listing fees have been paid to all the Stock Exchanges for the year 2010-2011.

During the year under review, the Securities of your Company have been delisted from Stock Exchanges at Chennai and New Delhi upon application made in terms of special resolution passed by the members in this regard.

CASH FLOW STATEMENT

A Cash Flow Statement for the year ended March 31, 2010 is appended.

CORPORATE GOVERNANCE

A Report on Corporate Governance forms part of this Report along with the Certificate from the Company Secretary in practice.

FIXED DEPOSITS

The Company has not invited any Fixed Deposits.

PARTICULARS OF EMPLOYEES, CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION, ETC.:

Information in accordance with sub-Section (2A) of Section 217 of the Companies Act, 1956, read with the Companys (Particulars of Employees) Rules, 1975, forms part of this Directors Report and is annexed. Particulars required under Section 217(1 )(e) are also annexed.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Board of Directors report that:

- in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

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

- proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

- the annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation for the continued support received from shareholders, banks and financial institutions. Your Directors are also grateful to the Companys business partners and customers for their continued support and patronage. Finally, your Directors wish to acknowledge the support and contribution on the part of all employees who constitute our most valuable asset.

By Authority of the Board, Bangalore Kalyan Ganguly Guido de Boer

July 21,2010 Managing Director Director & CFO

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