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Notes to Accounts of United Breweries Ltd.

Mar 31, 2023

The accompanying notes are an integral part of the standalone financial statements.

Capital redemption reserve - The said reserve was created by transfer from general reserve on redemption of preference shares. This reserve account can be applied in paying up unissued shares to be issued to members of the Company as fully paid bonus shares in accordance with the provisions of the Companies Act, 2013.

Securities premium - The reserve is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares etc., in accordance with the provisions of the Companies Act, 2013. General reserve - Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act, 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. The amount transferred to the general reserve can be utilised only in accordance with the specific requirements of the Companies Act, 2013.

There are no changes in equity share capital and other equity due to accounting policy changes or prior period errors.

*Non-current advance to suppliers includes an amount of Rs. 3,356 Lakhs (March 31, 2022: Rs. 3,271 Lakhs) paid under protest to Maharashtra Industrial Development Corporation ("MIDC”) towards increased charges for water supplies. The Company has filed a special leave petition before the Supreme Court in respect of this matter and the management, basis a legal advice, believes that the Company''s position will be upheld in the appellate process and accordingly, the same has been considered as a contingent liability as at year end.

**Non-current portion includes amount paid under protest against various tax demands under appeal, which are included under contingent liabilities in Note 33.

***Relates to Industrial promotion subsidy. There are no unfulfilled conditions or other contingencies attached to these grants.

There are no advances to directors or other officers of the Company or any of them either severally or jointly with any other person or advances to firms or private companies, respectively, in which any director is a partner or a director or a member. Further there are no loans or advances in the nature of loan to promoters, directors or key management personnel.

(iii) Compensated absences

Acturial valuation is based on the assumption that the employee can either avail and/or encash his accumulated balance in future years after allowing for inflation in employee salary. Present value of Defined Benefit Obligation is calculated by projecting future benefit considering salaries, exits due to death, resignation, and other decrements, if any, using assumed rates of salary escalation, mortality, availment and employee turnover rates. The estimated term of the benefit obligation works out to 7 years. For the current valuation a discount rate of 7.10% per annum (March 31, 2022: 6.70% per annum) compound has been used.

The Company has lease contracts for land, office premises, employee residential premises, computers, plant and equipment, furniture and vehicles. Leasehold land arrangements are for 90-99 years with various government authorities. Other leases are for a period upto 9 years with options of renewal and premature termination with notice, except in certain leases with lock-in period of 6 to 36 months. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets. There are certain lease contracts that include extension and termination options. The Company also has certain leases with lease terms of twelve months or less and leases with low value. The Company applies the ''short-term lease'' and ''lease of low-value assets'' recognition exemptions for these leases. There are no lease arrangements with variable lease payments.

The Company had total cash outflows for leases of Rs. 3,872 Lakhs (Previous year: Rs. 4,522 Lakhs) for the year ended March 31, 2023. The Company also had non-cash additions to right-of-use assets and lease liabilities of Rs. 1,586 Lakhs (Previous year: Rs. 286 Lakhs) during the year ended March 31,2023. There are no leases that have been entered into but not yet commenced as at year end.

The undiscounted potential future rental payment relating to periods following the exercise date of extension option that are not included in the lease term is Rs. Nil (Previous Year: Rs. 151 Lakhs). There are no termination options which are expected to be exercised but not included in lease term.

(a) The Company received an order dated September 24, 2021 under Section 27 of the Competition Act, 2002 from the Competition Commission of India ("CCI") (''the CCI Order''), wherein the CCI concluded that the Company and certain executives (including former executives) of the Company contravened the provisions of Section 3 of the Competition Act, 2002. The CCI levied a penalty of Rs. 75,183 Lakhs on the Company. On December 8, 2021, the Company filed an appeal against the aforesaid CCI Order before the National Company Law Appellate Tribunal (''NCLAT''). The NCLAT vide its order dated December 22, 2021 granted a stay of the CCI Order during the pendency of the appeal, including recovery of the penalty imposed by the CCI, subject to deposit of 10% of the penalty amount by the Company. The Company has accordingly deposited Rs. 7,518 Lakhs in the form of Fixed Deposit Receipt (FDR) with the Registrar, NCLAT which is presented under "Other non-current assets". The FDR was valid till December 24, 2022 and as per NCLAT order dated December 8, 2022 the FDR aggregating to Rs7,793 Lakhs was renewed for another period of six months. On December 23, 2022 NCLAT passed its judgment and dismissed the appeals filed by the Company and other appellants. The Company has filed appeal against NCLAT order dated December 23, 2022 before the Supreme Court of India on January 30, 2023 under Section 53T of the Competition Act, 2002. On February 17, 2023, after hearing the arguments of the counsel for the Company and the CCI, the Supreme Court admitted the appeal and stayed the NCLAT Order (and consequently, the CCI Order and the recovery proceeding initiated by the CCI), subject to a deposit of additional 10% of the total penalty amount, over and above the amount already deposited by way of the First FDR before the Registrar, NCLAT. The Company has accordingly deposited Rs. 7,518 Lakhs in the form of FDR with the Registrar, NCLAT which is presented under "Other non-current assets" in all aggregating to Rs. 15,311 Lakhs. Based on the advice of the external legal experts, the Company is of the view that the Director General, the CCI and the NCLAT has 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. Accordingly, no provision has been recorded in the books of account and the same has been considered as a contingent liability in accordance with Ind AS 37 -Provisions, Contingent Liabilities and Contingent Assets.

(b) On January 5, 2022, a party has filed a claim of Rs. 2,877 Lakhs against the Company before the Arbitral Tribunal, which includes claims towards loss of profit, certain reimbursement claims and damages towards breach of contract, etc. On February 12, 2022, the Company filed a counter claim against the party before the Arbitral Tribunal, which includes claim towards loss of business and other recoverables. Management based on a legal opinion, believes that the claims made by the party are not sustainable and no liability would arise from the same. Accordingly, no liability/provision is recognised in this regard.

March 31,

March 31,

2023

2022

(c) Others

Claims against the Company not acknowledged as debtsA

Income tax

82,361

77,959

Excise duty

15,906

14,845

Sales tax

37,586

11,410

Service tax

2,631

2,599

Water charges

3,414

3,271

Employee state insurance/provident fund

92

104

Others

8,604

9,941

Other money for which the Company is contingently liable

Bank guarantees

2,024

1,891

Total

1,52,618

1,22,020

AThe Company is contesting these demands / notices and the management, based on advice of its legal/tax consultants, believes that its position will likely be upheld in the appellate process. No expense has been accrued in the standalone financial statements for these demands raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations. The Company does not expect any reimbursements in respect of these contingent liabilities. The amounts disclosed as contingent liabilities above are based on the demands stated in the orders /notices received from the tax authorities. These do not include amounts for similar matters for periods subsequent to periods covered by these demands / notices and interest or penalty which are not included in these demands / notices.

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

(d) The Supreme Court of India in a judgement on Provident Fund dated February 28, 2019 addressed the principle for determining salary components that form part of Basic Salary for individuals below a prescribed salary threshold. It is however unclear as to whether the clarified definition of Basic Salary would be applicable prospectively or retrospectively. The Component has complied with the aforesaid judgement on a prospective basis from the date of the judgement and will continue to monitor and evaluate retrospective application, if applicable, based on future events and developments.

As per Ind AS 108, operating segment is a component of the Company that engages in business activities, whose operating results are regularly reviewed by the Company''s Chief Operating Decision Maker (''CODM'') to make decisions about resources to be allocated to the segment and assess its performance; and for which discrete financial information is available. Accordingly, the Company has identified its operating segments, as below:

(a) Beer - This segment includes manufacture, purchase and sale of beer including licensing of brands

(b) Non-alcoholic beverages - This segment includes manufacture, purchase and sale of non-alcoholic beverages

The Securities and Exchange Board of India vide its order dated January 25, 2017 restrained Dr. Vijay Mallya from holding position as Director or Key Managerial Person of any listed company. Pursuant to the decision of the Board at its meeting held on July 4, 2017, the Company had 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. Further, pursuant to the decision of the Board at its meeting held on August 10, 2017, the Company carried out necessary filings with the Registrar of Companies, Karnataka (ROC) and Stock Exchanges notifying Dr. Mallya''s cessation from holding the position of director in the Company. The applicable form relating to cessation of directorship has since been approved by the ROC. Effective July 29,2021, Mr. Vijay Mallya is not a related party.

All assets and liabilities for which fair value is measured or disclosed in the standalone financial statements are categorised within the fair value hierarchy, as below, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 : Quoted (unadjusted) market prices in active markets for identical assets or liabilities Level 2 : Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 : Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

Considering that the amounts involved for investment in equity instruments are not significant, fair value fluctuations are not expected to be material and hence no further disclosure has been made. The fair values of investment in quoted debt instruments are based on price quotations and available market information at the reporting date are classified as Level 1.

The fair value of investment in subsidiary for the purpose of impairment assessment is determined based on fair valuation of the underlying assets. The key assumptions used in the valuation includes marketability discount of 10% and cost to sell of 2%. The sensitivity of 5% increase/(decrease) in the marketability discount and cost of sell would have an immaterial impact on the valuation.

The management assessed that the carrying values of trade and other receivables, cash and short-term deposits, other assets, borrowings, trade and other payables and balances with related parties, based on their notional amounts, reasonably approximate their fair values because these instruments have short-term maturities.

38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include investments, trade and other receivables, cash and cash equivalents, bank balances and security deposits that are out of regular business operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is supported by a risk management committee that advises on financial risks and the appropriate financial risk governance framework for the Company.

The risk management committee provides assurance to the Company''s senior management that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument that will fluctuate because of changes in market prices. Market risk comprises of three types of risk i.e. interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include borrowings and trade payables. i. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Company''s financial instruments will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rate relates primarily to the Company''s borrowings with floating interest rates.

(b) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments if a counterparty default on its obligations. The Company''s exposure to credit risk arises majorly from trade/other receivables and investment in debt instruments. Other financial assets like security deposits and bank deposits are mostly with government authorities and nationalised banks and hence, the Company does not expect any significant credit risk with respect to these financial assets. With respect to trade receivables, significant portion (66% at March 31, 2023 and 68% as at March 31,2022) includes dues from state government corporations, where probability of default is remote. The Company has constituted regional and corporate credit committees to review trade receivables on periodic basis and to take necessary mitigations, wherever required.

For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity shareholders. The primary objective of the Company''s capital management is to ensure that it maintains a strong credit rating and capital ratios in order to support its business and maximise shareholder value.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing borrowings that define capital structure requirements. The breaches in meeting the financial covenants would permit the bank to immediately call borrowings. There have been no breaches in the financial covenants of any interest-bearing borrowings in the current year or previous year.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31,2023 and March 31, 2022.

40. The Bihar State Government ("the Government") vide its notification dated April 5, 2016 had imposed ban on trade and consumption of alcoholic beverages in the State of Bihar. The Company had filed a writ petition with the High Court at Patna, requesting remedies and compensation for losses incurred on account of such abrupt notification, which was allowed by Patna High Court and against which the Government preferred a special leave petition before the Supreme Court of India. Further, the Government did not renew brewery licenses for the financial year 2017-18 onwards and consequently the Company discontinued production of beer at Bihar. The matter is currently pending before the Supreme Court for final conclusion. During the financial year 2018-19, in order to maintain the assets in running condition, the Company commenced manufacture of non-alcoholic beverages at its existing manufacturing facility at Bihar using its existing property, plant and equipment. The Company carried out an impairment assessment of its property, plant and equipment and the recoverable amount for these property, plant and equipment is determined by an external valuer based on a fair value less cost of disposal calculation. Effective May 1, 2022, the Company has closed its manufacturing operations from Bihar unit and has made alternative arrangement for manufacturing non-alcoholic beverages on contract basis with a third-party contractor, considering the economies of scale of operations for non-alcoholic beverages. The Company has received a show cause notice dated June 25, 2022 from Bihar Industrial Area Development Authority (BIADA) for cancellation of its land lease at Bihar considering non-operation of the manufacturing unit. The Company, based on legal advice, has filed its response to the said show-cause notice stating that there has been no violation of the BIADA Act and the notice to the Company is not maintainable. BIADA thereafter, issued another show cause notice dated November 2, 2022 to start production within 30 days failing which the allotment of land would be cancelled forfeiting the allotment money. The Company sought six months'' time to commence production as per the Amnesty Scheme of BIADA. However, BIADA cancelled allotment of land to the Company vide order dated December 16, 2022 against which the Company has filed a writ before the High Court of Patna. The High Court vide order dated January 25, 2023 has directed to maintain status quo and also 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 08.02.2023 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 Management is planning to restart production of non-alcoholic beverages in the unit. As at March 31, 2023, the carrying value of property, plant and equipment at Bihar is Rs. 8,797 Lakhs (net of impairment). Recoverable value is determined based on the higher of value in use and fair value less cost of disposal. In determining the fair value less cost of disposal, the Company evaluated and concluded its right to transfer the leasehold land after considering contractual rights available to the Company under the BIADA Act.

41. The change in the operating models in the states of Tamil Nadu and Andhra Pradesh, has seen recent volumes decline in these states inter alia on account of the post integration review undertaken by Heineken. This resulted in lower cash inflows due to reduction in revenue, which triggered an impairment review being performed across property, plant and equipment of the breweries in the two states. As a result, the impacted assets were reviewed for impairment on an asset-by-asset basis and an impairment of Rs 3,312 Lakhs was recorded on the property, plant and equipment for the two states and presented as an exceptional item in the standalone financial statements. Management is reviewing opportunities to restore volumes in the states and, as such whilst there is no plan of restructuring as on date, potential risks of the Company incurring additional costs remain.

42. OTHER STATUTORY INFORMATION

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

(ii) The Company has balances with the below mentioned company, struck off under Section 248 of Companies Act, 2013 or Section 560 of Companies Act, 1956.

Name of the Company: M/s Maya Hotel Pvt. Limited

Nature of the transactions: Payables

Balance outstanding as on March 31, 2023: Rs.0.21

Relationship with struck off company: Not related as per Section 2(76) of the Companies Act 2013

(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyod the statutory period, except for Rs. 50 Lakhs in relation to loan repaid in the past.

(iv) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.

(v) The Company has not advanced or loaned or invested funds (either from borrowed funds or share premium or any other sources or kind of funds) to or in any other persons(s) or entity(ies), including foreign entities (Intermediaries) with the understanding whether recorded in writing or otherwise, that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries), or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwsie) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(vii) The Company did not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 such as, search or survey or any other relevant provisions of the Income tax Act, 1961.

43. The Code on Social Security, 2020 ("the Code) which would impact the contributions by the Company towards Provident Fund and Gratuity, has received Presidential assent in September 2020. The Code have been published in the Gazette of India. However, the date from which the Code will come into effect has not been notified. The Ministry of Labour and Employment (Ministry) has released draft rules for the Code on November 13, 2020 and has invited suggestions from stake holders which are under active consideration by the Ministry. The Company will complete its evaluation and will give appropriate impact in its standalone financial results in the period in which the Code becomes effective and the related rules are published.

44. The financial statements of the Company for the year ended March 31, 2022 were audited by S.R. Batliboi & Associates LLP, Chartered accountants, the predecessor auditor.

45. The comparative figures have been regrouped/reclassified, where necessary, to confirm to this year''s classification.


Mar 31, 2022

*Non-current advance to suppliers includes an amount of Rs. 3,271 Lakhs (March 31, 2021: Rs. 3,197 Lakhs) paid under protest to Maharashtra Industrial Development Corporation ("MIDC”) towards increased charges for water supplies. The Company has filed a special leave petition before the Supreme Court in respect of this matter and the management, basis a legal advice, believes that the Company''s position will be upheld in the appellate process and accordingly, the same has been considered as a contingent liability as at year end.

**Non-current portion includes amount paid under protest against various tax demands under appeal, which are included under contingent liabilities in Note 35.

***Relates to Industrial promotion subsidy. There are no unfulfilled conditions or other contingencies attached to these grants. There are no advances to directors or other officers of the Company or any of them either severally or jointly with any other person or advances to firms or private companies, respectively, in which any director is a partner or a director or a member. Further there are no loans or advances in the nature of loan to promoters, directors or key management personnel.

*Non-current advance to suppliers includes an amount of Rs. 3,271 Lakhs (March 31, 2021: Rs. 3,197 Lakhs) paid under protest to Maharashtra Industrial Development Corporation ("MIDC”) towards increased charges for water supplies. The Company has filed a special leave petition before the Supreme Court in respect of this matter and the management, basis a legal advice, believes that the Company''s position will be upheld in the appellate process and accordingly, the same has been considered as a contingent liability as at year end.

**Non-current portion includes amount paid under protest against various tax demands under appeal, which are included under contingent liabilities in Note 35.

***Relates to Industrial promotion subsidy. There are no unfulfilled conditions or other contingencies attached to these grants. There are no advances to directors or other officers of the Company or any of them either severally or jointly with any other person or advances to firms or private companies, respectively, in which any director is a partner or a director or a member. Further there are no loans or advances in the nature of loan to promoters, directors or key management personnel.

(a) Trade receivables are non-interest bearing and are generally on terms of 0 to 90 days. Balances disclosed as secured are secured by security deposits received from customers or amounts payable to commission agents.

(b) No debts are due from directors or other officers of the Company or any of them either severally or jointly with any other person. Also, no debts are due from firms or private companies, respectively, in which any director is a partner or a director or a member.

(c) The above balances includes dues from related parties (Refer Note 38).

(a) Trade receivables are non-interest bearing and are generally on terms of 0 to 90 days. Balances disclosed as secured are secured by security deposits received from customers or amounts payable to commission agents.

(b) No debts are due from directors or other officers of the Company or any of them either severally or jointly with any other person. Also, no debts are due from firms or private companies, respectively, in which any director is a partner or a director or a member.

(c) The above balances includes dues from related parties (Refer Note 38).

Bank balances towards unpaid dividend and CSR expense can be utilised only towards payment of dividend and CSR expense, respectively. Other bank balances excludes bank deposits with remaining maturity of more than twelve months and margin money deposits (Refer Note 6). Bank deposits include balances where fixed deposits receipts are pledged with statutory/government authorities.

(b) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Re. 1 per share. Each holder of equity share is eligible for one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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

(a) Indian currency cash credit and working capital demand loans are part of consortium facility and are secured by first pari-passu charge on all current assets of the Company namely stock of raw materials, semi finished and finished goods, stores and spares and not relating to plant & machinery (consumables, stores & spares), bills receivable and book debt of the present and the future. These facilities are repayable within 360 days and carry interest in the range of 4% to 7% per annum.

(i) The Company operates two defined benefit plans i.e., gratuity and provident fund for its employees. Under the tiered gratuity plan, every employee who has completed at least five years of service gets a gratuity on departure as per the Company policy subject to minimum of 15 days of last drawn salary for each completed year of service. The gratuity fund is managed by external agencies. Under the provident fund benefit plan, till Decmeber 31, 2021 the Company contributed to the provident fund trust which guaranteed a specified rate of return on such contributions on a periodical basis as per the government notification. The shortfall in the return, if any, was borne by the Company. The aforesaid funds are set up as trusts and are governed by the Board of Trustees who is responsible for the administration of plan assets and for deciding the investment strategy. Effective January 1, 2022, the provident fund trust has transferred the funds to the Regional Provident Fund (RPFC). Henceforth the provident fund and returns on the contribution would be managed by the RPFC and the Company''s obligation is restricted to payment of the contribution made by employees and the employer''s contribution on a monthly basis. As such, effective January 1, 2022 the provident fund benefit is a defined contribution plan. The following table summarises the components of net benefits expense and the funded status of the respective plans.

*Provident fund includes contribution by the employer towards loss on sale of investments by the provident fund trust.

**Provident fund benefits paid during the year ended March 31,2022 includes Rs. 17,002 Lakhs (March 31, 2021: Nil) transferred to the Employee''s Provident Fund Organisation, Government of India on surrender of exempted Provident Fund Trust.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The overall rate of return on assets is determined based on the market price prevailing on that date, applicable to the period over which the obligation is to be settled.

(a) As at March 31,2021, the Company carried out impairment assessment of its investment in a subsidiary company with carrying value of Rs. 2,541 Lakhs. The recoverable amount for this investment is determined by an external valuer to be Rs. 765 Lakhs based on a fair value less cost of disposal calculation and accordingly an impairment loss of Rs. 1,776 Lakhs was recognized during the year ended March 31, 2021. No further impairment was noted during the year.

(b) The Company executed a deed for assignment cum transfer of its rights and interest in a leasehold land property (disclosed as assets held for sale) and accordingly a profit of Rs. 5,500 Lakhs realised on such transfer was recognized during the year ended March 31, 2021.

33. LEASES

The Company has lease contracts for land, office premises, employee residential premises, computers, plant and equipment, furniture and vehicles. Leasehold land arrangements are for 90-99 years with various government authorities. Other leases are for a period upto 9 years with options of renewal and premature termination with notice, except in certain leases with lock-in period of 6 to 36 months. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and sub-leasing the leased assets. There are certain lease contracts that include extension and termination options. The Company also has certain leases with lease terms of twelve months or less and leases with low value. The Company applies the ''short-term lease'' and ''lease of low-value assets'' recognition exemptions for these leases. There are no lease arrangements with variable lease payments.

Refer Note 3 for details of carrying amounts of right-of-use assets recognised and the movements during the year. Set out below are the carrying amounts of lease liabilities and the movements during the year:

The Company had total cash outflows for leases of Rs. 4,522 Lakhs (Previous year: Rs. 4,858 Lakhs) for the year ended March 31, 2022. The Company also had non-cash additions to right-of-use assets and lease liabilities of Rs. 286 Lakhs (Previous year: Rs. 374 Lakhs) during the year ended March 31,2022. There are no leases that have been entered into but not yet commenced as at year end.

The undiscounted potential future rental payment relating to periods following the exercise date of extension option that are not included in the lease term is Rs. 151 Lakhs (Previous Year: Rs. 159 Lakhs). There are no termination options which are expected to be exercised but not included in lease term.

35. CONTINGENT LIABILITIES

(a) The Company received an order dated September 24, 2021 under Section 27 of the Competition Act, 2002 from the Competition Commission of India ("CCI") (''the CCI Order''), wherein the CCI concluded that the Company and certain executives (including former executives) of the Company contravened the provisions of Section 3 of the Competition Act, 2002. The CCI levied a penalty of Rs. 75,183 Lakhs on the Company. On December 8, 2021, the Company filed an appeal against the aforesaid CCI Order before the National Company Law Appellate Tribunal (''NCLAT''). The NCLAT vide its order dated December 22, 2021 granted a stay of the CCI Order during the pendency of the appeal, including recovery of the penalty imposed by the CCI, subject to deposit of 10% of the penalty amount by the Company. The Company has accordingly deposited Rs. 7,518 Lakhs with the Registrar, NCLAT.

Based on the advice of the external legal experts, the Company is of the view that the Director General and the CCI has 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. Accordingly, no provision has been recorded in the books of account and the same has been considered as a contingent liability in accordance with Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets.

(b) On January 5, 2022, a party has filed a claim of Rs. 2,877 Lakhs against the Company before the Arbitral Tribunal, which includes claims towards loss of profit, certain reimbursement claims and damages towards breach of contract, etc. On February 12, 2022, the Company filed a counter claim against the party before the Arbitral Tribunal, which includes claim towards loss of business and other recoverables. Management based on a legal opinion, believes that the claims made by the party are not sustainable and no liability would arise from the same. Accordingly, no liability/provision is recognised in this regard.

AThe Company is contesting these demands / notices and the management, based on advice of its legal/tax consultants, believes that its position will likely be upheld in the appellate process. No expense has been accrued in the standalone financial statements for these demands raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations. The Company does not expect any reimbursements in respect of these contingent liabilities. The amounts disclosed as contingent liabilities above are based on the demands stated in the orders /notices received from the tax authorities. These do not include amounts for similar matters for periods subsequent to periods covered by these demands / notices and interest or penalty which are not included in these demands / notices.

During the financial year 2006-07 relating to assessment year 2007-08, pursuant to acquisition of a subsidiary and its subsequent merger in the same financial year, the Company recognized goodwill of Rs. 6,230 Lakhs and has claimed depreciation thereon under the Income Tax Act. The claim of depreciation on goodwill has been litigated by the tax authorities and the Company''s appeal in this regard is pending before the Honorable High Court of Karnataka. The Company has relied on the Honorable Supreme Court''s (SC) judgement on depreciation claim and other rulings of High Courts relying on the aforesaid SC order which supports claim for depreciation on goodwill. Based on advice of its tax consultants and senior counsel, the Company believes that it is probable that its position will be upheld in the appellate process and hence tax thereupon is considered as a contingent liability.

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

(d) The Supreme Court of India in a judgement on Provident Fund dated February 28, 2019 addressed the principle for determining salary components that form part of Basic Salary for individuals below a prescribed salary threshold. It is however unclear as to whether the clarified definition of Basic Salary would be applicable prospectively or retrospectively. The Component has complied with the aforesaid judgement on a prospective basis from the date of the judgement and will continue to monitor and evaluate retrospective application, if applicable, based on future events and developments.

37. Segment reporting

As per Ind AS 108, operating segment is a component of the Company that engages in business activities, whose operating results are regularly reviewed by the Company''s Chief Operating Decision Maker (''CODM'') to make decisions about resources to be allocated to the segment and assess its performance; and for which discrete financial information is available. Accordingly, the Company has identified its operating segments, as below:

(a) Beer - This segment includes manufacture, purchase and sale of beer including licensing of brands

(b) Non-alcoholic beverages - This segment includes manufacture, purchase and sale of non-alcoholic beverages The Company''s CODM does not review assets and liabilities for each operating segment separately, hence segment disclosures relating to total assets and liabilities have not been furnished.

Non-current assets for this purpose consists of property, plant and equipment, capital work-in-progress and intangible assets.

Revenue (including excise duty) from customers individually contributing more than 10% of the Company''s revenue aggregates to Rs. 438,084 Lakhs (Previous year: Rs. 256,556 Lakhs) from 2 customers (Previous year: 1 customer).

The Securities and Exchange Board of India vide its order dated January 25, 2017 restrained Dr. Vijay Mallya from holding position as Director or Key Managerial Person of any listed company. Pursuant to the decision of the Board at its meeting held on July 4, 2017, the Company had 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. Further, pursuant to the decision of the Board at its meeting held on August 10, 2017, the Company carried out necessary filings with the Registrar of Companies, Karnataka (ROC) and Stock Exchanges notifying Dr. Mallya''s cessation from holding the position of director in the Company. The applicable form relating to cessation of directorship has since been approved by the ROC. Effective July 29,2021, Mr. Vijay Mallya is not a related party.

Key management personnel (KMP): : Mr. Govind Iyengar, Senior Vice-President Legal and Company Secretary

Body corporate/Private companies : United Breweries (Holdings) Limited (''UBHL'')A (till March 31, 2021) whose Board of directors is accustomed h. Parson Private Limited (''HPPL'') (till March 31, 2021)

to act in accordance with advise, Kingfisher Beer Europe Limited (''KBE'') (till March 31,2021)

directions or instructions of directors/ members (included in ''Others'' below)

AThe Karnataka High Court has ordered winding up of UBHL on February 7, 2017.

Considering that the amounts involved for investment in equity instruments are not significant, fair value fluctuations are not expected to be material and hence no further disclosure has been made. The fair values of investment in quoted debt instruments are based on price quotations and available market information at the reporting date are classified as Level 1.

The fair value of investment in subsidiary for the purpose of impairment assessment is determined based on fair valuation of the underlying assets. The key assumptions used in the valuation includes marketability discount of 10% and cost to sell of 2%. The sensitivity of 5% increase/(decrease) in the marketability discount and cost of sell would have an immaterial impact on the valuation. Also refer Note 30(a).

The management assessed that the carrying values of trade and other receivables, cash and short-term deposits, other assets, borrowings, trade and other payables and balances with related parties, based on their notional amounts, reasonably approximate their fair values because these instruments have short-term maturities.

40. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include investments, trade and other receivables, cash and cash equivalents, bank balances and security deposits that are out of regular business operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is supported by a risk management committee that advises on financial risks and the appropriate financial risk governance framework for the Company.

The risk management committee provides assurance to the Company''s senior management that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument that will fluctuate because of changes in market prices. Market risk comprises of three types of risk i.e. interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include borrowings and trade payables. i. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Company''s financial instruments will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rate relates primarily to the Company''s borrowings with floating interest rates.

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on borrowings affected. With all other variables held constant, the Company''s profit before tax is affected through the impact

iii. Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase and manufacture of Beer and therefore require a continuous supply of Barley. The Company''s Board of Directors has developed and enacted a risk management strategy regarding commodity price risk and its mitigation.

(b) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments if a counterparty default on its obligations. The Company''s exposure to credit risk arises majorly from trade/other receivables and investment in debt instruments. Other financial assets like security deposits and bank deposits are mostly with government authorities and nationalised banks and hence, the Company does not expect any significant credit risk with respect to these financial assets. With respect to trade receivables, significant portion (68% at March 31, 2022 and 70% as at March 31, 2021) includes dues from state government corporations, where probability of default is remote. The Company has constituted regional and corporate credit committees to review trade receivables on periodic basis and to take necessary mitigations, wherever required.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing borrowings that define capital structure requirements. The breaches in meeting the financial covenants would permit the bank to immediately call borrowings. There have been no breaches in the financial covenants of any interest-bearing borrowings in the current year or previous year.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2022 and March 31, 2021.

42. The Bihar State Government ("the Government") vide its notification dated April 5, 2016 had imposed ban on trade and consumption of alcoholic beverages in the State of Bihar. The Company had filed a writ petition with the High Court at Patna, requesting remedies and compensation for losses incurred on account of such abrupt notification, against which the Government preferred a special leave petition before the Supreme Court of India. Further, the Government did not renew brewery licenses for the financial year 2017-18 onwards and consequently the Company discontinued production of beer at Bihar. The matter is currently pending before the Supreme Court for final conclusion.

During the financial year 2018-19, in order to maintain the assets in running condition, the Company commenced manufacture of non-alcoholic beverages at its existing manufacturing facility at Bihar using its existing property, plant and equipment. The Company carried out an impairment assessment of its property, plant and equipment at Bihar and the recoverable amount of these property, plant and equipment was determined by an external valuer based on a fair value less cost of disposal calculation, considering uncertainity in the alcoholic beverages and the change in plan for use of these assets. An impairment loss of Rs. 4,446 Lakhs was recognized during the year ended March 31, 2021. As at March 31, 2022, the carrying value of property, plant and equipment at Bihar is Rs. 10,031 Lakhs (net of impairment) and no further impairment is considered necessary by the management based on annual impariment assessment.

44. OTHER STATUTORY INFORMATION

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

(ii) The Company did not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.

(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyod the statutory period, except for Rs. 50 Lakhs in relation to loan repaid in the past.

(iv) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.

(v) The Company has not advanced or loaned or invested funds (either from borrowed funds or share premium or any other sources or kind of funds) to or in any other persons(s) or entity(ies), including foreign entities (Intermediaries) with the understanding whether recorded in writing or otherwise, that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwsie) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

(vii) The Company did not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 such as, search or survey or any other relevant provisions of the Income tax Act, 1961.

45. The Code on Social Security, 2020 (the "Code") relating to employee benefits during employment and post-employment benefits, received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect is yet to be notified and the final rules / interpretation are yet to be issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact accordingly.

46. The Company has assessed the impact of Coronavirus (COVID-19) pandemic on its business operations and has considered all relevant internal and external information available upto the date of approval of these standalone financial statements in determining the recoverability and carrying values of property, plant and equipment, right-of-use assets, intangible assets, investments, trade and other receivables, inventories and other financial information captions. The impact of COVID-19 pandemic on the overall economic environment being uncertain may affect the underlying assumptions / estimates used in preparation of these standalone financial statements, whereby actual outcome may differ from those assumptions / estimates considered at the date of approval of these standalone financial statements. The Company will continue to closely monitor the situation and any material changes to future economic conditions.

47. The comparative figures have been regrouped/reclassified, where necessary, to confine to this year''s classification.


Mar 31, 2021

(a) Freehold land measuring 9.04 acres (forming part of land parcel of 23.87 acres with gross book value of Rs. 211 Lakhs) at Kuthambakkum (Tamilnadu) is pending registration in the name of the Company and titles of freehold land measuring 0.54 acres at Mallepally (Telangana), Nanjangud and Nelamangala (Karnataka) (together forming part of land parcel of 184.96 acres with gross book value of Rs. 11,724 Lakhs) are in dispute and pending resolution in the Courts as at March 31, 2021. Further, titles of freehold land measuring 63.07 acres (with gross book value of Rs. 654 Lakhs) at Kothlapur (Telangana) is held in the name of erstwhile merged entity.

(b) The title of leasehold land measuring 43.73 acres (with gross book value of Rs. 1,255 Lakhs) at Aurangabad (Maharashtra) are held in the name of erstwhile merged entities.

* Non-current advance to suppliers includes an amount of Rs. 3,197 Lakhs (March 31, 2020: Rs. 3,180 Lakhs) paid under protest to Maharashtra Industrial Development Corporation ("MIDC") towards increased charges for water supplies. The Company has filed a special leave petition before the Supreme Court in respect of this matter and the management, basis a legal advice, believes that the Company''s position will be upheld in the appellate process and accordingly, the same has been considered as a contingent liability as at year end.

** Non-current portion includes amount paid under protest against various tax demands under appeal, which are included under contingent liabilities.

*** Relates to Industrial promotion subsidy. There are no unfulfilled conditions or other contingencies attached to these grants.

There are no advances to directors or other officers of the Company or any of them either severally or jointly with any other person or advances to firms or private companies, respectively, in which any director is a partner or a director or a member.

Axis Bank: Rs. 25,000 Lakhs (March 31, 2020: Rs. Nil Repayable in 5 equal quarterly instalments of Rs. 4,750 Lakhs) secured by first pari-passu charge on all present Lakhs each and one instalment of Rs. 1,250 Lakhs starting and future movable property, plant and equipment of from September 2021. The loan carries floating interest the Company, excluding those which are exclusively rate, which was in the range of 5.4% to 7.5% per annum under charge of other lenders and with negative lien on during the year and is payable on monthly basis. immovable fixed assets of the Company.

Cooperatieve Rabo Bank U.A.: Rs. Nil (March 31, 2020: Repayable after 3 years from the date of drawal i.e. on Rs. 7,500 Lakhs) secured by a pari-passu charge over all December 22, 2020. The loan carried interest of 6.70% the movable fixed assets of the Company, other than to 8.50% per annum payable on monthly basis. assets of Taloja unit.

Daimler Financial Services India Private Limited: Rs. Nil Repayable in 48 equal monthly instalments starting from (March 31,2020: Rs. 43 Lakhs) secured by hypothecation October 2018. The loan carried interest rate of 11.5% of Car. per annum.

Unsecured

The lease liabilities are not secured by any assets owned by the Company. However, the Company''s obligations under the leases are secured by the lessor''s title to the leased assets and deposits given by the Company under normal lease arrangements.

33. LEASES

The Company has lease contracts for land, office premises, employee residential premises, computers, equipment, furniture and vehicles. Leasehold land arrangements are for 90-99 years with various government authorities. Other leases are for a period upto 9 years with options of renewal and premature termination with notice, except in certain leases with lock-in period of 6 to 36 months. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and sub-leasing the leased assets. There are certain lease contracts that include extension and termination options. The Company also has certain leases with lease terms of twelve months or less and leases with low value. The Company applies the ''short-term lease'' and ''lease of low-value assets'' recognition exemptions for these leases. There are no lease arrangements with variable lease payments.

Refer Note 3 for details of carrying amounts of right-of-use assets recognised and the movements during the year. Set out below are the carrying amounts of lease liabilities (included under interest-bearing borrowings) and the movements during the year:

The Company had total cash outflows for leases of Rs. 4,858 Lakhs (Previous year: Rs. 4,875 Lakhs) for the year ended March 31, 2021. The Company also had non-cash additions to right-of-use assets and lease liabilities of Rs. 374 Lakhs (Previous year: Rs. 789 Lakhs) during the year ended March 31, 2021. There are no leases that have been entered into but not yet commenced as at year end.

The undiscounted potential future rental payment relating to periods following the exercise date of extension option that are not included in the lease term is Rs. 159 Lakhs (Previous Year: Rs. 160 Lakhs). There are no termination options which are expected to be exercised but not included in lease term.

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

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

(c) On October 10, 2018, certain officials from the Competition Commission of India ("CCI") had visited the Company for their investigation in relation to allegations of price-fixation and performed search of the premises and conducted inquiries with certain officials of the Company at its registered office. Pursuant to this, the Company made requisite filings and also certain officials of the Company appeared before the aforesaid authorities. The Director General, CCI submitted its investigation report to the CCI for consideration which was also communicated to the Company on March 19, 2020. On August 28, 2020, the Company filed its comments / objections to the aforesaid investigation report. The matter was heard before the CCI on February 11, 2021 and March 2, 2021, followed by post hearing submissions filed by the Company with the CCI on March 23, 2021. Management, along-with its legal advisors, believe that there are mitigating factors to counter presumptions made against the Company by the CCI under the Competition Act, 2002, which have also been highlighted in the comments / objections to the investigation report and during hearing submissions

filed by the Company. Pending conclusion of this matter by the CCI, the management is of view that it is not practicable to state an estimate of its financial effect, if any.

(d) The Supreme Court of India in a judgement on Provident Fund dated February 28, 2019 addressed the principle for determining salary components that form part of Basic Salary for individuals below a prescribed salary threshold. It is however unclear as to whether the clarified definition of Basic Salary would be applicable prospectively or retrospectively. The Company has complied with the aforesaid judgement on a prospective basis from the date of the judgement and will continue to monitor and evaluate retrospective application, if applicable, based on future events and developments.

37. SEGMENT REPORTING

As per Ind AS 108, operating segment is a component of the Company that engages in business activities, whose operating results are regularly reviewed by the Company''s Chief Operating Decision Maker (''CODM'') to make decisions about resources to be allocated to the segment and assess its performance; and for which discrete financial information is available. Accordingly, the Company has identified its operating segments, as below:

(a) Beer - This segment includes manufacture, purchase and sale of beer including licensing of brands

(b) Non-alcoholic beverages - This segment includes manufacture, purchase and sale of non-alcoholic beverages

The Company''s CODM does not review assets and liabilities for each operating segment separately, hence segment disclosures relating to total assets and liabilities have not been furnished.

All assets and liabilities for which fair value is measured or disclosed in the standalone Ind AS financial statements are categorised within the fair value hierarchy, as below, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 : Quoted (unadjusted) market prices in active markets for identical assets or liabilities Level 2 : Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 : Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

The fair values of foreign exchange forward contract are derived from quoted market prices in active markets. Considering that the amounts involved for investment in equity instruments are not significant, fair value fluctuations are not expected to be material and hence no further disclosure has been made. The fair values of investment in quoted debt instruments are based on price quotations and available market information at the reporting date. The fair value of investment in subsidiary for the purpose of impairment assessment is determined based on fair valuation of the underlying assets. The key assumptions used in the valuation includes marketability discount of 10% and cost to sell of 2%. The sensitivity of 5% increase/(decrease) in the marketability discount and cost of sell would have an immaterial impact on the valuation. Also refer Note 30(a).

The management assessed that the carrying values of trade and other receivables, cash and short-term deposits, other assets, borrowings, trade and other payables and balances with related parties, based on their notional amounts, reasonably approximate their fair values because these instruments have short-term maturities and are re-priced frequently.

40. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include investments, trade and other receivables, cash and cash equivalents, bank balances, security deposits and derivatives that are out of regular business operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is supported by a risk management committee that advises on financial risks and the appropriate financial risk governance framework for the Company.

The risk management committee provides assurance to the Company''s senior management that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument that will fluctuate because of changes in market prices. Market risk comprises three types of risk i.e. interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include borrowings, derivatives financial instruments and trade payables. i. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Company''s financial instruments will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rate relates primarily to the Company''s borrowings with floating interest rates.

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on borrowings affected. With all other variables held constant, the Company''s profit before tax is affected through the impact on floating rate borrowings, as follows:

(b) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments if a counterparty default on its obligations. The Company''s exposure to credit risk arises majorly from trade/other receivables and investment in debt instruments. Other financial assets like security deposits and bank deposits are mostly with government authorities and nationalised banks and hence, the Company does not expect any significant credit risk with respect to these financial assets. With respect to trade receivables, significant portion (approximately 60%) includes dues from state government corporations, where probability of default is remote. The Company has constituted regional and corporate credit committees to review trade receivables on periodic basis and to take necessary mitigations, wherever required.

For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity shareholders. The primary objective of the Company''s capital management is to ensure that it maintains a strong credit rating and capital ratios in order to support its business and maximise shareholder value.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital. The Company includes within net debt, all non-current and current borrowings reduced by cash and cash equivalents and other bank balances. _ _

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing borrowings that define capital structure requirements. The breaches in meeting the financial covenants would permit the bank to immediately call borrowings. There have been no breaches in the financial covenants of any interest-bearing borrowings in the current year.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31,2021 and March 31, 2020

42. The Code on Social Security, 2020 (the "Code") relating to employee benefits during employment and postemployment benefits, received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect is yet to be notified and the final rules/ interpretation are yet to be issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact accordingly.

43. The Bihar State Government ("the Government") vide its notification dated April 5, 2016 had imposed ban on trade and consumption of alcoholic beverages in the State of Bihar. The Company had filed a writ petition with the High Court at Patna, requesting remedies and compensation for losses incurred on account of such abrupt notification, against which the Government preferred a special leave petition before the Supreme Court of India. Further, the Government did not renew brewery licenses for the financial year 2017-18 onwards and consequently the Company discontinued production of beer at Bihar. The matter is currently pending before the Supreme Court for final conclusion.

During the financial year 2018-19, in order to maintain the assets in running condition, the Company commenced manufacture of non-alcoholic beverages at its existing manufacturing facility at Bihar using its existing property, plant and equipment at Bihar. As at March 31, 2021, the Company carried out an impairment assessment of its property, plant and equipment at Bihar with carrying value of Rs. 15,944 Lakhs. The recoverable amount for these property, plant and equipment is determined by an external valuer to be about Rs. 11,498 Lakhs based on a fair value less cost of disposal calculation, considering uncertainty in the Government''s plans in respect of policy towards alcoholic beverages and the Company''s change in plan for use of these assets. Accordingly, an impairment loss of Rs. 4,446 Lakhs is recognized during the year ended March 31, 2021. The key assumptions used in the valuation includes marketability discount of 10% for leasehold land, market value adjustment factor of 50-100% for other assets and cost to sell of 2%.

44. In March 2020, the World Health Organisation had declared Coronavirus (COVID-19) to be a pandemic and consequently on March 24, 2020, the Government of India had ordered a nationwide lockdown, which got extended in phases. From May 2020, the Company resumed its business activities in a phased manner in line with directives issued by the central and state governments. The outbreak of COVID-19 pandemic in India had caused significant disturbance and slowdown of economic activities. The business operations of the Company have also been significantly impacted by way of interruption of production, supply chain, etc. Recently, there has been a surge in the spread of COVID-19 in India and various state governments have imposed restrictions ranging from night/weekend curfew including closure of malls, restaurants and other public places to contain the spread of COVID-19. The Company has taken various precautionary measures to protect its employees from COVID-19.

The Company has assessed the impact of this pandemic on its business operations and has considered all relevant internal and external information available upto the date of approval of these standalone Ind AS financial statements in determining the recoverability and carrying values of property, plant and equipment, intangible assets, investments, trade and other receivables, inventories and other financial statement captions. Considering the recent surge in the spread of COVID-19, the impact of COVID-19 pandemic on the overall economic environment continues to be uncertain and may affect the underlying assumptions / estimates used in preparation of these standalone Ind AS financial statements, whereby actual outcome may differ from those assumptions / estimates considered at the date of approval of these standalone Ind AS financial statements. The Company will continue to closely monitor the situation and any material changes to future economic conditions.


Mar 31, 2018

* Non-current advance to suppliers relates to amount paid under protest to Maharashtra Industrial Development Corporation ("MIDC”) towards increased charges for water supplies. The Company has filed a special leave petition before the Supreme Court in respect of this matter and the management, basis a legal advice, believes that the Company''s position will be upheld in the appellate process and accordingly, the same has been considered as a contingent liability as at year end. There are no advances to directors or other officers of the Company or any of them either severally or jointly with any other person or advances to firms or private companies, respectively, in which any director is a partner or a director or a member.

b) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Re. 1 per share. Each holder of equity share is eligible for one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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

Secured borrowings

a) Foreign currency short-term loan was part of consortium facility and was secured by first pari-passu charge on all current assets of the Company namely stock of raw materials, semi finished and finished goods, stores and spares and not relating to plant & machinery (consumables, stores & spares), bills receivable and book debt of the present and the future. This facility was fully hedged and was repayable on July 19, 2017 and carried interest rate of 8.43% per annum, payable on a monthly basis. The loan has been fully repaid during the year.

b) Cash credit facilities from banks are secured by first pari-passu charge on all current assets of the Company namely stock of raw materials, semi-finished and finished goods, stores and spares not relating to plant and machinery (consumable stores and spares), bills receivable and book debts both present and future. These are repayable on demand and carries interest in the range of 8.15% to 8.70% p.a.

c) Indian currency working capital demand loan is part of consortium facility and is secured by first pari-passu charge on all current assets of the Company namely stock of raw materials, semi finished and finished goods, stores and spares and not relating to plant & machinery (consumables, stores & spares), bills receivable and book debt of the present and the future. This facility is repayable within 180 days and carries interest rate of 6.40% per annum to 7.90% per annum.

Unsecured borrowings

a) Commercial papers were repayable after a term of 60 days from issue and carried interest rate of 9.20% p.a. These have been fully repaid during the year.

* Includes sale of beer Rs. 12,07,424 Lakhs (Previous year: Rs. 9,93,895 Lakhs) and sale of malt Rs. 8,811 Lakhs (Previous year: Rs. 6,531 Lakhs).

** Royalty income

*Net of reversal of provision no longer required amounting to Rs. 632 Lakhs (Previous year : Rs. 617 Lakhs).

(i) The Company operates two defined benefit plans i.e., gratuity and provident fund for its employees. Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on departure at 15 days of last drawn salary for each completed year of service. Under the provident fund benefit plan, the Company contributes to the provident fund trust which guarantees a specified rate of return on such contributions on a periodical basis. The shortfall in the return, if any, is borne by the Company. The following table summarizes the components of net benefit expenses and the funded status for respective plans:

The Company has entered into operating lease arrangements for vehicles, computers, equipments, manufacturing facility, office premises and employee residential premises. These leases are for a period of 11 to 60 months with options of renewal and premature termination with notice period, except in certain leases with lock-in period of 6 to 60 months. There are certain sub-lease restrictions placed upon the Company by entering into these leases. The total lease rentals expense for the year is Rs. 3,974 Lakhs (Previous year: Rs. 3,666 Lakhs). Future minimum rentals payable under non-cancellable operating leases are as follows:t

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

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

A. Name of related parties and related party relationships

Related party where control exists:

Subsidiary Maltex Malsters Limited (''MML'')

Related parties under Ind AS 24 with whom transactions have taken place during the year:

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

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

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

Key management personnel (KMP) : Mr. Shekhar Ramamurthy, Managing Director

Mr. Steven Bosch, Director, CFO (effective October 1, 2016)

Mr. Henricus Petrus van Zon, Director, CFO (till September 30, 2016)

Enterprises over which investing parties : Heineken UK Limited (''HUL''), holding company of SNIL

or KMP have significant influence Heineken International B.V. (''HIBV'')

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

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

Heineken Asia Pacific Pte. Ltd. (''HAPPL'')

Heineken Ceska Republika (''HCR'')

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

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

Directors : Dr. Vijay Mallya*

Mr. A K Ravi Nedungadi Mr. Sijbe Hiemstra Mr. Frans Erik Eusman Mr. Stephan Gerlich Mrs. Kiran Majumdar Shaw Mr. Madhav Bhatkuly Mr. Chugh Yoginder Pal Mr. Chhaganlal Jain Mr. Sunil Alagh

Mr. Christiaan August J Van Steenbergen (effective November 8, 2017)

*The Securities and Exchange Board of India vide its order dated January 25, 2017 restrained Dr. Vijay Mallya from holding position as Director or Key Managerial Person of any listed company. Pursuant to the decision of the Board at its meeting held on July 4, 2017, the Company had 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. Further, pursuant to the decision of the Board at its meeting held on August 10, 2017, the Company carried out necessary filings with the Registrar of Companies, Karnataka (ROC) and Stock Exchanges notifying Dr. Mallya''s cessation from holding the position of director in the Company. The applicable form relating to cessation of directorship has since been approved by the ROC.

Key management personnel (KMP): : Mr. Govind Iyengar, Company Secretary Relative of director or KMP : Mr. Umesh Hingorani

Body corporate/Private companies whose : United Breweries International (UK) Limited, UK (''UBIUK'')

Board of directors is accustomed to act Mandwa Farms Private Limited (''MFPL'') in accordance with advise, directions or H. Parson Private Limited (''HPPL'') instructions of a director (included in Blitz Publications Private Limited (''BPPL'')

''Others'' below)

(a) Fixed assets with gross block of Rs. 275 Lakhs (Previous year: Rs. 235 Lakhs) are lying with MML.

(b) The remuneration to key managerial personnel and relatives does not include the provisions made for gratuity and compensated absences, as they are determined on an actuarial basis for the Company as a whole.

(c) The Company received an order dated September 30, 2015 from the Debt Recovery Tribunal, Karnataka, Bangalore (DRT) whereby the Company has been directed not to pay/release amounts that may be payable with respect to shares in the Company held by an erstwhile director (including his joint holdings) and United Breweries (Holdings) Limited, without its prior permission. Accordingly, the Company has withheld payment of Rs. 1,127 Lakhs relating to dividend on aforesaid shares and the Company would also withhold payment of proposed dividend for the year ended March 31, 2018 on aforesaid shares, which is subject to approval by the shareholders in the ensuing annual general meeting.

The Company received an order dated March 11, 2016 from the Deputy Commissioner of Income Tax (International Taxation), Bangalore, requesting the Company to create a charge in favour of the Central Government on any amount due or likely to be due to a director of the Company, to the extent of Rs. 67,980 Lakhs relating to tax demands on Kingfisher Airlines Limited. The Company also received an order dated June 28, 2016 from the Commissioner of Income Tax (TDS), prohibiting the Company from making any payment in the nature of salary, remuneration, allowances, etc. to an erstwhile director of the Company. Further, the Company received an order dated September 19, 2017 from the Assistant Provident Fund Commissioner & Recovery Officer, whereby the Company has been directed to remit to the authorities amount to the extent of Rs. 874 Lakhs from any amount payable or that may accrue in future to an erstwhile director. The Company has accordingly withheld payment of Rs. 45 Lakhs (net of TDS) relating to director commission and sitting fees payable to the aforesaid erstwhile director.

39. FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT

All assets and liabilities for which fair value is measured or disclosed in the standalone Ind AS financial statements are categorised within the fair value hierarchy, as below, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 : Quoted (unadjusted) market prices in active markets for identical assets or liabilities Level 2 : Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable Level 3 : Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

There has been no transfers between levels during the year.

The fair values of Cross currency interest rate swap and Foreign currency forward contracts are derived from quoted market prices in active markets.

The management assessed that the carrying values of investments, trade and other receivables, cash and short term deposits, other assets, borrowings, trade and other payables and balances with related parties, based on their notional amounts, reasonably approximate their fair values because these instruments have short-term maturities and are re-priced frequently.

40. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include investments, trade and other receivables, cash and cash equivalents, bank balances, security deposits and derivatives that are out of regular business operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is supported by a risk management committee that advises on financial risks and the appropriate financial risk governance framework for the Company.

The risk management committee provides assurance to the Company''s senior management that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below. supervision. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken.

The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument that will fluctuate because of changes in market prices. Market risk comprises three types of risk i.e. interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include borrowings, derivatives financial instruments and trade payables.

i. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Company''s financial instruments will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rate relates primarily to the Company''s borrowings with floating interest rates. The Company has hedged its borrowings with interest rate swaps, therefore the changes in the interest rate will not have impact on future cash flows.

ii. Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s foreign currency borrowings and trade payable. The Company has hedged exposure to fluctuations in foreign exchange rates for all of its foreign currency borrowings with cross currency swaps and forward contracts, therefore the changes in the currency rates will not have impact on future cash flows.

iii. Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase and manufacture of Beer and therefore require a continuous supply of Barley. The Company''s Board of Directors has developed and enacted a risk management strategy regarding commodity price risk and its mitigation.

b) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments if a counterparty default on its obligations. The Company''s exposure to credit risk arises majorly from trade and other receivables. Other financial assets like security deposits and bank deposits are mostly with government authorities and nationalized banks and hence, the Company does not expect any credit risk with respect to these financial assets. With respect to trade receivables, significant portion includes dues from state government corporations, hence probability of default is remote. The Company has constituted regional and corporate credit committees to review trade receivables on periodic basis and to take necessary mitigations, wherever required.

For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity shareholders. The primary objective of the Company''s capital management is to ensure that it maintains a strong credit rating and capital ratios in order to support its business and maximize shareholder value.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital. The Company includes within net debt, all non-current and current borrowings reduced by cash and cash equivalents and other bank balances. ___

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing borrowings that define capital structure requirements. The breaches in meeting the financial covenants would permit the bank to immediately call borrowings. There have been no breaches in the financial covenants of any interest-bearing borrowings in the current year.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2018 and March 31, 2017.

1. The Bihar State Government ("the Government") vide its notification dated April 5, 2016 imposed ban on trade and consumption of foreign liquor in the State of Bihar with immediate effect. The Company filed a writ petition with the Honourable High Court at Patna ("the High Court"), requesting remedies and compensation for losses incurred on account of such abrupt notification. The High Court vide its order dated September 30, 2016 ("the Order") allowed the aforesaid writ petition, however, the Government preferred a special leave petition against the Order before the Honourable Supreme Court of India ("the Supreme Court"). As an interim measure, the Supreme Court directed stay of operation of the Order.

Further, pursuant to notification dated January 24, 2017, the Government did not renew existing brewery licenses for the financial year 2017-18 and consequently the Company was required to destroy or drain all its inventories of finished goods lying at Bihar, including those at warehouses of Bihar State Beverages Corporation Limited (''BSBCL''), for which the Supreme Court had extended time till July 31, 2017. Accordingly, effective April 1, 2017, the Company discontinued production of beer at Bihar and had given its consent to BSBCL to destroy / drain all its inventories lying with them, without prejudice to remedies and compensation available from its representation pending before the Supreme Court. The Company has obtained permission from authorities for manufacture of non-alcoholic beverages at its existing manufacturing facility at Bihar and has initiated necessary steps towards commencement of operations for the new product line.

As at March 31, 2018, the Company has property, plant and equipment (net) of Rs. 21,232 Lakhs (March 31, 2017: Rs. 23,530 Lakhs) at its unit in Bihar. Management believes that the carrying amount of these property, plant and equipment do not exceed their recoverable amount and is confident of utilization of these assets either for the new product line relating to non-alcoholic beverages in Bihar or for manufacturing units in other states. Accordingly, no provision has been considered necessary by the management in this regard.

3. STANDARDS ISSUED BUT NOT YET EFFECTIVE

Ind AS 115 - Revenue from Contract with Customers

Ind AS 115 was issued on March 28, 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115, revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The new revenue standard will supersede virtually all current revenue recognition requirements under Ind AS. Either a full retrospective application or a modified retrospective application is required for annual periods beginning on or after April 1, 2018.

The Company plans to adopt the new standard on the required effective date and is currently assessing the adoption method and the potential impact, the adoption of this standard will have on its financial statements and disclosures.

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration

On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The Company is evaluating the impact of this amendment on its financial statements.

4. Previous year figures

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.


Mar 31, 2017

b) The titles of leasehold land measuring 64.02 acres at Aurangabad (Maharashtra) are held in the name of erstwhile merged entities. Further, the title of leasehold land measuring 14.39 acres at Shahjahanpur (Rajasthan) is pending registration in the name of the Company.

* The impairment in value of investment in MML is due to continued delay in obtaining necessary approvals to expand malting facility at MML, leading to losses due to high overhead costs incurred on operating at its current level of capacity. In view of management, no further provision for impairment is considered necessary as at March 31, 2017.

**Rounded off.

* Non-current advance to suppliers relates to amount paid under protest to Maharashtra Industrial Development Corporation ("MIDC") towards increased charges for water supplies. The Company has filed a special leave petition before the Supreme Court in respect of this matter and the management, basis a legal advice, believes that the Company''s position will be upheld in the appellate process and accordingly, the same has been considered as a contingent liability as at year end.

** Fully written off during the year ended March 31, 2016.

There are no advances to directors or other officers of the Company or any of them either severally or jointly with any other person or advances to firms or private companies, respectively, in which any director is a partner or a director or a member.

b) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Re. 1 per share. Each holder of equity share is eligible for one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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

** Pursuant to the notification of Schedule II of the Companies Act, 2013 ("the Act"), by the Ministry of Corporate Affairs effective April 1, 2014, so as to conform to the requirements of the Act, the carrying value of Rs. 720 Lakhs (net of tax adjustment of Rs. 371 Lakhs), in respect of assets with nil revised remaining useful life as at April 1, 2014 had been reduced from the retained earnings as on such date.

Unsecured borrowings

Deferred payment liability of Rs. Nil (March 31, 2016: Rs. Nil, April 1, 2015: Rs. 4,160 Lakhs) pertains to sales tax payable to the Government of Maharashtra by virtue of being eligible for deferred payment after having established a manufacturing unit in a notified backward area. This amount was repayable in five equal annual installments on completion of 10 years from the end of respective year to which sales tax liability relates. The Company has fully repaid this amount during the year ended March 31, 2016.

* Financial liability at fair value though OCI reflect the change in fair value of foreign exchange forward contracts designated as cash flow hedge to hedge the foreign exchange risk on borrowings.

** There are no amounts due for payment to the Investor Education and Protection Fund under the Companies Act, 2013 as at year end.

Figures in brackets are of previous year.

Provision for litigations relates to matters which are sub-judice. Although the Company continues to contest these cases, the management believes that outflow of resources embodying economic benefits is probable and hence created provision towards these obligations.

Provision for claims relates to amount expected to be paid as reimbursements. The management believes that outflow of resources embodying economic benefits is probable and hence created provision towards these obligations.

Secured borrowings

a) Foreign currency short-term loans is part of consortium facility and it is secured by first pari-passu charge on all current assets of the Company namely stock of raw materials, semi finished and finished goods, stores and spares and not relating to plant & machinery (consumables, stores & spares), bills receivable and book debt of the present and the future. This facility is fully hedged and is repayable on July 19, 2017 and carries interest rate of 8.43%, payable on a monthly basis.

b) Cash credit facilities from banks are secured by first pari-passu charge on all current assets of the Company namely stock of raw materials, semi-finished and finished goods, stores and spares not relating to plant and machinery (consumable stores and spares), bills receivable and book debts both present and future. These are repayable on demand and carries interest in the range of 8.30% to 10.00% p.a.

c) Indian currency working capital demand loan is part of consortium facility and it is secured by first pari-passu charge on all current assets of the Company namely stock of raw materials, semi finished and finished goods, stores and spares and not relating to plant & machinery (consumables, stores & spares), bills receivable and book debt of the present and the future. This facility is repayable on April 15, 2017 and carries interest rate of 7.90% p.a.

unsecured borrowings

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

b) Bank overdraft were repayable on demand and carried interest in the range of 9.30% to 9.80% p.a.

* Includes sale of beer Rs. 9,93,895 Lakhs (Previous year: Rs. 9,32,453 Lakhs) and sale of malt Rs. 6,531 Lakhs (Previous year: Rs. 6,374 Lakhs).

** Royalty income

* Relates to industrial promotion subsidy. There are no unfulfilled conditions or other contingencies attached to these grants.

** Relates to cross currency interest rate swaps that did not qualify for hedge accounting.

(i) The Company operates two defined benefit plans i.e., gratuity and provident fund for its employees. Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on departure at 15 days of last drawn salary for each completed year of service. Under the provident fund benefit plan, the Company contributes to the provident fund trust which guarantees a specified rate of return on such contributions on a periodical basis. The shortfall in the return, if any, is borne by the Company. The following table summarizes the components of net benefit expenses and the funded status for respective plans:

*In respect of provident fund trust, since there is no shortfall in defined benefit obligation, the amount recognized in the statement of profit and loss is the amount contributed to provident fund by the Company.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The overall expected rate of return on assets is determined based on the market price prevailing on that date, applicable to the period over which the obligation is to be settled.

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

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

Note: The information given above is to the extent such parties have been identified by the Company on the basis of information disclosed by the suppliers.

37. SEGMENT REPORTING

The Company is engaged in the manufacture and sale of beer including licensing of brands which constitutes a single operating segment, hence, there are no additional disclosures required, other than those already provided in the standalone Ind AS financial statements. Information about geographical areas is as below:

38. RELATED PARTY DISCLOSURES

A. Name of related parties and related party relationships

Related parties under Ind AS 24 with whom transactions have taken place during the year:

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

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

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

Key management personnel (KMP) : Mr. Shekhar Ramamurthy, Managing Director (effective August 1, 2015)

Mr. Steven Bosch, Director, CFO (effective October 1, 2016)

Mr. Kalyan Ganguly, Managing Director (till July 31, 2015)

Mr. Henricus Petrus van Zon, Director, CFO (till September 30, 2016)

Relative of KMP : Mrs. Suparna Bakshi Ganguly (Wife of Mr. Kalyan Ganguly) (till July 31, 2015)

Enterprises over which investing parties : Heineken UK Limited (''HUL''), holding company of SNIL or KMP have significant influence Heineken International B.V. (''HIBV'')

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

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

Heineken Asia Pacific Pte. Ltd. (''HAPPL'')

Asia Pacific Breweries (Singapore) Pte. Ltd. (''APBS'')

Heineken Ceska Republika (''HCR'')

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

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

Directors : Dr. Vijay Mallya*

Mr. A K Ravi Nedungadi

Mr. Roland Pirmez (till August 1, 2015)

Mr. Sijbe Hiemstra (effective August 1, 2015)

Mr. Frans Erik Eusman (effective August 1, 2015)

Mr. Ernst Van De Weert (till July 23, 2015)

Mr. Stephan Gerlich Mrs. Kiran Majumdar Shaw Mr. Madhav Bhatkuly Mr. Chugh Yoginder Pal Mr. Chhaganlal Jain Mr. Sunil Alagh

* The Securities and Exchange Board of India vide its order dated January 25, 2017 ("the SEBI Order”) has restrained Dr. Vijay Mallya, Non-Executive Chairman of the Company, from holding position as Director or Key managerial person of any listed company with effect from the date of the said Order. The Company has accordingly taken effective steps following the SEBI Order in discussion with the Board of Directors.

Director of subsidiary : Ms. Kanta Labroo

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

Relative of director or KMP : Mr. Umesh Hingorani

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

Private companies in which a director is a : Royal Challengers Sports Private Limited (''RCSPL'') director (included in ''Others'' below) (till February 25, 2016)

Body corporate/Private companies whose : United Breweries International (UK) Limited, UK (''UBIUK'')

Board of directors is accustomed to act Mandwa Farms Private Limited (''MFPL'') in accordance with advise, directions or H. Parson Private Limited (''HPPL'') instructions of a director (included in Blitz Publications Private Limited (''BPPL'')

''Others'' below) United Spirits Limited (''USL'') (till February 25, 2016)

39. FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT

All assets and liabilities for which fair value is measured or disclosed in the standalone Ind AS financial statements are categorized within the fair value hierarchy, as below, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 : Quoted (unadjusted) market prices in active markets for identical assets or liabilities Level 2 : Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable Level 3 : Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

There has been no transfers between levels during the year.

The fair values of Cross currency interest rate swap and Foreign currency forward contracts are derived from quoted market prices in active markets.

The management assessed that the carrying values of investments, trade and other receivables, cash and short term deposits, other assets, borrowings, trade and other payables and balances with related parties, based on their notional amounts, reasonably approximate their fair values because these instruments have short-term maturities and are re-priced frequently.

40. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include investments, trade and other receivables, cash and cash equivalents, bank balances, security deposits and derivatives that are out of regular business operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is supported by a risk management committee that advises on financial risks and the appropriate financial risk governance framework for the Company.

The risk management committee provides assurance to the Company''s senior management that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument that will fluctuate because of changes in market prices. Market risk comprises three types of risk i.e. interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include borrowings, derivatives financial instruments, trade payables.

c) Liquidity risk

The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank borrowings. The table below summarizes the maturity profile of the Company''s financial liabilities:

41. CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity shareholders. The primary objective of the Company''s capital management is to ensure that it maintains a strong credit rating and capital ratios in order to support its business and maximize shareholder value.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital. The Company includes within net debt, all non-current and current borrowings reduced by cash and cash equivalents and other bank balances.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing borrowings that define capital structure requirements. The breaches in meeting the financial covenants would permit the bank to immediately call borrowings. There have been no breaches in the financial covenants of any interest-bearing borrowings in the current year.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2017 and March 31, 2016.

42. The Bihar State Government ("the Government") vide its notification dated April 5, 2016 imposed ban on trade and consumption of foreign liquor in the State of Bihar with immediate effect. The Company filed a writ petition with the Honorable High Court at Patna ("the High Court"), requesting remedies and compensation for losses incurred on account of such abrupt notification. The High Court vide its order dated September 30, 2016 ("the Order") allowed the aforesaid writ petition, however, the Government preferred a special leave petition against the Order before the Honourable Supreme Court of India ("the Supreme Court"). As an interim measure, the Supreme Court directed stay of operation of the Order.

Meanwhile, vide notification dated April 9, 2016, the Government had allowed production of beer in the state of Bihar for export to outside states, however, vide notification issued on January 24, 2017, the Government has decided not to renew existing brewery licenses from the financial year 2017-18. The said notification also mentions that, upon application, permission shall be granted for manufacture of non-alcoholic drinks / beverages. Pursuant to this notification, the Company has obtained permission from authorities for manufacture of non-alcoholic beverages at its existing manufacturing facility at Bihar and has initiated necessary steps towards commencement of operations for the new product line.

As at March 31, 2017, the Company has property, plant and equipment (net) of Rs. 23,530 Lakhs, inventories (gross) of Rs. 844 Lakhs, trade receivables (gross) of Rs. 2,476 Lakhs and advances of Rs. 875 Lakhs at its units in Bihar. Management believes that the carrying amount of the aforesaid property, plant and equipment do not exceed their recoverable amount and is confident of utilization of aforesaid property, plant and equipment either for the new product line in Bihar relating to non-alcoholic beverages or for manufacturing units in other states. Provision aggregating to Rs. 1,324 Lakhs have been made against aforesaid inventories and trade receivable balances and no other adjustment has been considered necessary by the management in this regard.

43. First time adoption of Ind AS

These standalone Ind AS financial statements, for the year ended March 31, 2017, are the first standalone financial statements of the Company that are prepared in accordance with Ind AS. For periods up to and including the year ended March 31, 2016, the Company prepared its standalone financial statements in accordance with accounting standards notified under section 133 of the Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 ("Previous GAAP"). Accordingly, the Company has prepared these standalone Ind AS financial statements which comply with applicable Ind AS for periods ended on March 31, 2017, together with the comparative period data as at and for the year ended March 31, 2016, as described in the summary of significant accounting policies. In preparing these standalone Ind AS financial statements, the Company''s opening balance sheet was prepared as at April 1, 2015, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Previous GAAP standalone financial statements, including the balance sheet as at April 1,

2015 and the standalone financial statements as at and for the year ended March 31, 2016.

Exemptions applied

a) Ind AS 101 permits a first-time adopter to elect to continue with the carrying value of all of its property, plant and equipment as recognized in the financial statements as on the date of transition to Ind AS, as per the Previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for decommissioning liabilities. The exemption can also be used for intangible assets covered by Ind AS 38. Accordingly, the Company has elected to measure all of its property, plant and equipment and intangibles at their Previous GAAP carrying value.

b) Ind AS 101 permits a first-time adopter to elect not to apply Ind AS 103 retrospectively to past business combinations (business combinations that occurred before the date of transition to Ind AS). Accordingly, the Company has elected to measure all assets and liabilities arising out of business combinations that occurred before the date of transition to Ind AS at their Previous GAAP carrying values.

c) When an entity prepares separate financial statements, Ind AS 27 requires it to account for its investments in subsidiaries, joint ventures and associates either at cost or in accordance with Ind AS 109. A first-time adopter may choose either fair value at the entity''s date of transition to Ind AS in its separate financial statements or Previous GAAP carrying amount at that date, to measure its investment in subsidiary or associate that it elects to measure using a deemed cost. Accordingly, the Company has elected to measure its investment in subsidiary and associate using the Previous GAAP carrying amount as deemed cost.

d) Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has elected to apply this exemption for such contracts/arrangements.

e) If a first-time adopter did not, under its Previous GAAP, recognize and measure a government loan at a below-market rate of interest on a basis consistent with Ind AS requirements, it shall use its Previous GAAP carrying amount of the loan at the date of transition to Ind AS as the carrying amount of the loan in the opening Ind AS Balance Sheet. An entity shall apply Ind AS 109 to the measurement of such loans after the date of transition to Ind AS. Accordingly, the Company has used its Previous GAAP carrying amount of the deferred payment liability at the date of transition to Ind AS as the carrying amount in the opening Ind AS Balance Sheet.

Foot notes to the reconciliation of equity as at April 1, 2015 and March 31, 2016 and profit and loss for the year ended March 31, 2016:

(a) Sale of products

Under Previous GAAP, sale of products was presented net of excise duty. However, under Ind AS, sale of products includes excise duty and excise duty on sale of products is separately presented on the face of statement of profit and loss. Thus, sale of products under Ind AS has increased by Rs. 408,625 Lakhs for the year ended March 31, 2016 with a corresponding increase in expenses.

Under Previous GAAP, sale of products was presented net of volume discount given to only primary customers and the volume discount given to secondary customers was included in sales promotion expenses under ''Other expenses''. Under Ind AS, sale of products are presented net of volume discounts given to all customers, including secondary customers. Thus, sale of products and sales promotion expenses for the year ended March 31, 2016 under Ind AS has reduced by Rs. 43,913 Lakhs.

Under Previous GAAP, breakages, cash discount and other reimbursements were recognized in respective expense heads under ''Other expenses''. Since realization from the customers are net of these deductions / reimbursements, under Ind AS, these expenses have been netted off from sales. Thus, sale of products for the year ended March 31, 2016 under Ind AS has reduced by Rs. 5,886 Lakhs.

(b) Revenue recognition under agency arrangement

The arrangement with Wave Distilleries and Breweries Limited (''WDBL'') has been considered an agency relationship based on principles of Ind AS 18 and accordingly its trial balance relating to operations of the Company have been consolidated on a line by line basis. In Previous GAAP, net income from WDBL was recognized in other operating revenue under ''Revenue from operations''. The summary of adjustments made under Ind AS are as below:

Also, on aforesaid consolidation, inter-unit transaction during the year ended March 31, 2016 relating to sale of products to WDBL of Rs. 2,726 Lakhs and purchase of stock-in-trade of Rs. 1,887 Lakhs from WDBL, have been eliminated.

(c) Leases

The arrangement with Winsome Breweries Limited (''WBL'') have been treated as operating lease as per the requirements of Ind AS 17 and accordingly its trial balance relating to operations of the Company have been consolidated on a line by line basis. In Previous GAAP, net income from WBL was recognized in other operating revenue under ''Revenue from operations''. The summary of adjustments made under Ind AS are as below:

Also, on aforesaid consolidation, inter-unit transaction during the year ended March 31, 2016 relating to sale of products to WBL of Rs. 954 Lakhs, have been eliminated.

(d) Derivative instruments and Foreign currency borrowings

The Company uses derivative financial instruments, such as cross currency interest rate swap contracts (''CCIRS'') and forward currency contracts, to hedge its foreign currency risks and interest rate risks. Under Previous GAAP, the Company had designated these as economic hedges and applied economic hedge accounting principles to avoid profit or loss mismatch. Under Ind AS, the fair value of CCIRS and foreign exchange gain/loss on restatement of foreign currency borrowings are recognized. Accordingly, during the year ended March 31, 2016, gain on fair valuation of CCIRS of Rs. 4,137 Lakhs has been recognized under ''Other income'' and loss on exchange restatement of foreign currency borrowings of Rs. 4,294 Lakhs, of which Rs. 516 Lakhs is recognized in finance costs and balance of Rs. 3,778 has been recognized under ''Other expenses''. Also, as at April 1, 2015, fair valuation of CCIRS of Rs. 11,638 Lakhs and loss on exchange restatement of foreign currency borrowings ofRs. 11,264 Lakhs have been recognized and adjusted to reserves.

(e) Defined benefit obligations

Both under Previous GAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Previous GAAP, the entire cost, including actuarial gains and losses, were charged to profit or loss. Under Ind AS, re-measurement (comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and return on plan assets excluding amounts included in net interest on the net defined benefit liability) are recognized immediately in the balance sheet with corresponding debit or credit to retained earnings through other comprehensive income. Thus, employee benefit cost for the year ended March 31, 2016 have been reduced by Rs. 662 Lakhs and remeasurement losses of Rs. 433 Lakhs (net of tax of Rs. 229 Lakhs), on defined benefit plans has been recognized in the other comprehensive income.

(f) Provision for proposed dividend

Under Previous GAAP, proposed dividend including dividend distribution tax was recognized as a provision in the period to which it was related, irrespective of when it was declared. Under Ind AS, a proposed dividend is recognized in the period in which it is declared by the Company (usually when approved by shareholders in a general meeting) or paid. The Company declares dividend after period end. Therefore, provision of Rs. 3,182 Lakhs for the year ended March 31, 2015 recorded for dividend has been de-recognized against retained earnings on April 1, 2015. Similarly, the proposed dividend (including tax thereon) for the year ended March 31, 2016 of Rs. 3,660 Lakhs recognized under Previous GAAP is reduced from provisions with corresponding impact on retained earnings.

Under Previous GAAP, the preference shares were classified as equity and dividend payable thereon was treated as distribution of profit. Under Ind AS, preference shares needs to be considered as liability and dividend needs to be treated as interest on liability. The Company had fully redeemed its preference shares before March 31, 2015, however, dividend payable of Rs. 268 Lakhs (including tax thereon) for the year ended March 31, 2015 was included under ''Provision''. The same has been reclassified to ''Other financial liabilities''.

(g) Deferred tax

The Company has recognized fair values of CCIRS as per Ind AS, resulting in temporary differences. Accordingly, deferred tax is recognized on the same. On the date of transition, the net impact on deferred tax liabilities is Rs. 129 Lakhs and Rs. 75 Lakhs as on April 1, 2015 and March 31, 2016, respectively, and that on profit or loss for the year ended March 31, 2016 is Rs. 54 Lakhs.

(h) Other comprehensive income

Under Previous GAAP, the Company had not presented other comprehensive income separately. Hence, it has reconciled Previous GAAP profit or loss to total comprehensive income as per Ind AS.

(i) Statement of Cash flows

The transition from Previous GAAP to Ind AS did not have a material impact on statement of cash flows.

(j) Reclassifications

Following reclassification adjustments have been carried out as per Ind AS requirements:

i. Security deposits has been classified under financial assets instead of loans and advances as per Previous GAAP.

ii. Capital and other advances, Prepaid expenses and Balance with statutory/government authorities have been classified under other assets instead of loans and advance as per Previous GAAP.

iii. Advance income tax (net) has been classified as Income tax asset instead of loans and advances as per Previous GAAP.

iv. Current maturities of long-term borrowings, liability for capital goods, interest accrued on borrowings, security deposits payable, unpaid dividends, salaries and bonus payable, freight expenses payable and other expenses payable have been classified under financial liabilities instead of current liabilities as per Previous GAAP.

(A) Conservation of energy Electrical Energy:

- Continued focus on optimal work-in-process during off-season has reduced refrigeration load and consequently reduced energy consumption.

- LED lighting replacement done at Chopanki, Kothambakkam and Ludhiana Units.

Water Conservation:

- Installation and commissioning of Effluent Treatment Plant (ETP) tertiary Reverse Osmosis (RO) plant at Taloja Unit to reduce intake of fresh water.

- Commissioning of ETP Reverse Osmosis (RO) at Ludhiana Unit.

Capital investment on Energy Conservation:

- During FY17 UBL spent Rs.22.9 Million on Energy Conservation equipment.

(B) Technology absorption

- All Surface Empty Bottle Inspectors installed in Nelamangala Unit.

- Additions of Outside Side Wall (OSW) on existing Empty Bottle Inspectors at Aranvoyal, Kothambakkam, Aurangabad, Chopanki, Khurda and Nelamangala Units.

Research & Development

- The Company has continued its Research & Development program in the area of development of two row malting variety of Barley.

Expenditure on Research & Development

- During FY17 UBL spent Rs. 6.2 Million on Research & Development.


Mar 31, 2016

1. Corporate Information

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

2. Basis Of Preparation Of Financial Statements

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

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

3. Operating Lease

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

4. Subsequent Event

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

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

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

5. Acquisition OF Assets OF Pacific Spirits Private Limited

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

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

7. Capitalization OF Expenditure

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

8. Segment Reporting

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

9. Previous Year Figures

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


Mar 31, 2015

1. Corporate information

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

2. Basis of preparation of financial statements

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

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

3. Terms/rights attached to equity shares

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

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

4. Terms of redemption of preference shares

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

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

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

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

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

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

Unsecured borrowings

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

Secured borrowings

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

Unsecured borrowings

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

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

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

6. CONTINGENT LIABILITIES

Bank guarantees 2,690 2,615

Letter of credit 1,111 1,386

Demands under appeal for following matters*

- Income tax 14,064 13,181

- Service tax 22,929 34,437

- Water charges 3,737 3,317

- Sales tax 7,050 356

- Excise duty 66 66

- Employee state insurance 16 16 /provident fund

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

Total 53,059 56,657

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

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

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

8. RELATED PARTY DISCLOSURES

A. Name of related parties and related party relationships

Related party where control exists:

Subsidiary : Maltex Malsters Limited ('MML')

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

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

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

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

Mr. Henricus Petrus van Zon, Director, CFO

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

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

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

Directors : Dr. Vijay Mallya, Chairman

Mr. A K Ravi Nedungadi

Mr. Duco Reinout Hooft Graafland

Mr. Roland Pirmez

Mr. Stephan Gerlich

Mrs. Kiran Majumdar Shaw

Mr. Madhav Bhatkuly

Mr. Chugh Yoginder Pal

Mr. Chhaganlal Jain

Mr. Sunil Alagh

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

Relative of director or KMP : Mr. Umesh Hingorani

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

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

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

9. SEGMENT REPORTING

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

10. PREVIOUS YEAR FIGURES

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


Mar 31, 2014

1. Corporate information

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

2. Basis of preparation of financial statements

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

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

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

3. CONTINGENT LIABILITIES

Bank guarantees 2,615 2,797

Letter of credit 1,386 1,529

Demands under appeal for following matters*

- Income tax 13,181 12,441

- Service tax 34,437 13,800

- Water charges 3,317 3,086

- Sales tax 356 307

- Excise duty 66 66

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

Total 56,432 35,439

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

4. AMALGAMATION ACCOUNTING

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

Further, in terms of the approved scheme:

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

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

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

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

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

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

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

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

6. CAPITALIZATION OF EXPENDITURE

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

7. RELATED PARTY DISCLOSURES

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

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

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

Associate:

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

Enterprises having significant influence:

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

Key management personnel (KMP):

Mr. Kalyan Ganguly, Managing Director

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

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

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

Enterprises over which investing parties or KMP have significant infuence:

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

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

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

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

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

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

8. SEGMENT REPORTING

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

9. PREVIOUS YEAR FIGURES

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


Mar 31, 2013

1. Corporate information

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

2. Basis of preparation of financial statements

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

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

3. OPERATING LEASE

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

4. AMALGAMATION ACCOUNTING

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

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

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

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

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

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

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

- The intercompany balances and the transactions were cancelled.

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

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

Further, in terms of the approved scheme:

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

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

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

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

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

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

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

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

6. CAPITALIZATION OF EXPENDITURE

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

7. RELATED PARTY DISCLOSURES

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

8. SEGMENT REPORTING

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

9. PREVIOUS YEAR FIGURES

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


Mar 31, 2012

1. General Information:

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

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

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

2. CONTINGENT LIABILITIES

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

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

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

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

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

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

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

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

23,207 10,847

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

3. AMALGAMATIONS

I. 2011-12

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

In respect of the merger of UBA with the Company -

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

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

c) Accounting for Amalgamation:

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

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

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

- The intercompany balances and the transactions stood cancelled.

UBA was engaged in brewing business.

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

B. UBL Benefit Trust

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

II. 2010-11

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

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

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

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

c) Accounting for Amalgamation:

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

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

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

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

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

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

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

c) Accounting for Amalgamation:

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

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

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

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

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

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

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

c) Accounting for Amalgamation:

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

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

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

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

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

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

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

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

c) Accounting for Amalgamation:

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

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

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

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

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

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

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

c) Accounting for Amalgamation:

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

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

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

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

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

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

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

c) Accounting for Amalgamation:

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

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

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

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

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

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

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

c) Accounting for Amalgamation:

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

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

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

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

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

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

4. RELATED PARTY DISCLOSURES

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

Subsidiary: Maltex Malsters Limited (MML)

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

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

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

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

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

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

e) Heineken International B.V.

f) Heineken Romania S.A.

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

i) Force India F1 Team Limited (Force India)

Key Management Personnel (KMP): Mr. Kalyan Ganguly

Mr. Guido de Boer

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

5. ADVANCE MADE TO STAR INVESTMENTS

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

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

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

6. SEGMENT REPORTING

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

7. PREVIOUS YEAR FIGURES

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

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

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