FY2009 Annual Report Highlights

CONTENTS
Report of the Directors Corporate Governance Report Management Discussion & Analysis Report Auditors Report Balance Sheet Profit and Loss Account Cash Flow Statement Schedules Consolidated Financial Statements 19 22 26 27 28 30 75 1 10
Dr. Vijay Mallya

Chairman
DIRECTORS
VIJAY MALLYA, Chairman S.R.GUPTE, Vice Chairman V.K.REKHI, Managing Director M.R. DORAISWAMY IYENGAR B.M. LABROO SREEDHARA MENON SUDHINDAR KRISHAN KHANNA
PRESIDENT & CFO THE UB GROUP

RAVI NEDUNGADI
DEPUTY PRESIDENT & CHIEF FINANCIAL OFFICER

P.A.MURALI
COMPANY SECRETARY
V.S.VENKATARAMAN
AUDITORS
PRICE WATERHOUSE, CHARTERED ACCOUNTANTS, BANGALORE
REGISTERED & CORPORATE OFFICE

UB TOWER, # 24, VITTAL MALLYA ROAD, BANGALORE 560 001
Report of the Directors
Your Directors have pleasure in presenting the Annual Report of your Company and the audited accounts for the year ended March 31, 2009. At the outset, your Directors are glad to report that the Scheme of Amalgamation of Shaw Wallace & Company Limited and Primo Distributors Private Limited with the Company (the Scheme) has been sanctioned by the Honble High Courts of Karnataka, Bombay and Calcutta and the Scheme has become effective on July 6, 2009. The Amalgamation takes effect from April 1, 2007, being the Appointed Date. Your Directors are also glad to report that the Scheme of Amalgamation of Zelinka Limited with the Company with the Appointed Date of April 1, 2007 has became operative from March 26, 2009 pursuant to a Scheme of Amalgamation sanctioned by the Honble High Court of Karnataka at Bangalore and compliance of the procedure required to be followed by Zelinka Limited under the local laws of Cyprus. Accordingly, the financial results for the year ended March 31, 2009 also include those relating to the amalgamating Companies. FINANCIAL RESULTS Rupees in Millions 2008-09 2007-08 The working of your Company for the year under review resulted in Profit from operations 4,953.169 Less: Depreciation 361.565 Taxation (including deferred tax) 1,624.980 Profit after tax 2,966.624 Profit B/F from previous year 7,018.342 Profit transferred on Amalgamation 103.983 Profit available for appropriation 10,088.949 Your Directors have made the following appropriations: To General Reserve To Capital Redemption Reserve Proposed Dividend: Preference Shares Equity Shares Corporate Tax on Proposed Dividend Balance carried to the Balance Sheet EPS Basic Rupees EPS Diluted Rupees 5,175.774 326.112 1,736.903 3,112.759 4,411.221 7,523.980
Your Directors propose a Dividend on the equity shares of the Company at the rate of Rs.2/- per share, including on 7,749,121 equity shares of Rs.10/- each fully paid-up allotted to the shareholders of Shaw Wallace & Company Limited pursuant to the Scheme of Amalgamation sanctioned by the Honble High Courts of Karnataka, Bombay and Calcutta. CAPITAL In terms of the Scheme of Amalgamation (the Scheme) sanctioned by the Honble High Courts of Karnataka, Bombay and Calcutta, the Authorised Capital of Shaw Wallace & Company Limited and Primo Distributors Private Limited, the Transferor Companies stood combined with that of your Company. Consequently, the Authorised Capital of the Company stands increased from Rs.1,200,000,000/- divided into 110,000,000 equity shares of Rs.10/- each and 10,000,000 Preference Shares of Rs.10/- each to Rs.3,292,000,000/- divided into 245,000,000 Equity Shares of Rs.10/- each and 84,200,000 Preference Shares of Rs.10/- each. In terms of the Scheme, 7,749,121 Equity shares of Rs.10/each, fully paid-up were issued and allotted on July 24, 2009 to the shareholders of Shaw Wallace & Company Limited in the ratio specified in the Scheme. Consequently, the Issued, Subscribed and Paid-up Equity Share Capital of the Company stood increased from Rs.1,001,632,560/- divided into 100,163,256 equity shares of Rs.10/- each to Rs.1,079,123,770/divided into 107,912,377 equity shares of Rs.10/- each. PERFORMANCE OF THE COMPANY The Company has been able to record a 20% growth in volumes during the year with some key brands such as Signature Whisky recording a growth of 27% to enter the Millionaires Club. The umbrella McDowells brand continues its buoyant growth and has earned the distinction of being Indias largest consumer brand calculated by retail value of sales. With over 50% of Indias 1.2 billion population not having yet achieved legal drinking age, the industry is currently witnessing a demographic window of opportunity with large number of first time consumers entering the market. The year however, witnessed a steep rise in input costs. Reduced sugarcane output and a political stand off between state governments and sugarcane farmers in key producing states during the crushing season, resulted in unprecedented spike in input costs. Despite an impact of over Rs.3.5 billion
350.000 215.825 36.679 9,486.445 27.49 27.49
250.000 77.500 1.930 150.331 25.877 7,018.342 31.84 31.40
1 3
Report of the Directors (Contd.)
on account of higher input prices during the year, the Company managed to show only a marginal reduction in profits for the year which stood at Rs.2.97 billion as against Rs.3.11 billion in the previous year. AMALGAMATION
effective, the beneficial interest in SWC Benefit Trust and Primo Benefit Trust stands transferred and vested in the USL Benefit Trust, whose beneficiary is the Company. Subsequent to the year end, SWCL has sold 10,282,553 Equity Shares held by it in the Company in the open market, through the stock exchanges and 1,306,431 equity shares held by Primo in the Company has been transferred to Primo Benefit Trust. Upon the Scheme becoming effective, the shares held by Primo Benefit Trust stood transferred to and vest with USL Benefit Trust.
Amalgamation of Shaw Wallace & Company Limited and Primo Distributors Private Limited with the Company:
In terms of the Scheme of Amalgamation of Shaw Wallace & Company Limited (SWCL) and Primo Distributors Private Limited (Primo) with the Company (the Scheme) sanctioned by the Honble High Courts of Karnataka, Bombay and Calcutta, which became effective on July 6, 2009, with Appointed Date as April 1, 2007: SWCL and Primo, both subsidiaries of the Company were amalgamated with the Company and the entire business and whole of the undertaking of the said transferor companies stood transferred to and vested in the Company; The shareholders of erstwhile SWCL were issued and allotted in aggregate 7,749,121 Equity Shares of Rs.10/each fully paid-up in the Company in the ratio of 4 equity shares of Rs.10/- each fully paid-up in the Company for every 17 equity shares of Rs.10/- each fully paid-up in SWCL; 15,072,311 equity shares of Rs.10/- each representing, 31.40% of the paid-up capital of SWCL held by the Company stood cancelled upon the Scheme becoming effective; The Equity Shares held by the Company in Primo were cancelled without any exchange of shares in the Company, as its entire paid-up share capital was held by the Company. Consequent to the Scheme becoming effective, Primo stood dissolved without winding up. SWCL will be dissolved without winding up under a separate Order of the Honble High Court at Calcutta.
Amalgamation of Zelinka Limited with the Company:

In terms of the Scheme of Amalgamation of Zelinka Limited with United Spirits Limited as sanctioned by the Honble High Court of Karnataka at Bangalore and subsequent compliance of the procedure required to be followed by Zelinka Limited under the local laws of Cyprus, which became operative on March 26, 2009, with Appointed Date as April 1, 2007: the entire undertaking of Zelinka Limited including all assets and liabilities, stood transferred to and vested in the Company; The Equity Shares held by the Company in Zelinka Limited were cancelled without any exchange of shares in the Company, as its entire paid-up share capital was held by the Company.
Amalgamation of Balaji Distilleries Limited with the Company:

Balaji Distilleries Limited (BDL), which has been a contract manufacturing unit of the UB Group ever since its inception in the year 1983, is proposed to be amalgamated with the Company with effect from April 1, 2009, being the Appointed Date. BDL has a large state of the art distillery and brewery in Tamil Nadu. The distillery has a capacity to produce Ten million cases per year while the brewery has a capacity of Nine million dozens per annum expandable to about twelve million dozens. BDL incurred huge losses resulting in the erosion of its entire Net Worth and in consequence, BDL on reference, has been declared as a sick industrial undertaking under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). The draft Rehabilitation Scheme along with the Scheme of Arrangement between Balaji Distilleries Limited, Chennai
In terms of the Scheme, a Trust in the name of Primo Benefit Trust and a Trust in the name of SWC Benefit Trust were created for transfer of 1,306,431 Equity shares held by Primo and 10,282,553 equity shares held by SWCL in the Company to the aforesaid Trusts respectively. Upon the Scheme becoming
2 4
Breweries Private Limited and United Spirits Limited has been submitted to the Board for Industrial and Financial Reconstruction (BIFR). The Scheme of Arrangement will become effective on receipt of necessary approval from BIFR. SUBSIDIARIES During the year under review, United Spirits (Shangai) Trading Company Limited became a wholly owned subsidiary of your Company. Consequent upon the amalgamation of Shaw Wallace & Company Limited and Primo Distributors Private Limited with the Company: Shaw Wallace & Company Limited and Primo Distributors Private Limited ceased to be subsidiaries of the Company; Shaw Wallace Breweries Limited became direct subsidiary of the Company; Consequent upon the amalgamation of Zelinka Limited with the Company: Zelinka Limited ceased to be a wholly owned subsidiary of the Company; Palmer Investment S.A. Group became Limited direct and Montrose owned International wholly
member at the Registered Office of the Company and that of the subsidiary Companies concerned. The Accounting year of United Spirits Nepal Private Limited (USNPL), your Companys Subsidiary in Nepal is from midJuly to mid-July every year. Accordingly, Accounting year of 2007-08 of USNPL ended on July 15, 2008 and the Accounting year 2008-09 ended on July 14, 2009, i.e., after the end of the close of the financial year of the Company, which ended on March 31, 2009. For the purpose of compliance under Accounting Standard 21, relating to Consolidated Financial Statement, the Accounts of USNPL has been drawn up to March 31, 2009. For the purpose of compliance under Accounting
Standard - 21, Consolidated Financial Statement presented by the Company includes the financial information of its subsidiaries. PROSPECTS The IMFL industry has been growing at a fast pace and the rate of growth seems to be accelerating. This is due to a combination of first time entrants to the market upon attaining legal age and uptrading from country liquor. For the year ended March 31, 2009, the total IMFL industry stood at 214 million cases and it is anticipated that double digit growth will continue in the industry for several years to come. Input costs have been on the rise for the last two years and continue to be a cause of concern. However, supply side constraints are somewhat mitigated by reduction in demand for industrial use of alcohol and new grain distillation facilities that have come up in various parts of the country. Your Company, as the clear market leader would expect to garner a major share of the growth prospects of the industry, while being able to parley its critical size to ensure consistent availability of inputs at competitive prices. Efforts by the Company to generate resources to pre pay loans were successfully initiated with the sale of 10,282,553 Treasury Shares, which raised about US$ 186 million. Plans have been drawn up for raising additional sums to further repay debt, which will have the beneficial impact of lower interest costs in the coming years.
subsidiaries of the Company; Liquidity Inc. became a direct subsidiary of the Company.
The Company has made application to the Government of India pursuant to Section 212(8) of the Companies Act, 1956 seeking approval for exempting the Company from attaching with the accounts of the Company, the Balance Sheet, Profit & Loss Account, Directors Report, Auditors Report and other particulars of the Subsidiary Companies as on March 31, 2009. The necessary approval in this regard is awaited. Pending such approval, Balance Sheet, Profit & Loss Account, Directors Report, Auditors Report and other particulars of the subsidiary companies as on March 31, 2009 have not been attached with the accounts of the Companies concerned. The documents/details will be made available to any Member of the Company and its subsidiaries upon request to the Company. The annual accounts of the subsidiary Companies as on March 31, 2009 will also be kept for inspection by any
3 5
The demand for Scotch continues to grow, especially from new markets in Asia and this has led to the continued hardening of scotch prices, thus affirming the strategic advantage of the Whyte and Mackay acquisition. The consolidated accounts for the year include non cash adjustments, reflecting changes in the relative exchange rates of reporting currency, the US Dollar and the Great Britain Pound. While Accounting Standards require the Company to recognize these differences in a calibrated manner over three years, the same is not viewed as a business constraint. DEPOSITORY SYSTEM The trading of the equity shares in your Company is under compulsory dematerialisation mode. As of date, equity shares representing 94.66% of the equity share capital are in dematerialised form. As the depository system offers numerous advantages, members are requested to take advantage of the same and avail of the facility of dematerialisation of the Companys shares. DIRECTORS Mr. Sreedhara Menon and Dr.Vijay Mallya retire by rotation and being eligible, offer themselves for re-appointment. AUDITORS M/s. Price Waterhouse, your Company's Auditors, are eligible for re-appointment at the Annual General Meeting and it is necessary to fix their remuneration. TAX AUDITORS Your Directors have appointed M/s. Lodha & Co., Chartered Accountants as the Tax Auditors of the Company to carry out the tax audit of the Company for the year ended March 31, 2009. LISTING OF SHARES OF THE COMPANY Your Companys Equity Shares have been delisted from the Stock Exchanges at Ahmedabad, Chennai, Delhi and Kolkata in accordance with the shareholders approval at the Annual General Meeting of the Company held on November 28, 2007. The Equity Shares of your Company continue to remain listed on Bangalore Stock Exchange Limited, Bombay Stock
Exchange Limited and National Stock Exchange of India Limited. The listing fees for the year 2009-10 have been paid to these Stock Exchanges. 7,749,121 equity shares issued and allotted to the
shareholders of erstwhile Shaw Wallace & Company Limited in terms of the Scheme of Amalgamation will be listed on the stock exchanges where the existing equity shares of the Company are presently listed and necessary steps have been taken by your company in this regard. GLOBAL DEPOSITARY SHARES Your Company had issued 17,502,762 Global Depositary Shares (GDSs) representing 8,751,381 Equity Shares ranking
pari-passu in all respects with the existing paid-up equity

shares, 2 GDSs representing 1 equity share of par value of Rs.10/- each at US$7.4274 per GDSs aggregating to US$ 130 mn. These GDSs are listed on the Luxembourg Stock Exchange. As on July 24, 2009, there is an outstanding of 689,900 GDSs representing 344,950 equity shares. CREDIT RATING ICRA Limited (ICRA) has assigned LA- (pronounced LA minus) rating on the long term scale to the Long Term Debt Programme of the Company (Basel II) and also assigned "A1 (pronounced A One) rating on the short term scale to the Short Term Debt Programme of the Company. CORPORATE GOVERNANCE A report on the Corporate Governance is annexed separately as part of this report along with a certificate of compliance from a Company Secretary in practice. Necessary requirements of obtaining certifications/declarations in terms of Clause 49 have been complied with. MANAGEMENT DISCUSSION AND ANALYSIS Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and analysis Report is annexed and forms an integral part of the Annual Report. FIXED DEPOSITS Fixed Deposits from the public and shareholders, stood at Rs.654.01 million as at March 31, 2009. Matured deposits
4 6
for which disposal instructions had not been received from concerned depositors stood at Rs.28.07 million as at March 31, 2009. Of this, a sum of Rs. 7.51 million has been since paid as per instructions received after the year-end. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act, 1956, the Unclaimed Dividend, Debentures and Deposits, remaining unclaimed and unpaid for more than 7 years, have been transferred to the Investor Education and Protection Fund. HUMAN RESOURCES Employee relations remained cordial at all the Companys locations. Particulars of employees drawing an aggregate remuneration of Rs.2,400,000/- or above per annum or Rs.200,000/- or above per month, as required under Section 217(2A) of the Companies Act, 1956, are annexed. EMPLOYEE STOCK OPTION SCHEME The Company has not offered any stock option to the Employees during the year 2008-2009 either under the McD ESOP Scheme or McD-Employee Stock Option Scheme 2002. CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION, ETC. In accordance with the provision of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors), Rules, 1988, the required information relating to Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo is annexed.
DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Section 217 (2AA) of the Companies Act, 1956, in relation to financial statements for the year 2008-09, the Board of Directors reports that: in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; accounting policies have been selected and applied consistently and that the judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for the year ended March 31, 2009; proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; the annual accounts have been prepared on a going concern basis. THANK YOU Your Directors place on record their sincere appreciation for the continued support from the shareholders, customers, suppliers, banks and financial institutions and other business associates. A particular note of thanks to all employees of your Company, without whose contribution, your Company could not have achieved the years performance. By Authority of the Board Bangalore July 29, 2009 Dr. VIJAY MALLYA Chairman
5 7
ANNEXURE TO DIRECTORS REPORT

[Additional information given pursuant to requirement of Section 217(1)(e) of the Companies Act, 1956]
CONSERVATION OF ENERGY
With reference to energy conservation and cost reduction, steps taken by the company at its various manufacturing units were as follows: Energy Audits were undertaken and devices such as Power Bos, Variable Frequency Drive and Automatic Power Factor Control unit were installed for conservation of electrical and thermal energies. Process plant revamp was done to reduce steam consumption. Plate Heat Exchangers were installed for Heat Recovery. Steam driven condensate recovery pumps were installed for reducing Electrical / Fuel consumption.
RESEARCH & DEVELOPMENT (R&D)

As an ongoing process the Company carries out research in its State-of-the-art in-house Research and Development Centre for development of new-age products, new innovative packaging materials and analytical method for quality management. Expenditure on R & D: (a) (b) (c) (d) (Rs. in Million)
Capital 0.214 Recurring 30.033 Total 30.247 Total R & D expenditure as a percentage of total turnover 0.08%
TECHNOLOGY ABSORPTION
Technology imported during the last 5 years : Nil The Company is evaluating latest Technology for effluent Treatment of Distillery waste by a new process called evaporation / incineration. Imported labeling machines were installed for labeling of premium products to further enhance the quality of finished product. The Company perfected the art of sleeving technology by importing sleeving machine for full body sleeving of certain White Spirit Brands. The Company is also evaluating the use of Gas Turbines for utilizing Methane gas produced in Anaerobic Digester and generating captive power for running the Distilleries.
FOREIGN EXCHANGE EARNINGS/OUTGO

(Rupees in Million) 2008-09 1 Exports & Foreign Exchange earnings 2 Imports / Expenditure in Foreign Currency 42.142 1,944.014 2007-08 19.597 792.318 By Authority of the Board Bangalore July 29, 2009 Dr. VIJAY MALLYA Chairman
6 8
ANNEXURE TO DIRECTORS REPORT

STATEMENT OF PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956 AND COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975.
SL. No 1 2 3 4 5 6 7 8 9 NAME AGE DESIGNATION/ NATURE OF DUTIES REMUNERATION (Rs.) 4,375,118 QUALIFICATION DATE OF EXPERICOMMENCEENCE MENT OF IN EMPLOYYEARS MENT 30 31 27 27 21 30 17 25 25 28 30 25 34 29 29 23 30 28 18 26 25 38 31 31 12 35 38 1-Oct-85 22-Nov-90 23-Aug-06 3-Nov-08 21-Feb-95 19-Apr-82 12-Jun-07 15-Jun-92 13-May-05 27-Oct-93 15-Apr-85 12-Apr-91 12-May-92 1-Nov-88 24-Jun-02 13-Feb-98 4-Oct-01 1-Nov-96 20-Sep-04 20-Aug-84 7-Nov-86 14-Dec-88 3-May-95 1-Apr-85 19-Jan-05 11-Oct-76 3-Sep-93 PARTICULARS OF PREVIOUS EMPLOYMENT Cost Accountant, Bengal Waterproof Limited Manager Treasury, Digital Equipment (I) Limited Vice President & Wine Maker, Grover Vineyards Limited Senior Vice President - Business Development & Mfg, Allied Blenders & Distillers Pvt Limited Deputy General Manager, Shaw Wallace & Company Limited Accounts Executive, Calcutta Industrial Supply Corporation Category Head - Beverages, Hindustan Lever Limited Controller - Marketing, Consolidated Distilleries Limited Scientific Director, Genesis Management Consultants Manager - Personnel & Admin, Karnataka Jewels Limited Mackinnon Mackensieco Limited Area Manager, Titan Watches Limited. Chief Operating Officer, erstwhile Herbertsons Limited Vice President Sales & Marketing, Carew Phipson Limited General Manager - Production & Admin, Balaji Group Senior Manager - Fixed Income, Peregrine Capital India Private Limited Vice President - Sales, Millenium Breweries Limited Chief Operating Officer, erstwhile Herbertsons Limited Head - Marketing & Alliances (Internet Services), Bharti Infotel Limited, New Delhi Chemist, Eastern Distilleries Private Limited Consultant, N M Raiji & Company Senior Research Officer & Head, Analytical Research Group, Shriram Institute For Industrial Research General Systems Manager, Amco Batteries Limited Secretary & Finance Manager ,UB Electronic Instruments Limited Britania Industries Limited Packsell Combine, Office Assistant General Manager (Corp. Finance) & Company Secretary, Ceeta Industries Limited,. Executive, Tunga Bhadra Sugar Works UDV India Limited Chief Operating Officer - Indian Operations, Mason And Summers Alcobev Private Limited.
A R BANERJEE A HARISHA BHAT ABHAY KEWADKAR AJAY B BALIGA* ALOK GUPTA* ALOK KUMAR SEN AMRIT THOMAS ANANT IYER ANIL KUMAR KUSH
51 55 48 50 43 54 42 49 53 57 52 46 56 51 55 45 55 49 41 51 51 60 53 52 36 56 58
ASSISTANT VICE PRESIDENT - FINANCE & ACCOUNTS SENIOR VICE PRESIDENT - WINES EXECUTIVE VICE PRESIDENT - PPMQC
B.COM (HONS)., AICWA CA B.TECH (CHEM) B.TECH (CHEM ENGG) B.COM, PGDM M.COM B.TECH, PGDM M.SC., M.M.S. PHD, MBA B.SC, LLB B.COM PGDM B.A. (ECO), MBA B.A. (ECO), MBA M.SC B.COM, ACS B.A PGDBM BSC, PGDBM BSC, B.TECH, PGDBM B.COM, ACA, LLB M.SC., PH.D., B.SC. B.A. (HONS.) MMS MSC, MBA B.A. B.Com (Hons), LLB, ACS., Inter ICWA M.SC., DIFAT B.SC, PDDBM, DIFAT B.COM
DEPUTY PRESIDENT & GROUP TREASURER 8,658,348 4,632,010 2,296,350
EXECUTIVE VICE PRESIDENT - MARKETING 3,606,686 & BRAND INDIA SENIOR GENERAL MANAGER - MATERIALS 2,934,709 EXECUTIVE VICE PRESIDENT - MARKETING 12,137,840 DIVISIONAL VICE PRESIDENT INSTITUTIONAL & TRADE MARKETING CHIEF EXECUTIVE - VITTAL MALLYA SCIENTIFIC RESEARCH FOUNDATION DIVISIONAL VICE PRESIDENT MANUFACTURING GENERAL MANAGER - ADMINISTRATION DIVISIONAL VICE PRESIDENT - SALES DEPUTY PRESIDENT CHIEF OPERATING OFFICER OF A SUBSIDIARY COMPANY ASSISTANT VICE PRESIDENT - DISTILLERY DIVISIONAL VICE PRESIDENT - LEGAL & SECRETARIAL DIVISIONAL VICE PRESIDENT - SALES SENIOR VICE PRESIDENT - SALES DIVISIONAL VICE PRESIDENT MARKETING DIVISIONAL VICE PRESIDENT MANUFACTURING (SOUTH) DIVISIONAL VICE PRESIDENT - FINANCE & ACCOUNTS SENIOR VICE PRESIDENT - QUALITY ASSURANCE & TECHNICAL SENIOR GENERAL MANAGER INFORMATION SYSTEMS SENIOR VICE PRESIDENT - PLANNING & CONTROL SENIOR GENERAL MANAGER MARKETING GENERAL MANAGER - SALES (CSD) ASSISTANT VICE PRESIDENT & COMPANY SECRETARY - SHAW WALLACE & COMPANY LIMITED SENIOR GENERAL MANAGER - DISTILLERY CHIEF OPERATING OFFICER - REGIONAL PROFIT CENTRE (EAST) 6,185,605 9,488,777 4,570,305 2,537,532 4,746,485 18,974,061 8,529,076 2,677,490 3,860,638 4,877,446 3,452,403 4,670,002 4,895,189 4,917,754 6,041,753 3,356,473 7,713,678 2,719,735 2,613,243 3,666,185
10 ARUN BOPAIAH 11 ARUN MOKAL 12 ARVIND JAIN 13 ASHOK CAPOOR 14 ASHWIN MALIK* 15 B NARAYANA RAJU 16 BHARATH RAGHAVAN 17 DALIP KUMAR GARG 18 DEBABRATHA BANERJEE* 19 DEBASHISH SHYAM 20 DEBASISH DAS 21 DHARMARAJAN S 22 DR. BINOD K MAITIN 23 G DEVANATHAN 24 I.P. SURESH MENON 25 JOHN MATHEW ANTHRAPER 26 JOSEPH P C 27 K. KRISHNAMOORTHY
28 K R SANKARANARAYANA 29 K VIJAY KUMAR 30 KAUSHIK CHATTERJEE
53 44 48
SENIOR GENERAL MANAGER - TECHNICAL 7,908,779 2,437,580 12,097,381
30 22 25
2-Jul-79 17-Feb-04 27-Apr-06
Contd...
7 9
STATEMENT OF PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956 AND COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975
SL. No NAME AGE DESIGNATION/ NATURE OF DUTIES REMUNERATION (Rs.) QUALIFICATION DATE OF EXPERICOMMENCEENCE MENT OF IN EMPLOYYEARS MENT 30 22 8-Jul-02 7-Aug-87 PARTICULARS OF PREVIOUS EMPLOYMENT Chief - Industrial Relations, Exide Industries Limited Executive, erstwhile Herbertsons Limited
31 KUSHAL BANERJEE 32 LAL RANGWANI
51 43
SENIOR GENERAL MANAGER - PERSONEEL 3,042,341 & ADMINISTRATION ASSISTANT VICE PRESIDENT - TRADE MARKETING & INSTITUTIONAL SALES (WEST) SENIOR VICE PRESIDENT - LEGAL CHIEF OPERATING OFFICER - REGIONAL PROFIT CENTRE (AP) ASSISTANT VICE PRESIDENT - SALES SENIOR GENERAL MANAGER - LEGAL DIVISIONAL VICE PRESIDENT- MARKETING & INNOVATIONS SENIOR GENERAL MANAGER - LOGISTCS, MATERIALS & MARKETING SERVICES SENIOR GENERAL MANAGER - SALES DIVISIONAL VICE PRESIDENT - BUSINESS PROMOTION CHIEF OPERATING OFFICER - REGIONAL PROFIT CENTRE (WEST) DIVISIONAL VICE PRESIDENT - SALES EXECUTIVE VICE PRESIDENT - CORPORATE AFFAIRS DEPUTY PRESIDENT - PROCUREMENT, PLANNING, MANUFACTURING & QUALITY CONTROL DEPUTY PRESIDENT & CHIEF FINANCIAL OFFICER ASSISTANT VICE PRESIDENT MANUFACTURING SENIOR VICE PRESIDENT MANUFACTURING GENERAL MANAGER - MATERIALS ASSISTANT VICE PRESIDENT - FINANCE & ACCOUNTS CHIEF OPERATING OFFICER - REGIONAL PROFIT CENTRE (NORTH) CHIEF OPERATING OFFICER - REGIONAL PROFIT CENTRE (SOUTH) ASSISTANT VICE PRESIDENT - CORP MEDIA ASSISTANT VICE PRESIDENT MANUFACTURING DIVISIONAL VICE PRESIDENT - REGIONAL MANUFACTURING HEAD (NORTH) DIVISIONAL VICE PRESIDENT - FINANCE EXECUTIVE VICE PRESIDENT - FINANCE & ACCOUNTS SENIOR GENERAL MANAGER - BUSINESS DEVELOPMENT DIVISIONAL VICE PRESIDENT - FINANCE SENIOR GENERAL MANAGER - ACCOUNTS PRESIDENT & CHIEF FINANCIAL OFFICER - UB GROUP SENIOR VICE PRESIDENT - HR GENERAL MANAGER - TAXATION 3,161,037
B.COM, PGDPM (IISWBM ) M.COM.
33 LALIT GUPTA 34 LAXMI NARASIMHAN 35 M A HAMEED 36 MAHESH NEDUNGADI 37 MATHEW XAVIER 38 MOHAN P MEDEIRA 39 MOHANTY B K 40 MONGIA S K 41 N R RAJSEKHER 42 NAGAPPA G S 43 NANDINI VERMA 44 NAVRATAN DUGAR 45 P A MURALI 46 P SRIRAM 47 P.N. PODDAR 48 P.V. ACHAR 49 PADMANABHAN N R 50 PARAMJIT SINGH GILL 51 PHILIP SARGUNAR A B 52 PRAKASH MIRPURI 53 PRATIP SEN 54 R SATSANGI 55 R.N. PILLAI 56 RAGHUNATHAN A 57 RAJA R PETER 58 RAJIV SURI 59 RANAJOY SARKAR* 60 RAVI NEDUNGADI.A.K. 61 ROBIN BASU* 62 S ANANDA PRASAD
49 39 52 49 45 51 55 68 53 54 54 65 51 49 56 57 52 47 60 46 57 52 53 57 50 52 58 51 50 56
5,105,868 5,781,485 3,366,006 2,802,274 5,954,224 3,246,935 2,534,637 3,611,808 12,493,979 4,835,691 7,470,077 15,198,254 18,680,713 4,606,605 6,523,806 2,686,430 3,816,458 7,272,217 15,730,324 2,811,797 3,988,859 4,914,504 3,859,614 8,180,984 2,446,835 5,047,917 3,237,286 26,126,482 4,074,211 2,784,284
BSC., LLB., DLL B.E, PGDM B.COM B.COM (HONS), ACS PGDM / B.COM B.SC (HONS), PGDSM, DBMM BA M.SC, DEF SC. B.SC B.SC BA (HONS), IFDAF B.COM, M.COM, MBA, MCIM B.COM, ACA B.TECH, PGDPM M.TECH, DMS B.COM, MBA, DIP IN MM B.COM, CA B.SC, D LL-CHARTERED MARKETER, M.PHIL BA, MA PGD B.TECH (CHEM), PGDBM B.TECH (MECH) CA B.COM, ACA BE B.COM (HONS), MBA, ACA, B.COM (HONS), AICWA B.COM (HONS), AICWA, ACA B.COM, MBA B.COM.,LL.B.,
26 15 25 26 20 31 32 51 30 34 37 40 28 26 33 38 26 26 39 26 35 30 33 34 20 31 33 30 24 35
1-Jun-98 8-Dec-03 1-Apr-03 6-May-96 10-Nov-03 17-Apr-84 20-Jul-77 2-Aug-93 8-Apr-82 1-Aug-75 13-Apr-07 1-May-01 5-Jul-93 4-Jan-95 1-Jan-88 11-Jan-88 31-Aug-94 1-Dec-07 20-Nov-02 9-Apr-07 24-Nov-03 19-Feb-96 1-Mar-86 24-Sep-79 16-Jul-07 16-May-94 1-Dec-86 1-Jan-90 20-Mar-07 1-Jul-84
Joint Manager - Legal, Shriram Foods & Fertilizers Regional Manager, Coca Cola India Branch Sales Manager, Seagram Manufacturing Private Limited Company Secretary, Nova Granites (India) Limited Vice President Marketing, Erstwhile Shaw Wallace Distilleries Limited Sales Assistant, Fibreglass Pilkington Limited NA Commodore-Indian Navy Vice President - Sales, erstwhile Shaw Wallace Distilleries Limited Executive, erstwhile Herbertsons Limited Vice President - Corporate Affairs & Public Relation, Jet Airways Adviser, Balaji Group of Companies Executive Vice President & Chief Financial Officer, United Breweries Limited Assistant Vice President - Manufacturing, erstwhile Shaw Wallace Distilleries Limited Production Manager, Union Carbide (I) Limited Ideal Jawa (I) Pvt Limited, Senior Stores Officer Accounts Superintendent, Schrader Duncan Limited Executive Vice President, United National Breweries (SA) (Pty) Limited, Centurion Executive Director & Chief Reputation Officer, The Empee Distilleries Limited Director - Client Services, Ipan Chief Executive Officer, Vivada Chemicals Private Limited Plant Manager, Pepsico India Holding Limited Accountant, Royal Oman Police Executive Vice President - Finance & Accounts, erstwhile Herbertsons Limited General Manager and Head Marketing Alliances, Tata Teleservices Limited Senior Manager - Marketing Finance, Reliance Industries Limited Western India Industries Group Finance Director, UB International Limited., U.K. Senior Vice President - HR, Berger Paints Assistant Manager - Accounts, Mysore Wine Products Limited
Contd...
10 8
STATEMENT OF PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956 AND COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975
SL. No NAME AGE DESIGNATION/ NATURE OF DUTIES REMUNERATION (Rs.) QUALIFICATION DATE OF EXPERICOMMENCEENCE PARTICULARS OF PREVIOUS MENT OF IN EMPLOYMENT EMPLOYYEARS MENT 27 1-Dec-87 Accounts Assistant, Kesarval Beverages Limited 34 13-Aug-75 NA 32 1-Sep-89 Assistant Manager (Works), Shri Shadilal Enterprises Limited 47 5-Apr-94 Managing Director, erstwhile Herbertsons Limited 37 14-Nov-82 Quality Control Officer, Jagatjit Industries Limited 25 29 27 22 12 29 34 35 36 28 32 38 27 31 38 37 23 27 18 24 7-Mar-91 21-Jul-89 10-Feb-89 19-Nov-08 18-Sep-00 18-Sep-08 6-Jul-84 5-Oct-84 13-Jan-06 20-Jan-89 1-Jul-82 16-Mar-83 12-Apr-83 16-Jun-86 3-Jan-72 20-Aug-82 4-Oct-90 15-Jun-98 25-Oct-06 19-Aug-03 Deputy Manager - Finance, UB Hoppecke Energy Products Limited Accounts Officer, BPL Sanyo Limited Purchase Officer, Sundaram - Clayton Limited Head HR - Network, Supply Chain - India & Er - SE Asia, Motorola India Private Limited Marketing Officer - Flash Lights, Eveready Industries India Limited Vice President, Aditya Birla Group, Stores And Purchase Officer, Kartnataka Oxygen Limited Executive Director - Chairman's Office, erstwhile Herbertsons Limited General Manager - Distillery, A B Sugars Limited Assistant Manager - Purchase, Astra Idl Limited, Bangalore NA Controller - Systems, UBICS Limited General Manager - Sales, erstwhile Shaw Wallace Distilleries Limited Manager-Branch Services, Deccon Marketing Limited Regional Director, UB International Limited., U.K. Deputy Company Secretary, United Breweries Limited Manager - Technical Service, Associated Drug Company Private Limited Deputy General Manager, Shaw Wallace & Company Limited Seagram Manufacturing Private Limited Managing Director, Adroit Tech Solutions Limited
63 S R AINAPUR 64 S.A. BAGI 65 S.C.SINGHAL 66 S.D.LALLA 67 S.K. RASTOGI 68 S.N. PRASAD 69 S.SATISH 70 S.SURYANARAYANAN 71 SANJAY RAINA* 72 SANJAY ROY 73 SATENDRA CHAUDHARY* 74 SATISH NAIR 75 SHARMA V K 76 SHIV KUMAR GUPTA 77 SUDARSHAN V ACHARYA 78 SUKHVINDER SINGH 79 T K SUBRAMANIAN 80 T SAMBANDASAMY 81 T.V. SUBRAMANIAN 82 V K REKHI 83 V S VENKATARAMAN 84 V.MURALI 85 VIVEK PRAKASH 86 WILLIAM DEVADASS 87 ZEYN MIRZA
51 55 56 65 55 51 49 49 44 35 50 57 66 56 50 58 58 50 54 63 55 47 48 41 46
ASSISTANT VICE PRESIDENT - ACCOUNTS 4,544,664 SENIOR GENERAL MANAGER - DISTILLERY 3,186,601 DIVISIONAL VICE PRESIDENT - MANUFAC- 4,944,857 TURING (EAST) JOINT PRESIDENT - OVERALL OPERATIONS 36,046,105 DIVISIONAL VICE PRESIDENT - Quality 5,357,745 Control DIVISIONAL VICE PRESIDENT - FINANCE 4,956,553 ASSISTANT VICE PRESIDENT - PLANNING & CONTROL ASSISTANT VICE PRESIDENT - ENGINEERING EXECUTIVE VICE PRESIDENT - HUMAN RESOURCES HEAD - MARKETING & SALES - WINES SENIOR GENERAL MANAGER - HR ASSISTANT VICE PRESIDENT - MATERIALS EXECUTIVE DIRECTOR - CHAIRMANS OFFICE ASSISTANT VICE PRESIDENT - DISTILLERY DIVISIONAL VICE PRESIDENT - RAW MATERIALS & OVERSEAS SUPPLY CHAIN SENIOR GENERAL MANAGER - DISTILLERY DIVISIONAL VICE PRESIDENT - SYSTEMS DIVISIONAL VICE PRESIDENT - SALES 4,234,769 3,817,452 2,282,195 2,833,566 1,318,669 3,854,268 7,028,860 3,379,526 4,266,689 2,695,602 6,496,668 3,443,486
CA B.SC., DIFAT, DBM B.SC, DIFAT LC & SE, AMIE (CIVIL) M.SC., B.COM, ACA, ACS, B.COM. B.SC,B.TECH (MECH) MSW - PERSONNEL MGMT B.COM, PGDM BA, LLB, PGDPM & IR B.SC, D-STRS MGMT, MATS B.COM, MA, LLB B.SC, DIFAT B.COM., DO-MAT, DIPLABOUR LAW BA B.SC., DMS B.B.A, M.B.A M.COM. ICWA MA (HONS)., PGDBA., B.COM (HONS), ACS ME (CHEM),DBA B.COM, LLB, B.COM B.COM, DIP IN COMP, F&A, HRSE BREED
ASSISTANT VICE PRESIDENT - BUSINESS 4,659,799 DEVELOPMENTS MANAGING DIRECTOR 42,361,828 COMPANY SECRETARY & SENIOR VICE 7,193,171 PRESIDENT SENIOR GENERAL MANAGER - DISTILLERY 2,813,692 SENIOR VICE PRESIDENT - CSD SALES SENIOR GENERAL MANAGER - INST SALES & TRADE MKTG SENIOR GENERAL MANAGER - BUSINESS DEVELOPMENT 7,521,889 2,792,350 2,728,074
* Employed for part of the year Notes: 1. No Employee is on Contract Employment. Other Terms and Conditions are as per Service Rules of the Company from time to time. 2. None of the above mentioned employees is related to any Director of the Company. 3. Remuneration as shown above includes Salary, House Rent Allowance, Company's contribution to Provident Fund and Super Annuation Fund, Value of Residential Accomodation, Bonus, Medical and other facilities.
By Authority of the Board
Bangalore July 29, 2009
Dr. VIJAY MALLYA Chairman
11 9
Corporate Governance Report
1.
COMPANYS PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE Your Company is committed to good Corporate Governance on a continuous basis by laying emphasis on ethical corporate citizenship and establishment of good corporate culture. Your Company adheres to the highest level of integrity, fairness and transparency in all its operations and believes that its operations and action must result in sustained growth and long term benefits to all its stakeholders.
Chairman, a Managing Director and five other Non Executive Directors. During the financial year under review, Seven
Board Meetings were held, i.e., on April 21, 2008, July 21, 2008, September 22, 2008, October 21, 2008, November 29, 2008, December 26, 2008 and January 21, 2009. Attendance of each Director at the Board Meetings and the last Annual General Meeting and details of number of outside Directorship and Committee position held by each of the Directors as on date are given below: Attendance at last AGM held on December 26, 2008 Yes Yes Yes Yes Yes Yes Yes No. of other Companies in which Director 24 11 3 5 8 2 1 No. of committees (other than the company) in which Chairman/ Member 1 (Chairman of 1) 8 (Chairman of 4) Nil 2 (Chairman of 2) 1 (Chairman of 1) Nil Nil
2.
BOARD OF DIRECTORS The Board of Directors comprises a Non - Executive Category of Directorship Non Executive Chairman Non Executive Vice Chairman Executive / Managing Director Independent Non Executive Director Independent Non Executive Director Independent Non Executive Director Independent Non Executive Director No. of Board Meetings attended 5 7 6 7 7 3 4
Name of Director
Dr. Vijay Mallya Mr. S.R. Gupte Mr. V.K. Rekhi Mr. M.R. Doraiswamy Iyengar Mr. B.M. Labroo Mr. Sreedhara Menon Mr. Sudhindar Krishan Khanna NOTE:
The above details are in respect of their Directorship only in Indian Companies. a) Out of 24 other Companies in which Dr. Vijay Mallya is a Director, 9 are Private Limited Companies and 2, Section 25 Companies. b) Out of 11 other Companies in which Mr. S.R. Gupte is a Director, 2 are Private Limited Companies and 1, Section 25 Company. c) Out of 5 other Companies in which Mr. M.R. Doraiswamy Iyengar is a Director, 4 are Private Limited Companies. d) Out of 8 other Companies in which Mr. B.M. Labroo is a Director, 4 are Private Limited Companies. e) Out of 4 other Companies in which Mr. V.K. Rekhi is a Director, 1 is Private Limited Company and 1, Section 25 Company. f) The other Company in which Mr. Sudhindar Krishan Khanna is a Director is a Private Limited Company. g) None of the Directors is related to any other Director.
10 12
Corporate Governance Report (Contd.)
DISCLOSURES REGARDING RE-APPOINTMENT OF DIRECTORS
APPOINTMENT
AND
Directors retiring by rotation and being reappointed : Mr. Sreedhara Menon Mr. Sreedhara Menon (Mr. Menon), aged 72 years, is the Chairman of the Board and Strategic Advisor of VITEOS Capital Market Services Limited, a business Process Outsourcing Company in India with a Sister Company located at Piscataway, New Jersey, U.S.A. Mr. Menon has previously held senior positions as Deputy President and Member of the Board of Directors of American Express Bank Limited, Chairman of the Board of Directors of American Express Bank International, Managing Director, Emerging Markets Group at Lehman Brothers Inc., New York and General Partner and Vice Chairman of RRE Ventures, LLC. Mr. Menon has served as a Member of the Board of Directors of U.S.-India Business Council, Asean-U.S. Business Council, President of the IndiaAmerica Chamber of Commerce in New York, etc. Mr. Menon holds Masters Degree in Economics from Maharajas College of the University of Kerala, India. He resides in Short Hills, New Jersey, U.S.A. Details of Mr. Menons directorships in other Indian Companies and Committee Memberships are as under:Other Directorships 1. 2. Viteos Capital Markets Services Limited Viteos Fund Services Limited Position held Director Director
The Fellowship Award 2003 the Institute of Directors, New Delhi Global Leader for Tomorrow World Economic Forum, Davos, Switzerland Sir M. Visvesvaraya Memorial Award instituted by the Federation of Karnataka Chambers of Commerce. The prestigious Lgion dHonneur award by the Government of France in 2008.
Dr.Mallya was a Member of the Rajya Sabha from 2002 to 2008. Details of Dr. Mallyas directorships in other Indian Companies and committee memberships are as under:Other Directorships 1. Aventis Pharma Limited 2. Bayer CropScience Limited 3. Kingfisher Airlines Limited 4. Mangalore Chemicals and Fertilizers Limited 5. McDowell Holdings Limited 6. Shaw Wallace & Company Limited 7. United Breweries Limited 8. United Breweries (Holdings) Limited 9. Deccan Charters Limited 10. Four Seasons Wines Limited 11. Shaw Wallace Breweries Limited 12. United Racing and Bloodstock Breeders Limited 13. Royal Challengers Sports Private Limited 14. Kamsco Industries Private Limited 15. Mallya Private Limited 16. Millennium Alcobev Private Limited 17. Pharma Trading Company Private Limited 18. The Gem Investment & Trading Co Private Limited 19. United East Bengal Football Team Private Limited 20. United Mohun Bagan Football Team Private Limited 21. VJM Investments Private Limited 22. DCL Holdings Private Limited 23. Motorsports Association of India 24. SWEW Benefit Company Position held Chairman Chairman Chairman & CEO Chairman Chairman Chairman Chairman Chairman Vice-Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Vice Chairman Management Committee Member Management Committee Member
Mr. Menon is a Member of the Audit Committee of the Company. Mr. Menon does not hold any share in the Company and is not related to any other Director. Dr. Vijay Mallya Dr. Vijay Mallya (Dr. Mallya), aged 53 years, who holds a Ph.D.in Business Administration, is a well-known Industrialist and is the Chairman of the Board of Directors of the Company. He took over the reins of the United Breweries Group in 1983 at the young age of 28, which today is a multi-national conglomerate. Dr. Mallya is the Chairman of several public Companies both in India as well as overseas. Dr. Mallya has won wide recognition from distinguished institutions throughout the span of his career, which includes:
He is the Chairman of the Remuneration Committee of Millennium Alcobev Private Limited. Dr. Mallya holds 10 equity shares in the Company and is not related to any other Director.
11 13
3.
AUDIT COMMITTEE Mr. Sreedhara Menon, a Non Executive Independent Director was inducted to the Audit Committee of Directors on March 20, 2009. Mr. Sreedhara Menon, who presently resides in U.S.A. has held various senior positions in Indian and Overseas Banking Institutions as well as Capital Market Intermediaries. The Audit Committee constituted on April 19, 2001 to meet the requirements under both the Listing Agreement and Section 292A of the Companies Act, 1956, comprises at present the following Directors: Mr. M.R. Doraiswamy Iyengar (Chairman) Mr. S.R. Gupte Mr. B.M. Labroo Mr. Sreedhara Menon Non Executive Independent Director Non Executive Director Non Executive Independent Director Non Executive Independent Director
e)
Reviewing the adequacy of internal audit function including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. Discussion with internal auditors any significant findings and follow up thereon.
f)
g) Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board. h) Discussion with statutory auditors before the audit commences nature and scope of audit as well as have post-audit discussions to ascertain any area of concern. i) j) Reviewing the Companys management policies. financial and risk
The terms of reference of the Audit Committee covers all matters specified under the Listing Agreement as well as the provisions of Section 292A of the Companies Act, 1956 and inter alia, includes the following: a) Oversight of the Companys financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.
To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors.
b) Recommending the appointment and removal of external auditor, fixation of audit fee and also approval of payment for any other services. c) Reviewing with management the annual financial statements before submission to the Board, focusing primarily on: Any changes in accounting policies and practices Major accounting entries based on exercise of judgment by management Qualifications in draft audit report Significant adjustments arising out of audit Compliance with Stock Exchange and legal requirements concerning financial statements Disclosure of any related party transactions.
The Committee, inter alia, has reviewed the financial statements including Auditors' Report for the year ended March 31, 2009 and has recommended its adoption. In addition, the Committee has also reviewed quarterly results for June 30, 2008, quarterly and half yearly results for September 30, 2008, quarterly results for December 31, 2008 and quarterly results for March 31, 2009, which were subjected to a Limited Review by the Statutory Auditors of the Company. During the financial year, five meetings were held i.e., on April 21, 2008, July 21, 2008, October 21, 2008, November 29, 2008, and January 21, 2009. The details of attendance by members of the Committee are as below: Name of the Director Mr. M.R. Doraiswamy Iyengar (Chairman) Mr. S.R. Gupte Mr. B.M. Labroo Mr. Sreedhara Menon* No. of Meetings 5 5 5 Meetings attended 5 5 5 -
d) Reviewing with the management, external and internal auditors, the adequacy of internal control systems.
* Appointed as Member of the Committee w.e.f. March 20, 2009.
12 14
4.
COMPENSATION COMMITTEE The Compensation Committee constituted by the Company comprises at present the following Directors:Mr. B.M. Labroo, Chairman Mr. S.R. Gupte Mr. M. R. Doraiswamy Iyengar The Committee is authorised, inter alia, to deal with the matters related to compensation by way of salary, perquisites, benefits etc. to the Managing/Whole Time Directors of the Company and set guidelines for salary, performance pay and perquisites to other senior employees from the level of Executive Vice President and above. The Committee is also empowered to formulate and implement the Scheme for grant of Stock Option to employees. During the financial year, three meetings were held i.e., on April 18, 2008, August 29, 2008 and November 29, 2008, which were attended by all the members of the Committee. Remuneration of Directors: The details of Remuneration paid/payable to the Directors during the Financial Year April 1, 2008 to March 31, 2009 are given below: a) Executive Directors Managing Director : Mr. V.K.Rekhi Salary & Performance Perquisites Retirement Allowances Linked Benefits incentive Rs. 18,062,406 Notes: 1. Mr. V.K.Rekhi (Mr.Rekhi) was appointed as the Managing Director of the Company for a period of five years with effect from April 19, 2001. The re-appointment for a further period of five years with effect from April 19, 2006 and the remuneration payable have been approved by the Members at the Annual General Meeting Rs. 17,084,564 Rs. 3,275,101 Rs. 3,939,757
held on December 28, 2006 with a revision thereon approved by the Members at the Annual General meeting held on December 26, 2008. The terms and conditions of appointment and remuneration of Mr. Rekhi are as set out in the resolution and as per the rules of the Company, as applicable. 2. The employment of Mr. Rekhi is terminable on either side by giving six months notice as per the rules of the Company. 3. There is no severance fee. 4. No stock option was granted during the year. b) Non Executive Directors Sitting Fees are paid to Non-Executive Directors for attending Board/ Committee Meetings. They are also entitled to reimbursement of actual travel expenses, boarding and lodging, conveyance and incidental expenses incurred for attending such meetings. Name of the Director Dr Vijay Mallya Mr. S.R. Gupte Mr. V.K.Rekhi Mr. M.R.Doraiswamy Iyengar Mr. B.M. Labroo Mr. Sreedhara Menon Mr. Sudhindar Krishan Khanna Sitting fees Nil 290,000 Nil 490,000 320,000 Nil 80,000
Non Executive Directors are also eligible for Commission every year not exceeding one per cent of the net profits of the Company as approved by the shareholders at the Annual General Meeting held on September 23, 2005 to remain in force for a period of five years from April 1, 2006. Such Commission may be apportioned amongst the Directors in any manner they deem fit. The Commission of Rs.48,726,790/- on profits for the year ended March 31, 2009 will be paid after adoption of Accounts by Shareholders at the Annual General Meeting to be held on September 30, 2009 and apportioned amongst the Directors in any manner they deem fit.
13 15
c)
Particulars of Equity Shares in the Company currently held by the Directors, are furnished below: Name of the Director Dr Vijay Mallya Mr. S.R. Gupte Mr. V.K.Rekhi* Mr. M.R.Doraiswamy Iyengar Mr. B.M. Labroo Mr. Sreedhara Menon Mr.S.K.Khanna * held jointly No. of Shares held 10 Nil 8,452 21 136,200 Nil 4,489 6.
new share certificates on account of certificates lost, defaced, etc., and for other routine operations such as issue of powers of attorney, operation of bank accounts, etc. The Committee comprises at present the following Directors: Mr. S.R. Gupte Mr. M.R. Doraiswamy Iyengar Mr. V.K. Rekhi and Mr. B.M. Labroo GENERAL BODY MEETINGS The details of the last three Annual General Meetings held are furnished as under:
Financial Year ended March 31, 2006 Date Time Venue Dr. B.R. Ambedkar Bhavana, Millers Road, Vasanthanagar, Bangalore - 560 052. Good Shepherd Auditorium, Opposite St. Josephs PreUniversity College, Residency Road, Bangalore 560 025 Dr. B.R. Ambedkar Bhavana, Millers Road, Vasanthanagar, Bangalore - 560 052.
5.
SHAREHOLDERS / INVESTORS GRIEVANCE COMMITTEE A Shareholders / Investors Grievance Committee was constituted on April 19, 2001, to operate in terms of the provisions related thereto in the Listing Agreements with the Stock Exchanges and /or the provisions as prescribed or as may be prescribed in this regard by the Companies Act, 1956. The Committee comprises at present the following Directors: Mr. M.R. Doraiswamy Iyengar, Chairman Mr. B.M. Labroo Mr. V.S. Venkataraman, Compliance Officer. During the financial year four meetings were held i.e., on April 21, 2008, August 2, 2008, October 21, 2008 and January 21, 2009 and attended by both Mr. M.R. Doraiswamy Iyengar and Mr. B. M. Labroo, Members of the Committee. The Company / Companys Registrars received 151 complaints during the financial year, all of which were resolved to the satisfaction of the shareholders/ investors. There are no complaints or Transfer of Shares pending as on March 31, 2009. The Company also has a Committee of Directors with authority delegated by the Board of Directors, inter alia, to approve transfer and transmission of shares, issue of Company Secretary is the
December, 28, 11.00 2006 a.m.
March 31,2007
November, 28, 3.30 2007 p.m.
March 31, 2008
December 26, 10.15 2008 a.m.
All the resolutions set out in the Notices, including Special Resolutions were passed by the Shareholders. POSTAL BALLOT The Company has not passed any resolution at the above Annual General Meetings held which was required to be passed through postal ballot as per the provisions of the Companies Act, 1956 and the rules framed thereunder. No resolution was passed through Postal Ballot during 2008-09. At this meeting also there is no Ordinary or Special Resolution requiring passing by way of Postal Ballot.
14 16
7.
DISCLOSURES During the financial year ended March 31, 2009, there were no materially significant related party transactions with its promoters, the Directors or the management, their subsidiaries or relatives, etc. that may have potential conflict with the interests of the Company at large. Details of related party transactions forms part of Notes on Accounts. The Company has complied with all the statutory requirements comprised in the Listing Agreements/ Regulations/Guidelines/Rules of the Stock Exchanges/ SEBI/other statutory authorities. There were no instances of non-compliance by the Company nor have any penalties, strictures been imposed by Stock Exchanges or SEBI or any other statutory authority since incorporation of the Company on any matter related to capital markets. Code of Conduct In compliance with Clause 49 of the Listing Agreement with the Stock Exchanges, the Company has adopted a Code of Business Conduct and Ethics for its Board Members and Senior Management Personnel, a copy of which is available at the Companys website, www.unitedspirits.in. All the members of the Board and the senior management personnel had affirmed compliance with the Code for the year ended March 31, 2009 and a declaration to this effect signed by the CEO is forming part of this report. Pursuant to the requirements of SEBI (Prohibition of Insider Trading) Regulations, 1992, the Company has adopted a Code of Conduct for prevention of Insider Trading. This Code is applicable to all the Directors and designated employees of the Company.
www.corpfiling.co.in, which is jointly owned, managed and maintained by Bombay Stock Exchange Limited and National Stock Exchange of India Limited The Company has designated an exclusive Email id viz. uslinvestor@ubmail.com to enable the investor to post their grievances and monitor its redressal. 9. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management Discussion & Analysis Report is appended and forms an integral part of this Annual Report. 10. GENERAL SHAREHOLDER INFORMATION
a) Wednesday, September 30, 2009 at 2.00 p.m. at Good Shepherd Auditorium, Opposite St. Josephs Pre-University College, Residency Road, Bangalore 560 025. b) Financial Year April 1 to March 31 First Quarterly Results By July 31 Second Quarterly Results By October 31 Third Quarterly Results By January 31 Fourth quarterly Results By April 30 c) Date of Book Closure Thursday, September 24, 2009 to Wednesday, September 30, 2009 (both days inclusive) d) Dividend payment date After September 30, 2009 e) Listing on Stock The shares of the Company are Exchanges: listed on the following Stock Exchanges: 1. 2. 3. Bangalore Stock Exchange Limited (BgSE) Bombay Stock Exchange Limited, (BSE) National Stock Exchange of India Limited (NSE) AGM Date, Time and Venue
8.
MEANS OF COMMUNICATION The unaudited quarterly and half-yearly results are sent to all the Stock Exchanges where the shares of the Company are listed. The results are normally published in Business Standard (English Daily) and Kannada Prabha (Kannada Daily). The results are displayed on the Companys Website www.unitedspirits.in. The required disclosures to the extent applicable including results were also posted in the portal
The listing fees for the years 2008-09 and 2009-10 have been paid to all the Stock Exchanges. Companys Equity Shares were delisted from Delhi Stock Exchange Limited during the year 2008-09. The Equity Shares of your Company continue to remain listed on Bangalore Stock Exchange Limited, Bombay Stock Exchange Limited and National Stock Exchange of India Limited.
f) Stock Code BSE NSE BgSE g) ISIN No. h) Market price data Demat 532432 Physical 32432 SYMBOL - McDOWELL-N McDowell INE854D01016 As per Annexure A
15 17
i) j)
Stock performance in comparison to BSE sensex Registrar and Transfer Agents
As per Annexure B Alpha Systems Private Limited Registered Office: 30, Ramana Residency, 4th Cross, Sampige Road, Malleswaram, Bangalore 560 003 Tel. Nos. (080) 2346 0815-818 Fax No. (080) 2346 0819 Email: alfint@vsnl.com The power to consider and approve share transfers / transmission / transposition / consolidation / subdivision etc. has been delegated to a Committee of Directors as indicated under the heading Shareholders / Investors Grievance Committee. The Committee meets generally once in a fortnight. The requirements under the Listing Agreement / Statutory regulations in this regard are being followed. As per Annexure C 94.57% of paid-up share capital is held in dematerialised form. 5514 Global Depository Shares (GDSs) representing 2757 Equity Shares of Rs.10/- each as on March 31, 2009 (2 GDSs representing one equity share of Rs.10/- each) 1. Cherthala (Kerala) 2. Hyderabad I (Andhra Pradesh) 3. Hyderabad II (Andhra Pradesh) 4. Ponda (Goa) 5. Hathidah (Bihar) 6. Kumbalgodu (Karnataka) 7. Rosa (Uttar Pradesh) 8. Udaipur (Rajasthan) 9. Serampore (West Bengal) 10. Bhopal - I(Madhya Pradesh) 11. Bhopal - II (Madhya Pradesh) 12. Asansol (West Bengal) 13. Nasik-I (Maharashtra) 14. Nasik-II (Maharashtra) 15. Pondicherry (Pondicherry) 16. Alwar (Rajasthan) 17. Aurangabad (Maharashtra) 18. Meerut (Uttar Pradesh) 19. Hospet (Karnataka) 20. Pathankot (Punjab) 21. Palwal (Hariyana) 22. Gopalpur - on - sea (Orissa) 23. Palakkad (Kerala) 24. Baddi (Himachal Pradesh) 25. Badrakali (West Bengal) 26. Baramati (Maharashtra) 27. Zuari Nagar (Goa)
p) Address for correspondence
Shareholder correspondence should be addressed to the Companys Registrars and Transfer Agents: Alpha Systems Private Limited Registered Office: 30, Ramana Residency, 4th Cross, Sampige Road, Malleswaram, Bangalore 560 003. Tel. Nos. (080) 2346 0815-818 Fax No.080 2346 0819 Email: alfint@vsnl.com Investors may also write or contact the Company Secretary, Mr. V.S. Venkataraman or Mr. Maloy Kumar Gupta, Sr. Manager Secretarial at the Registered Office of the Company at UB Tower, No.24, Vittal Mallya Road, Bangalore 560 001. Tel. Nos. (080) 3985 6500, 22210705. Fax No. (080) 3985 6862, 3985 6959. In compliance with the provisions of Clause 47(f) of the Listing Agreement with the Stock Exchanges, an exclusive email Id, viz. uslinvestor@ ubmail.com has been designated for registering complaint and its redressal by the Investor, which has been displayed on the website of the Company, www.unitedspirits.in.
k)
Share Transfer System
l)
Distribution of Shareholding m) Dematerialisation of shares n) Outstanding GDRs/ ADRs/ Warrants or any other Convertible instruments o) Plant Locations
NON MANDATORY REQUIREMENTS

a) Chairman of the Board Whether Chairman of the Board is entitled to maintain a Chairmans Office at the Companys expenses and also allowed reimbursement of expenses incurred in performance of his duties. b) c) Remuneration Committee Shareholders Rights: The half yearly declaration of financial performance including summary of the significant events in the last 6 months should be sent to each household of shareholders. The Companys half-yearly results are published in English and Kannada Newspapers. Hence, the same are not sent to the shareholders. Dr. Vijay Mallya The Company maintains the Chairmans Office at Companys expenses and also reimburses the expenses incurred in performance of his duties.
The Company has formed a Compensation Committee.
The Company has not adopted Whistle Blower Policy being non-mandatory.
16 18
ANNEXURE A: MARKET PRICE DATA

United Spirits Limited - Monthly BSE Month High Low Volume Apr-08 1,873.00 1,482.00 802,029 May-08 1,709.90 1,501.25 766,135 Jun-08 1,699.00 1,210.00 585,163 Jul-08 1,323.40 1,006.55 1,075,394 Aug-08 1,415.50 1,215.00 358,514 Sep-08 1,408.50 1,162.00 3,042,941 Oct-08 1,297.00 606.00 3,573,868 Nov-08 974.80 676.00 2,053,035 Dec-08 981.90 775.00 865,758 Jan-09 1,016.90 425.65 26,512,374 Feb-09 744.90 529.80 43,727,942 Mar-09 718.00 546.20 19,757,155 Month Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 United Spirits Limited - Monthly NSE High Low 1,873.70 1,480.00 1,727.00 1,500.00 1,692.90 1,215.00 1,328.00 1,006.00 1,417.00 1,248.00 1,471.00 1,140.00 1,299.50 606.00 984.70 677.50 1,000.05 765.15 1,015.00 426.05 744.80 530.00 716.95 532.00 Volume 3,746,793 5,515,773 3,745,889 5,003,178 2,466,541 4,984,128 8,943,412 6,252,973 3,614,850 50,709,696 88,137,465 50,955,864
ANNEXURE B: UNITED SPIRITS LIMITED - STOCK PERFORMANCE COMPARED TO BSE SENSEX
ANNEXURE C: DISTRIBUTION OF SHARE HOLDINGS AS ON MARCH 31, 2009

VALUEWISE Shareholding of nominal value Rs. Upto 5,000 5,001 10,000 10,001 20,000 20,001 30,000 30,001 40,000 40,001 50,000 50,001 100,000 100,001 and above Total Shareholders Number 79,573 1,009 403 151 78 59 91 252 81,616 Share Amount % to Total 6.34 0.76 0.57 0.38 0.27 0.28 0.64 90.76 100.00 CATEGORYWISE
Category Promoter Group Resident Body Corporate Banks/FI/FII/MF/Trust NRI/OCB/FCB GDS Resident Individuals Total
% to Rs. Total 97.50 63,466,510 1.24 7,646,190 0.49 5,757,050 0.19 3,810,740 0.10 2,725,840 0.07 2,763,850 0.11 6,422,970 0.31 9,090,39,410 100.00 1,001,632,560
No. of Shares 36,628,260 15,938,471 38,120,824 1,418,478 2,757 8,054,466 100,163,256
% of Equity Capital 36.57 15.91 38.06 1.42 0.00 8.04 100.00
17 19
CERTIFICATE ON CORPORATE GOVERNANCE

The Members of United Spirits Limited We have examined the compliance of conditions of Corporate Governance by United Spirits Limited, for the year ended on March 31, 2009 as stipulated in Clause 49 of the Listing Agreement, as amended, of the said Company with Stock Exchanges in India. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. We state that in respect of investor grievances received during the year ended on March 31, 2009, no grievances are pending against the Company as per the records maintained by the Company and presented to the Shareholders/Investors Grievance Committee. We further state that such compliance is neither an assurance as to future viability of the Company nor the efficiency of effectiveness with which the management has conducted the affairs of the Company.
Bangalore July 29, 2009
M.R. GOPINATH Company Secretary (in practice) FCS 3812 CP 1030
CEO/CFO CERTIFICATE
In terms of the requirement of the amended Clause 49 of the listing agreement with the Stock Exchanges, the certificates from CEO/CFO have been obtained. Bangalore July 29, 2009 V.K. REKHI Managing Director
DECLARATION REGARDING AFFIRMATION OF CODE OF CONDUCT

In terms of the requirement of the amended Clause 49 of the Listing Agreement, Code of Conduct as approved by the Board of Directors of the Company on December 30, 2005 had been displayed at the Companys website www.unitedspirits.in. All the members of the Board and the senior management personnel had affirmed compliance with the Code for the year March 31, 2009. Bangalore July 29, 2009 V.K. REKHI Managing Director
18 20
Annexure to Report of the Directors (Contd.)
MANAGEMENT DISCUSSION & ANALYSIS REPORT

A. INDUSTRY OVERVIEW: The Indian Alcoholic Beverages industry is a combination of branded liquors and the low-priced commodity segment that is referred to as Country Liquor. The branded beverage space is further classified into Spirits, Beer and Wine. The Spirits space consists of Indian Made Foreign Liquor (IMFL), Bottled In Origin (BIO) beverages and the Bottled In India (BII) spirits. The IMFL industry has been growing at a fast pace of 13% and for the year ended March 31, 2009 stood at 214 mio cases. Aspiration and higher disposable income propels growth at the top end, while new consumers and uptrading from country liquor spurt growth at lower end. Karnataka, where Country liquor was banned in July 2007 has particularly seen a spurt in volumes of the low-end brands. The outlook for the industry continues to be buoyant fuelled by the large and growing number of youth coming into the legal drinking age category. While countries like the USA and China are well past the demographic window, India is comparatively a young country with over half the 1.2 billion population under 25 years of the age. This offers considerable potential for the future. The progressive prohibition of country liquor will only boost the growth in other sectors, notably IMFL. B. REGULATORY ENVIRONMENT: Regulation and Taxation of the alcoholic beverages industry is a part of List II of the Seventh Schedule of the Constitution of India which places it in the jurisdiction of the State Governments and not of the Federal Government. While the Federal Government is authorized to license greenfield manufacturing units and levy customs duties on imports, every other activity including those relating to production and sale as also taxation are controlled by the State Governments. With over 28 different markets that a national organization like your Company operates in, it is a highly challenging and complex network of regulations and procedures that it has to contend with; compounding the problem is the fact that these undergo frequent changes. In July 2009, the Union Govt. again specifically targeted the alcoholic beverage sector by amending the law to tax manufacturing at contract units. The constitutional validity of this law is being questioned by the industry. C. BUSINESS ANALYSIS: During the fiscal year under review, input costs saw an unprecedented rise over the previous year, in excess of Rs. 3500 million, particularly in the price of key ingredients like alcoholic spirit Extra Neutral Alcohol (ENA) and glass. The increase in prices of ENA stemmed from a number of factors including reduced sugarcane output, increased fuel price, unremunerative sugar support prices leading to delay in crushing and a political stand off with the farmers. In earlier reports the Company had indicated that the price of spirit had increased significantly. In the current year this moved up even further and the sharp rise in fuel prices pushed it to an unprecedented level of Rs.160/case and that too in prime crushing season when prices are traditionally the lowest. Glass prices which were also impacted by the rise in fuel costs also saw an increase. The subsequent reduction in the prices of fuel has seen a nominal roll- back of the increase granted earlier. The Companys main-line brands grew by 19%, while overall growth was 20%, despite the selective defocus of low-end brands in an era of high input costs. D. MARKETING: The Companys top brands have contributed significantly to the 20% sales volume growth recorded in fiscal 2009. Signature Whisky, the premium whisky offering entered the coveted Millionaires Club, having recorded a 27% growth to sell over a million cases this fiscal. Blue Riband for long the touchstone for Gin in India also entered the Millionaires Club this year. At the end of the fiscal year, 19 brands in your Companys portfolio are members of the spirits Millionaires Club a hallowed group of brands that sell over a million cases of 9 liters each annually. McDowells No.1, the largest umbrella spirits brand in the world, sold over 31.5 million cases in the fiscal year just ended which represents a 15% growth over the previous year. McDowells No.1 Celebration Rum at over 10 million cases is now the worlds 3rd largest Rum growing in excess of 24% at a time when other Rum brands in the top 100 have either degrown or at best registered only marginal single-digit growth. The third flavor under the McDowells No.1 umbrella the Brandy - continues at its perch of the worlds largest selling brandy. Sales of the
19 21
brandy flavor were hampered by the lack of adequate capacity in Tamil Nadu, one of the largest markets for the flavor. Your Company has had a long history of investment in its brands through a continuous process of refurbishing and upgrading its offerings to the consumers apart from modifications in blends to adapt to changing palates, it also regularly upgrades the packaging to make the look & feel of the products more contemporary. As part of this concerted strategy, two key brands Royal Challenge and No.1 McDowells were revamped during fiscal 2009 and rolled out across the country in phases. As part of its well planned premiumisation strategy, the Company introduced a Vodka offering in the prestige segment called Romanov Red - this got off to a rousing launch capturing 8% market share in the very year of launch. Sales of the Companys other premium brands Black Dog Scotch Whisky, Antiquity Blue Whisky, White Mischief Vodka, DSP Black Whisky etc. continued to maintain double digit growths. During fiscal 2008 the Company had introduced the products from its overseas subsidiaries, Whyte & Mackay, Bouvet Ladubay and Liquidity Inc. to the Indian market. This process continued in 2009 with a national roll-out of these products which have all been well received in the Indian market. In the last quarter of the fiscal year, your Company introduced Whyte & Mackay Special, a blended whisky, through the BII route. Positioned in the regular scotch category, the product has received acclaim from consumers. During fiscal 2008 your Company had capitalized on a unique opportunity through investment in the the Royal Challengers Bangalore Team in the Indian Premier League of Twenty/20 Cricket Tournament. In the second year of the tournament, the response to the concept and to the team has been stronger than earlier the team ended up as the Runners-Up in the Tournament. While the franchise has been acquired in perpetuity through your Companys wholly owned subsidiary M/s.Royal Challengers Sports Private Limited, your Company will use the association as an effective platform to fuel the growth of its premium offerings through well thoughtout strategies.
E.
RISKS & CONCERNS, OPPORTUNITIES & THREATS: Favourable demographies, increasing prosperity and disposable income coupled with attitudinal changes towards consumption indicate strong and sustained demand for many years ahead. The feel good factor among the young Indians translates into steady uptrading. The Company has witnessed double digits growth in the 1st line range of products. This trend is expected to continue. There is a clearly visible, though slow process of deregulation taking place and over time it is expected that these will result in increased retail penetration as also elimination of several infructuous regulations that add to the costs of doing business. The Alcoholic Beverages industry is the favourite target of the Governments, both Central & State, when they need to balance their budgets. As a result, the industry suffers from the twin impact of over-regulation and excessive taxation. Nearly 60% of the price of a bottle of alcohol goes to the State and local Governments towards taxes and duties. The unreasonable levels of taxation show no sign of abatement and continue to impede profitability despite continuing growth in market demand. The Government of India, in keeping with its commitment to the WTO, has been consistently reducing the import tariff on Bottled in Origin (BIO) spirits. During the fiscal year 2008 additional Customs Duty on BIO products was removed by the Central Government. The State Governments however, offer some measure of protection to the domestic industry through the levy of countervailing duties on BIO products. During fiscal 2009, shareholder communication has consistently referred to the sharp rise in the prices of the Companys key inputs viz., Molasses/Spirit as a result of reduced acreage, unreasonable support prices fixed by local Governments and increase in fuel costs. The runaway inflation in the rupee-dollar parity as also in the price of oil impacted both spirit and glass prices. An oligopolistic situation in the glass industry ensured that when international prices of oil came down, the price increase that was granted to the suppliers of glass containers was not fully rolled back. However, excise duty concessions by the Federal Govt. in two tranches in December 2008 and February 2009 helped mitigate the situation somewhat. The spurt prices of spirit in Q3 impacted margins sharply. While the situation has since corrected itself somewhat, prices continue to be high. The spectre of a failing monsoon in the current fiscal is not expected to help the
20 22
situation both in terms of supply and price. However, the situation is partially offset by reduced demand for alchol from industrial users. In order to capitalize on an emerging segment in the alcoholic beverages space viz. wines, your Company had, in 2006, acquired M/s. Bouvet Ladubay SA, France and in fiscal 2007 invested in a subsidiary M/s. Four Seasons Wines Limited. The latter company has set up a state-of-the-art winery near Baramati in Maharashtra with a capacity to produce 1 mio cases per annum. Two brands, Zinzi (Red & White) and Four Seasons (which will be progressively available in 6 varietals) are being produced at this winery. Increased awareness through exposure gained from the media as also from global travel coupled with increased consumer spending has pushed up the sales at the premium end of the market. Through a wellbalanced portfolio, both domestic and international, your Company is poised to drive significant advantages from sales of products from the Whyte & Mackay stable using the Bottled In Origin (BIO) and Bottled In India (BII) routes. The hardening of prices owing to reduced worldwide availability of matured malt of the required vintage has boosted business prospects at Whyte & Mackay. The Company is also focusing its branded spirits activity on select geographies including travel retail as against an earlier strategy that attempted a presence in every market. F. OUTLOOK: Nearly 70% of the Companys sales are made to Government buying agencies who are reluctant to grant price increases whatever the provocation. Andhra Pradesh, the largest Indian market for IMFL, continues to deny the industry even inflation-linked price increases. Notwithstanding this, the Companys efforts to convince states and these buying agencies to adapt a more pragmatic approach continue. While the lack of such increases affects the profitability of your Company, particularly at a time of rising input costs, your Company consistently endeavours to work around the problem through a mix of strategy, higher volume throughput and cost control measures. G. INTERNAL CONTROL SYSTEM: The company has a robust system of internal control which has been incorporated in the enterprise-wise SAP system. J. I.
Additional checks of the Companys systems are carried out by the independent auditors as also by the Companys own Operations Review team and by the UB Groups Internal Audit Department. H. INTERNATIONAL OPERATIONS: Subsequent to the acquisition of Whyte & Mackay, Glasgow in fiscal 2008 your Company has reinforced the management and reorganized the selling operations. Products from Whyte & Mackay, as mentioned earlier, are available in India on both BIO & BII basis. The expansion of the winery at Bouvet Ladubay to a capacity of over 8 million bottles, has been completed during the fiscal year at a cost of 12 million Euros. The Companys sales which were around 4.5 million bottles during the fiscal year continue to grow in the traditional markets as also in India where they have been introduced on a BIO basis. The technical expertise of the French wine-maker has also been used in setting up the FSWL winery near Baramati. However, sales of the BIO wines in India have been marginally hampered through the unreasonable inter-state policies of certain State Governments. HUMAN RESOURCES: The Companys human capital is now in excess of 7,000 employees, including factory workmen. There has been no loss of production at any of the manufacturing facilities due to industrial unrest. The HR Department is geared to lend its support to the effort to make the Company a employer of choice in the Indian market place. FORWARD LOOKING STATEMENTS: This Report contains forward-looking statements that involve risks and uncertainties. Your Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from these expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto By Authority of the Board Bangalore July 29, 2009 Dr. VIJAY MALLYA Chairman
21 23
Auditors' Report to the Members of United Spirits Limited
1.
We have audited the attached Balance Sheet of United Spirits Limited, as at March 31, 2009, and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.
so far as appears from our examination of those books; 4.3. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; 4.4. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act; 4.5. On the basis of written representations received from the directors, as on March 31, 2009, and taken on record by the Board of Directors of the Company, none of the directors is disqualified as on March 31, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act; 4.6. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, together with the notes thereon and attached thereto, give, in the prescribed manner, the information required by the Act and also give a true and fair view in conformity with the accounting principles generally accepted in India: i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2009; ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. J. Majumdar Partner Membership Number F 51912 For and on behalf of Price Waterhouse Chartered Accountants Place: Bangalore Date : July 29, 2009
2.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3.
As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (together the Order), issued by the Central Government of India in terms of subsection (4A) of Section 227 of The Companies Act, 1956 of India (the Act) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4.
Further to our comments in the Annexure referred to in paragraph 3 above, we report that: 4.1. We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit; 4.2. In our opinion, proper books of account as required by law have been kept by the Company
22
Annexure to the Auditors' Report
[Referred to in paragraph 3 of the Auditors Report of even date to the members of United Spirits Limited on the financial statements for the year ended March 31, 2009] 1. (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets. (b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed. (c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year. 2. (a) The inventory (except those in transit at the yearend amounting to Rs.123.794 Million) has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. (b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) On the basis of our examination of inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material. 3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act and, accordingly, sub clauses (b), (c) and (d) of clause (iii) of Paragraph 4 of the Order are not applicable. (b) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act and accordingly, sub clauses (f) and (g) of clause (iii) of Paragraph 4 of the Order are not applicable. 4. In our opinion and according to the information and explanations given to us, having regard to the 6. 5. explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets, and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section. (b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except for sale of goods aggregating to Rs.649.482 million and purchase of services aggregating to Rs.94.938 million as there are no market prices comparable to those sold/ purchased, which, however, are considered to be of special nature as explained by the management of the Company. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no Order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.
7.
23
Annexure to the Auditors' Report (Contd.)
8.
The Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act for any of the products of the Company. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, wealth tax, service tax, customs duty, excise duty and cess, and other material statutory dues, as may be applicable, with the appropriate authorities except dues with respect to sales-tax. The extent of the arrears of statutory dues outstanding as at March 31, 2009 for a period of more than 6 months from the date they became payable in respect of sales tax is as follows : Name of the statute Maharashtra Value Added Tax, 2002 Period to Nature Amount which the of (Rs. in amount dues Million) relates Sales Tax 12.938 2005-06 Due date April 1, 2006 Date of Payment Not yet paid
13. The provisions of any special statute applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not applicable to the Company. 14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments. 15. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the Company. 16. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained. 17. On the basis of an overall examination of the balance sheet of the company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment. 18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year. 19. The Company has not issued any debenture during the year.. 20. The Company has not raised any money by public issues during the year. 21. 21. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management. J. Majumdar Partner Membership Number F 51912 For and on behalf of Price Waterhouse Chartered Accountants Place : Bangalore Date : July 29, 2009
9.
(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of incometax, sales-tax, wealth tax, service tax, customs duty, excise duty and cess as at March 31, 2009, which have not been deposited on account of a dispute, are given in Appendix-1. 10. The Company has neither accumulated losses as at March 31, 2009 nor has it incurred any cash loss either during the financial year ended on that date or in the immediately preceding financial year. 11. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date. 12. In our opinion, the Company has maintained adequate documents and records in the cases where the Company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
24
Annexure to the Auditors' Report
[Referred to in paragraph 9(b) of the Annexure to the Auditors report of even date to the members of United Spirits Limited on the financial statements for the year ended March 31, 2009].
Name of the Statute The Income-Tax Act, 1961 Amount* (Rs. Million) Forum where dispute is pending Year To Which The Amount Relates 1993-94, 1994-95, 1999-00, 2000-01, 2001-02, 2002-03 to 2005-06 2003-04 2003-04, 2004-05, 2005-06 1992-93, 1994-95,1996-97 1996-06 1982-83,1984-86,1992-93,1995-96,1996-97, 1997-98,1997-00,1999-00, 2002-03, 2003-04, 2006-07 1986-90,1985-86,1986-87,1987-88, 1988-89, 1989-96,1990-91,1991-92, 1991-93, 1994-95, 1995-96,1996-97, 1997-98, 1997-01,1998-99, 1999-00, 2000-01 1984-85,1985-86,1987-88,1991-92, 1992-93, 2000-01, 2006-07, 2007-08 1984-85,1992-93, 2002-03 1999-00, 2000-01 1974-76, 1995-96,1996-97, 2002-03, 2008-09 1993-94,1995-96, 1997-98, 2003-04, 2004-05 1993-94, 2004-05, 2005-06 2002-03, 2004-05, 2005-06 1971-72,1972-73,1973-74,1977-78, 1978-79, 1979-80, 1980-81, 1981- 82, 1981-09 1963-64,1972-74,1983-84,1984-85, 1985-86, 1986-87, 1988-91, 1990-91, 1991-92,1992-93, 1993-94,1995-00, 1996-97,1997-98, 1998-99, 1998-01, 1999-00, 2000-01,2001-09,2002-03, 2003-04. 1995-96 1974-81,1980-81,1981-82,1982-83, 1983-84, 1983-85,1984-85,1984-85, 1985-86, 1986-87, 1985-87,1987-88, 1987-89, 1988-89,1989-90, 1991-92, 1991-96, 1995-96,1993-94,1995-98, 1993-96,1998-99,1999-00, 2001-02, 2002- 03, 2004-05, 2005-06. 1986-87,1992-93,1992-99,1997-98, 2001-02 1994-95 1981-84 1993-94 1994-95 1989-97,1996-97, 2004-05 1995-96, 2003-04 1995-96
126.203 Commissioner of Income-Tax Appeals 3.620 Assessing Officer 140.476 Income Tax Appelate Tribunal Commissioner of Income Tax Appeals 199.471 Supreme Court 56.825 High Court
The Wealth-Tax Act, 1957 Central and Respective State Sales Tax Acts
88.749 Appellate Tribunal
15.756 Joint Commissioner 8.848 Deputy Commissioner 0.291 Commissioner of Sales Tax 1.995 Assistant Commissioner 7.183 Assessing Officer 0.892 Appellate and Revisional board 115.431 Additional Commissioner Respective State Excise Acts 4.785 Supreme Court
265.885 High Court
17.464 Appellate Tribunal
193.185 Excise Commissioner
1.593 Excise Superintendent 1.701 District Magistrate and Collector 12.170 Chinsurah Court, Hooghly 8.311 Additional District Magistrate 0.081 Collector The Central Excise Act, 1944 6.000 Supreme Court 25.635 High Court 2.363 Commissioner of Central excise - Assistant Commissioner
* Net of amounts paid under protest or otherwise
25
Balance Sheet as at March 31, 2009
Rs. Million Schedule SOURCES OF FUNDS Shareholders' Funds Share Capital Share Capital Suspense Reserves and Surplus Loan Funds Secured Loans Unsecured Loans Foreign Currency Monetary Items Translation Difference [Schedule 18 Note 12(d)] APPLICATION OF FUNDS Fixed Assets Gross Block Less: Depreciation Net Block Capital Work in Progress Investments Deferred Tax Asset (Net) [Schedule 18 Note 17(b)] Current Assets, Loans and Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances Less: Current Liabilities and Provisions Liabilities Provisions Net Current Assets Statement on Significant Accounting Policies Notes on Accounts 17 18 7 8 9 10 11 12 1 1A 2 3 4 1,001.633 77.491 29,708.037 13,064.790 6,163.730 311.347 50,327.028 5 1,001.633 19,091.596 11,067.394 553.385 31,714.008 2009 2008
7,876.187 1,949.852 5,926.335 282.632 6,208.967 20,514.765 216.403 6,539.691 6,650.397 848.628 2,103.003 16,709.818 32,851.537 8,781.513 683.131 9,464.644 23,386.893 50,327.028
6,530.725 1,602.381 4,928.344 361.223 5,289.567 6,571.557 5.162 3,843.829 4,134.998 280.013 1,187.662 18,158.071 27,604.573 7,298.083 458.768 7,756.851 19,847.722 31,714.008
The Schedules referred to above and the notes thereon form an integral part of the Accounts. This is the Balance Sheet referred to in our report of even date J. MAJUMDAR Partner For and on behalf of Price Waterhouse Chartered Accountants Bangalore July 29, 2009 M.R.DORAISWAMY IYENGAR Director V.S.VENKATARAMAN Company Secretary Bangalore July 29, 2009 V.K.REKHI Managing Director P.A.MURALI Chief Financial Officer
26
Profit and Loss Account for the year ended March 31, 2009
Rs. Million INCOME Sales (Gross) Less: Excise Duty Income arising from Sale by Manufacturers under 'Tie-up' agreements (Tie-up units) Income from Brand Franchise Other Income Exchange Gain EXPENDITURE Materials Manufacturing and Other Expenses Interest and Finance charges (Net) Profit before Depreciation and Taxation Depreciation Profit before Taxation Provision for Taxation: Current Tax Deferred Tax (Credit) Fringe Benefit Tax Profit after Taxation Profit brought forward from previous year Profit transferred on Amalgamation [Schedule 18 Note 2(D)] Appropriations: Proposed Dividend Preference Shares Equity Shares Corporate Tax on Proposed Dividend Transfer to Capital Redemption Reserve Transfer to General Reserve Profit carried to Balance Sheet Basic Earnings Per Share (Face Value of Rs.10 each) Diluted Earnings Per Share (Face Value of Rs.10 each) Statement on Significant Accounting Policies Notes on Accounts This is the Profit and Loss Account referred to in our report of even date J. MAJUMDAR Partner For and on behalf of Price Waterhouse Chartered Accountants Bangalore July 29, 2009 M.R. DORAISWAMY IYENGAR Director V.S.VENKATARAMAN Company Secretary Bangalore July 29, 2009 V.K. REKHI Managing Director P.A. MURALI Chief Financial Officer 17 18 Schedule 2009 71,130.831 33,654.208 37,476.623 2,958.308 460.493 543.446 90.901 41,529.771 23,118.263 11,500.545 1,957.794 36,576.602 4,953.169 361.565 4,591.604 1,760.925 (186.008) 50.063 2,966.624 7,018.342 103.983 10,088.949 2008 51,784.918 23,343.103 28,441.815 2,916.525 372.903 369.138 117.879 32,218.260 15,843.843 9,913.530 1,285.113 27,042.486 5,175.774 326.112 4,849.662 1,710.000 (13.097) 40.000 3,112.759 4,411.221 7,523.980
13
14 15 16
215.825 36.679 350.000 9,486.445 27.49 27.49
1.930 150.331 25.877 77.500 250.000 7,018.342 31.84 31.40
The Schedules referred to above and the notes thereon form an integral part of the Accounts.
27
Cash Flow Statement for the year ended March 31, 2009
Rs. Million 2009 A. CASH FLOW FROM OPERATING ACTIVITIES Profit before Taxation Adjustments for: Depreciation Unrealised Foreign Exchange Loss / (Gain) Bad Debts/ Advances written off Loss/(Gain) on Fixed Assets Sold/Written Off (Net) Loss/(Gain) on Sale of Investments (Net) Liabilities no longer required written back Provision for Doubtful Debts/ Advances/ Deposits Provision for diminution in value of Investments (Net) Provision - Others Interest Expense and Finance Charges Income from investments Interest Income Operating profit before working capital changes (Increase)/decrease in Trade and other receivables (Increase)/decrease in Inventories Increase/(decrease) in Trade payables Cash generated from operations Direct taxes paid Fringe Benefit taxes paid Cash generated / (used in) from operations B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets Sale of fixed assets Finance Lease Payments Purchase of long term investments Purchase of current Investments Disposal of investment in Associate Sale of long term investments Sale of current investments Investments in Subsidiaries Reduction in investment cost Loan given to Subsidiaries Realisation of Loan from Subsidiaries Interest received Dividend received Net cash used in investing activities (106.662) 62.875 (17.259) (50.000) 10.700 38.162 45.000 (26.635) (2,694.980) 133.895 34.713 55.386 (2,514.805) (982.991) 15.883 (15.159) (5.884) (1,256.094) 1.539 1,256.094 (18.506) 87.000 (7,271.191) 417.254 93.482 50.566 (7,628.007) (5,417.056) (2,578.433) 1,915.761 (6,079.728) 748.629 (2,047.839) (43.569) (1,342.779) 361.565 (168.432) 6.005 (44.955) (3.355) (136.599) 210.345 0.030 96.372 2,008.538 (42.017) (50.744) 2,236.753 6,828.357 (1,168.960) (907.333) 2,010.196 (66.097) 6,469.843 (2,099.154) (39.950) 4,330.739 326.112 (126.572) 94.538 20.354 (97.745) 171.171 0.051 74.961 1,339.205 (61.705) (54.092) 1,686.278 6,535.940 4,591.604 4,849.662 2008
28
Cash Flow Statement for the year ended March 31, 2009 (Contd.)
Rs. Million 2009 C. CASH FLOW FROM FINANCING ACTIVITIES Redemption of Preference Shares Proceeds/(Repayment) of long term loans: Proceeds Repayment Proceeds/(Repayment) of fixed deposits Proceeds/(Repayment) of short term loans Working Capital Loan / Cash Credit from Banks (net) Interest and Finance Charges paid [including on Finance lease Rs 2.981 Million (2008: Rs 3.003 Million)] Dividends paid Corporate Tax on distributed profit Net cash used in financing activities Net (Decrease)/ Increase in cash and cash equivalents Cash and cash equivalents as at March 31, 2008 Cash and Cash equivalents of Transferor Companies as at April 1, 2008 Cash and cash equivalents as at March 31, 2009 2008
3,686.681 (2,619.985) 95.169 2,150.000 2,347.704
(77.500) 291.402 (489.661) (117.669) (100.000) 1,868.588
(1,641.688) (208.446) (25.862) 3,783.573 (74.011) 280.013 642.626 848.628 (74.011)
(1,324.793) (190.831) (18.005) (158.469) (3,455.737) 3,735.750 280.013 (3,455.737)
Notes: 1. 2. The above Cash Flow Statement has been compiled from and is based on the Balance Sheet as at March 31, 2009 and the related Profit and Loss Account for the year ended on that date. The above cash flow statement has been prepared under the indirect method as set out in the Accounting Standard - 3 on Cash Flow Statements as notified under Section 211(3C) of the Companies Act, 1956 and reallocation required for this purpose are as made by the Company. In view of the amalgamation described in Note 2 on Schedule 18, the figures of the current year are not comparable with those of previous year. Previous year's figures have been regrouped wherever necessary in order to conform to this year's presentation.
3. 4.
This is the Cash Flow Statement referred to in our report of even date
J. MAJUMDAR Partner For and on behalf of Price Waterhouse Chartered Accountants Bangalore July 29, 2009
M.R. DORAISWAMY IYENGAR Director V.S.VENKATARAMAN Company Secretary Bangalore July 29, 2009
V.K. REKHI Managing Director P.A. MURALI Chief Financial Officer
29
Schedules forming part of Balance Sheet as at March 31, 2009
Rs. Million 2009 1. SHARE CAPITAL Authorised 245,000,000 (2008: 110,000,000) Equity Shares of Rs.10/- each 84,200,000 (2008: 10,000,000) Preference Shares of Rs.10/- each [Schedule 18 Note 2(A) (IV)] Issued, Subscribed and Paid-up 100,163,256 (2008: 100,163,256) Equity Shares of Rs.10/- each fully paid up Notes : Of the above, 1. 51,719,968 (2008: 51,719,968) Equity Shares were allotted as fully paid up on July 9, 2001 to the shareholders of the erstwhile McDowell & Company Limited, pursuant to a scheme of Amalgamation for consideration other than cash 34,010,521 (2008: 34,010,521) Equity Shares were alloted as fully paid on November 6, 2006 to Equity Shareholders of erstwhile Herbertsons Limited, Triumph Distillers & Vintners Private Limited, Baramati Grape Industries Limited, United Distillers India Limited and Shaw Wallace Distilleries Limited pursuant to a Scheme of Amalgamation for consideration other than cash. 8,751,381 (2008: 8,751,381) Equity shares of Rs.10/- each fully paid up represent 17,502,762 (2008: 17,502,762) Global Depository Shares issued by the Company on March 29, 2006. 5,681,326 (2008: 5,681,326) Equity shares of Rs.10/- each fully paid up were alloted consequent to conversion of 100,000, 2% Convertible Bonds in Foreign Currency during 2008. 1,001.633 1,001.633 1,001.633 1,001.633 2,450.000 842.000 3,292.000 1,100.000 100.000 1,200.000 2008
2.
3.
4.
1A SHARE CAPITAL SUSPENSE Equity Share Suspense 7,749,121 (2008: Nil) Equity Shares of Rs.10/- each to be issued as fully paid up to the equity shareholders of Transferor Companies pursuant to the Scheme of Amalgamation for consideration other than cash [Schedule 18 Note 2(A)(I)]
77.491 77.491
30
Schedules forming part of Balance Sheet as at March 31, 2009 (Contd.)
Rs. Million 2009 2. RESERVES AND SURPLUS Central Subsidy As per last Balance Sheet Capital Redemption Reserve As per last Balance Sheet Add: Transferred from Profit and Loss Account Add: Adjustment on Amalgamation [Schedule 18 Note 2(D)] Securities Premium Account As per last Balance Sheet Addition during the year: (a) Conversion of 100,000, 2% Convertible Bonds in Foreign Currency (b) Premium payable on redemption of 2% Convertible Bonds in Foreign Currency reversed during the year Foreign Currency Translation Reserve [Schedule 18 Note 5(d)] As per last Balance Sheet Addition during the year Transfer to General Reserve on Amalgamation [Schedule 18 Note 2(B)(II)(d)] Reversed during the year due to Amalgamation [Schedule 18 Note 2(B)(II)(d)] Contingency Reserve As per last Balance Sheet General Reserve As per last Balance sheet Add:Addition during the year: (a) Reserve arising on amalgamation [Schedule 18 Note 2(A)(V)(d) and 2(B)(II)(c)] (b) Transfer from Foreign Currency Translation Reserve on amalgamation [Schedule 18 Note 2(B)(II)(d)] (c) Adjustment on Amalgamation [Schedule 18 Note 2(D)] (d) Transfer from Profit and Loss Account Less: (a) Expenses relating to Amalgamation [Schedule 18 Note 2(C)] (b) Diminution in value of certain fixed assets of the Company [Schedule 18 Note 2(A)(V)(e)] (c) Adjustment on adoption of notification under Companies (Accounting Standards) Rules, 2009 relating to AS11 - "The Effects of Changes in Foreign Exchange Rates" [Schedule 18 Note 12(d)] Surplus in Profit and Loss account 541.946 37.000 9,893.917 9,893.917 (821.948) (357.000) 144.912 570.131 (463.905) 110.000 (144.912) (677.036) (821.948) 110.000 578.946 1.500 464.446 77.500 5,457.811 4,386.163 49.943 9,893.917 541.946 2008 1.500
2,347.839 7,849.035 (144.912) 20.000 350.000 10,421.962 (146.879) (80.704)
2,097.839 250.000 2,347.839 -
(93.245)
10,101.134 9,486.445 29,708.037
2,347.839 7,018.342 19,091.596
31
Rs. Million 2009 3. SECURED LOANS Term Loans From Banks [Note (i)] [Repayable within one year: Rs.1,296.805 Million (2008: Rs.1,349.236 Million)] Working Capital Loan / Cash Credit from Banks [Notes (ii) and (iii)] Finance Lease [Note (iv)] Notes: (i) Out of the above loans: (a) (b) Secured by charge on certain fixed assets of the Company including Land and Building. Secured by charge on fixed assets of the Company including Land and Buildings, pledge of certain shares held by the Company and also by pledge of certain investments of other companies. Secured by a second charge on certain fixed assets of the Company including Land and Building. Foreign Currency External Commercial Borrowings secured by charge on certain fixed assets of the Company including Land and Building, a Trademark and a fixed deposit with bank (charge created subsequent to the year end). Secured by hypothecation of specific fixed assets acquired under respective agreements. 1,426.205 488.222 7,711.007 26.724 13,064.790 5,096.500 41.551 11,067.394 5,327.059 5,929.343 2008
2,062.499 62.500
3,907.294 125.000
(c) (d)
1,775.550 0.305
1,404.200 4.627
(e)
(ii) Secured by hypothecation of inventories (except those held outside India), book debts and other current assets. (iii) Includes Foreign Currency Non-Resident [FCNR(B)] Loans. (iv) Secured against assets acquired under lease agreements. 4. UNSECURED LOANS Fixed Deposits [Repayable within one year Rs. 148.294 Million (2008 : Rs.367.072 Million)] Long term loan from a bank (Note below) [Repayable within one year Rs Nil (2008: Rs.Nil )] Short term loan from banks [Repayable within one year Rs 2,150 Million (2008: Rs.Nil )] From Subsidiary Company [Repayable within one year Rs. Nil (2008: Rs.Nil )] From Others Interest accrued and due [Schedule 18 Note 9]
Note: Out of the above loans, Rs 750 Million is guaranteed by a director of the Company.
893.069
631.505
553.385
750.000 2,150.000 2,556.633 35.000 40.592 6,163.730
553.385
32
Schedules forming parat of Balance Sheet as at March 31, 2009 (Contd.)
5. FIXED ASSETS
GROSS BLOCK DEPRECIATION Rs. Million NET BLOCK
2008
on Amalgamation (Notes 4 and 5) Additions 2009 2008 2009 2009 Deletion/ Adjustments For the year Deletion/ Adjustments Amalgamation (Note 4)
2008
Tangible: 1,592.059 213.027 1,342.301 2,856.364 (3.942) 139.037 16.757 2,974.702 1,067.016 11.495 218.383 138.718 14.472 1.176 1,494.315 260.121 11.099 47.824 0.318 10.211 845.460 5.870 (93.506) 100.766 2,536.895 112.261 318.726 1,286.683 2,536.895 1,592.059 112.261 213.027 1,175.589 1,082.180 1,688.019 1,789.348
Land (Note 1 below): Freehold Leasehold
Buildings (Notes 2 and 3 below)
Plant & Machinery
Furniture & Fixture and Office Equipments: Finance Lease Others 46.892 293.761 18.798 167.523 180.562 180.562 15.814 2.432 3.066 34.055 21.230 152.348 2.274 141.238 6.325 5.461 2.260 30.883 10.866 46.892 316.038 17.615 114.117 0.310 14.515 28.531 3.316 19.066 25.836
9.895 31.770 -
32.130 133.063 5.590 134.859 31.297
14.762 182.975 15.640 17.489 149.265
29.277 179.644 16.524 26.285 -
Vehicles : Finance Lease Others
Aircraft
6,530.725 1,219.816 195.760 2008 5,862.048 - 755.867 Capital Work-in-Progress (including Advances)
Intangible: Trademark, Formulae and License 70.114 7,876.187 87.190 6,530.725 40.944
40.944
1,602.381 1,323.350
3.410 38.100 -
4.094 361.565 326.112
52.194 47.081
7.504 1,949.852 1,602.381
33.440
5,926.335 4,928.344 282.632 361.223 6,208.967 5,289.567
Notes:
1.
2.
3. 4. 5.
The Company is in the process of registering certain freehold and leasehold land in its own name. Deletions/ adjustments include Rs.100.766 Million reclassified from lease hold land to freehold land. Cost of buildings includes the following payments made for the purpose of acquiring the right of occupation of Mumbai godown space: i) 660 equity shares (unquoted) of Rs.100 each fully paid in Shree Madhu Industrial Estate Limited Rs.0.066 Million (2008: Rs.0.066 Million) Application has been made for duplicate share certificates and the same is in the process. ii) 199, 6 % Debentures (unquoted) of Rs.1,000 each fully paid in Shree Madhu Industrial Estate Limited Rs. 0.199 Million (2008: Rs.0.199 Million). Application has been made for duplicate debentures certificates and the same is in the process. iii) Deposit with Shree Madhu Industrial Estate Limited Rs. 0.132 Million (2008: Rs. 0.132 Million) Include value of fully paid shares Rs. 0.006 Million (2008: Rs 0.003 Million) held in Co-operative Housing Societies. Addition on amalgamation and includes additions/deletions of the Transferor companies during the year ended March 31, 2008. Net of diminution in value of certain assets of the Company amounting to Rs 80.704 Million as per a Scheme of Amalgamation [Schedule 18 Note 2(A)(V)(e)].
33
Rs. Million 6. INVESTMENTS Particulars CURRENT Unquoted Investments Units (Fully Paid) SBI SHF Liquid Plus HSBC Mutual Fund ICICI Prudential Liquid Fund Total Current Investments LONG TERM Quoted Investments A. Trade Fully Paid Equity Shares Mangalore Chemicals & Fertilizers Limited (Note 2) McDowell Holdings Limited In Subsidiary Company Shaw Wallace & Company Limited B. Non-Trade Fully Paid Equity Shares Housing Development Finance Corporation Limited ICICI Bank Limited HDFC Bank Limited Vijaya Bank (Note 2) Premier Fertilizers Limited Radico Khaitan Limited Khaitan Chemicals & Fertilizers Limited Rampur Fertilizers Limited (Note 3) IndusInd Bank Limited Indo Lowenbraw Breweries Limited Hero Honda Motors Limited Rampur Engineering Company Limited Shree Synthetics Limited (Rs.350) Gammon India Limited (Note 2) Ashok Leyland Limited (Rs. 117) Crompton Greaves Limited Daewoo Motors Limited Exide Industries Limited (Rs.132) Areva TND (India) Limited (Rs.387) Harrisons Malayalam Limited Hindustan Motors Limited (Rs.51) Indian Rayon and Industries Limited MRF Limited Nirlon Limited (Rs.254) Rallis India Limited Siemens (India) Limited Units (Fully Paid) Unit Trust of India (Note 1) - 6.75% Tax Free US 64 Bonds - UTI Balance Fund -Income - Retail (formerly known as US 2002) Total Quoted Investments (A+B) Face Value (Rs) Nos. 2009 Nos. 2008
10 10 10
1,405,232 148,341 583,580
14.059 1.491 5.836 21.386
782,761 139,249 545,695
7.832 1.394 5.457 14.683
10 10 10
6,150 50,000 -
0.032 0.500 0.532 0.002 0.382 0.002 0.466 2.043 0.725 0.527 -
6,150 50,000 15,072,311
0.032 0.500 4,801.877 4,802.409 0.466 0.001 2.043 0.725 0.527 0.468 0.035 0.010 0.000 0.000 0.005 0.001 0.000 0.000 0.002 0.003 0.004 0.003 0.008
10 10 10 10 100 2 10 10 10 10 2 10 10 10 1 2 10 1 10 10 10 10 10 10 10 2
240 8,916 200 42,100 537,850 13,880 27,760 -
42,100 300 537,850 13,880 27,760 10,400 18 175 1,001 35 1,000 10 280 50 20 6 20 2 10 5 12 28 150
100 10
328,547
3.838 7.985 8.517
312,246 328,547
31.224 3.838 39.363 4,841.772
34
6.
INVESTMENTS (Contd.) Rs. Million Particulars Unquoted Investments C. Trade Fully paid Equity Shares Yankay Associates Private Limited Goa Fruit Distilleries Private Limited North West Distilleries Private Limited Phipson and Company (Pakistan) Limited (Re.1) Utkal Distilleries Limited Baramati Teluka Fruits Growers Fed Limited Shaw Scott Distilleries Private Limited In Subsidiary Companies Shaw Wallace Breweries Limited Asian Opportunities & Investments Limited United Spirits Nepal Limited Primo Distributors Private Limited Zelinka Limited Palmer Investment Group Limited Montrose International S.A Liquidity Inc. Four Seasons Wines Limited McDowell Scotland Limited Daffodils Flavours & Fragrances Private Limited United Vintners Limited USL Holdings Limited McDowell Beverages Limited United Alcobev Limited Herbertsons Limited United Spirits (Shanghai) Trading Company Limited McDowell & Company Limited Jasmine Flavours & Fragrances Private Limited Royal Challengers Sports Private Limited Fully paid Preference Shares 11% Redeemable Preference Shares of Ganges Soap Works Private Limited 9.3% Cumulative Redeemable Preference Shares of Rampur Engineering Company Limited In Subsidiary Company 7% Non Cumulative redeemable preference shares of Shaw Wallace Breweries limited Face Value (Rs) Nos. 2009 Nos. 2008
100 100 10 100 100 100 100 10 US$1 NRS 100 10 CYP 1 US$ 1 US$ 1000 US$0.0001 10 1 10 10 US$ 1 10 10 10 RMB 10 10 10 10
1 350 5,000 78,512,509 4,998,706 67,716 15,000,000 500 4,000,000 50,000 1,575,000 10,000 50,000 500,000 50,000 50,000 60,000 500,000 50,000 10,000 10,000
0.004 0.035 0.500 3,240.191 301.000 65.626 6,917.801 133.932 119.313 0.500 125.505 0.100 0.500 22.183 0.500 0.500 0.600 26.635 0.500 0.100 0.100
350 1,000 3,942 10,700 5,000 1 4,998,706 67,716 3,920,010 1,000 50,000 1,575,000 10,000 50,000 500,000 50,000 50,000 60,000 50,000 10,000 10,000
0.035 0.010 0.000 7.448 0.500 0.001 301.000 65.626 1,030.000 0.101 0.500 125.505 0.100 0.500 22.183 0.500 0.500 0.600 0.500 0.100 0.100
100
2,000
10
25,000
0.250
100
1,197,000
119.700 11,075.825
1,556.059
35
6.
INVESTMENTS (Contd.) Particulars D. Non-Trade In Government Securities Indira Vikas Patra National Savings/Plan/Def. Certificates (Deposited with Govt.Authorities) In Fully Paid Debentures Non-Redeemable 6.5% Bengal Chamber of Commerce & Industry 5% Woodland Hospital & Medical Centre Limited 0.5% Woodlands Medical Centre Limited 5.0% Woodlands Medical Centre Limited Fully paid Equity Shares Madhav Co-operative Housing Society Limited (Rs.250) Sangam Bhavan Cooperative Housing Society Limited U.B. Electronics Instruments Limited Stridewell Leather India Private Limited (Rs. 20) Ashoka Securities Private Limited McDowell & HRB Emp. Co-op Society Limited Koel Manufacturing and Investment (P) Limited Maltings Limited Central Investment (P) Limited Consolidated Breweries Limited. Goa Urban Co-Operative Bank Limited Mapusa Urban Co-Operative Bank Limited (Rs.130) Baramati Sahakari Bank Limited Thane Janta Sahakari Bank Limited Rupee Co- op Bank Limited E. Others Interest as Sole Beneficiary in USL Benefit Trust [Refer Schedule 18 Note 6(b)] Total Unquoted Investments (C+D+E) Total Long Term Investments (A+B+C+D+E) Total Current and Long Term Investments Less: Provision for diminution in the value of investments (Note 5) Total Aggregate value of Quoted Investments: - Book value - Market value Aggregate Book value of Unquoted Investments Face Value (Rs) Nos. 2009 Nos.
Rs. Million 2008
0.003 0.193
0.003 6.486
100 100 50 50 100 10 10 200 10 10 10 10 50 25 100 50 25
117 270 5 10 1,996 -
0.002 0.007 0.012 0.027 0.000 0.001 0.129 0.374
5 10 1,996 2 25 10 1 695 305 750 199 5 9 10 40
0.002 0.007 0.000 0.001 0.129 0.000 0.003 0.002 0.002 0.010 0.000 0.000 0.001 0.001 6.647
9,409,542 20,485.741 20,494.258 20,515.644 0.879 20,514.765 7.638 47.361 20,507.127
153.536 1,716.242 6,558.014 6,572.697 1.140 6,571.557 4,840.632 4,824.355 1,730.925
Notes:
1. Investments in units of Unit Trust of India amounting to Rs 3.175 Million (2008 : Rs 34.400 Million) represent those made under Rule 3A of the Companies (Acceptance of Deposit) Rules, 1975. 2. An application has been made for duplicate certificate. 3. Market Quotations are not available. 4. Also Refer Schedule 18 Note 6. 5. Investments written off during the year Rs 0.291 Million (2008: Rs Nil) and adjusted to provision for diminution in the value of investments.
36
2009 7. INVENTORIES Raw Materials including materials in transit Packing Materials, Stores and Spares Finished goods including goods in transit Work-in-Progress [including held outside India Rs 955.030 Million (2008: Rs Nil)] 964.531 897.769 2,052.475 2,624.916 6,539.691 8. SUNDRY DEBTORS (Unsecured) Exceeding six months Considered Good Considered Doubtful Others: Considered Good Less: Provision for Doubtful Debts
Rs. Million 2008 607.711 611.236 1,526.985 1,097.897 3,843.829
14.434 66.947 81.381 6,635.963 6,717.344 66.947 6,650.397
28.448 63.911 92.359 4,106.550 4,198.909 63.911 4,134.998
9.
CASH AND BANK BALANCES Cash on Hand Remittances-in-Transit/ Cheques on Hand Balances with Scheduled Banks: On Current Accounts [Note (i)] On Unpaid Dividend Account On Deposit Account [Notes (ii) and (iii)]
4.475 73.624 304.061 17.878 448.590 848.628
5.176 23.907 198.069 19.730 33.131 280.013
Notes: (i) includes Rs.32.097 Million (2008: Rs.25.385 Million) in Exchange Earners Foreign Currency (EEFC) Account and Rs.8.703 Million (2008: Rs.1.155 Million) in Foreign Currency. (ii) a) includes Rs.0.587 Million (2008: Rs.8.403 Million) pledged with Government Departments.. b) includes Rs.1.300 Million (2008: Rs. 2.673 Million) as margin. (iii) includes Rs 133.926 Million (2008: Rs Nil) pledged as security against loan from a bank. 10. OTHER CURRENT ASSETS (Unsecured, considered good except where otherwise stated) Income accrued on Investments and Deposits Other Deposits - Considered Good - Considered Doubtful Fixed assets held for sale Less: Provision for Doubtful Deposits
18.111 2,080.019 9.940 4.873 2,112.943 9.940 2,103.003
2.080 1,180.964 6.809 4.618 1,194.471 6.809 1,187.662
37
2009 11. LOANS AND ADVANCES (Unsecured, considered good except where otherwise stated) Loans and Advances to Subsidiaries Advances recoverable in cash or in kind or for value to be received: Advances to Tie-up units - Considered Good - Considered Doubtful Advance Income Tax (Net of Provisions) Taxes and Duties Paid in Advance Other Advances - Considered Good - Considered Doubtful Less: Provision for Doubtful Advances 12. CURRENT LIABILITIES AND PROVISIONS A. Liabilities Acceptances * Sundry Creditors Micro and Small Enterprises [Schedule 18 Note 7] Others Dues to Subsidiaries Dues to Directors Investor Education and Protection Fund [Schedule 18 Note 8] Unclaimed Debentures Unclaimed Dividends Unclaimed Fixed Deposits Security Deposit ** Advances Received from Customers Interest accrued but not due Other Liabilities * Includes bills drawn against inland letters of credit of Rs.876.924 Million (2008: Rs.215.149 Million)and secured by a charge on debtors, inventories and other current assets. ** Includes due to a subsidiary Rs Nil (2008: Rs.11 Million) B. Provisions Proposed Dividend Preference Shares Equity Shares Corporate Tax on Proposed Dividend Fringe Benefit Tax (Net of Payments) Employee Benefits 11,093.202 2,449.150 20.314 424.718 917.938 1,824.810 500.947 17,231.079 521.261 16,709.818
Rs. Million 2008
15,068.198 855.340 21.519 440.513 1,002.739 791.281 295.564 18,475.154 317.083 18,158.071
1,126.924 34.443 5,785.664 309.838 49.169 0.001 19.588 28.074 128.109 220.326 514.062 565.315 8,781.513
698.359 10.242 4,366.329 1,234.395 51.486 0.001 19.694 11.025 125.551 184.078 86.656 510.267 7,298.083
215.825 36.694 8.527 422.085
1.930 150.245 25.877 0.591 280.125
683.131
458.768
38
Schedules forming part of Profit & Loss Account as at March 31, 2009
Rs. Million 2009 13. OTHER INCOME Income from Investments: Dividend income from Subsidiary (Gross) [Tax deducted at source Rs.2.645 Million (2008 : Rs.1.905 Million)] Dividend income from other investments (Gross) Profit on Sale of Fixed Assets (Net) Profit on Sale of Investments Liabilities no longer required written back Provision for diminution in value of investment written back Bad debts / Advances recovered Scrap Sales Insurance Claims Miscellaneous 1.910 44.965 3.355 136.599 0.291 0.072 157.577 2.814 155.756 543.446 14. MATERIALS Raw Materials Consumed Purchase of Finished Goods Packing Materials Consumed Movement in Stocks Opening Stock: Work-in-Progress Finished Goods Add : Stocks of the Transferor Companies as on April 1, 2008 [Schedule 18 Note 2(D)] Work-in-Progress Finished Goods Closing Stock: Work-in-Progress Finished Goods (Increase)/ Decrease in Stocks Excise Duty on Opening/Closing Stock of Finished Goods (net) 2,624.916 2,052.475 4,677.391 (1,992.166) 238.081 23,118.263 1,097.897 1,526.985 2,624.882 (572.966) 357.559 15,843.843 3.696 56.647 60.343 1,097.897 1,526.985 2,624.882 1,055.278 996.638 2,051.916 10,207.958 5,186.702 9,477.688 5,424.371 4,072.316 6,562.563 20.051 97.745 3.172 114.996 2.657 88.863 369.138 40.107 41.654 2008
39
Schedules forming part of Profit & Loss Account as at March 31, 2009 (Contd.)
2009 15. MANUFACTURING AND OTHER EXPENSES Employee Cost: Salaries, Wages and Bonus Contribution to Provident and Other Funds Workmen and Staff Welfare Voluntary Retirement Scheme Compensation Power and Fuel Stores and Spares Consumed Repairs and Maintenance: Buildings Plant and Machinery Others Rent Rates and Taxes Insurance Travelling and Conveyance Legal and Professional Freight Outwards Advertisement and Sales Promotion Commission on Sales Royalty/ Brand Fee/ Trade Mark Licence Fees Cash Discount Sales Tax Fixed Assets Written Off Loss on Sale of Fixed Assets (Net) Directors' Remuneration: Sitting Fee Commission [Schedule 18 Note 19] Bad Debts and Advances Written Off Investments Written Off Provision for Doubtful Debts/ Advances/ Deposits Provision for Diminution in Value of Investments Research and Development Others: Personnel and Administration Selling and Distribution Miscellaneous 16. INTEREST AND FINANCE CHARGES Interest on: Fixed Loans Other Loans Finance Charges (Including Bill Discounting) Less: Interest Income: On Investments On Deposits and Other Accounts (Gross) [Tax Deducted at Source Rs. 3.825 Million (2008: Rs.7.982 Million)] On Income Tax Refunds 2,183.409 272.379 136.527 196.797 47.940 49.390 70.646 53.392 322.595 311.443 38.316 460.965 459.907 836.505 3,467.676 311.980 60.032 362.937 192.964 0.010 1.180 48.727 6.005 0.291 210.345 0.030 30.033 265.733 828.115 274.276 11,500.545
Rs. Million 2008 1,921.848 236.884 116.830 4.053 160.397 41.572 56.459 54.031 54.685 138.440 236.126 32.784 401.404 284.423 605.481 3,030.129 267.257 358.652 195.655 142.686 16.949 3.405 1.070 51.044 94.538 171.171 0.051 27.681 233.730 785.498 188.597 9,913.530
822.464 925.627 260.447 2,008.538 1.054 45.305 4.385 1,957.794
769.797 488.420 80.988 1,339.205 2.142 50.270 1.680 1,285.113
40
Schedules forming part of account for the year ended March 31, 2009
17. STATEMENT ON SIGNIFICANT ACCOUNTING POLICIES

1. Basis of preparation of Financial Statements The Financial Statements of the Company are prepared under historical cost convention, except as otherwise stated, in accordance with the Generally Accepted Accounting Principles (GAAP) in India, the Accounting Standards as specified in the Companies (Accounting Standard) Rules 2006, and the relevant provisions of the Companies Act, 1956. 2. Fixed Assets (a) Fixed assets are stated at their original cost of acquisition and subsequent improvements thereto including taxes, duties, freight and other incidental expenses related to acquisition and installation of the assets concerned, except amounts adjusted on revaluation and amalgamation. Interest on borrowings attributable to qualifying assets are capitalised and included in the cost of fixed assets as appropriate. (b) The costs of Fixed Assets acquired in amalgamations are determined at their fair values, on the date of acquisition or nearer thereto, or as approved under the schemes of amalgamation. (c) Assets held for disposal are stated at their net book value or estimated net realisable value, whichever is lower. (d) Intangible assets are stated at the consideration paid for acquisition less accumulated amortisation. 3. Leases Assets acquired under Leases, where the Company has substantially all the risks and rewards of ownership, are classified as finance leases. Such leases are capitalised at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period. Assets acquired as leases, where a significant portion of the risk and rewards of ownership are retained by the lessor, are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis. 4. Depreciation and Amortisation a) Depreciation is provided on the Straight Line Method, including on assets revalued, at rates prescribed in Schedule XIV to the Companies Act, 1956 except for the following, which are based on managements estimate of useful life of the assets concerned: i) ii) b) Computers, Vehicles and Aircrafts over a period of three, five and eleven years respectively; In respect of certain items of Plant and Machinery eligible for triple shift allowance, depreciation is provided for the full year on triple shift basis.
Fixed assets acquired on amalgamation over the remaining useful life computed based on rates prescribed in Schedule XIV to the Companies Act, 1956, as below: Buildings Factory Non factory Plant & Machinery Vehicles Computers 1 to 30 years 1 to 54 years 1 to 20 years 1 to 4 years 1 to 2 years
41
Schedules forming part of account for the year ended March 31, 2009 (Contd.)
c) d) e) f)
Assets taken on finance lease are depreciated over their estimated useful lives or the lease term, whichever is lower. Leasehold Land are not amortised. Goodwill arising on amalgamation is charged to the Profit and Loss Account in the year of amalgamation. Intangible assets are amortised, on a straight line basis, commencing from the date the assets are available for use, over their respective individual estimated useful lives as estimated by the management: Trademark, Formulae and Licence 10 years
Depreciation charged as above is not less than the minimum specified as per Schedule XIV of the Companies Act, 1956. 5. Impairment Impairment loss, if any, is provided to the extent the carrying amounts of assets exceed their recoverable amount. Recoverable amount is higher of the net selling price of an asset and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. 6. Investments Long-term Investments are stated at cost to the Company. Provision for diminution in the value is made to recognise a decline, other than temporary, in the value of long-term investments. Current investments are valued at cost or market value, whichever is less. 7. Inventories Inventories are valued at lower of cost and net realisable value. The costs are, in general, ascertained under Weighted Average Method. Finished goods and Work-in-Progress include appropriate manufacturing overheads and borrowing costs, as applicable. Excise/ Customs duty payable on stocks in bond is added to the cost. Due allowance is made for obsolete and slow moving items. 8. Revenue Recognition Sales are recognised when goods are despatched from distilleries/ warehouses of the Company in accordance with the terms of sale except where such terms provide otherwise, where sales are recognised based on such terms. Gross Sales are inclusive of excise duty but are net of trade discounts and sales tax, where applicable. Income arising from sales by manufacturers under Tie-up agreements (Tie-up units) and income from brand franchise are recognised in terms of the respective contracts on sale of the products by the Tie-up unit/ Franchisees. Income from brand franchise is net of service tax, where applicable. Dividend income on investments are recognised and accounted for when the right to receive the payment is established. 9. Foreign Currency Transactions Transactions in foreign currency are recognised at the rates of exchange prevailing on the dates of the transactions. Liabilities/ assets in foreign currencies are reckoned in the accounts as per the following principles: Exchange differences arising on a monetary item that, in substance, forms part of an enterprises net investment in a non-integral foreign operation is accumulated in a foreign currency translation reserve in the enterprises financial statements until the disposal of the net investment.
42
Exchange differences arising on reporting of long term foreign currency monetary items, with the exception of exchange differences arising on a monetary item that, in substance, forms part of an enterprises net investment in a non-integral foreign operation, at rates different from those at which they were initially recorded during the period or reported in previous financial statements, are accounted as below: (a) In so far as they relate to the acquisition of depreciable capital assets, are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset; and (b) In other cases, the said exchange differences are accumulated in a Foreign Currency Monetary Items Translation Difference Account and amortised over the balance period of such long term asset/liability but not beyond March 31, 2011. All other monetary assets and liabilities denominated in foreign currency are restated at the rates ruling at the year end and all exchange gains/ losses arising therefrom are adjusted to the Profit and Loss Account, except those covered by forward contracted rates where the premium or discount arising at the inception of such forward exchange contract is amortised as expense or income over the life of the contract. Exchange differences on forward contracts are recognised in the Profit and Loss Account in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward contracts is recognised as income or expense for the year. For forward exchange contracts and other derivatives that are not covered by Accounting Standard (AS) -11 The Effects of Changes in Foreign Exchange Rates, the Company follows the guidance in the announcement of the Institute of Chartered Accountants of India (ICAI) dated March 29, 2008, whereby for each category of derivatives, the Company records any net mark-to-market losses. Net mark-to-market gains are not recorded for such derivatives. Also refer Schedule 18 Note 12 below. 10. Employee Benefits a) Defined-contribution plans These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. These comprise of contributions to the employees provident fund with the government, superannuation fund and certain state plans like Employees State Insurance and Employees Pension Scheme. The Companys payments to the defined contribution plans are recognised as expenses during the period in which the employees perform the services that the payment covers. b) Defined-benefit plans Gratuity: The Company provides for gratuity, a defined benefit plan (the Gratuity Plan), to certain categories of employees. Liability with regard to gratuity plan is accrued based on actuarial valuation, based on Projected Unit Credit Method at the balance sheet date, carried out by an independent actuary. Actuarial Gains and Losses comprise experience adjustments and the effect of changes in the actuarial assumptions and are recognised immediately in the Profit and Loss Account as income or expense. Provident Fund: Companys Provident Funds administered by trusts set up by the Company where the Companys obligation is to provide the agreed benefit to the employees and the actuarial risk and investment risk fall, in substance, on the Company are treated as a defined benefit plan. Liability with regard to such provident fund plans are
43
accrued based on actuarial valuation, based on Projected Unit Credit Method, carried out by an independent actuary at the balance sheet date. Actuarial Gains and Losses comprise experience adjustments and the effect of changes in the actuarial assumptions and are recognised immediately in the Profit and Loss Account as income or expense. Death Benefit: Death Benefit payable at the time of death is actuarially ascertained at the year-end and provided for in the accounts. c) Other long term employee benefits: Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as a liability at the present value of the defined benefit obligation at the balance sheet date based on actuarial valuation carried out at each balance sheet date. d) Short term employee benefits: Undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees is recognised during the period when the employee renders the services. These benefits include compensated absences such as paid annual leave and performance incentives. 11. Expenditure on account of Voluntary Retirement Scheme Expenditure on account of Voluntary Retirement Scheme of employees is expensed in the period in which it is incurred. 12. Research and Development Revenue expenditure on research and development is charged to Profit and Loss Account in the period in which it is incurred. Capital Expenditure is included as part of fixed assets and depreciated on the same basis as other fixed assets. 13. Taxes on Income Provision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax assets are recognised and carried forward to the extent that there is a reasonable/ virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised. Fringe Benefit Tax is determined at current applicable rates on expenses falling within the ambit of Fringe Benefit as defined under the Income Tax Act, 1961. 14. Earnings per Share (EPS) Basic EPS is arrived at based on Net Profit after Taxation available to equity shareholders to the weighted average number of equity shares outstanding during the year. The Diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effects of potential dilutive equity shares unless impact is anti-dilutive.
44
15. Provisions A provision is recognised when an enterprise has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions, other than employee benefits, are not discounted to their present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates. 16. Contingencies Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent and, to the extent not provided for, are disclosed by way of notes on the accounts. 17. Share / Foreign Currency Convertible Bonds [FCCB] issue expenses and Premium on Redemption of FCCB Share/ Foreign Currency Convertible Bonds issue expenses incurred are expensed in the same year and premium payable on FCCBs is expensed over the currency of FCCBs. Both are adjusted to the Securities Premium Account as permitted by Section 78(2) of the Companies Act, 1956. 18. Expenditure Expenses are net of taxes recoverable, where applicable.
45
18. NOTES ON ACCOUNTS

Rs. Million 2009 1. Contingent Liabilities a) (i) Guarantee given on behalf of other bodies corporate (including performance guarantees) 2008
31,397.558 172.217
24,887.119 125.151
(ii) Guarantees given by the Companys bankers for which Counter Guarantees have been given by the Company b) Disputed claims against the Company not acknowledged as debts, currently under appeal/ sub judice: (i) Excise demands for excess wastages and distillation losses
238.384 244.274 305.186 604.036 15.016 45.449
176.179 215.178 198.175 634.134 216.740 50.967
(ii) Other miscellaneous claims (iii) Income Tax demand (including interest) under appeal (iv) Sales Tax demands under appeal in various states c) Co-accepted bills of Tie-up Units since fully settled d) Claims from suppliers not acknowledged as debts
The Management is hopeful of succeeding in the above appeals/ disputes based on legal opinions/ legal precedents. 2. A. The Scheme of Amalgamation under Section 391 to 394 of the Companies Act, 1956 for the amalgamation of Shaw Wallace & Company Limited (SWCL), a subsidiary company, and Primo Distributors Private Limited (Primo), a wholly owned subsidiary company, (together Transferor Companies) with the Company (the Scheme) and their respective shareholders, with April 1, 2007 being the Appointed Date, has been sanctioned by the Honble High Court of Karnataka, the Honble High Court of Judicature at Bombay and the Honble High Court at Calcutta. Upon necessary filings with the respective Registrar of Companies, the Scheme has become effective on July 6, 2009 and the effect thereof have been given in these accounts. Consequently, a. In terms of the Scheme the entire business and undertaking of Transferor Companies including all assets and liabilities, as a going concern, stand transferred to and vested in the Company (hereinafter referred to as Amalgamation) with effect from April 1, 2007 being the Merger Appointed Date. Primo ceased to be subsidiary of the Company and Shaw Wallace Breweries Limited (SWBL) became a direct subsidiary of the Company. Primo stands dissolved without being wound up. SWCL will be dissolved without winding up by separate order by the Honble High Court at Calcutta. SWCL was engaged in manufacture and sale of potable alcohol and Primo was engaged in the business of distribution of alcoholic beverages. (I) In consideration of the amalgamation, the Company will issue : a) 7,749,121 equity shares of Rs.10/- each aggregating to Rs.77.491 Million in the ratio of 4 (four) fully paid up Equity Shares of the face value of Rs.10/- each of the Company for every 17 (Seventeen) fully paid up equity shares of Rs.10/- each held in SWCL [also refer Note 2 (A)(II) below].
b.
46
Pending issue of these Equity Shares, a sum of Rs. 77.491 Million has been shown under Equity Share Capital Suspense. Subsequently, on July 24, 2009, the allotment of the Companys shares to the eligible shareholders of SWCL has been completed. Steps have been taken to list the shares with the stock exchanges where the existing shares of the Company are currently listed. b) As Primo was a wholly owned subsidiary of the Company, no consideration was payable pursuant to amalgamation of Primo with the Company. (II) Pursuant to the Scheme, Equity Shares to be issued as above include 4,925,231 Equity Shares of Rs.10/- each fully paid up to Palmer Investment Group Limited(Palmer), R.G.Shaw & Company Limited (R G Shaw), JIHL Nominees Limited (JIHL Nominees), Shaw Scott & Company Limited (Shaw Scott), Shaw Darby & Company Limited (Shaw Darby) and Thames Rice Milling Company Limited (Thames Rice), subsidiaries of the Company, in exchange for the 20,932,244 Equity Shares of Rs.10/- each fully paid up held by them in the share capital of SWCL, in the proportion of Equity Shares held by them respectively. (III) Pursuant to the Scheme, 10,282,553 Equity Shares of Rs.10/- each fully paid up held by SWCL and 1,306,431 Equity Shares of Rs.10/- each fully paid up held by Primo in the share capital of the Company, were to be transferred to the SWCL Benefit Trust and the Primo Benefit Trust established by virtue of trust deeds dated July 25, 2008 for the benefit of SWCL and Primo respectively. Upon the Scheme becoming effective, the beneficial interest in SWC Benefit Trust and Primo Benefit Trust stands transferred and vested in the USL Benefit Trust established by virtue of trust deed dated September 26, 2006 for the benefit of the Company. Subsequent to the year end, on June 30, 2009 SWCL has sold 10,282,553 Equity Shares held by it in the Company in the open market, through the stock exchanges and 1,306,431 Equity shares held by Primo in the Company has been transferred to Primo Benefit Trust on July 6, 2009 which stands vested with USL Benefit Trust in terms of the Scheme. (IV) Pursuant to the scheme, the Authorised Share Capital of the Company stands increased 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 the authorised share capital of the transferor companies amounting to Rs 2,092 Million and the Memorandum of Association and Articles of Association of the Company stand amended accordingly without any further act or deed as the part of the Company. (V) Accounting for Amalgamation The amalgamation of the Transferor Companies 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: a. All tangible assets [excluding investment in shares held by the Transferor Companies in the Company and the interest in the USL Benefit Trust in accordance with the terms of the Scheme as explained in Note 2(A)(III) above] and liabilities of the Transferor Companies at their respective fair values. Interest in USL Benefit Trust, arising from the terms of the Scheme as explained in Note 2(A)(III) above, has been accounted as Investment, valued and recorded, in the manner prescribed in the Scheme, at the average of the weekly high and low of the closing price of the Company, on the stock exchange where the shares of the Company are more frequently traded in terms of turnover, for the period ended six months preceding the Appointed Date, i.e. April 1, 2007, aggregating to Rs. 9,256.006 Million. The equity shares directly held by the Company in the Transferor Companies stand cancelled and debited to General Reserve of the Company [refer (d) below].
b.
c.
47
d.
Rs.7,860.187 Million, being the difference between the value of net assets of the Transferor Companies transferred to the Company (determined as stated above) and the face value of equity shares to be issued and after adjusting for the equity shares directly held by the Company in the Transferor Companies which are cancelled, is credited to General Reserve of the Company. This accounting treatment of the reserve has been prescribed in the Scheme. Had the Scheme not prescribed this treatment, this amount would have been credited to Capital Reserve. The Company, based on the reports by an Independent valuer, has revalued, at their respective fair values, all fixed assets being Land, Buildings, Plant and Machinery, Furniture and Fixtures and Office Equipment and Vehicles, at one location, as at April 1, 2007 and an amount of Rs. 80.704 Million, being diminution in value of certain Plant and Machinery determined based on their respective disposal value as estimated by the independent valuer, has been debited to General Reserve. This accounting treatment has been prescribed in the Scheme. Had the scheme not prescribed this treatment, Rs.80.704 Million being diminution in value of certain fixed assets would have been debited to the Profit and Loss Account for the year instead of General Reserve, having corresponding impact on the net profit for the year.
e.
B.
The Scheme of Amalgamation under Section 391 to 394 of the Companies Act, 1956 for the amalgamation of Zelinka Limited (Zelinka or the Transferor Company), Cyprus, with the Company (the ZL Scheme) and their respective shareholders, with April 1, 2007 being the Appointed Date, has been sanctioned by Honble High Court of Karnataka and the certified copy of the Order of the Honble High Court of Karnataka has been filed with the Registrar of Companies. Zelinka has complied with the procedure required to be followed under the local corporate laws of Cyprus to give effect to the ZL Scheme. Accordingly, the ZL scheme became operative from March 26, 2009. The Company has given effect to the ZL Scheme in these accounts with effect from April 1, 2007 being the Appointed Date. Consequently, in terms of the ZL Scheme: a. The entire business and undertaking of Zelinka including all assets and liabilities, as a going concern, stand transferred to and vested in the Company with effect from April 1, 2007 being the Merger Appointed Date. Zelinka ceased to be a subsidiary of the Company. Palmer Investment Group Ltd, British Virgin Islands and Montrose International SA, Panama have become direct wholly owned subsidiaries of the Company. Liquidity Inc has become direct subsidiary of the Company. Zelinka was engaged in Investment related activities. (I) As Zelinka was a wholly-owned subsidiary of the Company, no consideration was payable pursuant to the amalgamation of Zelinka with the Company. The amalgamation of Zelinka 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: a) All assets and liabilities of the Transferor Company at their respective book values.
b.
(II) Accounting treatment
b) The investment held by the Company in the equity share capital of the Transferor Company stands cancelled and debited to General Reserve of the Company [refer (c) below]. c) Rs.11.152 Million being the difference between the value of net assets of the Transferor Company transferred to the Company (determined as stated above) after adjusting for investments cancelled is debited to General Reserve of the Company. This accounting treatment of the reserve has been prescribed in the ZL Scheme. Had the ZL Scheme not prescribed this treatment, this amount would have been debited to Goodwill, which would have been charged to the Profit and Loss Account for the year as per the accounting policy of the Company, with a corresponding impact on the net profit for the year.
48
d) Interest free loans in foreign currency aggregating to Rs. 7,345.279 Million as on April 1, 2007, granted by the Company to Zelinka for acquisition of long term strategic investments, stand cancelled. Exchange difference on such loans aggregating to Rs.144.912 Million as on April 1, 2007, accumulated by the Company in Foreign Currency Translation Reserve, has been transferred to General Reserve. This accounting treatment of the reserve has been prescribed in the ZL Scheme. Had the ZL Scheme not prescribed this treatment, this amount would have been debited to the Profit and Loss Account for the year instead of General Reserve, having corresponding impact on the net profit for the year. Exchange differences of Rs. 570.131 Million on loan to Zelinka arising during the year ended March 31, 2008 stands reversed on cancellation of such loans on amalgamation. C. All costs and expenses (including those of the Transferor Companies) incidental with the finalisation of the schemes and to put these into operation, including expenses in connection with excise and label re-registrations, all advisory fees, stamp duty charges, meeting expenses, professional fees, consultant fees including expenses and other expenses or charges attributable to the implementation of the Scheme (expenses relating to amalgamation), aggregating to Rs.146.879 Million are debited to General Reserve in the books. This accounting treatment of the costs and expenses has been prescribed in the Scheme. Had the Scheme not prescribed this treatment, this amount would have been debited to the Profit and Loss Account for the year instead of General Reserve, having corresponding impact on the net profit for the year. D. From April 1, 2007, the Transferor Companies had carried out the business in trust on behalf of the Company. Accordingly, Profit for the year ended March 31, 2008 of the Transferor Companies after making the following adjustments have been added to the Profit and Loss Account: Rs. Million Profit after Taxation for the year ended March 31, 2008 as per audited accounts Transfer to General Reserve Transfer to Capital Redemption Reserve Proposed Dividend (Net of dividend received by the Company) Corporate Tax on Proposed Dividend Adjustments on Amalgamation Amount Transferred to Profit and Loss Account on Amalgamation E. 673.956 (20.000) (37.000) (32.940) (8.159) (471.874) 103.983
The Board of Directors of the erstwhile Central Distilleries & Breweries Limited (CDBL) (amalgamated with erstwhile SWDL amalgamated with the Company in an earlier year) on April 29, 1986 decided to issue 134,700 Equity Shares of Rs.10 each, the allotment whereof was stayed by the Honble High Court of Delhi on September 13,1988. The Honble High Court of Delhi had vacated its order and has ordered to keep in abeyance the allotment on 72,556 shares and the matter is sub-judice. The holders, in exchange of these shares will be entitled to 17,776 equity shares of Rs.10 each of the Company pursuant to a Scheme of Arrangement. Necessary adjustments in this respect will be carried out on disposal of the matter pending before the aforesaid Court. Pursuant to the Scheme of amalgamation, the bank accounts, agreements, licences and certain immovable properties are in the process of being transferred in the name of the Company. The Board of Directors of the Company at their meeting held on November 29, 2008 have approved the proposal of merger of Balaji Distilleries Limited with the Company with effect from April 1, 2009 as per the Scheme of Arrangement between BDL, Chennai Breweries Private Limited and the Company, subject to the necessary approvals.
F. 3.
49
The Draft Rehabilitation Scheme along with the Scheme of Arrangement is pending with the Board for Industrial and Financial Reconstruction formed under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985, for approval. 4. Fixed Assets Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs.106.562 Million (2008: Rs.219.396 Million). 5. Current Assets, Loans and Advances a) Loans and Advances include: i) Rs. 11,093.202 Million (2008: Rs.14,987.889 Million) given as loan to the subsidiaries. The entire loan is non interest bearing. ii) An amount of Rs. 736.429 Million (2008: Rs. 489.847 Million) due from a Tie-up unit secured by the assets of the Tie-up unit. iii) An amount of Rs. 250 Million (2008: Rs. Nil) due from a proposed tie-up unit secured by the shares of the proposed tie-up unit. iv) Rs.3 Million (2008: Rs.3 Million) being amount paid to BDA Limited (BDA) towards reassignment of certain Liquor Brands/ Trade Marks pursuant to a Memorandum of Understanding dated March 20, 1992. Pending execution of the deed for such assignments and judicial resolutions of various disputes with BDA pertaining to control of BDA and ownership of the Officers Choice and other brands currently sub-judice at the various courts, the advance given to the party has been provided for as a matter of prudence. All consequential adjustments arising out of the above matters will be made as and when ascertained. v) Due from an Officer of the Company Rs. 1.193 Million (2008: Rs.1.085 Million). Maximum amount outstanding at any time during the year Rs. 1.193 Million (2008: Rs.1.085 Million). vi) Due from the Managing Director of the Company Rs. 3.140 Million (2008: Rs. 2.854 Million). Maximum amount outstanding at any time during the year Rs. 3.140 Million (2008: Rs. 2.854 Million). b) Certain confirmation of balances from Sundry Debtors, Loans and Advances, Deposits and Sundry Creditors are awaited and the account reconciliations of some parties where confirmations have been received are in progress. Adjustment for differences, if any, arising out of such confirmations/reconciliations would be made in the accounts on receipt of such confirmations and reconciliation thereof. The Management is of the opinion that the impact of adjustments, if any, is not likely to be significant. In the opinion of the management, all current assets, loans and advances including advances on capital accounts would be realised at the values at which these are stated in the accounts, in the ordinary course of business. Bank Balance with scheduled bank includes Rs. 154.000 Million (2008: Rs. 205.960 Million) out of the proceeds of the beer business of erstwhile SWCL, sold in an earlier year. The said sum is kept under escrow pending resolution of various taxation matters. The Company has, granted interest free loans in foreign currency amounting to Rs.7,435.245 Million [2008: Rs. 6190.725 Million, excluding Rs. 6836.073 Million, relating to Zelinka cancelled on amalgamation as referred to in Note 2(B)(II)(d) above] to USL Holdings Limited, BVI (USL Holdings), a subsidiary of the Company, for acquisition of long term strategic investments. Management is of the view that out of these loans, Rs.3,630.300 Million (2008: Rs. 3,987.000 Million), from the inception of the grant of loans, in substance, form part of the Companys net investment in the subsidiary, as the settlement of these loans is neither planned nor likely to occur in the foreseeable future and management intends to convert these loans into investment in share capital of the subsidiary in near future. Accordingly, in accordance with AS 11 - The Effects of Changes in Foreign Exchange Rates (AS 11), exchange difference aggregating to Rs.463.905 Million [2008: Rs. 106.905 Million excluding Rs.715.043 Million relating to loans to Zelinka referred in Note 2(B)(II)(d) above] arising on such loans has been accumulated in a foreign currency translation reserve, which at the time of the disposal of the net investment in these subsidiaries would be recognised as income or as expenses.
c)
d)
50
6.
Investment
a) Face Value Nos Rs. Million Nos Rs. Million Purchased during the Year Acquired on Amalgamation* Transferred/Cancelled Sold/Written off during pursuant to scheme of the Year Amalgamation Rs. Rs. Nos Nos Million Million
CURRENT
Unquoted Investments
Units (Fully Paid) (Including dividend reinvestment) SBI SHF Liquid Plus 10 10 10 37,885 0.379 9,092 0.097 5,120,222 51.227 4,497,751 45.000 -
HSBC MF Investments
ICICI Prudential Liquid Fund
LONG TERM
A. Quoted Investments
1. Fully Paid Equity Shares
i) 10 -
Trade - 15,072,311 4,801.877
In Subsidiary Company
Shaw Wallace & Company Limited
ii) Non-Trade 100 10 10 2 10 10 1

10 2 10 1 10 10
Premier Fertilizers Limited. ** -
300 10,400 18 175 1,001 1000 10

35 280 50 20 6 20
0.001 0.468 0.035 0.010 0.000

0.000 0.005 0.001 0.000 0.000 0.002
IndusInd Bank Limited
Indo Lowenbraw Breweries Ltd **
Hero Honda Motors Limited.
Rampur Engineering Co., Limited **
Gammon India Ltd ** Ashok Leyland Limited (Rs. 117 )
Shree Synthetics Limited (Rs.350)**
Crompton Greaves Limited
Daewoo Motors Limited. **
Exide Industries Limited (Rs. 132 )
Areva TND (India) Limited(Rs. 387 )
Harrisons Malayalam Limited.
51
52
Face Value Nos
10 10 10 10 10 2 10 10 10 200 0.002 240 8,916 0.002 0.382 28 150 12 5 10 0.003 0.004 0.000 0.003 0.008 2 0.000
6.
Investment
a)
Purchased during the Year Rs. Million Nos

-
Acquired on Amalgamation* Rs. Million
Transferred/Cancelled Sold/Written off during pursuant to scheme of the Year Amalgamation Rs. Rs. Nos Nos Million Million
-
ii) Non-Trade (Contd)
Hindustan Motors Limited (Rs. 51 )
Indian Rayon and Industries Limited
MRF Limited
Nirlon Limited (Rs. 254)
Rallis India Limited
Siemens (India) Limited
Housing Development Finance Corporation Ltd. ICICI Bank Limited
HDFC Bank Limited
2. Units (Fully Paid) 100 312,246 31.225 -
Unit Trust of India
B.
6.75% Tax Free US 64 Bonds Unquoted Investments 1. Fully paid Equity Shares 10 10 100 100 10 10 US$ 1 US$ 1000 US$0.0001 RMB 10 CYP 1 500,000 26.635 -
i)
Trade Yankay Associates Private Limited
1 78,512,509 15,000,000 500 4,000,000 -
0.004 3,240.191 6,917.801 133.932 119.313 -
1,000 10,700 1 -
0.010 7.448 0.001 -
3,920,010 1,000
1,030.000 0.102
North West Distilleries Private Limited** Utkal Distilleries Limited Shaw Scott Dist Private Limited**
Shaw Wallace Breweries Limited
Primo Distributors Private Limited Palmer Investment Group Ltd Montrose International S.A
Liquidity Inc.
USL Shanghai trading co. Ltd
Zelinka Limited
6.
Investment (Contd.)
a) Face Value Nos

10 2 305 750 9 5 10 40 695 199 1 0.002 0.010 0.000 0.000 0.001 0.001 10 0.002 25 200 10 50 10 10 10 10 100 25 50 25 0.003 -
Purchased during the Year Rs. Million Nos Rs. Million
Acquired on Amalgamation*
Transferred/Cancelled Sold/Written off during pursuant to scheme of the Year Amalgamation Rs. Rs. Nos Nos Million Million
-
ii) Non Trade
Ashoka Securities Private Limited**
McDowell & HRB Emp. Co-op Society Ltd** Koel Manufacturing and Investment (P) Limited** Goa Urban Co-Operative Bank Limited**
Maltings Limited **
Stridewell Leather India Pvt. Ltd.(Rs.20)**
Central Investment (P) Ltd.**
Consolidated Breweries Ltd.**
Baramati Sahakari Bank Limited**
Mapusa Urban Co-Operative Bank Limited (Rs.130)** Thane Janta Sahakari Bank Limited** Rupee Co-op Bank Limited
2. Fully paid Preference Shares 100 2,000 -
10 100 -
1,197,000
119.700
25,000 -
0.250 -
11% Redeemable Preference shares of Works Private Ltd Ganges Soap** 9.3% Cumulative Redeemable Preference Shares of Rampur Engineering Company Limited ** 7% Non Cumulative redeemable preference shares of Shaw Wallace Breweries Limited 3. In Government Securities National Savings/Plan/Def. Certificates/FD's (Deposited with Govt. Authorities) 4. Fully paid Debentures 100 100 0.110 -
117 270 -
0.015 0.012 0.027 9,256.006
6.418 -
0.5% Woodlands Medical Centre Limited
5.0% Woodlands Medical Centre Limited
5. Others
Interest as Sole Beneficiary in USL Benefit Trust
* Including additions of the Transferor companies during the year ended March 31, 2008 [Note 2 (D) above] ** Written off during the year.
53
6.
Investment (Contd.) b) Investment in USL Benefit Trust represents beneficial interest in USL Benefit Trust which holds 13,741,643 (2008: 2,152,659) equity shares of Rs 10 each of the Company, with all additions or accretions thereto in trust for the benefit of the Company. The above includes 10,282,533 shares held by erstwhile SWCL, a transferor company, in the Company referred to in Note 2 (A) (III) above. c) The carrying cost of investment in Palmer Investment Group Limited amounting to Rs. 6,917.801 Million, substantially exceeds the net worth and the market value of shares held directly and indirectly through subsidiary, by it. The management of the Company believes that this reflects intrinsic value far in excess of the carrying cost of investments and that such shortfall in net worth / decline in market value of such shares is purely temporary in nature and, hence, no provision is considered necessary for the same.
7.
Disclosures of dues/payments to Micro and Small enterprises to the extent such enterprises are identified by the Company. Rs. Million
2009 a) (i) (ii) The principal amount remaining unpaid as at March 31, 2009 Interest due thereon remaining unpaid on March 31, 2009 32.359 0.047 2008 10.242 -
b) The amount of interest paid by the Company in terms of section 16 of the Micro, Small and Medium Enterprises Development Act, 2006, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year: (i) Delayed payments of principal beyond the appointed date during the entire accounting year (ii) Interest actually paid under Section 16 of the Micro, Small and Medium 'Enterprises Development Act, 2006 c) The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the Micro, Small and Medium 'Enterprises Development Act, 2006 d) The amount of interest accrued and remaining unpaid on March 31, 2009 in respect of principal amount settled during the year e) The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise, for the purpose of disallowance as a deductible expenditure under Section 23 of the Micro, Small and Medium 'Enterprises Development Act, 2006.
132.355 -
2.037
The above information has been determined to the extent such parties have been identified on the basis of information provided by the Company, which has been relied upon by the auditors. 8. As required under Section 205C of the Companies Act, 1956, the Company has transferred Rs. 4.678 Million (2008 : Rs. 10.517 Million) to the Investor Education and Protection Fund (IEPF) during the year. On March 31, 2009, no amount was due for transfer to the IEPF. Interest on inter corporate deposit included under Unsecured Loan Other in Schedule 4 acquired on amalgamation, where negotiation/ settlement has not been finalised, has been provided in terms of the decree and / or otherwise considered adequate by the management. In the opinion of the management, interest so far provided is adequate and no further provision is necessary in this respect. Adjustments, if any, are carried out as and when the amounts are determined on final disposal / settlement of the matter.
9.
54
10. Employee Benefits a) Defined Contribution Plans The Company offers its employees defined contribution plans in the form of Provident Fund (PF) and Employees Pension Scheme (EPS) with the government, Superannuation Fund (SF) and certain state plans such as Employees State Insurance (ESI). PF and EPS cover substantially all regular employees while the SF covers certain executives and the ESI covers certain workers. Contribution to SF is made to trust managed by the Company, while other contributions are made to the Governments funds. While both the employees and the Company pay predetermined contributions into the provident fund and the ESI Scheme, contributions into the pension fund and the superannuation fund are made only by the Company. The contributions are normally based on a certain proportion of the employees salary. During the year, the Company has recognised the following amounts in the Profit and Loss Account, which are included in Contribution to Provident and other funds in Schedule 15: Rs. Million 2009 Provident Fund and Employees Pension Scheme * Superannuation Fund Employees State Insurance * Excluding contribution to PF made to trusts managed by the Company. b) Defined Benefit Plans Gratuity: The Company provides for gratuity, a defined benefit plan, (the Gratuity Plan), to certain categories of employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement or termination of employment, an amount based on the respective employees last drawn salary and years of employment with the Company. The Company has employees gratuity funds managed by the Company as well as by Insurance Companies. Provident Fund: For certain executives and workers of the Company, contributions are made as per applicable Indian laws towards Provident Fund to certain Trusts set up and managed by the Company, where the Companys obligation is to provide the agreed benefit to the employees and the actuarial risk and investment risk fall, in substance, on the Company. Having regard to the assets of the Fund and the return on the investments, shortfall in the assured rate of interest notified by the Government, which the Company is obliged to make good is determined actuarially. Death Benefit: The Company provides for Death Benefit, a defined benefit plan (the Death Benefit Plan) to certain categories of employees. The Death Benefit Plan provides a lump sum payment to vested employees on death, an amount based on the respective employees last drawn salary and remaining years of employment with the Company after adjustments for any compensation received from the insurance company and restricted to limits set forth in the said plan. The Death Benefit Plan is Non-Funded. 45.614 33.380 8.738 87.732 2008 54.495 29.018 8.553 92.066
55
56
Rs Million 2009 Funded Gratuity PF Gratuity Pension DeathBenefit Gratuity PF Pension DeathBenefit Non-Funded Funded Non-Funded 2008 506.729 8.212 56.310 39.188 48.277 (50.199) 608.517 1,168.836 0.500 27.375 14.811 (183.650) (0.079) (0.023) 78.211 0.037 36.098 (0.860) (54.973) 506.729 106.378 0.060 9.925 10.957 75.237 114.921 54.746 0.505 17.450 194.223 69.316 65.432 (130.374) 998.230 998.230 3.854 451.227 799.633 3.525 0.329 3.854 423.665 6.250 86.044 35.895 (6.499) (50.199) 495.156 (183.650) 1,095.733 (0.079) 938.021 35.440 114.921 55.722 77.196 58.083 0.079 414.821 41.181 33.186 (10.550) (54.973) 747.196 194.223 48.878 85.811 12.287 (130.374) -
10. b) Defined Benefit Plan (Contd.)
A) Reconciliation of opening and closing balances of the present value of the defined benefit obligation:
Obligation at the beginning of the year
On amalgamation
Contributions by plan participants
Current Service cost
Interest cost
Actuarial (gain)/ loss on obligations
Benefits paid
Obligation at the end of the year
B)
Reconciliation of opening and closing balances of the fair value of plan assets: Plan Assets at the beginning of the year On amalgamation Prior period adjustment Contributions by plan participants Contributions by the Company Expected return on plan assets Actuarial gains / (losses) Benefits paid
Plan assets at the end of the year
423.665
958.021
C)
Reconciliation of present value of defined benefit obligation and the fair value of plan assets to the assets and liabilities recognised in the balance sheet: Present value of obligation at the end of the year Fair value of plan assets at the end of the year Liability/(Net Asset) Recognised in Balance Sheet [Included under Provisions in Schedule 12(B)]
608.517 495.156 113.361
1,168.836 1,095.733 73.103
0.500 0.500
27.375 27.375
14.811 14.811
506.729 423.665 83.064
998.230 938.021 60.209
3.854 3.854

Rs Million 2009 Funded Gratuity PF Gratuity DeathPension Benefit Gratuity PF Pension DeathBenefit Non-Funded Funded Non-Funded 2008
D) Expenses recognised in the Profit and Loss Account :

56.310 39.188 (35.895) 54.777 114.380 49.311 0.074 9.925 10.957 87.839 56.650 106.379 78.211 (77.196) (58.083) 0.060 0.037 (0.023) 9.925 10.957 75.237 36.098 (33.186) 9.690 69.316 65.432 (65.811) (12.287) 0.329 0.329
Current service cost Interest cost Expected return on plan assets Prior period adjustment Actuarial (gains)/losses Total Expenses recognised in the Profit and Loss Account
2009 Gratuity PF
0% 1% 0% 0% 0% 86% 13% 100% 38% 0% 0% 33% 17% 0% 12% 100% 18% 34% 2% 1% 7% 29% 9% 100%
2008 Gratuity PF
34% 29% 19% 18% 100%
E)
Investment details of plan assets Government securities Securities guaranteed by Government Private Sector Bonds Public Sector / Financial Institutional Bonds Special Deposit Scheme Fund balance with Insurance Companies Others (including bank balances)
Based on the above allocation and the prevailing yields on these assets, the long term estimate of the expected rate of return on fund assets has been arrived at. Assumed rate of return on assets is expected to vary from year to year reflecting the returns on matching government bonds.
57
58
Rs Million 2009 Funded Gratuity PF Gratuity Pension DeathBenefit Gratuity PF Pension LIC 1994-96 ultimate table 14.76 5% 8% 8.19% NA NA LIC 1994-96 ultimate table 8% 8% 8.55% 8.25% Non-Funded Funded Non-Funded DeathBenefit 2008 7.6% 7.75% 8.00% 5.00% 14 LIC 1994-96 ultimate table LIC 1994-96 ultimate table NA NA 8.19% 8.00% 7.75% -
F)
Actual return on plan assets
G) Assumptions
Discount Rate (per annum)
Expected Rate of Return on Plan Assets
Rate of increase in Compensation levels
Average past service of employees (years)
Mortality rates
The estimates of future increase in compensation levels, considered in the actuarial valuation, have been taken on account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.
As per the best estimate of the management, contribution of Rs 120 Million is expected to be paid to the plans during the year ending March 31, 2010.
11. Borrowing Costs Interest included in the Closing Stock of Malt and Grape Spirit under maturation 12. Foreign Currency Transactions a) 2009 82.643
Rs. Million 2008 38.117
The Company has marked to market all the outstanding derivative contracts on the Balance Sheet date and has recognised the resultant loss amounting to Rs. Nil (2008: Rs 55.238 Million) during the year.
b)
As on March 31, 2009, the Company has the following derivative instruments outstanding: i) Interest and currency swap arrangement (USD-INR) amounting to USD 35 Million (2008: USD 35 Million).
c)
The year end foreign currency exposures that have not been hedged by a derivate instrument or otherwise are as under: i) ii) Loans and Advances to Subsidiaries USD 76.086 Million, GBP 55.200 Million, Euro 24.750 Million (2008: USD 216.400 Million, GBP 57.850 Million, Euro 19.250 Million). FCNR Nil (2008: USD 22.260 Million).
d)
The central Government vide notification dated March 31, 2009 has amended Accounting Standard (AS-11)- The Effects of changes in Foreign Exchange Rates, notified under the Companys (Accounting Standard) Rules, 2006. The Company has exercised the option stated in Paragraph 46 of AS 11 retrospectively from April 1, 2007. As a result, the Company has changed its accounting policy for recognition of exchange differences arising on reporting of long term foreign currency monetary items, with the exception of exchange differences arising on a monetary item that, in substance, forms part of an enterprises net investment in a non-integral foreign operation, at rates different from those at which they were initially recorded during the period or reported in previous financial statements, which hitherto were charged to the Profit and Loss Account, as below: (i) In so far as they relate to the acquisition of depreciable capital assets, are added to or deducted from the cost of asset and are depreciated over the balance life of the asset. This, however, did not have any impact on the results for the year ended March 31, 2009; and (ii) In other cases, the said exchange differences are accumulated in a Foreign Currency Monetary Item Translation Difference Account and amortised over the balance period of such long term asset/liability but not beyond March 31, 2011. Exchange difference recognised in the Profit and Loss Account upto last financial year ending March 31, 2008 relating to said long term monetary items in foreign currency aggregating to Rs.93.245 Million (net of deferred tax Rs. 48.014 Million) has been debited to the opening revenue as provided in the rules. As a result of this change in accounting for exchange difference, net profit for the year is lower by Rs.170.089 Million. The amount remaining to be amortised in the financial statement as on March 31, 2009 is Rs.311.347 Million.
59
13. Segment Reporting The Company is engaged in the business of manufacture, purchase and sale of Beverage Alcohol (Spirits and Wines) including through Tie-up units/ brand franchise, which constitutes a single business segment. The Companys operations outside India did not exceed the quantitative threshold for disclosure envisaged in AS 17 on Segment Reporting specified in the Companies (Accounting Standard) Rules 2006. In view of the above, primary and secondary reporting disclosures for business/geographical segment as envisaged in AS-17 are not applicable to the Company. 14. Related Party Disclosures a) Names of related parties and description of relationship Enterprise where there is control i) Subsidiary Companies: 1) United Spirits Nepal Private Limited (USNPL), 2) Asian Opportunities & Investment Limited (AOIL), 3) BouvetLadubay S.A.S (BL)^, 4) Chapin Landais S.A.S (CL)^, 5) Palmer Investment Group Limited(PIG)^, 6) Montrose International SA (MI)^, 7) JIHL Nominees Limited (JIHL)^, 8) RG Shaw & Company Limited (RGSC)^, 9) Shaw Darby & Company Limited (SDC)^, 10) Shaw Scott & Company Ltd (SSC)^, 11) Thames Rice Milling Company Limited (TRMCL)^, 12) Shaw Wallace Overseas Limited (SWOL)^, 13) McDowell (Scotland) Limited (MSL), 14) USL Holdings Limited (USLHL), 15) Royal Challengers Sports Private Limited (RCSPL), 16) Spring Valley Investment Holdings Inc (SVIHI)^, 17) USL Holdings (UK) Limited^, 18) United Spirits (UK) Limited^, 19) United Spirits (Great Britain) Limited^, 20) Shaw Wallace Breweries Limited (SWBL), 21) Ramanretti Investment & Trading Limited (RITL)^, 22) Daffodils Fragrance and Flavours Private Limited (DFFPL), 23) Four Seasons Wines Private Limited (FSWPL), 24)Herbertsons Limited (HL), 25) United Vintners Limited (UVL), 26) United Alcobev Limited (UAL) , 27) McDowell Beverages Limited (MBL), 28) McDowell & Company Limited, 29) Jasmine Flavours and Fragrances Limited, 30) Liquidity Inc, 31) Whyte and Mackay Group Limited^, 32) Whyte and Mackay Holdings Ltd^, 33) Whyte and Mackay Limited (W&M), 34) Whyte and Mackay Warehousing Limited^, 35) Bruce & Company (Leith) Limited^, 36) Charles Mackinlay & Company Limited^, 37) Dalmore Distillers Limited^, 38) Dalmore Whyte & Mackay Limited^, 39) Edinburgh Scotch Whisky Company Limited^, 40) Ewen & Company Limited^, 41) Fettercairn Distillery Limited^, 42) Findlater Scotch Whisky Limited^, 43) Glayva Liqueur Limited^, 44) Glentalla Limited^, 45) GPS Realisations Limited^, 46) Grey Rogers & Company Limited^, 47) Hay & MacLeod Limited^, 48) Invergordon Distillers (Holdings) Limited^, 49) Invergordon Distillers Group Limited^, 50) Invergordon Distillers Limited^, 51) Invergordon Gin Limited^, 52) Isle of Jura Distillery Company Limited^, 53) Jarvis Halliday & Company Limited^, 54) John E McPherson & Sons Limited^, 55) Kensington Distillers Limited^, 56) Kyndal Spirits Limited^, 57) Leith Distillers Limited^, 58) Loch Glass Distilling Company Limited^, 59) Longman Distillers Limited^, 60) Lycidas (437) Limited^, 61) Pentland Bonding Company Limited^, 62) Ronald Morrison & Company Limited^, 63) St The Sheep Dip Whisky Company Limited^, 64) Vincent Street (437) Limited^, 65) Tamnavulin-Glenlivet Distillery Company Limited^, 66) TDL Realisations Limited^, 67) W & S Strong Limited^, 68) Watson & Middleton Limited^, 69) Wauchope Moodie & Company Limited^, 70) Whyte & Mackay Distillers Limited^, 71) William Muir Limited^, 72) WMB Realisations Limited^, 73) Whyte and Mackay Property Limited^, 74) Whyte and Mackay de Venezuela CA^, 75) KI Trustees Limited^, 76) USL Shanghai Trading Company Limited *. * Became a subsidiary during the year ^ No transactions during the year.
60
ii) USL Benefit Trust Associates with whom transactions have taken place during the year Utkal Distilleries Ltd (Utkal) (upto July 25, 2008) and Wine Soc. of India Private Limited. Key Management personnel Mr. V.K.Rekhi, Managing Director Employees Benefit Plans where there is significant influence: Mc Dowell & Company Limited Staff Gratuity Fund (McD SGF), McDowell & Company Limited Officers' Gratuity Fund (McD OGF), SWDL Group Officers Gratuity Fund (SWDL OGF), SWDL Employees Gratuity Fund (SWDL EGF), Herbertsons Limited Employees Gratuity Fund (HL EGF), Phipson & Company Limited Management Staff Gratuity Fund. (PCL SGF), Phipson & Company Limited Gratuity Fund. (PCL GF), Carew & Company Ltd. Gratuity Fund (CCL GF), McDowell & Company Limited Provident Fund (McD PF), Herbertsons Limited Executives Provident Fund (HL EPF) and The Bengal Distilleries Company Limited Staff Provident Fund (BD PF), Shaw Wallace & Associated Companies Employees Gratuity Fund (SWCEGF), Shaw Wallace & Associated Companies Executive Staff Fund (SWCSGF), Shaw Wallace & Co. Associated Companies Provident Fund (SWCPF).
61
62
Rs. Million 2009 2008
Entities where there is control Associates Total Key Management personnel Employees Benefit Plans where there is significant influence Entities where there is control 26.117 314.774 3.259 54.181 38.630 15.818 (1.719) 19.045 22.608 104.805 (126.478) 148.574 182.413 3.140 9,409.542 1,244.520 806.749 449.508 261.744 (1,652.733) (126.478) 148.574 272.027 9.074 153.536 8.655 1,244.520 806.749 449.508 261.744 (1,652.733) 6190.725 207.047 15.934 120.842 (519.200) (135.830) 6190.725 207.047 15.934 120.842 (519.200) (135.830) (1,155.201) (509.206) 181.666 125.223 0.336 6.328 2.854 0.309 Total 3.140 40.206 107.507 23.360 30.858 0.981 87.395 7.671 1,321.002 9.724 Employees Benefit Key Plans where Associates Management there is personnel significant influence 1,321.002 9.724 87.395 7.671 23.360 40.206 107.507 104.805 182.413 9,409.542 30.858 0.981 26.117 314.774 0.309 3.259 54.181 6.328 38.630 125.223 15.818 (1.719) 0.336 19.045 22.608 272.027 9.074 2.854 153.536 8.655
b) Summary of the transactions with related parties:
Sl. No.
Nature of transactions **
a) Purchase of goods - SWCL - W&M - Utkal - Others b) Sale of goods - SWCL - Utkal - USNPL - Others c) Income from sale by Tie-up Units. - Utkal d) Income from Brand Franchise - USNPL e) Sale/ (Purchase) of fixed assets - SWCL - Utkal f) Other Income - USNPL - SWCL g) Advertisement & Sales Promotion - RCSPL h) Rent - W&M i) Royalty and Brand Fee - SWCL - AOIL j) Interest Expense - SWBL k) Rental Deposit l) Interest as Sole Beneficiary in USL Benefit Trust m) Receipt from USL Benefit Trust n) Finance (including loans and equity contributions in cash or in kind) - USL Holding Ltd. - RCSPL - AOIL
- FSWPL - SWBL - Utkal
- SWCL - Zelinka - Others
(1,155.201) (509.206) 181.666
b) Summary of the transactions with related parties: (Contd.)

Entities where there is control Associates Key Management personnel Employees Benefit Plans where there is significant influence Total Entities where there is control Associates Key Employees Management Benefit personnel Plans where there is significant influence 31.439 2.790 6,206.641 1,674.998 910.74 1,225.489 6,836.073 207.809 489.847 5.984 33.621 48.015 0.863 24,830.870 56.250 31.439 2.790 1.306 25.706 5.382 5.984 33.621 48.015 0.863 6,206.641 1,225.489 6,836.073 489.847 207.809 Total
Sl. No.
Nature of transactions **
o) Guarantees and Collaterals given 31,397.558 3.229 7,451.161 1,674.998 910.74 498.627 641.161 (303.828) (2,556.633) (446.649) 7,451.161 55.068 55.068 0.654 0.654 33.493 33.493 43.692 43.692 3.229 5.382 25.706 1.306 3.069 3.069 42.362 42.362 56.250 31,397.558 24,830.870 -
- USL Holding Ltd
- USNPL
p) Managing Directors Remuneration
q) Rent r) Dividend Paid
- PDPL
- SWCL
- USL Benefit Trust
s) Contribution to Gratuity Fund
- McD OGF
- McD SGF
- SWCPF
t) Contribution to Provident Fund
- McD PF
- BD PF
u) Amount due from
- USL Holding Ltd
- AOIL
- Zelinka
- Utkal
- RCSPL
- FSWPL
498.627 641.161 (303.828) (2,556.633) (446.649)
196.305 355.406 (1,234.395) (11.000) (80.309) -
196.305 355.406 (1,234.395) (11.000) (80.309) -
- Others
v) Amount due to
- SWCL
- PDPL
-W&M
w) Loan from SWBL
x) Interest accrued and dues
** Excludes Reimbursement of Expenses and Cost sharing arrangements.
The above information has been determined to the extent such parties have been identified on the basis of information provided by the Company, which has been relied upon by the auditors.
63
15. (a)
The Companys significant leasing arrangements in respect of operating leases for premises (residential, office, stores, godown, manufacturing facilities etc), which are not non-cancellable, range between 11 months and 3 years generally (or longer in certain cases) and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent under Schedule 15 to the accounts. Leasing arrangements entered into prior to April 1, 2001 have not been considered for treatment under AS 19 Accounting for Leases.
(b) The Company has acquired computer equipment and cars on finance leases. The lease agreement is for a primary period of 48 months for computer equipment and 36 months to 60 months for cars. The Company has an option to renew these leases for a secondary period. There are no exceptional/restrictive covenants in the lease agreements. The minimum lease payments and their present value, for each of the following periods are as follows: Rs. Million 2009 Particulars Later than one year and not later than five years Later than five years Not later than one year Less: Finance Charges Present value of net minimum lease payments 16. Earnings Per Share:
Nominal Value of equity shares (Rs) Net Profit after tax (Rs. Million) Less: Proposed Dividend on Preference Shares (including Corporate tax thereon) Net Profit available for equity shares Basic number of Equity Shares of Rs.10 each outstanding during the year** Weighted Average number of Equity Shares of Rs.10 each outstanding during the year** Basic Earnings Per Share (Rs.) (a /c) Dilutive Effect on Profit (Rs Million) * Profit attributable to equity shareholders for computing Diluted EPS (Rs. Million) (a+e) Dilutive Effect on Weighted average number of equity shares outstanding during the year * Weighted average number of Equity Shares and equity equivalent shares for computing Diluted EPS (c+g) Diluted Earnings Per Share (Rs.) (f / h)
2008 Minimum lease payments 17.137 17.137 12.930 30.067 3.343 26.724
2009 10 2,966.624 2,966.624 107,912,377 107,912,377 27.49 2,966.624 107,912,377 27.49
Present Value of payments 15.618 15.618 11.106 26.724
Present Value of payments 24.074 24.074 17.477 41.551
Minimum lease payments 26.683 26.683 20.304 46.987 5.436 41.551

2008 10 3,112.759 2.258 3,110.501 100,163,256 97,702,675 31.84 23.130 3,133.631 2,080,338 99,783,013 31.40
a)
b) c) d) e) f) g) h) i)
Dilutive effect on weighted average number of equity shares and profit attributable is on account of Foreign Currency Convertible Bonds. ** Including Equity Shares to be issued referred to in Note 2(A)(I)(a).
64
Rs. Million 2009 17. Taxes on Income: a) Current Taxation Provision for current taxation includes: i) ii) b) Income Tax Wealth Tax 1,747.925 13.000 1,760.925 1,697.500 12.500 1,710.000 2008
Deferred Taxation The net Deferred Tax (Asset) / Liability as on March 31, 2009 has been arrived at as follows:
Deferred Taken over Tax (Assets) / on Liabilities as on Amalgamation* 1.4.2008 251.044 (131.814) (68.486) (55.906) (5.162) 40.279 (2.650) (14.849) 22.780 Current Year charge / (credit) 14.934 (71.496) (47.184) (130.275) (234.021) (48.013) 186.008 Deferred Tax (Assets) / Liabilities as on 31.03.2009 306.257 (203.310) (118.320) (201.030) (216.403)
Particulars
Difference between book and tax depreciation Provision for Doubtful Debts Employee Benefits Others Less: Adjustment on adoption of notification for amendment to AS11
Including deferred tax assets/(liabilities) of the Transferor Companies arising/ reversing during the year ended March 31, 2008. (Note 2 (D) above).
18. Remuneration paid/payable to Managing Director 2009 Salary and Allowances Incentives paid Contribution to Provident and other Funds * Value of Perquisites * 18.062 17.085 3.940 3.275 42.362 2008 14.966 10.213 3.383 2.877 31.439
Provision for contribution to employee retirement/post retirement and other employee benefits which are based on actuarial valuation done on an overall company basis are excluded above.
65
Rs. Million 2009 19. Directors Commission Computation of Net Profits under Section 198 of the Companies Act, 1956 Net Profit before Taxation Add: Depreciation as per Books Remuneration to Managing Director Directors Fees Directors Commission Book deficit/(surplus) on fixed assets sold, written-off, etc (net) as per books Provision for Doubtful Debts Diminution in value of Investments Less: Depreciation under Section 350 of the Companies Act, 1956 Profit on Sale of Investments Deficit/(Surplus) on disposal of fixed assets under Section 349 of the Companies Act, 1956 Net profit Commission 1% thereof 4,591.604 361.565 42.362 1.180 48.727 (45.105) 210.345 0.030 5,210.708 361.565 3.355 (26.891) 4,872.679 48.727 4,849.662 326.112 31.439 1.070 51.044 20.354 171.171 0.051 5,450.903 326.112 20.354 5,104.437 51.044 2008
The total remuneration as stated above is within the maximum permissible limit under the Companies Act, 1956. 20. Quantitative Information in respect of goods manufactured and sold by the Company a. Particulars of Capacity and Production: 2009 Description Beverage Alcohol [Note (i)] Notes: i. ii. iii. iv. Includes alcohol produced and bottled out of purchased rectified spirit. This activity is not considered as manufacture under the Industries (Development and Regulation) Act, 1951. The Company's applications for the Carry On Business licenses for certain Units are still pending with the authority. The Licensed and Installed Capacity has been certified by the Companys management and relied upon by the Auditors, this being a technical matter. Includes production at manufacturing facilities taken on lease. Unit Ltrs Licensed Capacity Installed Capacity Actual Production (Note iv) Licensed Capacity 2008 Installed Capacity Actual Production
201,627,259 229,217,267 186,609,997
164,560,592 192,150,600 150,225,898
66
Rs. Million 2009 b. Particulars of opening stock of Finished Goods: Description Beverage Alcohol Unit Cases Quantity 1,342,421 Value 1,526.985 1,526.985 c. Quantity 967,072 Value 996.638 996.638 2008
Particulars of stock of finished goods of the Transferor Companies as on April 1, 2008 (Note 3 (D) above) acquired on amalgamation Description Beverage Alcohol Unit Cases Quantity 66,899 Value 56.647 56.647 Quantity Value -
d.
Particulars of closing stock of Finished Goods: Description Beverage Alcohol Unit Cases Quantity 1,530,313 Value 2,052.475 2,052.475 Quantity 1,342,421 Value 1,526.985 1,526.985
e.
Particulars of Turnover: Description Beverage Alcohol Unit Cases Quantity 52,932,510 Value 71,130.831 71,130.831 Quantity 38,743,593 Value 51,784.918 51,784.918
f.
Particulars of purchase of traded goods: Description Beverage Alcohol Unit Cases Quantity 3,914,188 Value 5,186.702 5,186.702 Quantity 3,265,082 Value 4,072.316 4,072.316 Quantity 121,714,329 8,732,860 124,989,972 Value 3,721.819 206.760 314.633 1,181.159 5,424.371 % 15 85 100 Value 817.613 4,606.758 5,424.371
21. Particulars of Raw Materials Consumed: Description Spirits Malt Molasses Others Unit Litres Kg. Kg. Quantity 175,537,178 15,426,159 123,317,858 Value 7,841.101 415.177 605.718 1,345.962 10,207.958 Whereof: Imported Indigenous % 18 82 100 Value 1,888.249 8,319.709 10,207.958
67
22. Consumption of Packing Material, Stores and Spares: (including stores consumed in Repairs and Maintenance expenses) 2009 % Imported Indigenous 1 99 100 Value 124.304 9,410.332 9,534.636 % 1 99 100 2008 Value 55.499 6,581.998 6,637.497 Rs. Million 2009 23. Value of Imports on C.I.F. basis: Raw Materials and Packing Materials Components and Spare Parts Plant and Machinery 1,470.157 2.691 25.131 1,497.979 24. Earnings in Foreign Currency: Interest on Fixed Deposits (net) Dividend income from subsidiary 1.936 40.206 42.142 25. Expenditure in Foreign Currency: Interest Rent Others (Royalty, Travelling, Subscription, Professional fees, Foreign Travel Expenses, Advertisement, Bank Charges, Finance Charges, etc.) 115.803 104.805 225.427 446.035 26. Auditors Remuneration * Statutory Audit ** Other Services Out-of-pocket Expenses (including service tax) * Included under Legal and Professional Charges in Schedule 15. 11.000 5.950 0.407 17.357 ** Including relating to earlier year Rs. 1 Million (2008 : Nil). 7.000 7.670 0.293 14.963 121.616 102.924 224.540 0.552 19.045 19.597 538.831 0.794 28.153 567.778 2008 Rs Million
68
Rs. Million 2009 27. (a) Repairs to Plant and Machinery include: Wages Stores Consumed (b) Repairs to Building include: Wages Stores consumed 1.708 1.168 2.876 28. Research and Development expenses comprise the following: Salaries and Wages Contribution to Provident Fund and other Funds Staff Welfare Expenses Rent Miscellaneous Expenses 15.959 1.674 0.972 3.861 7.567 30.033 29. a) b) Previous year's figures have been regrouped / rearranged wherever necessary. In view of the amalgamation described in Note 2 above, the figures for the year ended March 31, 2009 are not comparable with those of previous year. 14.795 1.598 0.884 3.710 6.694 27.681 9.853 9.688 19.541 7.588 7.840 15.428 6.479 23.674 30.153 2008
M.R.DORAISWAMY IYENGAR Director
V.K. REKHI Managing Director
V.S.VENKATARAMAN Company Secretary Bangalore July 29, 2009
P.A. MURALI Chief Financial Officer
69
Statement Pursuant To Section 212(1)(e) Of The Companies Act, 1956 As At March 31, 2009
a) No of shares held at the end of the financial year of the subsidiary b) Extent of holding Net aggregate Profit/loss of the subsidiary so far as it concerns the members of the company a) Not dealt with in the accounts of the company (i ) (ii ) for the for the previous subsidiary's financial years financial of the subsidiary year ended since it became 31.03.2009 a subsidiary 6 (60.572) 38.828 (0.064) 227.303 (0.321) 18.383 4.556 3.115 2.462 0.607 2.085 12.686 18.255 0.802 (35.206) (0.119) (1,251.126) 477.551 (6,402.734) (0.158) 1.473 b) Dealt with in the accounts of the company (i ) (ii ) for the for the previous subsidary's financial years financial of the subsidiary year ended since it became 31.03.2009 a subsidiary (Rs. Million) 7 8 9 (148.097) 67.697 (0.211) 1,686.014 (0.569) 22.029 6.204 6.305 4.736 0.257 5.951 17.792 106.117 (0.351) (23.453) (0.219) (1,077.225) (9.606) (1,821.350) (0.325) (2.641) -
% Other United Spirits subsidiary Ltd. companies
Sl. Name of the subsidiary No.
Other United subsidiary Spirits Ltd. companies
1 1 Asian Opportunities & Investments Ltd. 2 United Spirits Nepal P. Ltd. (formerly known as McDowell Nepal Ltd.) 3 Ramanreti Investments & Trading Ltd. 4 Shaw Wallace Breweries Ltd.* 5 Palmer Investment Group Ltd. 6 RG Shaw & Company Ltd. 7 Shaw Scott & Company Ltd. 8 Shaw Darby & Company Ltd 9 Thames Rice Milling Company Ltd 10 Shaw Wallace Overseas Ltd 11 JIHL Nominees Ltd 12 Montrose International S.A 13 Bouvet Ladubay 14 Chapin Landais 15 McDowell & Co. (ScotLand) Ltd 16 Spring Valley Investments Holdings Inc 17 United Spirits (Great Britain) Ltd 18 USL Holdings Ltd 19 USL Holdings (UK) Ltd 20 United Spirits (UK) Ltd 21 Daffodils Flavours & Fragrances Pvt Ltd
2 4,998,706 Shares 67,716 Shares 78,512,509 Shares 15,000,000 Shares 10,000 Shares
3 50,000 Shares 1,686,004
4 100% 82.46% 51.44% -
5 100% 1.10% 0% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% -
7,690,180 Shares 105,609 Shares 130,845 Shares 90,160 Shares 357,745 Shares 10 Shares 500 Shares 5,40,000 Shares 5,000 Shares 1,575,000 Shares 50,000 Shares 100 Shares 100,000 Shares 100,000 Shares 100,000 Shares -
100%
70
Statement Pursuant To Section 212(1)(e) Of The Companies Act, 1956 As At March 31, 2009 (Contd.)
a) No of shares held at the end of the financial year of the subsidiary b) Extent of holding Net aggregate Profit/loss of the subsidiary so far as it concerns the members of the company a) Not dealt with in the accounts of the company (i ) (ii ) for the for the previous subsidiary's financial years financial of the subsidiary year ended since it became 31.03.2009 a subsidiary 6 (78.976) (0.024) (0.077) (0.072) (12.581) (0.053) (55.774) (0.029) 257.704 (66.647) (26.410) b) Dealt with in the accounts of the company (i ) (ii ) for the for the previous subsidary's financial years financial of the subsidiary year ended since it became 31.03.2009 a subsidiary (Rs. Million) 7 8 9 (46.419) (0.041) (0.026) (0.038) (12.241) (0.152) (7.987) (0.098) 2,141.720 (34.984) -
% Other United Spirits subsidiary Ltd. companies
Sl. Name of the subsidiary No.
Other United subsidiary Spirits Ltd. companies
1 22 Four Seasons Wines Ltd 23 Herbertsons Ltd 24 McDowell Beverages Ltd 25 United Alcobev Ltd 26 United Vintners Ltd 27 McDowell and Co. Ltd 28 Royal Challengers Sportsd Pvt. Ltd 29 Jasmine Flavours and Fragrances P Ltd 30 Whyte and Mackay Limited 31 Liquidity Inc., 32 United Spirits Trading (Shanghai) Co. P Ltd
2 50,000 Shares 54,000 Shares 50,000 Shares 50,000 Shares 50,000 Shares 50,000 Shares 10,000 Shares 10,000 Shares 4,000,000 Shares 5,000,000 Shares
3 4,600,349,728 Shares
4 100% 90% 100% 100% 100% 100% 100% 100% -
5 100% 51%
100%
* Balance 72,416,505 equity shares vest with SWFSL Benefit Trust whose beneficiary is Shaw Wallace Breweries Ltd.
Statement Pursuant to Section 212(1)(f) Of The Companies Act, 1956 as at March 31, 2009
Sl. Name of the no subsidiary Subsidiary Financial year ended on 16.07.2008 Company's Interest in the Subsidiary 82.46% Material changes that have occurred between the close of subsidiary's financial year and March 31, 2009 Subsidiary's Subsidiary's Moneys Moneys borrowed by the Fixed Investments lent by the subsidiary for the purposes Assets Subsidiary other than that of meeting current liabilities (Rs. Million) 1 United Spirits Nepal P. Ltd. (formerly known as McDowell Nepal Ltd.) M.R.DORAISWAMY IYENGAR Director angalore July 29, 2009 0.229 0.000
V.K.REKHI Managing Director
P. A. MURALI Chief Financial Officer
V.S.VENKATARAMAN Company Secretary
71
72 (Amount in Millions)
R.G. Shaw & Company Limited GBP INR 0.077 1.036 1.113 1.113 0.720 0.262 0.030 0.232 18.383 (0.007) (0.321) 0.273 12.686 0.058 4.556 2.353 0.006 0.476 0.039 20.736 (0.007) (0.321) 0.273 12.686 0.064 5.032 0.039 1.916 89.051 52.304 16.234 823.551 0.098 7.084 0.109 7.884 3.115 3.115 80.782 16.214 822.528 0.694 35.226 0.194 14.061 0.188 13.651 80.782 16.214 822.528 0.694 35.226 0.194 14.061 0.188 13.651 75.199 1.214 61.578 0.194 9.861 0.088 6.393 0.057 4.152 0.093 0.183 0.183 0.123 0.031 0.031 5.583 15.000 760.950 0.500 25.365 0.106 7.667 0.131 9.499 0.090 6.546 6.722 13.268 13.268 8.908 2.462 2.462 Palmer Investment Group Limited USD INR Montrose International S.A. USD INR Shaw Scott & Company Limited GBP INR Shaw Darby & Company Limited GBP INR Thames Rice Milling Company Limited GBP INR JIHL Nominees Limited USL Holdings (UK) Limited USD 0.000 0.001 0.179 0.179 0.179 0.045 0.045 0.001 0.073 0.050 2.537 9.087 (198.663) (14,422.953) (0.008) (0.402) 9.088 234.237 17,005.640 0.042 2.135 9.088 234.237 17,005.640 0.042 2.135 0.000 0.000 0.002 0.100 2.085 (80.911) (6,402.734) (0.003) (0.119) 2.085 (80.911) (6,402.734) (0.003) (0.119) INR GBP INR USD INR USD 0.500 Spring Valley Investments Holding Inc. USL Holdings Limited United Spirits (Great Britain) Limited United Spirits (UK) Limited Ramanreti Investments and Trading Company Private Ltd INR 25.365 GBP 0.000 INR 0.000 30.779 1,561.401 (30.603) (2,215.657) 31.279 1,586.766 501.282 36,292.817 31.279 1,586.766 (531.885) (38,508.474) 0.050 2.537 506.794 36,691.886 10.277 477.551 (24.002) (1,737.745) 6.721 486.600 10.277 477.551 (17.281) (1,251.144) GBP 0.000 (0.006) (0.006) (0.006) 0.000 (0.002) (0.002) INR 0.000 (0.436) (0.435) (0.435) 0.000 (0.158) (0.158) INR 0.500 (6.650) (6.150) (6.150) 16.860 (0.064) (0.064) -
Details of Subsidiary Companies
Name of the Subsidiary
1. Capital
2. Reserves
3. Total Assets
4. Total Liabilities
5. Investments
6. Turnover
7. Profit before Taxation
8. Provision for Taxation
9. Profit after Taxation
10. Proposed Dividend
1. Capital
2. 3. 4. 5. 6. 7. 8. 9. 10.
Reserves Total Assets Total Liabilities Investments Turnover Profit before Taxation Provision for Taxation Profit after Taxation Proposed Dividend
Details of Subsidiary Companies (Contd.)

(Amount in Millions)
Bouvet Ladubay S.A.S EURO 10.800 2.399 23.183 23.183 0.235 16.537 0.349 0.071 0.278 29.423 18.389 18.255 62.125 38.828 (1.304) (60.572) 0.008 0.607 4.667 28.470 17.794 0.002 0.157 98.018 22.922 90.595 56.622 (1.304) (60.572) 0.010 0.764 1086.989 691.787 432.367 23.335 5.767 15.893 - 27.189 1,379.294 58.573 8.721 1565.553 186.047 116.280 3.946 200.173 0.195 14.156 5,000.248 (74.925) (24.352) 0.360 1565.553 186.047 116.280 3.946 200.173 0.195 14.156 5,000.248 (74.925) (24.352) 0.360 162.035 100.713 62.945 (1.952) (99.035) (0.163) (11.816) 3,355.460 (125.425) (24.852) (0.140) 0.355 0.355 729.324 8.212 5.132 4.999 253.584 0.358 25.972 1,645.850 50.500 0.500 0.500 0.500 INR USD INR GBP INR INR INR INR INR INR GBP INR United Spirits Nepal Pvt. Ltd. (Formerly known as McDowell Nepal Ltd) NRS INR Asian Opportunities and Investments Limited Shaw Wallace Overseas Limited McDowell (Scotland) Limited 1.575 114.345 4.876 353.965 4.876 353.965 (0.077) (0.445) (35.206) (0.077) (0.445) (35.206) Shaw Four United United McDowell Wallace Seasons Vintners Alcobev Beverages Breweries Wines Limited Limited Limited Limited Limited (0.145) (0.945) (68.580)
1. Capital
2. Reserves
3. Total Assets
5. Investments
6. Turnover
7. Profit before Taxation
325.321 (78.976) (12.581) (0.072) 227.303 (78.976) (12.581) (0.072)
8. Provision for Taxation
Daffodils Herbert- Flavours & Chapin sons Fragrances Liquidity Inc., Landias S.A.S Limited Private Limited White & Mackay Group Ltd. EURO 0.100 0.079 0.179 12.064 0.179 12.064 3.042 199.970 1.238 (0.024) 0.436 0.802 (0.024) 0.754 0.535 0.535 (1.122) 0.469 23.768 5.309 (0.065) (1.222) (0.946) (48.015) 6.753 0.600 0.100 0.001 0.051 62.315 2.477 299.443 0.121 176.703 4.371 1.473 (1.434) (66.647) 0.812 3.559 INR INR INR USD INR GBP INR
Jasmine United Spirits McDowell Royal Flavours (Trading) and Challengand White & Mackay Ltd. Shanghai Company ers Sports Fragrances Co. P Ltd Limited P Ltd P Ltd GBP INR INR INR RMB INR INR
1. Capital
4,511.634 178.973 12957.647 179.304 107.059
0.100 7751.072 (63.760) 21,679.692 888.687 64340.939 (92.168) 8.738 483.505 35005.762 316.471 58.767 257.704 23.443 1.268 22.174 12,793.310 173.091 12531.788 501.608 697.273 (84.281) 91.803 (28.507) 160.398 (55.774) -
0.100 (0.027) (0.027) -
5.000 38.220 (0.127) (4.398) (33.619) 0.602 0.602 4.600 4.600 3.311 22.450 (0.029) (3.895) (26.410) (0.029) (3.895) (26.410) -
0.500 (0.205) 0.295 0.295 (0.053) (0.053) -
2. Reserves
3. Total Assets
(1.122) 0.469 23.768 (234.651) (16,988.754) 888.687 64340.939 (92.168) - 0.589 27.358 2.227 (1.434) (66.647)
5. Investments
6. Turnover
7. Profit before Taxation 0.019 0.012 -
8. Provision for Taxation 0.007
73
BALANCE SHEET ABSTRACT
BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE

I Registration Details Registration No. Balance Sheet Date II Public issue Bonus Shares Others* III Total Liabilities Sources of funds Paid-up Capital Share Capital Suspense Application of Funds Net Fixed Assets Net Current Assets Accumulated Losses IV Performance of Company (Rs. Million) Turnover (Gross Revenue) (+) Profit / (-) Loss Before Tax Earning (Basic) per share in Rs. Earnings (Diluted) per Share in Rs. V Item Code No. (ITC Code) Product Description Item Code No. (ITC Code) Product Description Item Code No. (ITC Code) Product description V.K.REKHI Managing Director Bangalore July 29, 2009 + 4 5 9 1 . 6 0 4 2 7 . 4 9 2 7 . 4 9 0 0 0 1 0 1 R U M M.R.DORAISWAMY IYENGER Director V.S. VENKATARAMAN Company Secretary P. A. MURALI Chief Financial Officer Dividend rate % 2 0 (+) Profit / (-) Loss After Tax (incl. Deferred Tax) + 2 9 6 6 . 6 2 4 4 1 5 2 9 . 7 7 1 Total Expenditure 3 6 5 7 6 . 6 0 2 6 2 0 8 . 9 6 7 2 3 4 8 6 . 8 9 3 N I L Investments Misc. Expenditure Deferred Tax Asset (Net) 2 0 5 1 4 . 7 6 5 N I L 2 1 6 . 4 0 3 7 7 . 4 9 1 1 0 0 1 . 6 3 3 Reserves & Surplus Secured Loans Unsecured Loans 2 9 7 0 8 . 0 3 7 1 3 0 6 4 . 7 9 0 6 1 6 3 . 7 3 0 L 0 1 5 5 1 K A 1 9 9 9 P L C 0 2 4 9 9 1 3 1 0 3 2 0 0 9 N I L N I L N I L 5 0 3 2 7 . 0 2 8 Rights issue Private Placement Naked Warrants / Pref. offer Total Assets N I L N I L N I L 5 0 3 2 7 . 0 2 8 State Code 0 8
Capital Raised during the period (Rs. Million)
Position of Mobilisation and Deployment of Funds (Rs. Million)
Generic Name of Three Principal Products / Services of Company (as per monetary items) 2 2 0 8 3 0 2 2 0 8 2 0 2 2 0 8 4 0 WH I S K Y B R A N D Y
74
Auditors' Report to the Board of Directors of United Spirits Limited
1.
We have audited the attached Consolidated Balance Sheet of United Spirits Limited and its subsidiaries (United Spirits Limited Group) as at March 31, 2009, the Consolidated Profit and Loss account for the year ended on that date annexed thereto, and the Consolidated Cash Flow Statement for the year ended on that date, which we have signed under reference to this report. These Consolidated Financial Statements are the responsibility of the United Spirits Limiteds management and have been prepared by the management on the basis of separate financial statements and other financial information regarding components. Our responsibility is to express an opinion on these Consolidated Financial Statements based on our audit. 5. 4
information of these subsidiaries and associates have been audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included in respect of these subsidiaries, is based solely on the report of the other auditors. We report that the Consolidated Financial Statements have been prepared by United Spirits Limiteds management in accordance with the requirements of Accounting Standard 21, Consolidated Financial Statements and Accounting Standard 23, Accounting for Investments in Associates in Consolidated Financial Statements, as specified in the Companies (Accounting Standard) Rules, 2006. Based on our audit and on consideration of the reports of other auditors on separate financial statements and on the other financial information of the components, in our opinion and to the best of our information and according to the explanations given to us, the attached Consolidated Financial Statements, give a true and fair view in conformity with the accounting principles generally accepted in India: i) in the case of the Consolidated Balance Sheet, of the state of affairs of the United Spirits Limited Group as at March 31, 2009; ii) in the case of the Consolidated Profit and Loss account, of the loss for the year ended on that date; and iii) in the case of the Consolidated Cash Flow Statement, of the cash flows for the year ended on that date.
2.
We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3.
We did not audit the financial statements of certain subsidiaries, whose financial statements reflect total assets of Rs. 68,927.464 Million as at March 31, 2009, total revenues of Rs. 16,381.334 Million and net cash outflow amounting to Rs. 731.870 Million for the year ended on that date as considered in the Consolidated Financial Statements and associates whose financial statements reflect the United Spirits Limited Groups share of loss of Rs. 1.308 Million for the year ended on that date as considered in the Consolidated Financial Statements. These financial statements and other
Place: Bangalore Date : July 29, 2009
J. Majumdar Partner Membership Number F 51912 For and on behalf of Price Waterhouse Chartered Accountants
75
Consolidated Financial Statement Balance Sheet as at March 31, 2009

Schedule SOURCES OF FUNDS Shareholders Funds Share Capital Share Capital Suspense Reserves and Surplus Minority Interest Loan Funds Secured Loans Unsecured Loans Term Liability towards Franchisee rights [Schedule 19 Note 4] Deferred Tax Liability (Net) [Schedule 19 Note 15(b)] APPLICATION OF FUNDS a) Fixed Assets Gross Block Less: Depreciation Net Block Capital Work in Progress b) Goodwill on Consolidation Investments Deferred Tax Asset (Net) [Schedule 19 Note 15(b)] Foreign Currency Monetory Item Translation Difference [Schedule 19 Note17(d)(ii)] Current Assets, Loans and Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances Less: Current Liabilities and Provisions Liabilities Provisions Net Current Assets Miscellaneous Expenditure ( to the extent not written off) Statement on Significant Accounting Policies Notes on Accounts 13 18 19 7 8 9 10 11 12 6 5 3 4 2009 Rs. Million 2008
1 1A 2
1,001.633 28.239 22,826.141 62.854 69,926.045 3,678.829 4,431.413 101,955.154
885.744 19,886.905 1,992.239 65,270.189 771.175 18.029 88,824.281
22,919.456 6,649.966 16,269.490 288.382 16,557.872 44,738.318 9,501.457 917.977 5,597.523 17,458.044 8,879.604 4,490.023 2,145.024 7,399.294 40,371.989 13,878.812 2,584.477 16,463.289 23,908.700 733.307 101,955.154
16,985.241 6,357.133 10,628.108 534.432 11,162.540 53,259.734 2,119.087 14,850.027 8,369.997 5,437.838 1,469.204 4,350.572 34,477.638 11,933.516 1,227.972 13,161.488 21,316.150 966.770 88,824.281
The Schedules referred to above and the notes thereon form an integral part of the Accounts. This is the Consolidated Balance Sheet referred to in our report of even date
M. R. DORAISWAMY IYENGAR Director V. S. VENKATARAMAN Company Secretary Bangalore July 29, 2009
V. K. REKHI Managing Director P. A. MURALI Chief Financial Officer
76
Consolidated Financial Statement Profit and Loss Account for the year ended March 31, 2009
Rs. Million Schedule INCOME Sales (Gross) Less: Excise Duty Income arising from Sale by Manufacturers under Tie-up' agreements (Tie-up units) Income from Brand Franchise Income from IPL Franchise Other Income EXPENDITURE Materials Manufacturing and Other Expenses Interest and Finance charges Exchange Loss (Net) Profit before Exceptional and Other Non-Recurring items, Depreciation and Taxation Depreciation Profit before Exceptional and Other Non-Recurring Items and Taxation Exceptional and Other Non-Recurring Items (Net) - Contingency Provision Written Back (Loss)/ Profit before Taxation and before share in Profit/Losses) of Associates Provision for Taxation: Current Tax Deferred Tax Fringe Benefit Tax (Loss)/Profit after Taxation and before share in Profits/(Losses) of Associates Share in Profits/ (losses) of Associates (Net) (Loss) / Profit before Minority Interest Minority Interest in (Profit)/Loss Net (Loss)/ Profit for the year Profit brought forward from previous year Profit transferred on Amalgamation [Schedule 19 Note 2(D)] Appropriations: Proposed Dividend Equity Shares - Interim Equity Shares - Final Corporate Tax on Proposed Dividend Transfer to Capital Redemption Reserve Transfer to General Reserve Profit carried to Balance Sheet Basic Earnings Per Share (Rs.) (Face Value of Rs.10 each) Diluted Earnings Per Share (Rs.) (Face Value of Rs.10 each) Statement on Significant Accounting Policies 18 Notes on Accounts 19 The Schedules referred to above and the notes thereon form an integral part of the Accounts. This is the Consolidated Profit and Loss Account referred to in our report of even date 2009 88,991.063 38,449.701 50,541.362 2,286.740 1,417.905 434.608 1,038.408 55,719.023 26,909.455 20,067.629 7,175.643 3,809.315 57,962.042 (2,243.019) 925.839 (3,168.858) (3,168.858) 1,815.351 (949.703) 50.063 (4,084.569) (1.308) (4,085.877) (1.741) (4,084.136) 8,036.929 (162.543) 3,790.250 8.552 206.280 36.679 350.000 3,188.739 (39.66) (39.66) 2008 71,710.354 28,993.749 42,716.605 2,393.603 1,165.041 1,063.172 47,338.424 20,905.933 14,670.312 5,447.563 81.168 41,104.976 6,233.448 741.412 5,492.036 181.258 5,673.294 1,841.299 773.129 46.815 3,012.051 (7.419) 3,004.632 (284.048) 2,720.584 5,822.345 8,542.929 132.623 25.877 77.500 270.000 8,036.929 31.59 31.11
14 15 16 17
77
Consolidated Financial Statement Cash Flow Statement for the Year Ended March 31, 2009
2009 A. CASH FLOW FROM OPERATING ACTIVITIES Net profit/(loss) before Exceptional and Other Non- recurring items and Taxation Adjustments for : Depreciation Unrealised Foreign Exchange Loss/(Gain) Bad Debts/Advances written off Loss/(Gain) on Fixed Assets Sold/Written Off (Net) Loss/(Gain) on Sale of Investments (Net) Liabilities no longer required written back Provision for Doubtful Debts/Advances/Deposits Provision for diminution in value of Investments/(Written back) Provision for Onerous Lease/(written back) Provision - Others Interest and Finance Charges Income from investments Interest Income Operating profit before working capital changes (Increase)/decrease in Trade and other receivables (Increase)/decrease in Inventories Increase/(decrease) in Trade payables Rs. Million 2008
(3,168.858) 925.839 3,174.218 19.289 (142.002) (24.500) (136.619) 212.444 0.031 403.578 1,057.645 7,377.259 (31.696) (201.616) 741.412 (72.702) 187.060 (97.325) 5.798 (199.962) 135.350 0.051 (82.863) 77.550 5,880.823 (94.097) (433.260)
5,492.036
12,633.870 9,465.012
6,047.835 11,539.871
(3,991.660) (2,608.017) 1,846.147
(4,753.530)
(2,597.188) (793.677) (3,208.175)
(6,599.040)
Cash generated from operations Direct taxes paid Fringe Benefit taxes paid Cash flow before Exceptional and Other Non-Recurring Items Prior Period, Exceptional and Other Non-Recurring items Cash flow after extraordinary items and net cash from operating activities B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets Payment towards Franchise rights Sale of fixed assets Finance Lease Payments Purchase of long term investments Purchase of current investments Consideration paid on acquisitions of shares in Subsidiaries [net of cash and cash equivalent on the acquisition date Rs. NIL (2008: Rs.112.446 Million)] Disposal of Investment in Associate Sale of long term investments Sale of current investments Interest received Dividend received Net cash used in investing activities
4,711.482 (2,314.180) (43.632) 2,353.670 2,353.670
4,940.831 (2,222.266) (45.320) 2,673.245 2,673.245
(951.509) (501.575) 189.223 (17.257) (9.683) (50.000) -
(2,641.536) 168.906 (15.159) (14.582) (1,303.931) (36,574.961)
10.700 1,068.924 881.551 214.423 29.993 864.790
1.539 1,249.216 419.443 82.958 (38,628.107)
78
Consolidated Financial Statements Cash Flow Statement for the Year Ended March 31, 2009 (Contd.)
Rs. Million 2008 (788.716) 40,742.225 (505.269) (117.669) (1,700.328) 2,340.240 (4,124.167) (175.510) (56.119) (4,166.275) (947.815) 5,437.838 4,490.023 (947.815) 35,614.687 (340.175) 5,778.013 5,437.838 (340.175)
2009 C. CASH FLOW FROM FINANCING ACTIVITIES Share Application Money in a Subsidiary Company Expenses incurred on arrangement of borrowings Proceeds/(Repayment) of long term loans Proceeds Repayment Proceeds/(Repayment) of fixed deposits Proceeds/(Repayment) of short term loans Working Capital Loan / Cash Credit from Banks (net) Interest and Finance charges Paid 50.000 2,170.756 (4,465.117) 95.169 2,814.552 2,415.467 (7,104.189) (142.913) -
[including on Finance lease Rs. 2.981 Million (2008: Rs. 3.003 Million)] Dividends paid Corporate Tax on distributed profit
Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents as at March 31, 2008 Cash and cash equivalents as at March 31, 2009
Notes: 1. 2. The above Cash Flow Statement has been compiled from and is based on the Balance Sheet as at March 31, 2009 and the related Profit and Loss Account for the year ended on that date. The above cash flow statement has been prepared under the indirect method as set out in the Accounting Standard - 3 on Cash Flow Statements as notified under Section 211(3C) of the Companies Act, 1956 and reallocation required for this purpose are as made by the Company. Previous years figures have been regrouped wherever necessary in order to conform to this years presentation.
3.
This is the Consolidated Cash Flow Statement referred to in our report of even date.
79
Consolidated Financial Statement Schedules forming part of Balance Sheet as at March 31, 2009
Rs. Million 2009 1. SHARE CAPITAL Authorised 245,000,000 (2008: 110,000,000) Equity Shares of Rs.10/- each 84,200,000 (2008: 10,000,000) Preference Shares of Rs.10/- each [Schedule 19 Note 2(A)(IV)] 2,450.000 842.000 3,292.000 1,100.000 100.000 1,200.000 2008
Issued, Subscribed and Paid-up 100,163,256 (2008: 100,163,256) Equity Shares of Rs.10/- each fully paid up. 1,001.633 1,001.633
Less: Nil (2008: 11,588,984)Equity Shares held by Subsidiaries Notes : Of the above,
1,001.633
115.889 885.744
1. 51,719,968 (2008: 51,719,968) Equity Shares were allotted as fully paid up on July 9, 2001 to the Shareholders of the erstwhile McDowell & Company Limited, pursuant to the Schemes of Amalgamation for consideration other than cash. 2. 34,010,521 (2008: 34,010,521) Equity Shares were alloted as fully paid on November 6, 2006 to Equity Shareholders of erstwhile Herbertsons Limited, Triumph Distillers & Vintners Private Limited, Baramati Grape Industries Limited, United Distillers India Limited and Shaw Wallace Distilleries Limited pursuant to a Scheme of Amalgamation for consideration other than cash. 3. 8,751,381 (2008: 8,751,381) Equity shares of Rs.10/- each fully paid up represent 17,502,762 (2008: 17,502,762) Global Depository Shares issued by the Company on March 29, 2006. 4. 5,681,326 (2008: 5,681,326) Equity shares of Rs.10/- each fully paid up were alloted consequent to conversion of 100,000, 2% Convertible Bonds in Foreign Currency during 2008.
1A. SHARE CAPITAL SUSPENSE Equity Share Suspense 7,749,121 (2008: Nil) Equity Shares of Rs.10/- each to be issued as fully paid up to the Equity Shareholders of Transferor Companies pursuant to the Scheme of Amalgamation for consideration other than cash [Schedule 19 Note 2(A)(I)] Less: 4,925,231 (2008: 11,588,984) Equity Shares to be held by Subsidiaries 77.491 -
49.252 28.239
80
Consolidated Financial Statement Schedules forming part of Balance Sheet as at March 31, 2009 (Contd.)
Rs. Million 2009 2. RESERVES AND SURPLUS Central Subsidy As per Last Balance Sheet Capital Redemption Reserve As per last Balance Sheet Transferred from the General Reserve Transferred from the Profit and Loss Account 2008
1.500 578.946 578.946 464.446 37.000 77.500
1.500
578.946
Securities Premium Account As per last Balance Sheet Addition during the year: (a) Conversion of 100,000, 2% Convertible Bonds in Foreign Currency (b) Premium payable on redemption of 2% Convertible Bonds in Foreign Currency reversed during the year Employee Housing Fund As per last Balance Sheet Foreign Currency Translation Reserve Contingency Reserve As per last Balance Sheet General Reserve As per last Balance sheet Add: Addition during the year (a) Reserve arising on amalgamation [Schedule 19 Note 2(A)(V) (d) and 2(B)(II)(c)] (b) Adjustment on adoption of notification under Companies (Accounting Standards) Rules, 2009 relating to AS11 - The Effects of Changes in Foreign Exchange Rates [Schedule 19 Note 17(d)] (c) Transferred from Profit and Loss Account Less: (a) Expenses relating to Amalgamation [Schedule 19 Note 2(C)] (b) Diminution in value of certain fixed assets of the Company [Schedule 19 Note 2(A)(V)(e)] (c) Transfer from Foreign Currency Translation Reserve on amalgamation [Schedule 19 Note 2(B)(II)(d)] (d) Transferred to Capital Redemption Reserve Surplus in Profit and Loss Account
9,893.918 9,893.918 0.625 350.527
5,457.811 4,386.164 49.943 9,893.918 0.625 (82.000)
110.000
110.000
1,346.987 7,849.035 99.360
1,113.987 -
350.000 9,645.382 (146.879) (80.704) (715.913) 8,701.886 3,188.739 22,826.141
270.000 1,383.987 (37.000) 1,346.987 8,036.929 19,886.905
81
Rs. Million 2009 3. SECURED LOANS Term Loans From Banks [Note (i)] [Repayable within one year: Rs.6,314.639 Million (2008: Rs.1,604.634 Million)] Working Capital Loan / Cash Credit from Banks [Note (ii) and (iii)] Finance Lease [Note (iv)] Notes: (i) Out of the above loans: (a) Secured by charge on certain fixed assets of the Company including Land and Building. (b) Secured by charge on certain fixed assets of the Company including Land and Buildings, pledge of certain shares held by the Company and also by pledge of certain shares of other Companies. (c) Foreign Currency Borrowings and External Commercial Borrowings secured by charge on certain fixed assets of the Company inlcuding land and buildings, a trade mark and fixed deposits with bank (charge created subsequent to year end). (d) Secured by a second charge on certain fixed assets of the Company including land and building. (e) Secured by hypothecation of specific fixed assets acquired under respective agreements. (f) Secured by a charge on fixed and floating securities over the Group's assets including a pledge on Group's maturing stock and pledge over the Share Capital of Subsidiary Companies in United Kingdom. (g) Secrued by hypothecation of certain trademarks of the Group Pledge of certain shares held by the Group and Trust including charge on Immovable property, current assets including inventories held by the Group. (h) Secured by charge on property (i) Secured by fixed assets and inventory (ii) Secured by charge on certain fixed assets of the Company including land and building and hypothecation of inventories (except those held outside India), book debts and other current assets.. (iii) Includes Foreign Currency Non-Resident [FCNR(B)] Loans. (iv) Secured against assets acquired under lease agreements 4. UNSECURED LOANS Fixed Deposits [Repayable within one year Rs.148.294 Million (2008: Rs. 367.072 Million)] Long term loan from a bank (Note below) [Repayable within one year Rs.Nil (2008: Rs. Nil)] Short term loan from banks [Repayable within one year Rs.2,150 Million (2008: Rs. Nil)] From Others Interest accrued and due Note: Out of the above loans Rs.750 Million (Rs. Nil) is guaranteed by a promoter/ director of the Company. 2008
61,893.339 8,005.982 26.724 69,926.045
59,638.123 5,590.515 41.551 65,270.189
1,426.205
488.222
2,062.412
3,906.754
1,775.550 62.500 0.305
1,404.200 125.000 4.627
24,358.044
28,307.701
31,428.520 308.200 471.603
24,856.350 255.938 289.331
893.069
631.505 750.000 2,150.000 106.732 40.592 3,678.829
553.385 177.198 40.592 771.175
82
Consolidated financial Statement Schedules forming part of Balance Sheet as at March 31, 2009 (Contd.)
Rs. Million GROSS BLOCK 2008 Acquisition / Translation Amalgamation Adjustments (Note 4 and 5) Additions 2009 2008 For the year 2009 2009 2008 Deletion/ Adjustments Acquisition / Translation AmalgamaAdjustments tion Deletion/ Adjustments DEPRECIATION NET BLOCK
5. FIXED ASSETS
Tangible 1,987.266 (15.080) 215.246 4,273.751 (203.279) 8,647.132 (491.413) (60.529) 766.700 220.066 8,641.824 4,348.038 (274.502) 84.001 295.807 18.040 4,432.240 995.682 (53.173) - 113.760 13.060 1,043.209 (2.220) (27.419) 100.766 84.841 811.183 112.121 (93.506) 2,988.996 2,988.996 84.841 3,389.031 4,204.715 1,987.266 215.246 3,278.069 4,299.094
Land ( Note 1 below):
Freehold
Leasehold
Buildings (Notes 2 and 3 below)
Plant and Machinery
- 552.172 188.599 4,437.109
Furniture and Fixtures and 46.892 1,083.256 (61.773) 18.798 235.681 180.562 180.562 5.461 (2.756) (4.042) 3.066 34.055 197.894 194.627 (2.818) 2.432 21.230 2.274 (13.206) 41.606 20.349 1,029.534 782.670 (55.812) (6.146) 40.746 17.615 - 14.515 - 60.800 3.316 - 19.527 - 25.837 19.120 31.770 32.130 768.538 5.590 179.566 31.298 8.616 260.996 15.640 18.328 149.264 29.277 300.586 16.524 41.054 175.101
Office Equipments :
Finance Lease
Others
Vehicles :
Finance Lease
Others
Aircraft
Intangible 296.657 16,985.241 (708.269) 6,821.724 20.324 8,234.907 809.275 4,932.988 4,932.988 66.032 0.234 5.678 368.601 10.766 5.848 - 37.252 - 98.660 53.866 98.660 - 925.839 252.549 6,649.966 24.213 4,111.633 741.412 284.591 6,357.133 288.382 534.432 16,557.872 11,162.540 314.735 4,834.328 285.891 16,269.490 10,628.108
Trademark, Formulae and License
Franchisee Rights
6,132.979 299.770 22,919.456 6,357.133 (380.457) 2,268.330 360.044 16,985.241 1,764.466
2008
Capital Work-in-Progress (including Advances)
Notes:
1. The Company is in the process of registering certain freehold and leasehold land in its own name. Deletions / adjustments include Rs.100.766 Million reclassified from lease hold land to freehold land.
2. Cost of buildings includes the following payments made for the purpose of acquiring the right of occupation of Mumbai Godown space: i) 660 Equity Shares (unquoted) of Rs.100 each fully paid in Shree Madhu Industrial Estate Limited Rs.0.066 Million (2008: Rs.0.066 Million). Application has been made for Duplicate Share Certificates and the same is in process. ii) 199, 6% Debentures (unquoted) of Rs.1,000 each fully paid in Shree Madhu Industrial Estate Limited Rs. 0.199 Million (2008: Rs.0.199 Million). Application has been made for duplicate Debentures certificates and the same is in the process.
3. Include value of fully paid shares of Rs.0.006 Million (2008: Rs.0.003 Million) held in Co-operative Housing Socities.
4. Adjustments on amalgamation. Refer Schedule 19 Notes 2(V)(d).
5. Net of diminution in value of assets of the Company amounting to Rs.80.704 Million as per a Scheme of Amalgamation [Schedule 19 Note 2(A)(V)(e)].
83
2009 6. INVESTMENTS CURRENT Unquoted Investments Units (Fully Paid) Mutual funds Investments Total Current Investments LONG TERM Quoted Investments A. Trade Fully Paid Equity Shares B. Non-Trade Fully Paid Equity Shares Units (Fully Paid) (Note 1) Total Quoted Investments (A+B) Unquoted Investments C. Trade Fully paid Equity Shares Associates** Add: Accumulated Profits/ (Losses) of Associates (net of dividend received) 21.386 21.386 851.233 851.233 Rs. Million 2008
0.532 4.147 4.679 3.839 8.518
10.155 6.124 16.279 35.982 52.261
10.828 8.721 (8.721) 15.896 (11.197)
0.683
4.699
** Including Goodwill on acquisition of Associates Rs.3.518 Million (2008: Rs. 10.828 Million)
Fully paid Preference Shares D. Non-Trade In Government Securities In Fully Paid Debentures Fully Paid Equity Shares E. Others (Note 2) Total Unquoted Investments (C+D+E) Total Long Term Investments (A+B+C+D+E) Total Current and Long Term Investments Less: Provision for diminution in the value of Investments (Note 3) Total 10.828 0.200 0.048 10.675 10.923 9,450.681 9,450.681 9,472.432 9,480.950 9,502.336 0.879 9,501.457 0.250 5.632 1,006.501 0.048 10.800 1,017.349 194.676 194.676 1,217.657 1,269.918 2,121.151 2.064 2,119.087
84
Rs. Million 2009 6. INVESTMENTS (Contd.) Aggregate Value of Quoted Investments - Book Value - Market Value Aggregate book value of Unquoted Investments 8.518 68.748 9,472.432 901.430 1,182.416 1,217.657 2008
Acquired on acquisition Additions during the year Adjustments to Investments Sold during the year Notes:
52.666 9,256.005 1,927.486
9.378 1,322.503 1,256.823
1. Investments in units of Unit Trust of India amounting to Rs.3.175 Million (2008: Rs. 34.400 Million) represent those made under Rule 3A of the Companies (Acceptance of Deposit) Rules, 1975. 2. Include: a) Rs. 9,409.541 Million (2008: Rs.153.536 Million) pertaining to investment in USL Benefit Trust represents beneficial interest USL Benefit Trust which holds 3,459,090 (2008: 2,152,659) equity shares of Rs.10 each of the Company, with all additions or accretions thereto in trust for the benefit of the Company and includes 10,282,553 Shares held by erstwhile Shaw Wallace and Company referred to in Schedule 19 Note 2(A)(III). b) Rs. 41.140 Million (2008: Rs. 41.140 Million) pertaining to 72,416,505 (2008: 72,416,505) Equity Shares of SWBL whose beneficial ownership vested with SWFSL are kept with escrow agent in view of court order. Pursuant to a scheme of amalgamation, such beneficial interest are held in trust by the trustee of SWFSL benefit trust for the benefit of SWBL 3. Investments written off during the year aggregated to Rs.1.216 Million (2008: Rs. Nil) adjusted against the provision for diminution in the value of Investment.
85
Rs. Million 2009 7. INVENTORIES Raw Materials including materials in transit Packing Materials, Stores and Spares Finished goods including goods in transit Work-in-Progress 8. SUNDRY DEBTORS (Unsecured) Exceeding six months: Considered Good Considered Doubtful Others: Considered Good Less: Provision for Doubtful debts 9. CASH AND BANK BALANCES Cash on Hand Remittance in Transit/ Cheques on Hand Balances with Scheduled Banks: On Current Accounts [Note (i)] On Unpaid Dividend Account On Deposit Account [Note (ii) and Note (iii)] Notes:
(i) includes Rs.32.097 Million (2008: Rs.25,285 Million) in Exchange Earners Foreign Currency . (EEFC) Account and Rs.8.703 Million (2008: Rs.1.155 Million) in Foreign Currency (ii) (a) includes Rs. 0.587 Million (2008: Rs. 8.403 Million) pledged with Government Departments. (b) includes Rs. 1.300 Million (2008: Rs.2.673 Million) as margin. (iii) includes Rs.133.926 Million (2008: Nil) pledge as Security against loan from a bank
2008 777.277 754.209 2,548.239 10,770.302 14,850.027
1,210.364 1,065.984 3,320.363 11,861.333 17,458.044
14.434 147.707 162.141 8,865.170 9,027.311 147.707 8,879.604 5.527 232.624 2,398.959 17.878 1,835.035 4,490.023
64.064 149.849 213.913 8,305.933 8,519.846 149.849 8,369.997 6.558 30.675 1,010.607 19.730 4,370.268 5,437.838
10. OTHER CURRENT ASSETS (Unsecured, Considered Good except otherwise stated) Income accrued on Investments and Deposits Other Deposits Considered Good Considered Doubtful Fixed assets held for sale Less: Provision for Doubtful Deposits 46.331 2,093.820 9.940 4.873 2,154.964 9.940 2,145.024 59.138 1,405.448 8.031 4.618 1,477.235 8.031 1,469.204
86
Rs. Million 2009 11. LOANS AND ADVANCES (Unsecured, considered good except where otherwise stated) Advances recoverable in cash or in kind or for value to be received Advances to Tie-up units Considered Good Considered Doubtful Advances Income Tax (Net of Provisions) Other Advances Considered Good Considered Doubtful Less: Provision for Doubtful Advances 2008
2,522.168 20.314 491.243 4,385.883 500.947 7,920.555 521.261 7,399.294
917.736 21.519 3,432.836 295.564 4,667.655 317.083 4,350.572
12. CURRENT LIABILITIES AND PROVISIONS A. Liabilities Acceptances * Sundry Creditors Dues to Directors Investors Education and Protection Fund [Schedule 19 Note 8] Unclaimed Debentures Unclaimed Dividends Unclaimed Fixed Deposits Security Deposit Advances Received from Customers Interest accrued but not due Other Liabilities * Includes bills drawn against inland letters of credit of Rs. 876.924 Million (2008: Rs. 215.149 Million) and secured by a charge on debtors, inventories and other current assets.
1,126.924 9,790.924 49.193 0.001 19.518 28.074 130.847 371.992 1,847.209 514.130 13,878.812
753.918 8,502.305 51.486 0.001 22.840 11.025 115.810 183.105 1,734.259 558.767 11,933.516
B. Provisions Proposed Dividend Equity Shares - Final Corporate Tax on Proposed Dividend Taxation (Net of Payments) Fringe Benefit Tax (Net of Payments) Provision for Contingencies Onerous Lease Provision [Schedule 19 Note 16] Employee Benefits
206.280 36.679 8.467 909.890 1,423.161 2,584.477
131.039 7.586 2.036 103.744 600.601 382.966 1,227.972
13. MISCELLANEOUS EXPENDITURE Expenditure Incurred for Raising Borrowed Funds As per the last Balance Sheet Add: Additions during the year Less: Amortisation during the year Less: Translation Adjustments
966.770 966.770 160.140 806.630 73.323 733.307
1,078.845 1,078.845 112.075 966.770 966.770
87
Consolidated Financial Statement Schedules forming part of Profit & Loss Account for the year ended March 31, 2009
Rs. Million 2009 14. OTHER INCOME Income from Investments: Dividend income from other investments [Tax deducted at source Rs. 1.905 Million (2008: Rs.1.905 Million)] Lease Rent Profit on Sale of Fixed Assets (Net) Profit on Sale of Investments Provision for Onerous Lease written back Liabilities no longer required written back Bad debts/ Advances recovered Scrap Sales Insurance Claims Miscellaneous 322.776 142.012 24.500 136.619 0.088 158.491 2.814 219.412 1,038.408 15. MATERIALS Raw Materials Consumed Purchase of Finished Goods Packing Materials Consumed Movement in Stocks: Opening Stock: Work-in-Progress Finished Goods Add : Taken over on Amalgamation/Acquisition Work-in-Progress Finished Goods Closing Stock: Work-in-Progress Finished Goods (Increase)/ Decrease in Stocks Excise Duty on Opening/Closing Stock of Finished Goods (Net) 11,861.333 3,320.363 15,181.696 (1,863.155) 241.849 26,909.455 10,770.302 2,548.239 13,318.541 (560.140) 372.819 20,905.933 9,188.949 1,083.380 10,272.329 10,770.302 2,548.239 13,318.541 1,422.364 1,063.708 2,486.072 12,140.730 5,292.096 11,097.935 8,160.766 4,409.791 8,522.697 261.801 114.274 82.863 199.962 3.173 160.114 3.308 143.580 1,063.172 31.696 94.097 2008
88
Consolidated Financial Statement Schedules forming part of Profit & Loss Account for the year ended March 31, 2009 (Contd.)
Rs. Million 2009 16. MANUFACTURING AND OTHER EXPENSES Employee Cost: Salaries, Wages and Bonus Contribution to Provident and Other Funds Workmen and Staff Welfare Voluntary Retirement Scheme Compensation Actuarial Loss/ (Gain) on Pension Direct Expenses on IPL Franchise Power and Fuel Stores and Spares Consumed Repairs and Maintenance: Buildings Plant and Machinery Others Rent Rates and Taxes Insurance Travelling and Conveyance Legal and Professional Freight Outwards Advertisement and Sales Promotion Commission on Sales Royalty/ Brand Fee/ Trade Mark Licence Fees Cash Discount Sales Tax Fixed Assets Written Off Loss on Sale of Investments Directors Remuneration: Sitting Fee Commission Bad Debts and Advances Written Off Provision for Doubtful Debts/ Advances / Deposits Provision for Onerous Lease Provision for Diminution in Value of Investments (Net) Research and Development Others: Personnel and Administration Selling and Distribution Miscellaneous 415.636 977.023 335.679 20,067.629 360.199 947.971 253.085 14,670.312 1.180 48.727 19.289 212.444 403.578 0.031 30.536 2.311 51.044 187.060 135.350 0.051 28.779 87.824 182.926 217.315 107.924 457.318 133.719 640.265 656.441 1,008.744 5,378.471 390.848 60.032 363.748 194.732 0.010 71.483 155.477 136.034 281.236 417.433 117.390 561.727 633.271 815.710 4,781.123 405.644 96.925 206.742 142.850 16.949 5.798 4,174.779 441.248 132.447 1,746.228 6,494.702 411.571 706.332 130.584 3,748.690 408.542 117.749 4.053 (975.539) 3,303.495 444.233 110.942 2008
89
Consolidated Financial Statement Schedules forming part of Profit & Loss Account for the year ended March 31, 2009 (Contd.)
Rs. Million 2009 17. INTEREST AND FINANCE CHARGES Interest on: Fixed Loans Others Loans Amortisation of Expenditure Incurred for Raising Borrowed Funds Finance Charges (including Bill discounting charges) Less : Interest Income: On Investments On Deposits and Other Accounts (Gross) On Income Tax Refunds 1.222 196.009 4.385 7,175.643 2.144 341.877 89.239 5,447.563 4,795.748 1,998.334 160.140 423.037 7,377.259 3,842.234 1,617.936 112.075 308.578 5,880.823 2008
90
Consolidated Financial Statement Schedules forming part of account for the year ended March 31, 2009
18. STATEMENT ON SIGNIFICANT ACCOUNTING POLICIES 1. Basis of Preparation of Consolidated Financial Statements The Consolidated Financial Statements relate to United Spirits Limited (the Company) and its subsidiaries and associates (the Group). The Consolidated Financial Statements are prepared in accordance with Accounting Standard (AS) 21 on Consolidated Financial Statements and AS 23 on Accounting for Investments in Associates in Consolidated Financial Statement as specified in the Companies (Accounting Standard) Rules, 2006, and the relevant provisions of the Companies Act, 1956 of India. The Consolidated Financial Statements are prepared by adopting uniform accounting policies for like transactions and other events in similar circumstances and are presented to the extent possible, in the same manner as the Companys separate financial statement. Accounting policies have been consistently applied except where a newly-issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. On occasion, a subsidiary company whose financial statements are consolidated may issue its shares to third parties as either a public offering or private placement at per share amounts in excess of or less than the Company's average per share carrying value. With respect to such transactions, the resulting gains or losses arising from the dilution of interest are recorded as Capital Reserve/Goodwill. Gains or losses arising on the direct sale by the Company of its investment in its subsidiaries or associated companies to third parties are transferred to the profit and loss account. Such gains or losses are the difference between the sale proceeds and the net carrying value of the investments. 2. Subsidiary and Associate Companies considered in the Consolidated Financial Statements: (A) Subsidiary Companies:
Proportion of voting Proportion of power held directly or Country of owner-ship interest indirectly, if different Incorporation (%) from proportion of ownership interest (%) 2009 1 2 3 4 5 6 7 8 9 Asian Opportunities & Investments Limited (AOIL) United Spirits Nepal Private Limited Zelinka Limited (ZL) (ii) Shaw Wallace & Company Limited (SWCL) (ii) Ramanretti Investments & Trading Ltd. (RITL) (iii) Shaw Wallace Breweries Limited (SWBL) (iii) Primo Distributors Pvt. Ltd. (PDPL) (ii) Palmer Investment Group Ltd.(PIG) RG Shaw & Company Ltd. (RGSC) Mauritius Nepal Cyprus India India India India British Virgin Islands U.K. U.K. U.K. U.K. 100 82.47 100 100 100 100 100 100 100 2008 100 82.47 100 75 75 75 100 100 100 100 100 100 2009 2008 100 -
Sl. No.
Name of the Company
10 Shaw Scott & Company Ltd. (SSC) 11 Shaw Darby & Company Ltd. (SDC) 12 Thames Rice Milling Company Limited (TRMC)
91
Consolidated Financial Statement Schedules forming part of account for the year ended March 31, 2009 (Contd.)
(A) Subsidiary Companies ( Contd.)
Proportion of voting power held directly or Proportion of ownerindirectly, if different ship interest (%) from proportion of ownership interest (%) 2009 2008 2009 2008
Sl. No.
Name of the Company
Country of Incorporation
13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34
Shaw Wallace Overseas Limited (SWOL) (iii) JIHL Nominees Limited(JIHL) Montrose International S.A (MI) USL Holdings Limited (UHL) Spring Valley Investments Holding Inc. (SVIH) USL Holdings (UK) Limited (UHUKL) United Spirits (UK) Limited (USUKL) United Spirits (Great Britain) Limited (USGBL) Four Seasons Wines Limited (FSWL) United Vintners Limited (UVL) United Alcobev Limited (UAL) McDowell Beverages Limited (MBL) McDowell (Scotland) Limited (MSL) Bouvet Ladubay S.A.S (BL) Chapin Landias S.A.S (CL) Herbertsons Limited (HL) Daffodils Flavours & Fragrances Private Limited (DFFPL) Jasmine Flavours and Fragrances Private Limited Royal Challengers Sports Private Limited McDowell and Company Limited Liquidity Inc. USL Shanghai Trading Company Limited (USLS) (i) Whyte and Mackay Group Limited Bruce & Company (Leith) Limited Charles Mackinlay & Company Limited Dalmore Distillers Limited Dalmore Whyte & Mackay Limited Edinburgh Scotch Whisky Company Limited Ewen & Company Limited Fettercairn Distillery Limited Findlater Scotch Whisky Limited
U.K. Jersey Islands Panama British Virgin Islands British Virgin Islands U.K U.K U.K India India India India Scotland France France India India India India India USA China
100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 51 100
75 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 51 -
100 -
Whyte and Mackay Group 35 36 37 38 39 40 41 42 43 U.K U.K U.K U.K U.K U.K U.K U.K U.K 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 -
92
(A) Subsidiary Companies (Contd.)
Proportion of voting power held directly or indirectly, if different from proportion of ownership interest (%) 2009 2008
Sl. No.
Name of the Company
Country of Incorporation
Proportion of ownership interest (%) 2009 2008
44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79
Glayva Liqueur Limited Glentalla Limited GPS Realisations Limited Grey Rogers & Company Limited Hay & MacLeod Limited Invergordon Distillers (Holdings) Limited Invergordon Distillers Group Limited Invergordon Distillers Limited Invergordon Gin Limited Isle of Jura Distillery Company Limited Jarvis Halliday & Company Limited John E McPherson & Sons Limited Kensington Distillers Limited Kyndal Spirits Limited Leith Distillers Limited Loch Glass Distilling Company Limited Longman Distillers Limited Lycidas (437) Limited Pentland Bonding Company Limited Ronald Morrison & Company Limited St Vincent Street (437) Limited Tamnavulin-Glenlivet Distillery Company Limited TDL Realisations Limited The Sheep Dip Whisky Company Limited W & S Strong Limited Watson & Middleton Limited Whyte & Mackay Distillers Limited William Muir Limited WMB Realisations Limited Whyte and Mackay Property Limited Whyte and Mackay de Venezuela CA KI Trustees Limited Wauchope Moodle & Company Limited Whyte and Mackay Limited Whyte and Mackay Warehousing Limited Whyte and Mackay Holdings Limited
U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K U.K Venezuela U.K U.K U.K U.K U.K
100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100
100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100
93
2. Subsidiary and Associate Companies considered in the Consolidated Financial Statements: (Contd.) (B) Associate Companies (Note 4 below) Name of the Company 1 2 Utkal Distillery Limited (Utkal) (iv) Wine Soc of India Private Limited Country of Incorporation India India Proportion of owner-ship interest (%) 2009 2008 43 49 49
(i) Became subsidiaries/ associate during the year. (ii) Ceased to be subsidiaries due to amalgamation (Schedule 19 Note 2). (iii) Became wholly owned subsidiaries due to amalgamation (Schedule 19 Note 2). (iv) Sold during the year. (v) Consolidated Financial Statements also include financial statements of USL Benefit Trust and SWFSL Benefit Trust. 3. Principles of Consolidation These Consolidated Financial Statements have been prepared by consolidation of the financial statements of the Company and its subsidiaries on a line-by-line basis after fully eliminating the inter-Company transactions. 4. Accounting for Investment in Associates a) Accounting for Investments in Associate Companies has been carried out under the Equity Method of accounting prescribed under AS 23 wherein Goodwill/Capital Reserve arising at the time of acquisition and the Groups share of profits or losses after the date of acquisition have been adjusted in the investment value. b) U B Distilleries Limited (UBDL) UBDL, which was an associate company of erstwhile HL in view of significant influence, ceased its operations in 2003-04, consequent to the order of the Honble Supreme Court of India vesting the distillery unit with the state of Bihar. Since the Company does not have any investment /significant influence in UBDL, the same has not been accounted for as an associate in these Consolidated Financial Statements under the Equity Method. 5. Basis of presentation of Financial Statements The Consolidated Financial Statements of the Group have been prepared under historical cost convention, except as otherwise stated, in accordance with the Generally Accepted Accounting Principles (GAAP) in India, the Accounting Standards as specified in the Companies (Accounting Standard) Rules, 2006, and the relevant provisions of the Companies Act,1956 of India. 6. Fixed Assets (a) Fixed assets are stated at their original cost of acquisition and subsequent improvements thereto including taxes, duties, freight and other incidental expenses related to acquisition and installation of the assets concerned, except amounts adjusted on revaluation and amalgamation. Interest on borrowings attributable to qualifying assets are capitalised and included in the cost of fixed assets as appropriate. (b) The costs of fixed assets acquired in amalgamations are determined at their fair values, on the date of acquisition or nearer thereto, or as approved under the schemes of amalgamation. (c) Assets held for disposal are stated at their net book value or estimated net realisable values, whichever is lower.
94
(d) Goodwill represents the difference between the Companys share in the net worth of a subsidiary and cost of acquisition at each point of time of making the investment in the subsidiary. Negative goodwill is shown separately as Capital Reserve on consolidation. (e) Intangible assets are stated at the consideration paid for acquisition less accumulated amortisation. 7. Leases Assets acquired under Leases, where the Company has substantially all the risks and rewards of ownership, are classified as finance leases. Such leases are capitalised at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period. Assets acquired on leases, where a significant portion of the risk and rewards of ownership are retained by the lessor, are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis. Income from operating leases is credited to Profit and Loss Account on a straight line basis over the lease term. 8. Depreciation and Amortisation a) Depreciation is provided on the Straight Line Method, including on assets revalued, at rates prescribed in Schedule XIV to the Companies Act, 1956 of India except for the following, which are based on managements estimate of useful life of the assets concerned : i) ii) Computers, Vehicles and Aircrafts over a period of three, five and eleven years respectively; In respect of certain items of Plant and Machinery eligible for triple shift allowance, depreciation is provided for the full year on triple shift basis; iii) In respect of fixed assets of Whyte and Mackay Group, depreciation is provided based on management estimate of useful lives of the assets concerned as below: Buildings Plant and Machinery Vehicles Computers Also refer Note 6(b) on Schedule 19 b) Fixed assets acquired on amalgamation, over the remaining useful life computed based on rates prescribed in Schedule XIV to the Companies Act, 1956 of India, as below: Buildings Factory Non Factory Plant & Machinery Vehicles Computers c) 1 to 30 years 1 to 54 years 1 to 20 years 1 to 4 years 1 to 2 years 50 years 10 to 20 years 4 years 3 years
Assets taken on finance lease are depreciated over their estimated useful life or the lease term, whichever is lower. Goodwill arising on amalgamation is charged to the Profit and Loss Account in the year of amalgamation. Goodwill arising on Consolidation is not amortised.
d) Leasehold Land are not amortised. e) f)
95
g) Intangible assets are amortised, on a straight line basis, commencing from the date the asset is available for its use, over their respective individual estimated useful lives as estimated by the management: Trademark , formulae and License Franchise Rights in Perpetuity 9. Impairment Impairment loss, if any, is provided to the extent the carrying amounts of assets exceed their recoverable amounts. Recoverable amount is higher of the net selling price of an asset and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. 10. Investments Long-term Investments are stated at cost to the Company. Provision for diminution in the value is made to recognise a decline, other than temporary, in the value of long-term investments. Current investments are valued at cost or market value, whichever is less. 11. Inventories Inventories are valued at lower of cost and net realisable value. The costs are, in general, ascertained under Weighted Average Method. Finished goods and Work-in-Progress include appropriate manufacturing overheads and borrowing costs, as applicable. Excise/ Customs duty payable on stocks in bond is added to the cost. Due allowance is made for obsolete and slow moving items. 12. Revenue Recognition Sales are recognised when goods are despatched from distilleries/ warehouses of the Company in accordance with the terms of sale except where such terms provide otherwise, where sales are recognised based on such terms. Gross Sales are inclusive of excise duty but are net of trade discounts and sales tax, where applicable. Income arising from sales by manufacturers under Tie-up agreements (Tie-up units) and income from brand franchise are recognised in terms of the respective contracts on sale of the products by the Tie-up unit/Franchisees. Income from brand franchise is net of service tax, where applicable. Dividend income on investments are recognised and accounted for when the right to receive the payment is established. 13. Foreign Currency Transactions Transactions in foreign currency are recognised at the rates of exchange prevailing on the dates of the transactions. Liabilities/ assets in foreign currencies are reckoned in the accounts as per the following principles: Exchange differences arising on a monetary item that, in substance, forms part of an enterprises net investment in a non-integral foreign operation is accumulated in a foreign currency translation reserve in the enterprises financial statements until the disposal of the net investment. Exchange differences arising on reporting of long term foreign currency monetary items, with the exception of exchange differences arising on a monetary item that, in substance, forms part of an enterprises net investment in a non-integral foreign operation, at rates different from those at which they were initially recorded during the period or reported in previous financial statements are accounted as below: 10 Years 50 Years (Refer Schedule 19 Note 4)
96
(a) In so far as they relate to the acquisition of depreciable capital assets, are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset; and (b) In other cases, the said exchange differences are accumulated in a Foreign Currency Monetary Item Translation Difference Account and amortised over the balance period of such long term asset/liability but not beyond March 31, 2011. All other monetary assets and liabilities denominated in foreign currency are restated at the rates ruling at the year end and all exchange gains/ losses arising therefrom are adjusted to the Profit and Loss Account, except those covered by forward contracted rates where the premium or discount arising at the inception of such forward exchange contract is amortised as expense or income over the life of the contract. Exchange differences on forward contracts are recognised in the Profit and Loss Account in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward contracts is recognised as income or expense for the year. For forward exchange contracts and other derivatives that are not covered by AS-11 The Effects of Changes in Foreign Exchange Rates, the Company follows the guidance in the announcement of the Institute of Chartered Accountants of India (ICAI) dated March 29,2008 whereby for each category of derivatives, the Company records any net mark- to- market losses. Net mark-to-market gains are not recorded for such derivatives. [Also refer Schedule 19 Note 17 below]
Foreign Company:
In respect of overseas subsidiary companies, Income and Expenses are translated at average exchange rate for the year. Assets and Liabilities, both monetary and non-monetary, are translated at the year-end exchange rates. The differences arising out of translation are included in the foreign currency translation reserve. Any Goodwill or Capital Reserve arising on acquisition of non integral operation is translated at closing rate. 14. Employee Benefits a) Defined-contribution plans These are plans in which the Group pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. These comprise of contributions to the employees provident fund with the government, superannuation fund and certain state plans like Employees State Insurance and Employees Pension Scheme. The Groups payments to the defined contribution plans are recognised as expenses during the period in which the employees perform the services that the payments cover. b) Defined-benefit plans Gratuity: The Group provides for gratuity, a defined benefit plan (the Gratuity Plan), to certain categories of employees. Liability with regard to the Gratuity Plan is accrued based on actuarial valuation, based on Projected Unit Credit Method at the balance sheet date, carried out by an independent actuary. Actuarial Gains and Losses comprise experience adjustments and the effect of changes in the actuarial assumptions and are recognised immediately in the Profit and Loss Account as income or expense.
97
Pension: Whyte and Mackay Group operates and contributes in a defined benefit pension scheme (the Pension Plan). Liability with regard to Pension Plan is accrued based on actuarial valuation, based on Projected Unit Credit Method at the balance sheet date, carried out by an independent actuary. Actuarial Gains and Losses comprise experience adjustments and the effect of changes in the actuarial assumptions and are recognised immediately in the Profit and Loss Account as income or expense. Provident Fund: Groups Provident Funds administered by trusts set up any company in the Group where the companys obligation is to provide the agreed benefit to the employees and the actuarial risk and investment risk fall, in substance, on the company, are treated as a defined benefit plan. Liability with regard to such provident fund plans are accrued based on actuarial valuation, based on Projected Unit Credit Method, carried out by an independent actuary at the balance sheet date. Actuarial Gains and Losses comprise experience adjustments and the effect of changes in the actuarial assumptions and are recognised immediately in the Profit and Loss Account as income or expense. Death Benefit: Death Benefit payable at the time of death is actuarially ascertained at the year-end and provided for in the accounts. c) Other long term employee benefits: Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as a liability at the present value of the defined benefit obligation at the balance sheet date based on actuarial valuation carried out at each balance sheet date. d) Short term employee benefits: Undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees is recognised during the period when the employee renders the services. These benefits include compensated absences such as paid annual leave and performance incentives. 15. Expenditure on account of Voluntary Retirement Scheme Expenditure on account of Voluntary Retirement Scheme of employees is expensed in the period in which it is incurred. 16. Research and Development Revenue expenditure on research and development is charged to Profit and Loss Account in the period in which it is incurred. Capital Expenditure is included as part of fixed assets and depreciated on the same basis as other fixed assets. 17. Taxes on Income Provision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amount of tax payable in respect of taxable income for the period in accordance with the applicable laws. Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date.
98
Deferred tax assets are recognised and carried forward to the extent that there is a reasonable / virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised. Fringe Benefit Tax is determined at current applicable rates on expenses falling within the ambit of Fringe Benefit as defined under the Income Tax Act, 1961. 18. Earnings / (Loss) per Share (EPS) Basic EPS is arrived at based on Net Profit after Taxation available to equity shareholders to the weighted average number of equity shares outstanding during the year. The Diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effects of potential dilutive equity shares unless impact is anti-dilutive. 19. Provisions A provision is recognised when an enterprise has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions, other than employee benefits, are not discounted to their present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates. Onerous Lease Provision: When a leasehold property ceases to be used in the business or a commitment is entered into which would cause this to occur, provision is made for the entire amount by which the recoverable amount of interest in the property is expected to be insufficient to cover future obligations relating to the lease. 20. Contingencies Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent and, to the extent not provided for, are disclosed by way of notes on the accounts. 21. Share / Foreign Currency Convertible Bonds [FCCBs] issue expenses and Premium on Redemption of FCCB : Share/ FCCBs issue expenses incurred are expensed in the year of issue and premium payable on FCCBs is expensed over the currency of FCCBs. Both are adjusted to the Securities Premium Account as permitted by Section 78(2) of the Companies Act, 1956. 22. Expenditure Expenses are net of taxes recoverable, where applicable. 23. Government grants Government grants related to revenue expenses are recognised on a systematic basis in the Profit and Loss Account over the periods necessary to match them with the related costs which they are intended to compensate. 24. Miscellaneous Expenditure (to the extent not written off) Expenditure incurred for raising borrowed funds represents ancillary costs incurred in connection with the arrangement of borrowings and is amortised over the tenure of the respective borrowings. Amortisation of such Miscellaneous Expenditure is included under Interest and Finance charges.
99
19. NOTES ON ACCOUNTS 1. Contingent Liabilities 2009 a) Guarantees given by the Companys bankers for which Counter Guarantees have been given by the Company b) Disputed claims against the Company not acknowledged as debts, currently under appeal / sub judice: (i) Excise demands for excess wastages and distillation losses (ii) Other miscellaneous claims (iii) Income Tax demand (including interest) under appeal (iv) Sales Tax demands under appeal in various states c) Co-accepted bills of Tie-up Units - since fully settled d) Claims from suppliers not acknowledged as debts precedents. 2. A. The Scheme of Amalgamation under Section 391 to 394 of the Companies Act, 1956 for the amalgamation of Shaw Wallace & Company Limited (SWCL), a subsidiary company, and Primo Distributors Private Limited (Primo), a wholly owned subsidiary company, (together Transferor Companies) with the Company (the Scheme) and their respective shareholders, with effect from April 1, 2007 being the Appointed Date, has been sanctioned by Honble High Court of Karnataka, Honble High Court of Judicature at Bombay and Honble High Court at Calcutta. Upon necessary filings with the respective Registrar of Companies, the Scheme has become effective on July 6, 2009 and effect thereof have been given in the accounts. Consequently, a. In terms of the Scheme the entire business and undertaking of Transferor Companies including all assets and liabilities, as a going concern, stand transferred to and vested in the Company (hereinafter referred to as Amalgamation) with effect from April 1, 2007 being the Merger Appointed Date. b. Primo ceased to be subsidiary of the Company and Shaw Wallace Breweries Limited (SWBL) became a direct subsidiary of the Company. Primo stand dissolved without being wound up. SWCL will be dissolved without winding up by separate order by the Honble High Court at Calcutta. c. The SWCL was engaged in manufacture and sale of potable alcohol and Primo was engaged in the business of distribution of alcoholic beverages. (I) (a) In Consideration of the amalgamation, the Company will issue: 7,749,121 equity shares of Rs.10/- each aggregating to Rs.77.491 Million in the ratio of 4 (four) fully paid up Equity Shares of the face value of Rs.10/- each of the Company for every 17 (Seventeen) fully paid up equity shares of Rs.10/- each held in SWCL. [also refer Note 2 A (II) below]: Pending issue of these Equity Shares, a sum of Rs. 77.491 million has been shown under Equity Share Capital Suspense. Subsequently, on July 24, 2009, the allotment of the Companys shares to the eligible shareholders of SWCL has been completed. Steps have been taken to list the shares with the stock exchanges where existing shares of the company are currently listed. (b) As primo was a wholly owned subsidiary of the Company, no consideration was payable pursuant to amalgamation of Primo with the Company. 172.217 Rs. Million 2008 141.942
238.384 244.274 1,436.973 604.036 15.016 45.490
231.804 367.582 211.573 682.086 216.740 50.967
The Management is hopeful of succeeding in the above appeals /disputes based on legal opinions / legal
100
2. A. (Contd.)
(II) Pursuant to the Scheme, Equity Shares to be issued as above include 4,925,231 Equity Shares of Rs.10/- each fully paid up to be issued to Palmer Investment Group Limited (Palmer), R.G.Shaw & Company Limited (R G Shaw), JIHL Nominees Limited (JIHL Nominees), Shaw Scott & Company Limited (Shaw Scott), Shaw Darby & Company Limited (Shaw Darby) and Thames Rice Milling Company Limited (Thames Rice), subsidiaries of the Company, in exchange for the 20,932,244 Equity Shares of Rs.10/- each fully paid up held by them in the share capital of SWCL, in the proportion of Equity Shares held by them respectively. (III) Pursuant to the Scheme, 10,282,553 Equity Shares of Rs.10/- each fully paid up held by SWCL and 1,306,431 Equity Shares of Rs.10/- each fully paid up held by Primo in the share capital of the Company were to be transferred to the SWCL Benefit Trust and the Primo Benefit Trust established by virtue of trust deeds dated July 25, 2008 for the benefit of SWCL and Primo respectively. Upon the Scheme becoming effective, the beneficial interest in SWC Benefit Trust and Primo Benefit Trust stands transferred and vested in the USL Benefit Trust established by virtue of trust deed dated September 26, 2006 for the benefit of the Company. Subsequent to the year end, on June 30, 2009 SWCL has sold 10,282,553 Equity Shares held by it in the Company in the open market, through the stock exchanges and 1,306,431 Equity shares held by Primo in the Company has been transferred to Primo Benefit Trust on July 6, 2009 which stands vested with USL Benefit Trust in terms of the scheme. (IV) Pursuant to the scheme, the Authorised Share Capital of the Company stands increased 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 the authorised share capital of the transferor companies amounting to Rs 2,092 Million and the Memorandum of Association and Articles of Association of the Company stand amended accordingly without any further act or deed as the part of the Company. (V) Accounting for Amalgamation The amalgamation of the Transferor Companies 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: a. All tangible assets [excluding investment in shares held by the Transferor Companies in the Company and the interest in the USL Benefit Trust in accordance with the terms of the Scheme as explained in Note 2 (A) (III) above] and liabilities of the Transferor Companies at their respective fair values. Interest in USL Benefit Trust, arising from the terms of the Scheme as explained in Note 2 (A) (III) above, has been accounted as Investment, valued and recorded, in the manner prescribed in the Scheme, at the average of the weekly high and low of the closing price of the Company, on the stock exchange where the shares of the Company are more frequently traded in terms of turnover, for the period ended six months preceding the Appointed Date, i.e. April 1, 2007, aggregating to Rs. 9,256.006 Million. The equity shares directly held by the Company in the Transferor Companies stand cancelled and debited to General Reserve of the Company. [refer (d) below]. Rs.7,860.187 Million being the difference between the value of net assets of the Transferor Companies transferred to the Company (determined as stated above) and the face value of equity shares to be issued and after adjusting for the equity shares directly held by the Company in the Transferor Companies which are cancelled, is credited to General Reserve of the Company. This accounting treatment of the reserve has been prescribed in the Scheme. Had the Scheme not prescribed this treatment, this amount would have been credited to Capital Reserve.
b.
c. d.
101
2. e. A. (v) (Contd.) The Company, based on the reports by Independent valuer, has revalued, at their respective fair values, all fixed assets being Land, Buildings, Plant and Machinery, Furniture and Fixtures and Office Equipment and Vehicles, at one location, as at April 1, 2007 and an amount of Rs. 80.704 Million, being diminution in value of certain Plant and Machinery determined based on their respective disposal value as estimated by the independent valuer, has been debited to General Reserve. This accounting treatment has been prescribed in the Scheme. Had the scheme not prescribed this treatment, Rs.80.704 Million being diminution in value of certain fixed assets would have been debited to the Profit and Loss Account for the year instead of General Reserve, having corresponding impact on the net profit for the year. B. The Scheme of Amalgamation under Section 391 to 394 of the Companies Act, 1956 for the amalgamation of Zelinka Limited (Zelinka or the Transferor Company), Cyprus, with the Company (the ZL Scheme) and their respective shareholders, with April 1, 2007 being the Appointed Date, has been sanctioned by Honble High Court of Karnataka and the certified copy of the Order of the Honble High Court of Karnataka has been filed with the Registrar of Companies. Zelinka has complied with the procedure required to be followed under the local corporate laws of Cyprus to give effect to the ZL scheme. Accordingly, the ZL scheme became operative from March 26, 2009. The Company has given effect to the ZL Scheme in these accounts with effect from April 1, 2007 being the Appointed Date. Consequently, in terms of the ZL Scheme: a. The entire business and undertaking of Zelinka including all assets and liabilities, as a going concern, stand transferred to and vested in the Company with effect from April 1, 2007 being the Merger Appointed Date. b. Zelinka ceased to be subsidiary of the Company and Palmer Investment Group Ltd, British Virgin Island and Montrose International SA, Panama have became wholly owned subsidiaries of the Company and Liquidity Inc, USA has become direct subsidiary of the Company. Zelinka was engaged in Investment related activities. I. II. As Zelinka was a wholly-owned subsidiary of the Company, no consideration was payable pursuant to the amalgamation of Zelinka with the Company. Accounting treatment The amalgamation of Zelinka with the Company is accounted 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: a) All assets and liabilities of the Transferor Company at their respective book values.
b) The investment held by the Company in the equity share capital of the Transferor Company stands cancelled and debited to General Reserve of the Company. [refer (e) below]. c) Rs.11.152 Million being the difference between the value of net assets of the Transferor Company transferred to the Company (determined as stated above) after adjusting for investments cancelled is debited to General Reserve of the Company. This accounting treatment of the reserve has been prescribed in the ZL Scheme. Had the ZL Scheme not prescribed this treatment, this amount would have been debited to Goodwill, which would have been charged to the Profit and Loss Account for the year as per the accounting policy of the Company, with a corresponding impact on the net profit for the year.
102
2. B. (ii) (Contd.) d) Interest free loans in foreign currency aggregating to Rs. 7,345.279 Million as on April 1, 2007, granted by the Company to Zelinka for acquisition of long term strategic investments, stand cancelled. Exchange difference on such loans aggregating to Rs.144.912 million as on April 1, 2007, accumulated by the Company in Foreign Currency Translation Reserve, has been transferred to General Reserve. This accounting treatment of the reserve has been prescribed in the ZL Scheme. Exchange differences of Rs.570.131 million during the year ended March 31, 2008 stands reversed on cancellation of such loans on amalgamation. Had the ZL Scheme not prescribed this treatment, this amount would have been debited to the Profit and Loss Account for the year instead of General Reserve, having corresponding impact on the net loss for the year. e) The difference as on the appointed dated, i.e. April 1, 2007, between the cost of investment of Zelinka in the shares of its subsidiary viz., Palmer and similarly the cost of investment of Palmer in the shares of its subsidiaries viz., RG Shaw, JIHL nominees, Shaw Scott, Shaw Derby and Thames Rice, and the cost of shares of the Company, if any, held by these subsidiaries after considering the book values of the assets (net of liabilities), has been reflected as Goodwill on Consolidation. Had the ZL Scheme not prescribed this treatment, Goodwill on Consolidation and General Reserves would have been lower by Rs.3,793.500 Million.
C.
All costs and expenses (including those of the Transferor Companies) incidental with the finalisation of the schemes and to put these into operation, including expenses in connection with excise and label re-registrations, all advisory fees, stamp duty charges, meeting expenses, professional fees, consultant fees including expenses and other expenses or charges attributable to the implementation of the Scheme (expenses relating to amalgamation), aggregating to Rs. 146.879 Million are debited to General Reserve in the books. This accounting treatment of the cost and expenses has been prescribed in the Schemes. Had the Scheme not prescribed this treatment, this amount would have been debited to the Profit and Loss Account for the year instead of General Reserve, having corresponding impact on the net loss for the year.
D.
From April 1, 2007, the Transferor Companies had carried out the business in trust on behalf of the Company. Accordingly, adjustment to the Profit for the year ended March 31, 2008 of the Transferor Companies on amalgamation aggregating to Rs. 162.543 have been debited to the Balance in Profit and Loss Account. Board of Directors of the erstwhile Central Distilleries & Breweries Limited (CDBL) (amalgamated with erstwhile SWDL amalgamated with the Company in an earlier year) on April 29, 1986 decided to issue 134,700 Equity Shares of Rs.10 each, the allotment whereof was stayed by the Honble High Court of Delhi on September 13,1988. The Honble High Court of Delhi had vacated its order and has ordered to keep in abeyance the allotment on 72,556 shares and the matter is sub-judice. The holders, in exchange of these shares will be entitled to 17,776 equity shares of Rs.10 each of the Company pursuant to a Scheme of Arrangement. Necessary adjustments in this respect will be carried out on disposal of the matter pending before the aforesaid Court. Pursuant to the schemes of amalgamation, the bank accounts, agreements, licences and certain immovable properties are in the process of being transferred in the name of the Company.
E.
F. 3.
The Board of Directors of the Company at their meeting held on November 29, 2008 have approved the proposal of merger of Balaji Distilleries Limited (BDL) with the Company with effect from April 1, 2009 as per the Scheme of Arrangement between BDL, Chennai Breweries Private Limited (CBPL) and the Company, subject to the necessary approvals. The Draft Rehabilitation Scheme along with the Scheme of Arrangement is pending with the Board for Industrial and Financial Reconstruction formed under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 , for approval.
103
4. (a) The Group through Royal Challengers Sports Private Limited, a subsidiary Company, holds the perpetual right to the Bangalore Franchise of BCCI-IPL. Although this right is perpetual it would be prudent to consider this as having a finite rather than an infinite life. The limited over version of the game which was first introduced in 1970s is continuing even now after 38 years and an even shorter version (20 over) has only recently being introduced and is more popular than the 50 over format. The Management has held discussion internally as well as with other experts in the field on the subject of useful life and the period of amortisation. Although the Management regards the useful life as indefinite, as a measure of prudence a useful life of 50 years is considered as appropriate and the rights are amortised over 50 years having regard to the following factors: The game of cricket has been in existence for over 100 years and there is no indication of interest in the game and the commercial prospects waning The shorter version of the game is increasingly popular. The commercial exploitation of the shorter version is on an increasing scale and is expected to reach the scale which other games like soccer have reached. This industry (cricket) is, therefore, highly stable and the market demand for this game is likely to remain for more than 50 years with its spread to many countries. IPL and its teams have acquired brand status and teams are not identified with countries or geographies but with brand names. The franchisees have the intent and ability to provide the necessary financial and other resources required to obtain the expected future economic benefits from this for atleast 50 years. The carrying value of the capitalized Rights would be assessed for impairment at every balance sheet date The carrying amount of Franchise Rights as at March 31, 2009 is Rs.4,834.328 Million to be amortised over the remaining period of 49 years. Term liability towards franchisee rights at the year end aggregating to Rs.4,431.413 Million is payable over a period of 9 years, of which Rs.492.379 Million is payable within one year. (b) The governing bodies of this sport in India and globally, over a period of last 7 to 15 years have experienced an annualised growth of 19 to 35% in their Media/Central Rights. The management believes, given the sheer appeal of this format which has surpassed all expectations, an annualised growth of 20% from 2015 to 2025, a 15% annualized growth from 2026 to 2035 and a 4% annualised growth for the balance period of life. The Gate Receipts and Merchandising revenues are based on specific interventions designed to increase the same in the near to medium term, including geographical expansion in the case of Merchandising revenue, with a 5-7% inflation / premiumisation assumptions built in. The key assumption in Local Rights has been indexed to Central Rights. Management has tested for impairment of Franchise Rights at the balance sheet date based on the cash flow projection using the above assumptions, which did not indicate any impairment.
104
5. Employee Benefits a) Defined Contribution Plans The Group offers its employees defined contribution plan in the form of Provident Fund (PF) with the government, Superannuation Fund (SF) and certain state plans such as Employees State Insurance (ESI) and Employees Pension Scheme (EPS). PF and EPS cover substantially all regular employees while the SF covers certain executives and the ESI covers certain workers. Contribution to SF is made to trust managed by the Group, while other contributions are made to the Governments funds. While both the employees and the Group pay predetermined contributions into the Provident Fund and the ESI Scheme, contributions into the Pension Fund and the Superannuation Fund are made only by the Group. The contributions are normally based on a certain proportion of the employees salary. During the year, the Group has recognised the following amounts in the Profit and Loss Account, which are included in Contribution to Provident and other funds in Schedule 16: 2009 95.887 33.494 8.738 138.119 Rs.Million 2008 96.287 29.726 8.819 134.832
Provident Fund and Employees Pension Scheme* Superannuation Fund Employees State Insurance * Excluding contribution to PF made to trusts managed by the Company. b) Defined Benefit Plans Gratuity:
The Group provides for gratuity, a defined benefit plan (the Gratuity Plan), to certain categories of employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement or termination of employment, an amount based on the respective employees last drawn salary and years of employment with the Group. The Group has employees gratuity funds managed by the Group as well as by Insurance Companies. In certain subsidiaries gratuity plan is funded. Pension: Whyte and Mackay Group operates and contributes in a defined benefit Pension Scheme, under which amounts are held in a separately administered trust. Provident Fund: For certain executives and workers of the Group, contributions are made as per applicable Indian laws towards Provident Fund to certain Trusts set up and managed by the Group, where the Companys obligation is to provide the agreed benefit to the employees and the actuarial risk and investment risk fall, in substance, on the Group. Having regard to the assets of the Fund and the return on the investments, shortfall in the assured rate of interest notified by the Government, which the Group is obliged to make good is determined actuarially. Death Benefit: The Company provides for Death Benefit, a defined benefit plan, (the Death Benefit Plan) to certain categories of employees. The Death Benefit Plan provides a lump sum payment to vested employees on Death, an amount based on the respective employees last drawn salary and remaining years of employment with the Company after adjustments for any compensation received from the insurance Company and restricted to limits set forth in the said plan. The Death Benefit Plan is Non-Funded.
105
106
Rs. Million
2009 Funded DeathBenefit Gratuity PF Pension Fund Gratuity Funded Pension Fund PF Non-Funded Pension Gratuity Fund Non-Funded Pension DeathGratuity Fund Benefit 2008 539.162 7,700.334 50.249 56.952 100.895 39.990 522.040 46.667 (413.074) (53.020) (302.763) 0.950 (685.974) 630.701 6,971.707 114.921 106.379 78.211 (183.650) 1,168.838 0.946 0.048 0.125 (0.079) 0.000 6.236 9.925 27.375 10.957 14.811 1,052.977 5.196 17.450 3.854 478.663 962.623 9,329.580 - 195.705 39.312 79.146 74.620 130.136 37.199 68.228 448.538 (1.077) - (1,975.957) (56.668) (248.199) (271.275) 1.899 539.162 1,052.977 7,700.334 5.269 (0.077) 0.005 (0.013) 0.012 5.196 17.450 17.450 3.525 0.329 3.854 438.144 8,214.975 50.249 89.589 351.430 36.260 533.119 (7.190) (2,159.302) (53.020) (302.763) 0.285 (609.490) 504.068 6,078.218 973.462 114.921 55.722 77.196 58.083 (187.650) 1,091.734 0.079 (0.079) 427.553 896.106 7,399.872 - 195.705 39.312 43.430 48.878 1,584.514 34.021 68.685 462.970 (10.615) 12.287 (1,000.418) (56.668) (248.199) (271.275) 0.423 438.144 973.462 8,214.975 630.701 6,971.707 504.068 6,078.218 126.633 893.489 1,091.734 77.104 1,168.838 6.236 6.236 27.375 27.375 14.811 14.811 539.162 1,052.977 438.144 101.018 973.462 79.515 7,700.334 8,214.975 5.196 17.450 3.854 -
b) Defined Benefit Plans (Contd.)
Particulars
A) Reconciliation of opening and closing balances of the present value of the defined benefit obligation Obligation at the beginning of the year Taken over on Acquisition Contributions by plan participants Current service cost Interest cost Actuarial (gain)/ loss on obligations Benefits paid Exchange Fluctuation Obligation at the end of the year B) Reconciliation of opening and closing balances of the fair value of plan assets Plan Assets at the beginning of the year Taken over on acquisition Contributions by plan participants Contributions by the Company Expected return on plan assets Actuarial gains / (losses) Benefits paid Exchange Fluctuation Plan assets at the end of the year C) Reconciliation of present value of defined benefit obligation and the fair value of plan assets to the assets and liabilities recognised in the balance sheet: Present value of obligation at the end of the year Fair value of plan assets at the end of the year Liability Recognised in Balance Sheet
(514.641)
5.196
17.450
3.854
[Included under Provisions in Schedule 12(B)] (Net Asset) Recognised in Balance Sheet [Included under Loans and Advances in Schedule 11]
-
b) Defined Benefit Plans (Contd.)

2009 Funded DeathBenefit Gratuity PF 10.957 10.957 10.957 10.957 91.862 61.876 91.862 61.876 115.704 (975.539) (859.835) 91.862 61.876 (859.835) (0.061) (0.061) (0.061) 79.146 37.199 (34.021) 9.538 74.620 68.228 (68.685) (12.287) 130.136 448.538 (462.970) (975.539) (0.079) 0.005 0.013 0.329 0.329 0.329 0.329 Pension Fund Gratuity Funded Pension Fund PF 106.308 78.212 (72.522) (61.640) 0.947 0.048 0.125 1.120 1.120 1.120 9.925 9.925 9.925 9.925 50.358 50.358 50.358 Non-Funded Pension Gratuity Fund Non-Funded Pension DeathGratuity Fund Benefit 2008
Particulars
D) Expenses recognised in the Profit and Loss Account Current service cost Interest cost Expected return on plan assets Actuarial (gains)/losses 56.953 100.895 39.990 522.040 (36.212) (533.119) 53.809 1,746.228 114.540 1,836.044 114.540 114.540 1836.044 1746.228 89.816
Total Expenses recognised in the Profit and Loss Account Included in: Contribution to Provident and Other Funds in Schedule 16 Actuarial Gain on Pension Scheme in Schedule 16
E) Investment details of plan assets Government securities Securities guaranteed by Government Private Sector Bonds Public Sector / Financial Institutional Bonds Special Deposit Scheme Fund balance with Insurance Companies Others (including bank balances)
2009 2008 Gratuity PF Pension Gratuity PF Pension 38% 32% 17% 34% 27% 1% 16% 32% 2% 15% 33% 1% 29% 17% 7% 19% 91% 32% 8% 12% 52% 9% 18% 58% 100% 100% 100% 100% 100% 100% Based on the above allocation and the prevailing yields on these assets, the long term estimate of the expected rate of return on fund assets has been arrived at. Assumed rate of return on assets is expected to vary from year to year reflecting the returns on matching government bonds. F) Actual return on plan assets 7.60% 7.75% (19.30)% 8.55% 8.25% (7.70)% G) Assumptions Discount Rate (per annum) 7.75% 8.00% 7.10% 8.00% 8.00% 6.90% Expected Rate of Return on Plan Assets 8.00% 8.19% 6.00% 8.00% 8.19% 6.40% Rate of increase in Compensation levels 5.00% Not Applicable 3.50% 5.00% Not Applicable 3.60% Average past service of employees (years) 14 Not Applicable 13 14.76 Not Applicable 12.00 Table PA00 year Table PA00 year of of birth 117% birth 117% loading LIC 1994-96 LIC 1994-96 loading for current LIC 1994-96 LIC 1994-96 Mortality rates for current pensioners ultimate table ultimate table pensioners and a ultimate table ultimate table and a 123% loading 123% loading for for future pensioners future pensioners
The estimates of future increase in compensation levels, considered in the actuarial valuation, have been taken on account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. As per the best estimate of the management, contribution of Rs.90 million is expected to be paid to the plan during the year ending March 31, 2010.
107
6. Fixed Assets a) b) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 472.728 Million (2008: Rs. 553.079 Million). In view of different sets of environment in which foreign subsidiaries operate in their respective countries, provision for depreciation is made to comply with local laws and use of management estimate. It is practically not possible to align rates of depreciation of such subsidiaries with those of the Company. However on review, the management is of the opinion that provision of such depreciation is adequate. Accounting policies followed by Whyte and Mackay Group in respect of depreciation on fixed assets are different from accounting policies of the Company as mentioned in Note 8(iii) Schedule 18. The proportion of the fixed assets in the consolidated financial statement to which different accounting policies have been applied are as below: Rs. Million 2009 Gross Block Proportion % 2,195.330 49% 5,193.470 61% 28.880 16% 2008 Gross Block Proportion % 2,325.689 54% 5,361.108 62% 31.723 13%
Building Plant & Machinery Vehicles 7. Current Assets, Loans and Advances a) Loans and Advances include: (i)
An amount of Rs. 736.429 Million (2008: Rs. 489.847 Million) due from a Tie-up unit secured by the assets of the Tie-up unit.
(ii) An amount of Rs. 250 Million (2008: Rs. Nil) due from a proposed tie-up unit secured by the shares of the proposed tie-up unit. b) Certain confirmation of balances from Sundry Debtors, Loans and Advances, Deposits and Sundry Creditors are awaited and the account reconciliations of some parties where confirmations have been received are in progress. Adjustment for differences, if any, arising out of such confirmations/reconciliations would be made in the accounts on receipt of such confirmations and reconciliation thereof. The management is of the opinion that the impact of adjustments, if any, is not likely to be significant. In the opinion of the management, all Current Assets, Loans and Advances including advances on capital accounts would be realised at the values at which these are stated in the accounts, in the ordinary course of business. Bank balances with scheduled bank includes Rs 154.000 Million (2008: Rs. 715.055 Million) out of the proceeds of the beer business sold in the earlier year, kept under escrow pending resolution of various taxation matters. Subsequent to the year end, the taxation matters have been resolved and the escrow amount has been released. The Company has granted interest free loans in foreign currency amounting to Rs.7,435.245 Million [2008: Rs. 6190.725 Million, excluding Rs.6836.073 Million relating to Zelinka cancelled on amalgamation as referred to in Note 2(B)(II)(d) above] given to USL Holdings Limited (USL Holdings), BVI, a subsidiary of the Company, for acquisition of long term strategic investments. Management is of the view that out of these loans, Rs.3,630.300 Million (2008: Rs.3,987.000 Million), from the inception of the grant of loans, in substance, form part of the Companys net investment in the subsidiary, as the settlement of these loans is neither planned nor likely to occur in the foreseeable future and management intends to convert these loans into investment in share capital of the subsidiary in near future. Accordingly, in accordance with AS 11 - The Effects of Changes in Foreign Exchange Rates (AS 11), exchange difference aggregating to Rs.463.905 Million (2008: Rs. 106.905 Million excluding Rs.715.043 Million relating to loans to Zelinka referred in Note 2(B)(II)(d) above) arising on such loans has been accumulated in a foreign currency translation reserve, which at the time of the disposal of the net investment in these subsidiaries would be recognised as income or as expenses.
c)
d)
108
8. As required under Section 205C of the Companies Act, 1956, the Company has transferred Rs. 4.678 Million (2008: Rs. 10.517 Million) to the Investor Education and Protection Fund (IEPF) during the year. On March 31, 2009, no amount was due for transfer to the IEPF. Interest on inter corporate deposit included under Unsecured Loan others in Schedule 4 acquired on amalgamation, where negotiation/ settlement has not been finalised, has been provided in terms of the decree and / or otherwise considered adequate by the management. In the opinion of the management, interest so far provided is adequate and no further provision is necessary in this respect. Adjustments, if any, are carried out as and when the amounts are determined on final disposal / settlement of the matter. Rs. Million 2009 82.643 160.140 2008 38.117 112.075
9.
10. Borrowing Costs a) Interest included in the Closing Stock of Malt and Grape Spirit under maturation b) Amortisation of Expenditure Incurred for Raising Borrowed Funds 11. Segment Reporting The Company is primarily organised into two main geographic segments:
India: The India segment is engaged in the business of manufacture, purchase and sale of Beverage Alcohol (Spirits and Wines) including through Tie-up units/ brand franchisees within India. Outside India: The Outside India segment is engaged in the business of manufacture, purchase and sale of Beverage Alcohol (Spirits and Wines) including through Tie-up units/ brand franchisees outside India. A. Primary Segmental Reporting
Geographic Segment 2009 (i) Revenue External Less: Excise Duty Inter-segment Total Revenue Result Segment Result Profit/(Loss) Unallocated corporate expenses/(income) Income from Investments Interest and Finance Charges Profit/(Loss) before Taxation Prior Period, Exceptional and Other Non-Recurring Items Profit before taxation Provision for taxation Profit/(Loss) after Taxation Total Revenue Income from Investments India 2008 Outside India 2009 2008 Un allocated / Elimination 2009 2008 (1,921.414) (1,921.414) (353.404) (353.404) 94.097 5,447.563
Rs. Million
Total 2009 2008
75,414.761 58,607.017 33,655.018 24,616.008 118.227 38.630 41,641.516 33,952.379 6,534.077 7.964 3,496.371 3,045.670 3,045.670 3,045.670 6,541.923 6,541.923 181.258 6,360.665 6,360.665
18,722.267 17,631.059 4794.683 4377.741 1803.187 314.774 12,124.396 12,938.544 (2,558.988) 4,303.579 23.732 3,679.272 -
94,137.028 76,238.076 38,449.701 28,993.749 55,687.327 47,244.327 3,975.089 10,845.502 31.696 7,175.643 (3,168.858) 94.097 5,447.563 5,492.036 181.258
(ii)
(6,214.529) 4,303.579 -
- (5,353.466) -
(6,214.529) 4,303.579 (6,214.529) 4,303.579
- (5,353.466) 915.711 2,661.243 (915.711) (8,014.709)
(3,168.858) 5,673.294 915.711 2,661.243 (4,084.569) 3,012.051 55,687.327 47,244.327 31.696 94.097 55,719.023 47,338.424
109
11 A. Primary Segmental Reporting (Contd.)
Geographic Segment 2009 (iii) Other information Segment Assets Segment Liabilities Capital Expenditure Depreciation Other non cash expenses 55,644.947 22,991.609 17,526.859 6,798.504 106.662 1215.284 463.294 322.780 290.926 197.160 11,519.678 25,734.426 7,355.128 4,574.720 844.847 1,426.254 462.545 15.081 1,265.452 2.889 44,738.318 53,259.73 69,617.589 67,847.657 111,902.943 101,985.769 94,499.576 79,220.881 951.509 2,641.538 925.839 337.861 1,556.378 200.049 India 2008 Outside India 2009 2008 Un allocated / Elimination 2009 2008 Total 2009 2008
B.
Secondary Segmental Reporting The Group is engaged in the business of manufacture, purchase and sale of Beverage Alcohol (Spirits and Wines) including through Tie-up units / brand franchisees, which constitutes a single business segment. The Groups other operations did not exceed the quantitative threshold for disclosure as envisaged in AS 17Segment Reporting specified in the Companies (Accounting Standard) Rules 2006.
Notes: a. Segment accounting policies are in line with the accounting policy of the Company. b. Segment revenue includes sales and other income directly identifiable with/allocable to the segment including intersegment revenues. c. Expenses that are directly identifiable with/allocable to segment are considered for determining the segment results. Expenses which relates to the group as a whole and not allocable to segments, are included under Unallocable Corporate expenses. d. Income which relates to the group as a whole and not allocable to segments is included in Unallocable Corporate income. e. Segment revenue resulting from transactions with other segments is accounted on the basis of transfer price agreed between the segments. Such transfer prices are either determined to yield a desired margin or agreed on a negotiated basis. f. Segment assets and liabilities includes those directly identifiable with the respective segments. Unallocable corporate assets and liabilities represents the assets and liabilities that relates to the company as a whole and not allocable to any segment. Unallocable assets mainly comprise trade investments in associate companies. Unallocable liabilities include mainly loan funds and proposed dividend. 12. Related Party Disclosures a) Names of related parties and description of relationship Associates with whom transactions have taken place during the year (i) Utkal Distillers Limited (Utkal) (upto July, 2008) UB Distilleries Limited [Schedule 18 Note 4(b) ]^ Wine Soc of India Private Limited Key Management personnel Mr.V.K.Rekhi Managing Director Employees' Benefit Plans where there is significant influence Mc Dowell & Company Limited Staff Gratuity Fund (McD SGF) McDowell & Company Limited Officers'Gratuity Fund (McD OGF) SWDL Group Officers Gratuity Fund (SWDL OGF)^ SWDL Employees Gratuity Fund (SWDL EGF)^ Herbertsons Limited Employees Gratuity Fund (HL EGF)^ Phipson & Company Limited Management Staff Gratuity Fund. (PCL SGF)^ Phipson & Company Limited Gratuity Fund. (PCL GF)^ Carew & Company Ltd. Gratuity Fund (CCL GF)^ Mc Dowell & Company Limited Provident Fund (McD PF) Herbertsons Limited Executives Provident Fund (HL EPF)^
110
12 a) Names of related parties and description of relationship (Contd.) The Bengal Distilleries Company Limited Staff Provident Fund (BD PF) Shaw Wallce & Associated Companies Employees Gratuity Fund^ Shaw Wallce & Associated Companies Executive Staff Gratuity Fund^ Shaw Wallce & Associated Companies Provident Fund^ Whyte and Mackay Pension Scheme ^ No transactions during the year. b) Summary of the transactions with related parties:
2009 Employees Benefit Plans where there is significant influence Key Management personnel Key Management personnel 2008 Employees Benefit Plans where there is significant influence 2.859 31.439 2.790 5.984 33.621 48.015 0.863 1,584.514 -
Rs. Million
Associates
Sl. No.
Nature of transactions *
Total
Associates
Total
a) Purchase of goods - Utkal b) Sale of goods - Utkal c) Income from sale by Tie-up Units. - Utkal d) Sale/ (Purchase) of Fixed Assets - Utkal e) Interest received from associates - Wine Soc f) Rental Deposit g) Finance (including loans and equity contributions in cash or in kind) - Wine Soc of India - Utkal h) Managing Directors Remuneration i) Rent j) Contribution to Gratuity Fund - McD OGF - McD SGF - SWC PF k) Contribution to Provident Fund -McD PF -HL EPF - BD PF l) Contribution to Pension Scheme Whyte and Mackay Pension Scheme m) Amount due from - Utkal - Wine Soc
0.981 30.858 1.809 49.320 (126.478) 49.320
3.140 42.362 3.069 -
0.981 30.858 1.809 3.140
0.309 6.328 125.223 0.336 -
0.309 6.328 125.223 0.336 2.859 2.000 (135.830) 31.439 2.790 5.984 33.621 48.015 0.863 1,584.514 489.847 -
49.320 2.000 - (126.478) (135.830) 42.362 3.069 43.693 33.493 0.654 55.068 351.416 43.693 33.493 0.654 55.068 351.416 49.320 489.847 -
* Excludes Reimbursement of Expenses and Cost sharing arrangements. The above information has been determined to the extent such parties have been identified on the basis of information provided by the Company, which has been relied upon by the auditors.
111
13. (a) The Companys significant leasing arrangements in respect of operating leases for premises (residential, office, stores, godown, manufacturing facilities etc), which are not non-cancellable, range between 11 months and 3 years generally (or longer in certain cases) and are usually renewable by mutual consent on mutually agreeable terms. Leasing arrangements entered into prior to April 1, 2001 have not been considered for treatment under AS 19 Accounting for Leases. The Whyte and Mackay Group entered into an operating lease agreement in September 2006 to rent a property over a 30 year period at an annual cost of Rs.69.31 Million. The annual rent payable is subject to review every 5 years. There are no contingent rent payments. The aggregate lease rentals payable are charged as Rent under Schedule 16 to the accounts. Sub-lease payments received Rs. 322.776 Million (2008: Rs. 261.801 Million) have been recognised in the statement of Profit and Loss for the year and are included under Schedule 14. Total of future minimum lease payments under non-cancellable operating leases for each of the following periods: 2009 30.228 9.337 68.764 Rs. Million 2008 8.611 38.514 69.294
(i) Not later than one year; (ii) later than one year and not later than five years; (iii) later than five years; the total of future minimum sublease payments expected to be received under non-cancellable subleases at the balance sheet date;
108.329
116.419
(b) The Company has acquired computer equipment and cars on finance leases. The lease agreements are for a primary period of 48 months for computer equipments and for 36 months to 60 months for cars. The Company has an option to renew these leases for a secondary period. There are no exceptional/restrictive covenants in the lease agreements. The minimum lease payments and their present value, for each of the following periods are as follows: Rs. Million 2009 Particulars Present Value of payments 15.618 15.618 11.106 26.724 Minimum lease payments 17.137 17.137 12.930 30.067 3.343 26.724 2008 Present Value of payments 24.074 24.074 17.477 41.551 Minimum lease payments 26.683 26.683 20.304 46.987 5.436 41.551
Later than one year and not later than five years Later than five years Not later than one year Less: Finance Charges Present value of net minimum lease payments
112
2009 2008
14. Earnings / (Loss) per Share:

Nominal Value of equity shares (Rs) a) Net Profit/(Loss) after tax and attributable to Minority (Rs. Million) b) Basic number of Equity Shares of Rs.10 each outstanding during the year # c) Weighted Average number of Equity Shares of Rs.10 each outstanding during the year d) Basic Earnings Per Share (Rs.) (a /c) e) Dilutive Effect on Profit (Rs Million) * f) Profit/(Loss) attributable to equity shareholders for computing Diluted EPS (Rs. Million) (a+e) g) Dilutive Effect on Weighted average number of equity shares outstanding during the year * h) Weighted average number of Equity Shares and equity equivalent shares for computing Diluted EPS (c+g) i) Diluted Earnings Per Share(Rs.) (f / h) 10 (4,084.136) 102,985,569 102,985,569 (39.66) (4,084.136) 102,985,569 (39.66) 10 2,720.584 88,574,272 86,113,691 31.59 23.131 2,743.715 2,080,338 88,194,029 31.11
* #
Diluted effect on weighted average number of equity shares and profit attributable is on account of Foreign Currency Convertible Bonds. Including Equity Shares to be issued referred to in Note 2(A)(I)(a).
15. Taxes on Income: a) Current Taxation Provision for current taxation includes: 2009 i) ii) b) Income Tax Wealth Tax Total 1,802.351 13.000 1,815.351 2008 1,828.799 12.500 1,841.299 Rs. Million
Deferred Taxation The net Deferred Tax (Asset) / Liability as on March 31, 2009 has been arrived at as follows: Rs. Million Particulars Deferred Tax (Assets) / Liabilities as on 1.4.2008 477.296 (131.814) (220.526) (106.927) 18.029 Current Year charge / (credit) 318.299 (71.496) (362.280) (881.120) (996.597) (48.014) (949.703) Translation Adjustment Deferred Tax (Assets) / Liabilities as on 31.03.2009 785.981 (203.310) (544.990) (955.658) (917.977)
Difference between book and tax depreciation Provision for Doubtful Debts Employee Benefits Others Total Less: Adjustment on adoption of notification for amendment to AS 11
(9.614) 37.816 32.389 60.591
113
16. Onerous Lease Provision Rs. Million At the beginning of the year Add: Taken over on acquisition Less: Translation Adjustment Add/ (Less): Provisions made/ (Written back) during the year Charged/ (Credited) to income statement (Less): Utilised (incurred and charged against provision) during the year At the end of the year Note: These provisions were set up in relation to certain leasehold properties of Whyte and Mackay Group, which are un-let or sub-let at a discount. The provisions take account of current market conditions and expected future vacant periods and are utilised over the remaining period of the lease, which at March 31, 2009 is between 7 and 20 years. 17. Foreign Currency Transactions a) The Group has marked to market all the outstanding derivative contracts on the balance sheet date and has recognised the resultant loss amounting to Rs.1,350.142 Million (2008: Rs. 423.716 Million ) during the year. b) As on March 31, 2009, the Group has the following derivative instruments outstanding: i) ii) Forward currency exchange contracts (Euro - GBP) amounting to Euro. 1 Million (2008: Nil) for the purpose of hedging its exposures to foreign currency loans. Interest and Currency Swap arrangement (USD-INR) in connection with borrowings amounting to USD 35 Million (2008: USD 35 Million). iii) Interest Rate Swap arrangements in connection with borrowings amounting to GBP 171.250 Million (2008: GBP. 171.250 Million). c) The year end foreign currency exposures that have not been hedged by a derivate instrument or otherwise are as under : i) ii) d) Receivables: USD 0.876 Million (2008: USD 0.845 Million), Euro 0.188 Million (2008: Euro 1.816 Million), Canadian Dollars 0.298 Million (2008: Rs.Nil), Taiwan Dollar 3.639 Million (2008: Rs. Nil) Term Loans USD 641.175 Million (2008: USD 641.175 Million). 2009 600.601 (94.289) 506.312 403.578 909.890 2008 683.464 683.464 (82.863) (82.863) 600.601
The Central Government vide notification dated March 31, 2009 has amended Accounting Standard (AS11)- The effects of changes in Foreign Exchange Rates, notified under the Companys (Accounting Standard) Rules, 2006. The Company has exercised the option stated in Paragraph 46 of AS 11 retrospectively from April 1, 2007. As a result, the Company has changed its accounting policy for recognition of exchange differences arising on reporting of long term foreign currency monetary items, with the exception of exchange differences arising on a monetary item that, in substance, forms part of an enterprises net investment in a non-integral foreign operation, at rates different from those at which they were initially recorded during the period or reported in previous financial statements, which hitherto were charged to the Profit and Loss Account, as below :
114
17. Foreign Currency Transactions (Contd.) (i) In so far as they relate to the acquisition of depreciable capital assets, are added to or deducted from the cost of asset and are depreciated over the balance life of the asset. This, however, did not have any impact on the results for the year ended March 31, 2009; and (ii) In other cases, the said exchange differences are accumulated in a Foreign Currency Monetary Item Translation Difference Account and amortised over the balance period of such long term asset/liability but not beyond March 31, 2011. Exchange difference recognised in the Profit and Loss Account upto last financial year ending March 31, 2008 relating to said long term monetary items in foreign currency aggregating to Rs. 99.360 Million (net of deferred tax Rs. 48.014 Million) has been credited to the opening revenue as provided in the rules. As a result of this change in accounting for exchange difference, net Loss for the year is lower by Rs. 8,817.723 Million. The amount remaining to be amortised in the financial statement as on March 31, 2009 is Rs.5,597.523 Million. 18. a) Previous years figures have been regrouped / re-arranged wherever necessary. not comparable with those of previous year.
b) In view of the amalgamation described in Note 2 above, the figures for the year ended March 31, 2009 are
115
NOTES
116
NOTES
117
NOTES
118
The Team
Sitting from left to right - V.S.Venkataraman, T.K.Subramanian, P.A.B.Sargunar, V.K.Rekhi, P.A.Murali, Ashok Capoor, K.Laxminarasimhan and K.Chatterjee. Standing from left to right - Dr. B.K.Maitin, Amrit Thomas, Ravi Nedungadi, S.D.Lalla, Vivek Prakash, Abhay Kewadkar, N.R.Rajsekher, P.S.Gill, Sanjay Raina, I.P.Suresh Menon and Ajay Baliga.
Board of Directors
S.R. Gupte Vice Chairman
V. K. Rekhi Managing Director
Dr. Vijay Mallya Chairman

M. R. D. Iyengar B. M. Labroo
Sreedhara Menon
S. K. Khanna
Level 6-10, UB Tower, UB City, 24 Vittal Mallya Road, Bangalore - 560 001. www.unitedspirits.in www.theubgroup.com

FY2009 Annual Report Highlights

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

FY2009 Annual Report Highlights

Uploaded by

Copyright:

Available Formats

CONTENTS

Dr. Vijay Mallya

PRESIDENT & CFO THE UB GROUP

DEPUTY PRESIDENT & CHIEF FINANCIAL OFFICER

REGISTERED & CORPORATE OFFICE

Report of the Directors

350.000 215.825 36.679 9,486.445 27.49 27.49

250.000 77.500 1.930 150.331 25.877 7,018.342 31.84 31.40

Report of the Directors (Contd.)

Amalgamation of Zelinka Limited with the Company:

Amalgamation of Balaji Distilleries Limited with the Company:

Report of the Directors (Contd.)

Report of the Directors (Contd.)

pari-passu in all respects with the existing paid-up equity

Report of the Directors (Contd.)

Report of the Directors (Contd.)

ANNEXURE TO DIRECTORS REPORT

RESEARCH & DEVELOPMENT (R&D)

FOREIGN EXCHANGE EARNINGS/OUTGO

Report of the Directors (Contd.)

ANNEXURE TO DIRECTORS REPORT

DEPUTY PRESIDENT & GROUP TREASURER 8,658,348 4,632,010 2,296,350

28 K R SANKARANARAYANA 29 K VIJAY KUMAR 30 KAUSHIK CHATTERJEE

SENIOR GENERAL MANAGER - TECHNICAL 7,908,779 2,437,580 12,097,381

2-Jul-79 17-Feb-04 27-Apr-06

Report of the Directors (Contd.)

31 KUSHAL BANERJEE 32 LAL RANGWANI

B.COM, PGDPM (IISWBM ) M.COM.

Report of the Directors (Contd.)

By Authority of the Board

Bangalore July 29, 2009

Dr. VIJAY MALLYA Chairman

Corporate Governance Report

Corporate Governance Report (Contd.)

DISCLOSURES REGARDING RE-APPOINTMENT OF DIRECTORS

Corporate Governance Report (Contd.)

* Appointed as Member of the Committee w.e.f. March 20, 2009.

Corporate Governance Report (Contd.)

Corporate Governance Report (Contd.)

December, 28, 11.00 2006 a.m.

November, 28, 3.30 2007 p.m.

March 31, 2008

December 26, 10.15 2008 a.m.

Corporate Governance Report (Contd.)

Corporate Governance Report (Contd.)

Stock performance in comparison to BSE sensex Registrar and Transfer Agents

p) Address for correspondence

Share Transfer System

NON MANDATORY REQUIREMENTS

The Company has formed a Compensation Committee.

Corporate Governance Report (Contd.)

ANNEXURE A: MARKET PRICE DATA

ANNEXURE B: UNITED SPIRITS LIMITED - STOCK PERFORMANCE COMPARED TO BSE SENSEX

ANNEXURE C: DISTRIBUTION OF SHARE HOLDINGS AS ON MARCH 31, 2009

No. of Shares 36,628,260 15,938,471 38,120,824 1,418,478 2,757 8,054,466 100,163,256

% of Equity Capital 36.57 15.91 38.06 1.42 0.00 8.04 100.00

Corporate Governance Report (Contd.)

CERTIFICATE ON CORPORATE GOVERNANCE

Bangalore July 29, 2009

M.R. GOPINATH Company Secretary (in practice) FCS 3812 CP 1030

DECLARATION REGARDING AFFIRMATION OF CODE OF CONDUCT

Annexure to Report of the Directors (Contd.)