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Report of the Directors
Your Directors have pleasure in presenting this Annual Report on the business and operations with audited accounts of your
company for the year ended March 31, 2010.
FINANCIAL RESULTS
Your Company’s financial performance for the year ended March 31, 2010 is summarized below:
(Rupees in Million)
Particulars 2009-2010 2008-2009
Net Income 20751.3 17475.7
Profit before Interest & Depreciation 2949.0 2675.2
Interest 555.0 896.4
Depreciation 882.7 762.1
Profit before non-recurring items 1511.3 1016.7
Non-recurring items — —
Profit before Taxation 1511.3 1016.7
Provision for Taxation (541.6) (391.8)
Profit after Tax available for appropriation 969.7 624.9
Appropriation
Dividend on Equity Shares (including Taxes thereon)
Interim dividend paid — 42.1
Final dividend proposed 100.7 42.1
Dividend on Preference Shares paid (including Taxes thereon) 86.7 86.7
Transfer to General Reserve 100.0 65.0
Balance your Directors propose to carry to the Balance Sheet 682.3 389.0
DIVIDEND
Your Board of Directors take pleasure in declaring a dividend of 36% for the year ended March 31, 2010.
Your Company paid a dividend on the Cumulative Redeemable Preference Shares (CRPS) at the rate of 3% under the terms of
the issue of the 24.69 million CRPS held by Scottish & Newcastle.
CAPITAL
The Authorized Share Capital of the Company remained unchanged at Rs.2,800 million, comprising Equity Share Capital of
Rs.300 million and Preference Share Capital of Rs.2,500 million. The Issued, Subscribed and Paid-up Share Capital as on March
31, 2010 stood at Rs.2,709 million, comprising of Equity Share Capital of Re.1 each aggregating to Rs.240 million and Cumulative
Redeemable Preference Shares of Rs.100 each aggregating to Rs.2,469 million.
ALLIANCE WITH HEINEKEN N.V.
As a result of the acquisition of Sctottish & Newcastle by Heineken, the effective ownership of 37.49% of Equity holding in
your Company now effectively vests in Heineken. Your Company has entered into a new Shareholders’ Agreement inter alia
with Heineken. A comprehensive business partnership with Heineken has been agreed, thereby formalizing their entry into your
Company as an equal promoter. The Parties have agreed upon key commercial terms for the production of ‘Heineken’ in India,
which will accelerate the growth of the premium beer segment throughout India. At the same time, your Company will work
with Heineken to expand the international presence of the ‘Kingfisher’ brand through Heineken’s global footprint.
MANAGEMENT DISCUSSION AND ANALYSIS
INDUSTRY OVERVIEW
The per capita consumption of beer in India continues to be very low compared to other countries. There has been a steady
growth in the Indian Beer Industry of about 15% per year in the last five years, with Industry volumes crossing 200 million cases
in financial year 2009-2010 from about 100 million cases in financial year 2003-2004. Considering the Indian demographics,
with around 70% of the population below the age of 30 years, growing income and increasing international influence, the
industry is expected to maintain if not exceed, its growth at present rate. While the Industry grew by 10% in volume terms
during the last financial year your Company’s volumes grew by 20%.
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Report of the Directors (contd.)
The Indian market infrastructure is a barrier to higher growth. In India, alcohol is available in around 65,000 outlets including
shops, bars and restaurants which translates to roughly one outlet for every 18,000 residents, whereas the global average
for the same is one outlet per 250 residents and the corresponding figure for China is one outlet for every 300 residents. For
instance, in urban conglomeration like Greater Mumbai, there are around 2,500 outlets while in Shanghai, which has similar
population base, the number of outlets selling alcohol is 18,000. An encouraging development is that in some cities, like
Mumbai, the government has started to issue licenses for outlets to sell beer and wine only, delinking it from the sale of spirits.
This development should facilitate future growth.
Taxation is another major factor which adversely affects the Indian brewing industry. In India, all alcoholic beverages are taxed
uniformly, irrespective of their alcohol content. Consequently, same rate of taxation is applied for spirits, lager beer, strong beer
and other alcoholic beverages, resulting in higher price for beer relative to high alcohol beverages. Across the globe, levies on
beer are typically at half the rate applicable to spirits, providing an incentive for consumers towards lower alcohol beverages.
Due to the prevalent excise taxation structure, the majority of Indians who consume alcohol prefer to purchase spirits over beer as
it contains higher alcohol at a similar price. Therefore in India, unlike most other countries, consumption of spirits is higher than
beer. Some States have recently started to delink beer taxation from spirits, thereby promoting a logical growth in the future.
Taxation & Regulation of alcohol being a State subject under the Constitution of India, each State has separate set of regulations,
restrictions and taxation structure for alcoholic beverages. Some States also impose high export duties and restrictions on the
export of beer outside the State. Even the sales & distribution structure varies from State to State as some markets are open
while in most States primary sale is canalized through State controlled corporations.
Over the last 5 years, a plethora of foreign brands have entered the country as 100% Foreign Direct Investment is permitted
thereby increasing the choice of brands and competition. All major global brewers are now present in India. Despite this, your
Company has been able to extend its market leadership position.
OPERATIONS
Volumes during 2009-2010 were buoyant in the Northern & Western markets, but sales in key Southern States were adversely
affected. A change in taxation structure in Karnataka and the voluntary withdrawal of your Company’s brands in the first
quarter of the year 2009-2010 from Andhra Pradesh, on account of a stand off on pricing between beer producers and the
State Government, impacted sales in these key markets.
Your Company has successfully commissioned its largest greenfield brewery with a capacity of 6 Lac HL per annum in the State of
Andhra Pradesh which became operational in January 2010. The greenfield brewery has been built to international specifications
and has adopted several international standards like HAZOP for safe operation, and HACCP, the worldwide standard for food
certification. The brewery has been built with a commitment to the environment and your Company has taken various steps
to reduce the overall carbon footprint. The latest equipment has been installed with a vision of productivity and environmental
conscience. In keeping with its new mantra, ‘Conserve, Connect & Conquer’, your Company’s unique environmental initiative
on inclusive water management, the plant design aims not just to deliver water consumption levels exceeding world class
standards, but also to maintain the water table levels and the greenery around the brewery. In view of production at enhanced
capacity at the new greenfield brewery and to achieve economies in scale of operation, the management has discontinued its
operations at its Hyderabad brewery.
Your Company received the prestigious Water Digest Award for the year 2009-2010 in the categories of Best Water Conserver
– Waste Water Management Company, and Corporate Social Responsibility for water practices supported by UNESCO, PHDCCI
and various Government of India agencies. The brewing unit of your Company at Palakkad has been awarded the State First
Prize for ‘Pollution Control and Environmental Protection’ among medium scale industries in Kerala for 2008. This is the third
consecutive year that the unit has received this coveted award. It earlier won the second prize in the same category in the year
2006 and the first prize in 2007.
Acquisition of land at Nanjangud, Karnataka through KIADB has been completed and your company will commence setting up
of a new brewery in this profitable State.
Your Company has shifted from furnace oil fired boilers to solid fuel boilers in most of its breweries, leading to savings in the
cost of fuel. To contain the increase in bottle cost, your Company has introduced dedicated design registered bottles in select
markets. We expect the benefits of this initiative materialising from the financial year 2010-2011.
Heineken owns breweries in Andhra Pradesh and Maharashtra. Your Company has now the benefit of utilization of capacity
available at these two breweries.
SALES
Your Company continues to lead the beer market with a sale of 101 million cases and combined national market share
crossing 50%. The net sales for the year 2009-2010 stood at Rs.19,975 million as against net sales of Rs.16,983 million in the
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Report of the Directors (contd.)
financial year 2008-2009, registering a growth of 18% over the comparable figure in the previous year. This spectacular result has
been achieved despite impasse in supply to the Andhra Pradesh market during peak season and excise increases in Karnataka. Your
Company has a market share that now stands at over 50%, and is twice the size of its nearest competitor. Your Company along
with its associates controls over 63% of the mild beer market and over 46% of the strong beer market in India. The ubiquitous
“Kingfisher” brand continues to be the largest selling beer brand in India while “Kingfisher Strong” has grown by 22%.
Region wise, the Northern market grew by 33% particularly due to growth in the States of Rajasthan and Uttar Pradesh. The
Eastern markets grew by 70% on account of high growth in the States of Bihar, Jharkhand, West Bengal, Orissa and North
Eastern States. The Southern markets grew by 7% as the growth in the States of Kerala and Tamil Nadu was offset by the
de-growth of Karnataka market and halting of sales in Andhra Pradesh. The Western markets grew by 19% riding on growth
in the States of Madhya Pradesh and Maharashtra and a decline in Daman & Diu.
Your Company has launched a new super premium brand by the name ‘Kingfisher Ultra’ which has been widely acclaimed in
the markets of its launch. Your Company has also launched an All Season beer by the name ‘Kingfisher Red’ in the North and
East markets. ‘Kingfisher Red’ is developed following a unique process and can be consumed even at 14 to 17 degrees Celsius,
without any change in the taste of beer.
The Brand ‘Kingfisher’ has been awarded the prestigious Gold Medal in the World Beer Championship 2009.
MANUFACTURING EXPENSES
Manufacturing expenses for the financial year 2009-2010 were Rs.10,088 million constituting 50.5% of the net sales as against
Rs. 8,693 million in the previous financial year which constituted 51.2% of the net sales.
A significant increase in price of second hand bottles on account of hoarding by bottle traders has adversely affected manufacturing
costs. Your Company has recently introduced patented bottles with a view to gain strategic control of this major item of cost.
Since the bottles are patented and the name and logo of your Company are embossed on the bottles, they cannot be used by
other brewers and are to be necessarily supplied back to your Company. The cost associated with accelerated investment in
new patented bottles is expected to be recovered by a drop in the price of second hand bottles.
Your Company has entered into long term agreements for securing supply of malt & barley thereby minimizing the fluctuation
in price of these ingredients.
Most of the units have installed solid fuel boilers which has resulted in a reduction of fuel cost. The breweries are continuously
improving efficiencies in the brewing process as well as in packing thereby reducing the manufacturing costs.
PERSONNEL AND OTHER OPERATING EXPENSES
Personnel expenses of your Company stood at Rs.989 million as compared to Rs.871 million in the previous year. This constituted
5% of the net sales as against 5.1% of the net sales in the previous year. Other operating expenses amounted to Rs.1,094
million constituting 5.5% of the net sales. Personnel and other operating expenses were contained despite increased volumes
during the year.
SELLING AND BRAND PROMOTION EXPENSES
During the period under review, your Company has spent 28% of net sales on selling and brand promotion exercise as compared
to 25.2% of net sales spent in the previous year.
During the year, your Company continued its investments in brand building, especially behind the Kingfisher Brand. Kingfisher
continues its high profile association with five of the eight IPL teams as their ‘Good Times Partner’. This association was effectively
leveraged both through communication as well as consumer and trade contacts.
Kingfisher further strengthened its association with football by signing on as the title sponsor of the Goa Professional League.
Kingfisher continued to leverage on the excitement and glamour of Formula-1 by being a very visible and prominent sponsor
of the Force India team.
Kingfisher also continued its association with large city-based sporting events such as the Mumbai Marathon, Delhi Half Marathon
and the World 10K race in Bangalore.
Kingfisher and fashion have been synonymous for over a decade. Kingfisher has strengthened its association with fashion by
being a key sponsor to the India Couture Week, Wills Lifestyle India Fashion Week and the Lakme Fashion Week, apart from
the fashion weeks in Kolkata, Chennai and Bangalore.
Music has been another significant platform that Kingfisher has used over the years. During the year, the pub-based rock festival
– ‘Kingfisher Pubrock Fest’ was extended to 20 cities and over 75 shows. The Kingfisher Voice of Goa talent hunt has grown
from strength to strength and has firmly entrenched Kingfisher extremely close to the hearts of Goans.
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Report of the Directors (contd.)
The eighth edition of the much awaited and world acclaimed ‘Kingfisher Swimsuit Calendar’ was released in January to a
tremendous response. Your Company’s association with India’s No.1 Lifestyle TV channel ‘NDTV Good Times’ continued into
its third year.
PROFIT BEFORE INTEREST, DEPRECIATION AND TAXATION (PBIDT)
PBIDT for the year under review stood at Rs.2,949 million as compared to Rs.2,675.2 million in the previous year, reflecting
an increase of 10.2%. This increase in PBIDT is resulting from strong revenue growth and sustained investment behind your
Company’s brands.
INTEREST AND DEPRECIATION
Interest paid during the year amounted to Rs.555 million as against Rs.896.4 million in the previous year. Depreciation for the
year was Rs.882.7 million as compared to Rs.762.1 million in the previous year.
There has been reduction in the interest cost as compared to the previous year due to exchange gains in the current year
compared to losses in the previous year and the payment of a term loan commitment fee in the previous year. Depreciation
has increased on account of continued investment in production capacities, including the investment in the greenfield
Andhra Pradesh brewery.
PROFIT BEFORE AND AFTER TAXATION
The Profit Before Taxation for the year stood at Rs.1,511.3 million as compared to Rs.1,016.7 million in the previous year
reflecting an increase of around 48.6%. The Profit After Taxation stood at Rs.969.7 million as against Rs.624.9 million in the
previous year reflecting a growth of 55.2%.
PROSPECTS
While multinational companies are expected to increase competition in the premium beer segment, established domestic brands,
particularly those of your Company have the advantage of having an established brand equity. Several international brewers
have currently built brand associations and are marketing their brands aggressively through various point-of-sale promotions
throughout their distribution networks. Your Company has the benefit of a strong route to market combined with India’s leading
brands.
A double digit growth rate is expected for the coming years, resulting from the increase in disposable income and the growth
of consumers entering the legal drinking age.
On-trade sales are expected to grow considerably with growing affluence among young consumers together with the culture of
frequenting pubs and clubs that is now spreading to second-tier cities. Off-trade sales are meanwhile expected to be boosted
by the gradual deregulation of beer retail through supermarkets/hypermarkets and beer & wine licenses.
In order to augment capacities in critical markets, expansion in Karnataka is expected to commence in the next financial year.
ENVIRONMENTAL INITIATIVES
Besides corporate social responsibility, water conservation has been our key focus area. Also, with the expected future growth,
its importance has considerably increased. Most of our units have a constraint on disposal of waste water, and therefore, the
Company has embarked upon a plan to install sophisticated equipment and modification process so as to reduce consumption
of water and its disposal. This will in turn reduce need for acquisition of additional lands for waste water disposal. As an
environmental initiative, your Company has installed bottle washers incorporating the latest technology at all units and is
encouraging rain water harvesting at these units. Your Company has also collaborated with several agricultural universities for
cultivation of identified crops with waste water from the Brewery being used for irrigation on a select basis.
Dry yeast recovery has also been earning revenue as an ingredient for probiotics, as a mixer with spent grain and pesticides.
Going ahead, as an environment friendly initiative, your Company is determined to focus on measures for reduction of process
loss during production, reduction of pollutants and other wastages and utilization of natural methods of root zone treatments
such as usage of duck weed / water hyacinth as an economical method for water purification. This is being done in addition
to reducing pollutants which will in turn reduce load on the effluent treatment facility and thereby assist in conservation of the
environment.
SOCIAL INITIATIVES
Social responsibility is integrated in the corporate philosophy of your Company and we have been able to positively impact
the lives of the communities that we work in. Primary Health, Primary Education and Water are the three key areas for our
interventions. Each initiative undertaken is long term and sustainable and addresses a specific need of the local community.
These are implemented and monitored in partnership with representatives of the community. Our teams work relentlessly to
ensure that each of these meet the needs of the local people. In Education, the objective is to ensure that quality education is
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Report of the Directors (contd.)
imparted to children from the underprivileged strata of the society. Here your Company’s representatives work closely with local
schools to provide better infrastructure, mid day meals, stationery and uniforms as well as deployment of teachers to enhance
the quality of education. In primary health, your Company’s endeavour has been to ensure that the community has access to
primary healthcare. These are either in the form of Primary Health Centres set up by us or mobile health services where a qualified
doctor travels in an ambulance to villages that do not have primary health facilities. Your Company’s initiatives in water have
been to both conserve as well as provide potable water to the local community. These interventions have earned us the trust
and appreciation of the community, local bodies and Governmental agencies. Your Company’s initiatives in Primary Health in
7 locations have benefitted over 6000 people. In Education, the interventions have enhanced the quality of education for over
1000 students in 7 locations and we have been able to facilitate access to water for over 13000 locales in 6 locations.
INTERNAL CONTROL SYSTEM
Your Company has established a robust system of internal controls to ensure that assets are safeguarded and transactions are
appropriately authorized, recorded and reported. Internal Audit evaluates the functioning and quality of internal controls and
provides assurance of its adequacy and effectiveness through periodic reporting. Your Company’s internal control systems are
adequate and are routinely tested and certified by statutory and internal auditors. The process adopted provides reasonable
assurance regarding the effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable
laws and regulations.
In order to continuously upgrade the internal control system, to be in line with International best practices and to ensure
proper corporate governance, your Company has implemented risk assessment, control self assessment and legal compliance
management systems. These have been updated during the year under review.
The internal control system evaluates adequacy of segregation of duties and reliability of management information systems,
including controls in the area of authorization procedures and steps for safeguarding assets. Planned periodic reviews are carried
out for identification of control deficiencies and opportunities for bridging gaps with best practices along with formalization of
action plans to minimize risks.
Your Company believes that the overall internal control system is dynamic, and reflects the current requirements at all times,
hence ensuring that appropriate procedures and controls, in operating and monitoring practices are in place.
Internal Audit reports to the Audit Committee and recommends control measures from time to time.
OPPORTUNITIES & THREATS
With growing demand, the domestic production of beer is on the rise. With further investments, your company has been able
to upgrade and expand its capacities and also its brands. International brewers have established breweries across India in order
to extend their brand presence to more States. With these international brands starting domestic production in India, indigenous
brands such as your company’s face increasing competition. International premium lager is growing steadily (though on a smaller
base) as the companies have expanded their distribution across India, and have launched several new brands during the year
under review. Despite this influx of new entrants, Kingfisher Lager continues to not just maintain market share but indeed
increased it beyond 50% during the period under report.
India is predominantly a spirits market and beer is a minority preference for those who consume beverage alcohol. The low
penetration in beer consumption in comparison to international levels offers the expectation of substantial and sustainable
growth in demand for beer in years to come, particularly given the youthful age of India’s populace. It is expected that gradually
there will be a deregulation in the Indian beer industry too, giving it a boost.
Foreign brewers have been eyeing the Indian market for some years now as India is widely acknowledged to be the last untapped
big growth market. However, consistent investments by your Company, in the product, packaging and communication, along
with well established distribution, puts UB in a strong position, as seen by consistent improvements to the Company’s national
market share.
RISK MANAGEMENT
Your Company has evolved a framework for management of Business Risks. Towards this end the company has identified risk
categories under strategic risks, operative risks, information technology risks, financial risks. This is audited regularly by the
internal audit team.
Continuity and sustainability of the business is as important to stakeholders as growing and operating the business. Managing
risks and protecting the business from the effects of disasters, failures and reputational damage are focal points on the
management’s agenda.
RISKS AND CONCERNS
The Indian beer industry is plagued with myriad taxes & levies that vary from State to State. These along with price regulation,
inadequate market infrastructure and restrictions in interstate movement of beer, pose a great challenge for the industry.
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Report of the Directors (contd.)
Unlike most developed countries where beer is less regulated and available freely, high level of regulation and higher end
consumer price hampers beer sales in India.
Uniform tax regime for beer in all States will be a boon for the industry. If implemented, it will help the beer industry by rationalizing
end consumer prices in all States, as is in the case of other consumer goods. Globally, the policy of uniform taxation has been
a success because of inherent positive implications on Government revenue. In addition to economic contribution, a uniform
tax structure will also create increased agro linkages that are beneficial to a country like India.
It is important to realize that the beer sector can contribute immensely to the agricultural sector, as beer is an agro-based product.
Barley farmers particularly stand to benefit from the growth of the beer sector.
Additionally, the continuing control on pricing as exercised by a number of State Governments has resulted in our inability to raise
prices on roughly 60% of our sales. This has had a direct bearing upon the Company’s profitability. As this challenge continues
in the current financial year, it has resulted in a number of key markets becoming unattractive from a financial perspective.
Your Company has explored a variety of avenues to contain the risk of continued increase in basic costs and has entered into
a number of long term agreements for sourcing vital inputs. There has been a continuing review of the long term strategy for
procurement at an economical cost.
Excessive regulation and further extensions of Government intervention, in the areas of distribution and pricing, is affecting the
growth and profitability of the industry as well as restricting Government revenues. In addition, restrictions on advertising and
licensing of retail outlets continue to present challenges to the Industry.
Inclusion of alcoholic beverages into Goods and Service Tax (GST), is uncertain. Non-inclusion of alcoholic beverages in purview
of GST would be against the fundamental concept of GST and could have a material negative impact. However, even if it is
included there may be material negative impact on input cost.
HUMAN RESOURCES
People continue to be the focal point of the organization’s development. Your Company believes in building a stimulating,
conducive and transparent culture that drives high level of performance. For a high performance organization, it is imperative
that it has right people in the right job equipped with the right set of skills. As such, the emphasis this year was in identifying
and developing people capability to ensure that we not only maintain but accelerate our rate of growth and performance. With
this intent, an in-depth evaluation of role requirement vis a vis the individual’s strength was carried out. This was to ensure right
deployment of people and also identify their developmental needs that will strengthen and consolidate our leadership pipeline.
The organization also completed the succession planning exercise that has also enabled us to fill critical positions internally.
We continued to significantly improve our performance in the areas of productivity and safety by means of focused initiatives.
Your Company maintained harmonious employee relations during the year. The transition of workforce from the existing plant
to the new greenfield also happened seamlessly.
As on March 31, 2010, the total employee strength at United Breweries Limited stands at 1661. Your Directors place on record
their sincere appreciation to all employees for their contribution towards the continuous success of the organization.
SUBSIDIARY COMPANIES
Associated Breweries & Distilleries Limited remains a wholly owned Subsidiary of your Company while your Company holds
51% of equity in Maltex Masters Limited.
Your Company has received approval from the Central Government exempting your Company from attaching the Accounts
etc., of its subsidiaries viz. Associated Breweries & Distilleries Limited and Maltex Malsters Limited with the balance sheet of
your Company. In terms of the approval so granted by the Central Government, the Accounts, etc., of the above subsidiaries
are not required to be attached with the balance sheet of the holding company. However, these Accounts will be provided on
request to any member requiring to have a copy, on receipt of such request by the Company Secretary at the Registered Office
of the Company.
Statement pursuant to Section 212 (1) (e) also forms part of the Annual Report.
CONSOLIDATION
As per the Listing Agreement, Consolidated Accounts conforming to applicable Accounting Standards are attached to this
Annual Report.
DEPOSITORY SYSTEM
Your Company has entered into Agreement with National Securities Depository Limited and Central Depository Services (India)
Limited in accordance with the provisions of the Depositories Act, 1996 and as per the directions issued by Securities and
Exchange Board of India.
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Report of the Directors (contd.)
DIRECTORS
The Board of Directors of your company has been reconstituted and broad based to comprise of 12 Directors with a balanced
combination of Promoters and Independent Directors. Mr. John Hunt and Mr. John Nicolson opted out of the Board.
Mrs. Kiran Mazumdar Shaw and Mr. Madhav Bhatkuly have been inducted on Board as Independent Directors with effect from
October 26, 2009. Mr. Duco Reinout Hooft Graafland, Mr. Sijbe Hiemstra and Mr. Guido de Boer were inducted on Board with
effect from December 07, 2009. Mr. Stephan Gerlich was appointed to the board on July 02, 2010.
The Board places on record the contributions of outgoing Directors during their tenure on the Board of your Company.
Mr. Chugh Yoginder Pal, Mr. A K Ravi Nedungadi and Mr. Sunil Alagh retire by rotation at the ensuing Annual General Meeting
and being eligible, offer themselves for re-appointment.
AUDITORS AND AUDITORS’ REPORT
M/s Price Waterhouse, Statutory Auditors hold office until the conclusion of the ensuing Annual General Meeting and are
eligible for re-appointment.
There are no qualifications or adverse remarks in the Auditors’ Report which require any clarification or explanation.
LISTING REQUIREMENTS
Your Company’s Equity Shares are presently listed at the Bombay Stock Exchange Limited, National Stock Exchange of India
Limited and the Bangalore Stock Exchange Limited. The listing fees have been paid to all the Stock Exchanges for the year
2010-2011.
During the year under review, the Securities of your Company have been delisted from Stock Exchanges at Chennai and New
Delhi upon application made in terms of special resolution passed by the members in this regard.
CASH FLOW STATEMENT
A Cash Flow Statement for the year ended March 31, 2010 is appended.
CORPORATE GOVERNANCE
A Report on Corporate Governance forms part of this Report along with the Certificate from the Company Secretary in practice.
FIXED DEPOSITS
The Company has not invited any Fixed Deposits.
PARTICULARS OF EMPLOYEES, CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION, ETC.:
Information in accordance with sub-Section (2A) of Section 217 of the Companies Act,1956, read with the Company’s (Particulars
of Employees) Rules, 1975, forms part of this Directors’ Report and is annexed. Particulars required under Section 217(1)(e) are
also annexed.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, your Board of Directors report that:
– in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper
explanation relating to material departures, if any.
– accounting policies have been selected and applied consistently and that the judgements and estimates made are reasonable
and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of
the profit of the Company for that period.
– proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud
and other irregularities.
– the annual accounts have been prepared on a going concern basis.
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation for the continued support received from shareholders, banks and
financial institutions. Your Directors are also grateful to the Company’s business partners and customers for their continued
support and patronage. Finally, your Directors wish to acknowledge the support and contribution on the part of all employees
who constitute our most valuable asset.
By Authority of the Board,
Bangalore Kalyan Ganguly Guido de Boer
July 21, 2010 Managing Director Director & CFO
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STATEMENT UNDER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956
A. Conservation of Energy
Energy conservation measures taken by the Company:
Electrical Energy
– Vapour absorption machine is being commissioned at Bangalore unit for generating chilled water for wort cooling instead
of using high electricity consuming reciprocating compressors.
– Draft control on alternate fuel boilers installed to reduce electricity consumption at Palakkad, Orissa & Mangalore units.
– Lighting energy savers installed at Mumbai, Bangalore & Mangalore units.
– Focus on optimal work in process during the off season has reduced refrigeration load and consequently saved on energy
consumption.
– Installed variable frequency drives in Mumbai on high load motor to reduce energy consumption.
– De-superheaters in Refrigeration compressor installed at Bangalore, Kalyani & Palakkad units to reduce electricity
consumption.
– Chilled water generation through CO
2
evaporation implemented at Mumbai to reduce electrical consumption.
Fuel Oil Consumption
– De-superheaters installed at Bangalore, Palakkad and Kalyani units to generate higher feed water temperature in boilers
leading to reduced solid fuel consumption.
– After successful implementation of alternate fuel boilers at units located at Punjab, West Bengal and Andhra Pradesh,
alternate fuel boilers are installed at all units except at Cherthala and Goa. This has reduced fuel cost substantially.
Water Conservation
– Recycling of effluent treated water with programmable logic control operated reverse osmosis plant installed at Mallepally,
and Ludhiana units to ensure water conservation.
– Rainwater harvesting initiative is being undertaken at Mallepally unit in a phased manner to save water and enhance
the ground water table.
Environment
– LED coupled with solar power & geo thermal office cooling system installed at Mallepally unit. Vapor Heat recovery
systems are installed at Mumbai & Mallepally units.
– Heat recovery system installed in Mumbai to reduce fuel consumption and reduce heat emission into the atmosphere.
This has a positive impact on reduction in global warming.
– Commissioned CO
2
recovery plant at all units. This has reduced release of green house gases into atmosphere.
B. Technology Absorption
– First Mash filter & high speed 36000 BPH bottling line commissioned at Mallepally unit in Andhra Pradesh.
– Coil cooler installed for Diesel Generator (DG) sets at Mallepally unit in place of Radiators to increase efficiency of DG
sets during longer running hours at high temperature regions.
– Latest technology in labellers, Auto PU controlled Pasteurizer and fillers for beer packaging has been implemented at
Mallepally. This has resulted in improved quality, reduced wastages and higher productivities on the line.
– Double Evacuation Filler commissioned in Cherthala unit.
– Automation and Auto Blowdown installed in the boilers on selective basis.
C. Research and Development
The Company has continued its Research & Development (R&D) programme in the area of development of two row malting
variety of Barley. The Company is expecting to shortly launch a flavoured beer in the market by utilizing the technology
developed by our R&D department.
D. Foreign Exchange Inflow and Outflow (Rs. in Million)
Foreign Exchange earned : 9.42
Foreign Exchange used : 738.30
Annexure to Directors’ Report
9
Annexure to Directors’ Report (contd.)
Sl.
No.
Name Age Date of
Joining
Total
Remuneration
Designation Educational
Qualifications
Experience
in Years
Previous Employment
1 K Ganguly 59 1-Feb-79 33876106 Managing Director B.A. (Hons.),
PGDBM (XLRI)
37 EVP - Marketing & Sales
McDowell & Co. Ltd.
2 Shekhar Ramamurthy 49 15-May-89 18910553 Dy. President B.Tech. (Civil) - IIT, Delhi,
PGDBM - IIM - Kolkata
23 General Manager - Marketing
Herbertsons Ltd.
3 Cedric Vaz 51 15-May-06 9404063 EVP - Manufacturing B.Tech. (Chem. Engg.),
IIT - Kanpur
28 Head Operations –
Cadbury India Ltd.
4 J Noronha 55 15-Jul-91 8651142 EVP - Human Resources B.Com. (Hons.) PGDPM-IR
(XLRI)
30 Personnel Manager –
The Oberoi Bogmalo Beach, Goa
5 Perry Goes 45 14-Jun-04 7603786 SVP - MIS, Strategic
Planning & Business
B.E. (Mech.), PGDBM
(Mktg-Fin & HR) - Goa
Inst. of Mgmt.
23 Group Leader for Business Analytics –
Honeywell Technologies Solutions Labs
6 Sudhir Jain 50 15-Jan-04 4529166 DVP - Operations - South
& West
B.E. (Mech.)
University of Roorkee
24 G M Plant Operations –
Pepsico India Holdings P. Ltd.
7 Kiran Kumar 42 28-Apr-97 7489206 SVP - Sales B.Com., PGDBM
IIM - Ahmedabad
19 Marketing Manager –
Herbertsons Ltd.
8 Vivek Agnihotri 40 01-Mar-09 3082756 GM-Instl. Sales &
Customer Mktg.
B.Com., MBA (Marketing) 15 Kingfisher Airlines Ltd.
9 Umesh Hingorani 41 2-Feb-93 4191295 DVP - Business
Development
BBA - University of
Southern California
17 Marketing Manager –
Castle Breweries Ltd.
10 R K Jindal 49 19-Mar-85 4925478 DVP - Operations North &
East and Malting
B.Com., F C A 25 First Employment
11 Govind Iyengar 43 5-Feb-01 5047026 DVP - Legal &
Company Secretary
B.Com., L.L.B., ACS 20 Company Secretary –
Citurgia Biochemicals Ltd.
12 Govind Tiwari 58 12-Feb-75 5304010 DVP - UBL Goa &
Contract Units
B.Sc., PGDIFAT, DBA,
PGDM & IR
40 Asst. Brewer – Indo Lowenbrau
Breweries Ltd., Faridabad
13 Sharad Dalmia 45 1-Feb-01 3629681 DVP - Engineering
& Projects
B.E. (Mech.), PGDM
(Mech. & Elec. Engg.)
(Jamshedpur Tech. Inst.)
23 General Manager –
McDowell & Co. Ltd.
14 George Paul 46 6-Jan-03 3775894 AVP - UBL Rajasthan B.Tech. (Mech.), MBM
(Asian Inst. of Mgmt.)
22 General Manager –
A W Faber Castel (I) Pvt. Ltd.
15 R Santosh Kumar 45 1-Jul-98 4835879 DVP - Commercial B.E., PGDCA 22 Mfg. Manager – Pepsico India Holdings
16 Samrat Chadha 37 2-May-97 3673183 General Manager, Sales
- West
B.Sc., PGDM
(T.A. Pai Mgmt. Inst.)
13 First Employment
17 Gurpreet Singh 35 20-Apr-98 3544549 General Manager -
Marketing
B.Com., PGDM
(T.A. Pai Mgmt.Inst.)
12 First Employment
18 M R Srinivasan 58 15-Jul-89 3135187 AVP - UBL Mangalore B.Sc., MSW
(University of Mysore)
36 Personnel Executive - Indl. Relations &
Welfare – Cipla Ltd.
19 P A Poonacha 39 1-Jul-96 4241712 AVP - Finance B.Com., ACA, AICWA 15 Accounts Executive –
BPL Sanyo Technologies Ltd.
20 R Raghupathy 50 10-Jul-89 3349725 General Manager - B.Com., AICWA 27 Accounts Executive –
Laurel Aromatics Pvt. Ltd.
21 P L Murugappan 39 27-Sep-97 3409282 General Manager -
Finance
B.Sc., MBA (Fin.), AICWA 18 Head Finance–Cipla Ltd. (Bangalore Unit)
22 Jayant Basu 58 11-May-98 3491441 AVP - UBL Kalyani B.Sc., PGDPMIR, LLB, MBA 36 Plant Manager – Pfizer Ltd.
23 S Ramakrishnan 50 1-Jun-95 3882606 AVP – IT M.Com.,
Dip. in Comp. Sc.
25 Senior Manager - Systems –
McDowell & Co. Ltd.
24 Susheel Kumar 58 19-Apr-02 2931639 AVP - UBL Nelamangala B.Sc., Tech., Bio Engg. &
PGDMM
33 Chief Executive –
Empee Breweries Ltd.
25 Rakesh Chandra
Gupta
41 1-Jun-04 3058102 AVP - UBL Mumbai B.E. (Mech.), MFM,
Master in SAP-PS, MDP
18 Senior Manager - Projects –
Birla Management Corporation
26 C Gouri Sankar 44 14-Mar-07 3136132 AVP - Srikakulam B.E. (Mech.), Adv. Dip. in
Business Admn.
21 Senior Manager - Production –
Asian Paints (I) Ltd.
27 A K Das 56 14-Jan-81 2716744 AVP - Aurangabad M.Com. 31 Indo Lowenbrau Breweries Ltd.
28 A V Ganesh Ramu 49 01-Mar-83 2449750 General Manager –
Brewing & Technical
B.Sc., PGD Business Mgmt.
Masters in Brewing - UK
27 First Employment
29 A Narayanan 43 03-Nov-93 2573604 General Manager-Chennai B.Tech. ME., EGMP (IIM-B) 20 Skol Brewries Ltd.
30 Nirmal Rajani 47 01-Jun-98 2494732 General Manager Sales
- South
B.Com. 27 McDowell & Co. Ltd.
STATEMENT UNDER SECTION 217 (2A) OF THE COMPANIES ACT, 1956 READ WITH THE COMPANIES
(PARTICULARS OF EMPLOYEES) RULES, 1975 (EMPLOYED FOR FULL YEAR)
Analysis
Corporate Accounting
10
By Authority of the Board,
Bangalore Kalyan Ganguly Guido de Boer
July 21, 2010 Managing Director Director & CFO
All the employees mentioned above are in full time employment with the Company.
AVP – Assistant Vice President, DVP – Divisional Vice President, SVP – Senior Vice President, EVP – Executive Vice President, CFO – Chief Financial Officer.
*Mr. Guido de Boer was appointed as Director & CFO effective December 7, 2009.
NOTES:
s 2EMUNERATIONSHOWNABOVEINCLUDESSALARYALLOWANCEMEDICALLEAVETRAVELEXPENSESANDMONETARYVALUEOFPERQUISITESASPER)NCOME4AX2ULES.ONEOF
the employees mentioned above is a relative of any Director of the Company except Mr. Umesh Hingorani, who is related to Dr. Vijay Mallya. None of the
above mentioned employees holds more than 2% of the paid-up equity capital in the Company.
31 Shyamlal Mittal 50 02-May-01 2564511 General Technical
Manager
M.Sc. (Micro Biology) 27 Shaw Wallace & Co. Ltd.
32 Prem Korah 36 20-May-04 2455282 General Marketing
Manager
B.E. (Electronics), MBA
(XIMB)
10 Cavincare Pvt. Ltd.
33 Madhusudhan
Sharma
39 01-Jul-05 2764484 AVP - Projects B.E., MBA 15 G M R Beverages & Industries Ltd.
34 Ajay Jairath 46 09-Jan-07 2563912 General Manager - B.Tech. (Chem. Engg.)
MBDA (Intl. Marketing)
23 International Packaging
Products Pvt. Ltd.
35 Ramakrishnan S 46 22-Jan-07 3056879 AVP - UBL Palakkad B.E. (Chem. Engg.) PGDM 23 Organics Aromatics Pvt. Ltd.
36 Eswar Van Sharma 41 06-Mar-08 2804086 General Manager -
Innovation
B.E. (Civil & Environmental
Engg.) PGDM (XIM)
16 McCann Erickson
Employed for part of the year and in receipt of remuneration in aggregate of not less than Rs. 24,00,000/- per annum
1 Guido de Boer* 38 01-Oct-09 6989448 Director & CFO M.Sc., Economics &
Business
13 Heineken International B.V.
2 Ravikanth Sabnavis 41 12-Mar-07 2730898 DVP - Marketing B.E., MMS 18 Marketing Manager, Heinz India Pvt. Ltd.
3 Samar Singh
Shekhawat
44 09-Nov-09 2634407 SVP - Marketing B.A. MBA (Marketing) 20 Spencers Retail Ltd.
Annexure to Directors’ Report (contd.)
“Persons constituting group coming within the definition “group” for the purpose of Regulation 3(1)(e)(i) of the
Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 include the
following:”
Dr. Vijay Mallya
Mr. Sidhartha V Mallya
Ms. Ritu Mallya
Kamsco Industries Private Limited
The Gem Investment & Trading Company Private Limited
Mallya Private Limited
McDowell Holdings Limited
United Breweries (Holdings) Limited
Pharma Trading Company Private Limited
Vittal Investments Private Limited
Devi Investments Private Limited
VJM Investments Private Limited
Scottish & Newcastle India Limited
Heineken International B.V.
Heineken N.V.
Scottish and Newcastle India Private Limited
UBL Ludhiana
11
Report on Corporate Governance
A. MANDATORY REQUIREMENTS
COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE
As manifested in the Company’s vision United Breweries Limited has always strived for excellence in Corporate Governance.
Beyond mere compliance we are committed towards taking all strategic initiatives to enhance Shareholders’ wealth in the long
term. In pursuit of corporate goals, the Company accords high importance to transparency, accountability and integrity in its
dealings. Our philosophy on Corporate Governance is driven towards welfare of all the Stakeholders and the Board of Directors
remains committed towards this end.
The Board of Directors supports the broad principles of Corporate Governance and lays strong emphasis on its role to align and
direct the actions of the Company in achieving its objectives.
BOARD OF DIRECTORS
Your Company is managed and controlled through a professional Board of Directors. The Board comprises of a balanced
combination of non-Executive and independent Directors in addition to the Managing Director and Chief Financial Officer. Your
Company’s Board consists of eminent persons with considerable professional expertise and experience.
Matters of policy and other relevant and significant information are regularly made available to the Board. In order to ensure better
Corporate Governance and transparency, the Company has constituted an Audit Committee, Investors’ Grievance Committee,
Remuneration / Compensation Committee and Share Transfer Committee to look into the aspects of each Committee. Internal
Audit carried out by the Group Internal Audit team commensurate with the size of the organization. There is comprehensive
management reporting systems involving the preparation of operating results and their review by senior management and by
the Board.
In addition to securing Board approvals for various matters prescribed under the Companies Act, 1956, matters such as annual
budget, operating plans, significant and material show cause notice and demands, if any, minutes of Committee meetings,
control self assessment, risk management and updates thereof are regularly placed before the Board.
During the financial year ended on March 31, 2010, 6 Board Meetings were held on April 09, 2009, April 28, 2009,
July 23, 2009, October 26, 2009, December 07, 2009 and January 22, 2010.
ATTENDANCE AT BOARD MEETINGS AND ANNUAL GENERAL MEETING (AGM)
Names of the Directors Category
Number of Board
Meetings held
Number of
Board Meetings
attended
Attendance at the
last AGM held on
10.09.2009
Dr. Vijay Mallya Chairman (NE) 6 5 YES
Mr. Kalyan Ganguly Managing Director 6 6 YES
Mr. A K Ravi Nedungadi Director (NE) 6 5 YES
Mr. John Hunt* Director (NE) 6 1 YES
Mr. John Nicolson* Director (NE) 6 1 —
Mr. Guido de Boer** Director (CFO) 6 2 —
Mr. Chugh Yoginder Pal Director (NE, Ind) 6 5 YES
Mr. Sunil Alagh Director (NE, Ind) 6 6 YES
Mr. Chhaganlal Jain Director (NE, Ind) 6 6 YES
Ms. Kiran Mazumdar Shaw# Director (NE, Ind) 6 2 —
Mr. Madhav Bhatkuly# Director (NE, Ind) 6 2 —
Mr. Sijbe Hiemstra** Director (NE) 6 1 —
Mr. Duco Reinout Hooft Graafland** Director (NE) 6 1 —
Mr. Stephan Gerlich@ Director (NE, Ind) 6 — —
Notes: NE – Non-Executive, Ind – Independent, CFO – Chief Financial Officer
12
Report on Corporate Governance (contd.)
# Ms. Kiran Mazumdar Shaw and Mr. Madhav Bhatkuly have been appointed as non-executive Directors in independent
capacity with effect from October 26, 2009.
* Mr. John Hunt and Mr. John Nicolson have resigned from the Board with effect from December 07, 2009 in view of
reconstitution of the Board of Directors of the Company.
** Mr. Sijbe Hiemstra and Mr. Duco Reinout Hooft Graafland have been appointed as non-executive Directors on the Board of
the Company with effect from December 07, 2009. Mr. Guido de Boer was appointed as Director & CFO with effect from
December 07, 2009.
@ Mr. Stephan Gerlich has been appointed as non-executive Director in independent capacity with effect from July 02, 2010.
MEMBERSHIP IN BOARDS AND BOARD COMMITTEES – OTHER THAN UNITED BREWERIES LIMITED (UBL)
Names of the
Directors
Membership in
Boards
other than UBL
Membership in Board Committees other than UBL
Prescribed for reckoning the
limits under Clause 49 of the
Listing Agreement **
Other Committees not so
prescribed ***
Dr. Vijay Mallya 21 NIL 1 (Chairman of 1 Committee)
Mr. Kalyan Ganguly 6 2 (Chairman of 2 Committees) 2 (Chairman of 2 Committees)
Mr. A K Ravi Nedungadi 9 5 (Chairman of 1 Committee) 2
Mr. Sijbe Hiemstra 1 NIL NIL
Mr. Duco Reinout Hooft
Graafland
1 NIL NIL
Mr. Chugh Yoginder Pal 4 4 (Chairman of 3 Committees) 2
Mr. Sunil Alagh 4 1 (Chairman of 1 Committee) 2
Mr. Chhaganlal Jain 7 4 (Chairman of 1 Committee) 3
Mr. Guido de Boer NIL NIL NIL
Ms. Kiran Mazundar
Shaw
8 1 1
Mr. Madhav Bhatkuly 3 1 NIL
Mr. Stephan Gerlich 2 1 2 (Chairman of 2 Committees)
The above position is as on the date of this Report and in respect of their Directorships only in Indian Companies.
** Audit & Investors’ Grievance Committees *** Remuneration, Share Transfer & Other Committees
NOTES:
a. Out of 21 other Companies in India in which Dr. Vijay Mallya is a Director, 8 are Private Limited Companies and 2 are Section
25 Companies. Dr. Vijay Mallya is also on the Board of 36 Overseas Companies.
b. Out of 6 other Companies in which Mr. Kalyan Ganguly is a Director, 1 is a Private Limited Company. Mr. Kalyan Ganguly is
also on the Board of 1 Overseas Company.
c. Out of 9 other Companies in which Mr. A K Ravi Nedungadi is a Director, 3 are Private Limited Companies and 1 is a Section
25 Company. Mr. A K Ravi Nedungadi is also on the Board of 9 Overseas Companies.
d. Mr. Sijbe Hiemstra is a director in 1 Private Limited Company. Mr. Hiemstra is also on the Board of 22 Overseas Companies.
e. Mr. Duco Reinout Hooft Graafland is a director in 1 Private Limited Company. Mr. Hooft Graafland is also on the Board of
1 Overseas Company.
f. Out of 4 other Companies in which Mr. Chugh Yoginder Pal is a Director, 1 is a Private Limited Company.
g. Out of 4 other Companies in which Mr. Sunil Alagh is a Director, 2 are Private Limited Companies.
h. Out of 7 other Companies in which Mr. Chhaganlal Jain is a Director, 1 is a Private Limited Company.
i. Out of 8 other Companies in which Ms. Kiran Mazumdar Shaw is a Director, 4 are Private Limited Companies. Ms. Mazumdar
is also on the Board of 3 Overseas Companies.
j. Out of 3 other Companies in which Mr. Madhav Bhatkuly is Director, 2 are Private Limited Companies. Mr. Bhatkuly is also
on the Board of 2 Overseas Companies.
13
Report on Corporate Governance (contd.)
PROFILE OF NEW DIRECTORS
Brief resume
Other Directorships & Committee
Memberships in India
Ms. Kiran Mazumdar Shaw
Ms. Kiran Mazumdar Shaw, is a first generation entrepreneur with more than 32
years experience in the field of biotechnology. After graduating in B.Sc. (Zoology
Hons.) from Bangalore University in 1973, she completed her post-graduate
degree in malting and brewing from Ballarat College, Melbourne University in
1975. She has been awarded with several honorary degrees including Honorary
Doctorate of Science from Ballarat University, in recognition of pre-eminent
contribution to the field of Biotechnology, 2004, Doctor of Technology from
the University of Abertay Dundee, 2007, Doctor of Science from the University
of Glasgow, 2008 and Doctor of Science from the Heriot-Watt University,
Edinburgh, 2008.
She is a founder promoter and has led Biocon Limited since its inception in
1978. She is the recipient of several awards, the most noteworthy being the
’Padmabhushan’ Award (one of the highest civilian awards in India) in 2005
conferred by the President of India, the Nikkei Asia Prize, 2009 for Regional
Growth, Express Pharmaceutical Leadership Summit Award 2009 for Dynamic
Entrepreneur, the Economic Times ‘Businesswoman of the Year’, the ‘Veuve
Clicquot Initiative for Economic Development For Asia’, Ernst & Young’s
Entrepreneur of the Year Award for Life Sciences & Healthcare, ‘Technology
Pioneer’ recognition by World Economic Forum and The Indian Chamber of
Commerce Lifetime Achievement Award. She heads several biotechnology task
forces including the Karnataka Vision Group on Biotechnology, an initiative by
the Government of Karnataka and the National Taskforce on Biotechnology for
the Confederation of Indian Industry (CII). She is a member of the Prime Minister’s
Council on Trade and Industry and also serves as a Member, Governing Body
and general Body of the Indian Pharmacopoeia Commission, an Autonomous
Body of the Government of India.
Other Boards
Biocon Limited
Syngene International Limited
Clinigene International Limited
Biocon Biopharmaceuticals Private Limited
Biocon Research Limited
Glenloch Properties Private Limited
Narayana Institute For Advance Research
Private Limited
Narayana Hrudayalaya Private Limited
Investors’ Grievance Committee
Biocon Limited
Mr. Madhav Bhatkuly
Mr. Madhav Bhatkuly has a Masters Degree in Commerce from Sydenham
College, Bombay and a Masters Degree in Economics from the London School of
Economics. He is a recipient of the Foreign and Commonwealth Scholarship from
the British Government. Mr Bhatkuly was a country partner of Arisaig Partners
from 1999 to 2005. Prior to that, he was associated with SG Securities and ICICI
Bank Limited. He partnered with Chris Hohn of The Children’s Investment Fund,
(UK) TCI to set up a dedicated India Fund. He is credited to have been amongst
the first institutional investors in many small companies which have gone on
to become some of India’s leading names. He has been featured on several
TV shows including “CNBC’s wizards of Dalal Street”, Indianomics, the Karan
Thapar Show etc., and has been invited to speak at many business schools such
as the Indian Institute of Management, and by many organizations such as the
Confederation of India Industries (CII), Goldman Sachs etc.
Other Boards
Motilal Oswal Financial Services Limited
New Horizon Financial Research Private
Limited
New Horizon Wealth Management
Private Limited
Audit Committee
Motilal Oswal Financial Services Limited
Mr. Duco Reinout Hooft Graafland
Mr. Duco Reinout Hooft Graafland studied Business Administration at the
Erasmus University in Rotterdam and finished the Post-Graduate study for
Chartered Accountant. He started his career as a Management Trainee with
Heineken Nederland in 1981, became brand manager for Vrumona, Heineken’s
soft drink company and continued as Area Export Manager for Central and West
Africa. The experience with the African market prompted his move to Kinshasha,
where he worked as Financial Director for Heineken’s operations for three years
from 1987-1989. Then Rene returned to the Netherlands as Marketing Director
for Heineken Nederland. In 1993 he went to Indonesia as President Director
of Multi Bintang. As of 1997 he continues his career at Heineken’s Corporate
Office as Director Corporate Marketing to become Director of Heineken Export
Group in 2001. In 2002 he was appointed Member of the Executive Board and
CFO Heineken N.V.
Other Boards
Millennium Alcobev Private Limited
14
Report on Corporate Governance (contd.)
Mr. Sijbe Hiemstra
Mr. Sijbe Hiemstra has Bachelor’s degree in Business Administration at the School
of Higher Economic Studies, Rotterdam and has attended various International
Management programmes. Mr. Hiemstra joined Heineken in 1978. The first six
years he worked with Gedistilleerd en Wijngroep Nederland. He started in various
commercial and logistic projects, culminating in Product, Brand and Category
Manager. In 1985 he was appointed Export Manager Softdrinks with Heineken
Export Department/Vrumona. In 1989 Mr. Hiemstra started his overseas career as
Country Manager of Heineken Export in Seoul, South Korea. This was followed
by several years as Commercial Manager with South Pacific Holdings in Papua
New Guinea and as General Manager of Brasseries de Bourbon in ILLe de La
Reunion. In 1995 he returned to the Netherlands to take up the position of
Deputy Director Central Africa for Heineken’s Africa/Middle East Cluster. In 1998
he was appointed Regional Director SEA/Oceania with Asia Pacific Breweries
Ltd in Singapore. In 2001 he became Director of Heineken Technical Services in
Zoeterwoude. In October 2005 he was appointed Regional President.
Other Boards
Millennium Alcobev Private Limited
Mr. Guido de Boer
Mr. Guido de Boer has a Masters Degree in Economics and Business from
Erasmus University Rotterdam. He has completed various Executive Development
Programs at INSEAD-Fontainebleau and IMD-Lausanne. He started his career in
investment banking, ultimately as Director at MeesPierson Corporate Finance
& Capital Markets, advising corporations on M&A and Equity Capital Markets
transactions in the Food & Beverages and Media Industries. In 2004, he joined
Heineken’s Group Business Development department where he was involved
in acquisitions, business due diligence projects, and business development
strategy. Mr. De Boer led the Heineken deal team in the public offer for Scottish
& Newcastle, in consortium with Carlsberg, for an enterprise value in excess of
EUR 15 bn. Having worked on acquisition and business due diligence projects in
countries like Russia, Colombia, Nigeria and China, he brings the experience of
a finance professional, possessing broad business skills, and an understanding
of diverse emerging markets.
Other Boards
Nil
Mr. Stephan Gerlich
Mr. Stephan Gerlich is a Wirtschaftassistent from Industrial Chambers of
Commerce, Koeln Germany. He is Country Group Speaker for the Bayer Group
in India and Vice Chairman and Managing Director of Bayer CropScience Limited
and Chairman & Managing Director of Bayer MaterialScience Private Limited.
Based at the headquarters in Mumbai, Mr. Gerlich has been responsible for the
Bayer Group business activities in India since July 2003. Mr. Gerlich started his
career with Bayer in 1978 and shortly afterwards moved to a subsidiary in France.
After 3 years in France, he joined the Bayer operations in Mexico. In 1991, Mr.
Gerlich returned to the Bayer Headquarters in Leverkusen, Germany as Regional
Marketing Manager for Engineering Plastics Division and later designated as
Global Marketing Manager in 1992. In 1994, Mr. Gerlich took over as Director
Sales and Marketing and Key Account Manager in Bayer France and in 1995
he was made President / CEO of the Bayer / Hoechst Joint Venture, Dystar, in
Mexico. In 2000, he became Vice President in charge of sale in USA & Canada
for Dystar, based in North Carolina.
Other Boards
Bayer CropScience Limited
Bayer MaterialScience Private Limited
Investors’ Grievance Committee
Bayer CropScience Limited
Mr. Chugh Yoginder Pal, Mr. Sunil Alagh and Mr. A K Ravi Nedungadi retire at the ensuing Annual General Meeting and
being eligible, have offered themselves for re-appointment. Brief particulars of Mr. Chugh Yoginder Pal, Mr. Sunil Alagh and
Mr. A K Ravi Nedungadi are mentioned below:
15
Report on Corporate Governance (contd.)
PROFILE OF DIRECTORS RETIRING BY ROTATION
Brief resume
Other Directorships & Committee
Memberships
Mr. Chugh Yoginder Pal
Mr. Chugh Yoginder Pal is a Graduate in Engineering with First Class (Distinction)
from Delhi University. He started his career at TELCO in 1958 & was trained in
Industrial Engineering after which he moved to Hindustan Lever Limited in 1960,
where he held various positions starting as an Industrial Engineer & moving up
quickly in the Management hierarchy in a variety of Production, Factory and
General Management roles and was the head of Corporate Materials Management
(1975-1977). He then joined Cadbury India Limited & held various positions as
Technical Director (1977-1982), Managing Director (1983-1987), Chairman &
Managing Director (1987-1994), Executive Chairman (1994-1997); He continues
to be the Chairman (Non-Executive) at Cadbury India Limited.
Mr. Pal brings with him great expertise & understanding of the Indian business
environment. Mr. Pal is on the Board of UBL since April 29, 2005.
Other Boards
Cadbury India Limited
Aptech Limited
Sriram Pistons & Rings Limited
Renfro India Private Limited
Audit Committee
Cadbury India Limited (Chairman)
Aptech Limited (Chairman)
Sriram Pistons & Rings Limited
Investors’ Grievance Committee
Cadbury India Limited (Chairman)
Mr. Sunil Alagh
Mr. Sunil Alagh is Chairman of SKA Advisors, a Business Advisory / Consultancy
firm with a focus on Marketing and Brand building strategies. He is a graduate in
Economics (Hons.) with MBA from IIM Calcutta. He has worked with ITC Limited,
Jagatjit Industries Limited and Britannia Industries Limited. He was Managing
Director and CEO of Britannia Industries Limited from 1989 to 2003. During this
tenure, Britannia figured in the Forbes Magazine list of 300 Best Small Companies
in the world for 3 years. It also became the Number 1 Food Brand in India.
He is a member of the Indian Advisory Board of Schindler and on the Governing
Body of IIM Bangalore & Indore, National Institute of Design, Ahmedabad and the
Indian Institute of Foreign Trade, Delhi. In addition, he is a member of the Round
Table on Higher Education of the Ministry of HRD, Government of India.
He was honoured with the ‘Gold Medal Kashlkar Memorial Award 2000’ for
outstanding contribution to the food processing industry in India. He was a finalist
for the Ernst and Young Entrepreneur of the Year Award, 2002.
Mr. Alagh is on the Board of UBL since April 29, 2005.
Other Boards
GATI Limited
Indofil Organic Industries Limited
Tamara Capital Advisors Private Limited
SKA Advisors Private Limited
Investors’ Grievance Committee
Indofil Organic Industries Limited
Mr. A K Ravi Nedungadi
A trained Chartered Accountant, Mr. Nedungadi set early academic records by
qualifying in the final of the Chartered Accountancy Exam at age 20. Early position
at Macneill & Magor Ltd., a diversified conglomerate and Pentagon Fasteners Ltd.
Delhi set the stage for an outstanding track record with current employer.
He joined the UB Group in 1990 as the Corporate Treasurer. Within two years, he
was transferred to London as Group Finance Director of the Group’s international
business managing the businesses of UB International, which included the paint
giant Berger Jenson and Nicholson, spanning 27 countries. He was instrumental
in listing the Berger group companies on London and Singapore bourses.
Since his appointment as the President and Group CFO in 1998, the youngest to
have been elevated to such a position in the Group, he led his way to sharpening
the focus of the Group, which had a conglomerate approach, on areas of core
competence and global reach. This saw the group focus on three verticals –
Brewing, Distilling & Aviation, each area presenting clear leadership within India
and global significance too. He was also responsible for opening up the beverage
alcohol sector to Global Best Practices and Transparency, enabling the entry of
institutional investors and rerating of the industry itself.
Other Boards
Aventis Pharma Limited
Bayer CropScience Limited
Kingfisher Airlines Limited
Idea Streamz Consultants Private
Limited
Pie Education Limited
Millenea Vision Advertising (P) Limited
Millennium Alcobev Private Limited
Shaw Wallace Breweries Limited
Audit Committee
Aventis Pharma Limited
Bayer CropScience Limited
Kingfisher Airlines Limited
Investors’ Grievance Committee
Aventis Pharma Limited
Bayer CropScience Limited (Chairman)
16
Report on Corporate Governance (contd.)
Under his leadership the market capitalization of the 3 principal Group Companies
has crossed US$ 7 billion, which bears testimony to the successful accomplishment
of business restructuring, consolidation and enhanced shareholder value. As the
principle leadership resource of UB Group, Mr. Nedungadi was key to concluding
the acquisition of Shaw Wallace & Co. India, Bouvet Ladubay, France, Whyte &
Mackay, Scotland, Air Deccan in India etc., each of which has contributed to the
value creation for all stake holders.
Mr. Nedungadi is the recipient of many awards of excellence including the Udyog
Ratan Award; CNBC TV 18’s – CFO of the year – M&A (2006), the CNBC Award
for India’s best CFO in the FMCG & Retail Sector (2007), the IMA Award for CFO
of the year (2007), etc. Memberships in esteemed organizations like Who’s Who
of Professionals only reinforce the above testimonials. Further, he is on the Board
of Directors of several companies, both in India and overseas.
His interest in social work and the arts engage his free time. He is an active
Rotarian and is a Trustee of India Foundation for Arts, a leading Grant making
Art Philanthropy.
Mr. Nedungadi joined the Board on August 9, 2002.
NOTE: Committee Memberships of Directors mentioned above includes only those Committees prescribed for reckoning of limits
under Clause 49 of the Listing Agreement.
None of the Directors are related inter-se.
COMMITTEES OF DIRECTORS
The Board has constituted Committees of Directors to deal with matters which need quick decisions and timely monitoring of
the activities falling within their terms of reference. The Board Committees are as follows:
AUDIT COMMITTEE
The Audit Committee comprises of Mr. Chugh Yoginder Pal, Mr. Sunil Alagh and Mr. Chhaganlal Jain as members, all of whom
are independent Directors. The Chairmanship of the Committee vests with Mr. Chugh Yoginder Pal.
The Committee oversees the financial reporting process, disclosure requirements and matters relating to Internal Control System.
The Committee also reviews periodically the financial accounts, adequacy of internal audit function, compliance with accounting
standards and other areas within its terms of reference, as under:
i) Oversee the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial
statement is correct, sufficient and credible;
ii) Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory
auditor and the fixation of Audit fee;
iii) Approval of payment to statutory auditors for any other services rendered by the statutory auditors;
iv) Reviewing, with the Management, the Annual Financial Statements before submission to the Board for approval, with
particular reference to:
º Mallers required lo be included in lhe Direclors Pesponsibilily Slalemenl lo be included in lhe 8oard's reporl in lerms
of Clause 2AA of Section 217 of the Companies Act, 1956;
º Changes, il any, in accounling policies and praclices and reasons lor lhe same,
º Major accounling enlries involving eslimales based on lhe exercise ol judgmenl by lhe Managemenl,
º Signilcanl adjuslmenls made in lhe lnancial slalemenls arising oul ol Audil lndings,
º Compliance wilh lisling and olher legal requiremenls relaling lo lnancial slalemenls ,
º Disclosure ol any relaled parly lransaclions,
º Oualilcalions in lhe drall audil reporl,
v) Reviewing with the Management the quarterly financial statements before submission to the Board for approval;
vi) Reviewing with the Management, performance of Statutory and Internal Auditors, adequacy of Internal Control Systems;
vii) Reviewing the adequacy of internal audit function, if any, 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;
viii) Discussing with Internal Auditors any significant findings and follow up there on;
17
Report on Corporate Governance (contd.)
ix) Reviewing the findings of any internal investigations by the Internal Auditors into matters where there is suspected fraud
or irregularity or failure of Internal Control Systems of a material nature and reporting the matter to the Board;
x) Discussing with Statutory Auditors before the audit commences, about the nature and scope of Audit as well as post-audit
discussion to ascertain any area of concern;
xi) To look into the reasons for substantial defaults in the payment to Depositors, Shareholders (in case of non-payment of
declared Dividends), Debenture-holders and Creditors;
xii) To review the function of the Whistle Blower mechanism, in case the same is existing, and
xiii) Carrying out any other function as may be mentioned in the terms of reference of the Audit Committee from time to
time.
The Audit Committee mandatorily reviews the following information:
1. Management discussion and analysis of financial conditions and results of operations;
2. Statement of significant related party transactions submitted by the management;
3. Management letters / letters of internal control weaknesses issued by the Statutory Auditors;
4. Internal audit reports relating to internal control weaknesses, and
5. The appointment, removal and terms of remuneration of the Chief Internal Auditor.
During the Year ended March 31, 2010, 4 Audit Committee Meetings were held on April 28, 2009, July 23, 2009, October 26,
2009 and January 22, 2010.
ATTENDANCE AT AUDIT COMMITTEE MEETINGS
Names of the Directors Category
Number of Audit
Committee
Meetings held
Number of Audit
Committee Meetings
attended
Mr. Chugh Yoginder Pal CHAIRMAN 4 4
Mr. Sunil Alagh MEMBER 4 4
Mr. Chhaganlal Jain MEMBER 4 4
The Company Secretary was present in all the Meetings of Audit Committee.
SHARE TRANSFER COMMITTEE
The Share Transfer Committee comprises of Mr. A K Ravi Nedungadi and Mr. Kalyan Ganguly as Members. Mr. Nedungadi,
a non-executive Director, is the Chairman of the Committee.
The Terms of reference are as under:
º To monilor Transler, Transmission and Transposilion ol lhe Shares ol lhe Company,
º lssue ol Duplicale Share Cerlilcales, in lieu ol Cerlilcales losl or misplaced,
º lssue ol New Share Cerlilcales in lieu ol Cerlilcales lorn, mulilaled, cages lor lransler llled up elcelera,
º Consolidalion and sub-division ol Share Cerlilcales,
º To oversee compliance ol lhe norms laid down under lhe Deposilories Acl, !996,
º To appoinl/remove Pegislrar and Transler Agenl,
º To oversee compliance ol lhe norms laid down under lhe Triparlile Agreemenl wilh Nalional Securilies Deposilory Limiled
/Central Depository Services (India) Limited, and
º Perlorm all such acls and deeds, mallers and lhings as il may in ils absolule discrelion deem necessary, expedienl, desirable,
usual or proper and to settle any question, dispute, difficulty or doubt that may arise in regard to the matters arising out of
the aforesaid acts.
In order to facilitate prompt and efficient service to the Shareholders all the transactions in connection with Transfer, Transmission,
issue of Duplicate Certificates, etc., have been entrusted to Alpha Systems Private Limited, Registrar and Transfer Agent and the
same are being processed and approved on fortnightly basis.
During the year ended March 31, 2010 the Committee met 9 times on April 16, 2009, June 01, 2009, June 30, 2009, July 16,
2009, September 08, 2009, September 30, 2009, November 16, 2009, December 31, 2009, and January 22, 2010 for approving
the transactions falling within the Terms of reference mentioned above.
18
The Board of Directors has, by a resolution by circulation passed on May 5, 2004, delegated the power to approve transfers /
transmission etc., upto 5000 shares to the Managing Director and the Company Secretary, who can act severally in the above
matter.
INVESTORS’ GRIEVANCE COMMITTEE
The Investors’ / Shareholders’ Grievance Committee comprises of Mr. Chugh Yoginder Pal, Mr. Sunil Alagh and Mr. Chhaganlal
Jain as Members. Mr. Chugh Yoginder Pal is the Chairman of the Committee.
The Terms of Reference for the Committee include inter alia specifically to look into the redressing of Shareholders’ and Investors’
complaints like non-receipt of Balance Sheet, non-receipt of declared Dividends, non-receipt of Share certificates, Demat Credit,
etcetera, and operate in terms of the provisions of the Listing Agreement and/or the provisions as may be prescribed under the
Companies Act, 1956 and other related Regulations from time to time..
The Compliance Officer is Mr. Govind Iyengar, Divisional Vice President – Legal and Company Secretary.
Number of Shareholders’ complaints received from 1-4-2009 to
31-3-2010 (These Complaints pertained mainly to non-receipt of
Share Certificates upon transfer, non-receipt of Annual Report,
non-receipt of Dividend etc.)
34
Number of complaints not solved to the satisfaction of the
Shareholders
Nil
Number of pending Share transfers Two transfer cases for 400 shares were kept pending as
on 31.03.2010 as the process of transfer of shares was
in progress. These shares were subsequently transferred
after completion of due procedures.
During the year ended March 31, 2010, 2 Investors’ Grievance Committee Meetings were held on October 26, 2009 and
January 22, 2010 which were attended by all the members.
REMUNERATION / COMPENSATION COMMITTEE (A NON MANDATORY REQUIREMENT)
The Remuneration Committee comprises of Mr. Chugh Yoginder Pal, Mr. Sunil Alagh and Mr. Chhaganlal Jain as Members.
Mr. Sunil Alagh is the Chairman of the Committee.
The Committee is authorized inter alia:
º lo deal wilh mallers relaled lo compensalion by way ol salary, perquisiles, benells, elc., lo lhe Managing Direclor/Lxeculive/
Wholetime Directors of the Company and set guidelines for the salary, performance, pay and perquisites to other Senior
Employees, and
º lo lormulale and implemenl Lmployee Slock Oplion Scheme lo employees/Direclors in lerms ol prescribed Cuidelines.
During the year ended March 31, 2010, 2 Meetings of Remuneration Committee were held on October 26, 2009 and
December 07, 2009 which were attended by all the Members.
REMUNERATION POLICY
The Company carries out periodic reviews of comparable Companies and through commissioned survey ascertains the
remuneration levels prevailing in these Companies. The Company’s Remuneration Policy is designed to ensure that the
remuneration applicable to Managers in the Company is comparable with multinational Companies operating in the Brewing
or similar industry in India.
For the financial year ended March 31, 2010, Mr. Kalyan Ganguly, Managing Director and Mr. Guido de Boer, Director & CFO
were paid remuneration as under:
(Rupees)
Salary & Allowance Perquisites Retiral Benefits
Mr. Kalyan Ganguly 27,087,048 2,694,113 4,094,945
Mr. Guido de Boer 6,125,448 720,000 144,000
After his initial term of 5 years, as Managing Director, Mr. Kalyan Ganguly was re-appointed as Managing Director for a further
period of 5 years effective August 09, 2007 till August 08, 2012. Mr. Guido de Boer was appointed as Director of the Company
with effect from December 07, 2009 for a period of three years and his remuneration mentioned above reflects remuneration
paid for part of the year only.
Report on Corporate Governance (contd.)
19
Report on Corporate Governance (contd.)
SITTING FEES PAID TO DIRECTORS DURING 2009-2010
(Rupees)
Sl. No. Name of the Director Sitting Fees paid
1. Dr. Vijay Mallya 100,000/-
2. Mr. A K Ravi Nedungadi 180,000/-
3. Mr. Chugh Yoginder Pal 230,000/-
4. Mr. Chhaganlal Jain 250,000/-
5. Mr. Sunil Alagh 250,000/-
6. Mr. John Hunt 20,000/-
7. Mr. John Nicolson 20,000/-
8. Mr. Sijbe Hiemstra 20,000/-
9. Mr. Duco Reinout Hooft Graafland 20,000/-
10. Ms. Kiran Mazumdar Shaw 40,000/-
11 Mr. Madhav Bhatkuly 40,000/-
Total 1,170,000/-
Sitting fees are being paid @ Rs.20,000/- for attending Board and Audit Committee Meetings and Rs.10,000/- for attending
other Committee Meetings. No stock options are granted to any of the Directors so far.
COMMISSION PAID TO DIRECTORS DURING 2009-2010
(Rupees)
Sl. No. Name of the Director Commission
1. Dr. Vijay Mallya 6,367,439/-
2. Mr. Chugh Yoginder Pal 1,414,986/-
3. Mr. Chhaganlal Jain 1,414,986/-
4. Mr. Sunil Alagh 1,414,986/-
OTHER COMMITTEE MEETINGS
A Meeting of the Special Committee (Selection Committee) comprising of Mr. Sunil Alagh, Mr. Chhaganlal Jain and Mr. Sheshagiri
Hedge (Consultant & Expert) was held on July 23, 2009 to consider the re-appointment of Mr. Umesh Hingorani (a relative of
the Chairman of the Company) as Divisional Vice President – Business Development, which was attended by all the members.
The particulars of Equity Shares of the Company held by the Directors are furnished below:
Sl. No. Name
Number of Equity Shares held
As on March 31, 2010 As on March 31, 2009
1. Dr. Vijay Mallya 21353620 21353620
2. Mr. Kalyan Ganguly 14690 14690
3. Mr. Sunil Alagh 6800 6800
GENERAL BODY MEETINGS
The previous three Annual General Meetings of the Company were held on the dates, time and venue as given below:
Date Time Venue Special Resolutions Passed
September 10, 2009 11.00 a.m.
Good Shepherd Auditorium, Opp. St. Joseph’s Pre-University
College, Residency Road, Bangalore-560 025.
One
September 10, 2008 11.00 a.m.
Good Shepherd Auditorium, Opp. St. Joseph’s Pre-University
College, Residency Road, Bangalore-560 025.
Three
September 28, 2007 12.30 p.m.
Good Shepherd Auditorium, Opp. St. Joseph’s Pre-University
College, Residency Road, Bangalore-560 025.
Three
All the Resolutions set out in respective Notices including Special Resolutions were passed by the Members at the above
Annual General Meetings.
20
Report on Corporate Governance (contd.)
DISCLOSURES
During the financial year ended March 31, 2010, there were no materially significant related party transactions with the
Company’s Directors or their relatives. Details of related party transaction form part of Notes on Accounts. In preparation of
financial statements for the year under review, treatment as prescribed in Accounting Standards has been followed.
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.
The Company did not suffer from any levies and there were no strictures on any Capital market related matters since incorporation.
The Company has complied with the mandatory requirements of Clause 49, as on date of this report.
The Company has also constituted a Remuneration Committee which is a non-mandatory requirement.
In terms of Section 313 of the Companies Act, 1956, Mr. Duco Reinout Hooft Grafland has appointed Mr. Ernst Willem Arnold
ven de Weert as his alternate on the Board and Mr. Sijbe Hiemstra has appointed Mr. Kenneth Choo Tay Siam as his alternate
on the Board.
MEANS OF COMMUNICATION
The Company has its own Web-site and all vital information relating to the Company and its performance involving quarterly
results, official Press release and presentation to analysts are posted on the Company’s Web-site “www.kingfisherworld.com”.
Aparl lrom lurnishing copies ol Pesulls lo all lhe Slock Lxchanges, lhe Ouarlerly, Hall-yearly and Annual Pesulls ol lhe Company's
performance are being published in The Financial Express and Kannada Prabha Newspapers.
In line with the requirement of clause 47 (f) of the Listing Agreement, the Company has designated an exclusive email ID viz,
ublinvestor@ubmail.com for the purpose of registering complaints by the investors. The investors can post their grievances by
sending a mail to the said email ID.
Management Discussion and Analysis form part of the Directors’ Report.
GENERAL SHAREHOLDER INFORMATION
The Company’s financial year begins on April 1 and ends on March 31 of immediately subsequent year.
Division of Financial Calendar Declaration of Unaudited Results
1
st
Ouarler April 1 to June 30 1
st
Ouarler By August 14
th

2
nd
Ouarler July 1 to September 30 2
nd
Ouarler By November 14
th

3
rd
Ouarler October 1 to December 31 3
rd
Ouarler By February 14
th
4
th
Ouarler January 1 to March 31 4
th
Ouarler By May 15
th

In terms of amendment to the Listing Agreements, the unaudited results of the Company are to be declared with 45 days of
the end of the quarter.
ANNUAL GENERAL MEETING INFORMATION
Board Meeting for Consideration of Accounts July 21, 2010
Posting of Annual Report July 27, 2010
Book Closure dates August 19, 2010 and August 20, 2010
Last date for receiving proxy August 18, 2010 (12.15 p.m.)
Date of AGM August 20, 2010
ANNUAL GENERAL MEETING ON
Friday, August 20, 2010
VENUE
Good Shepherd Auditorium,
Opp. St. Joseph’s Pre-University College,
Residency Road, Bangalore 560 025.
TIME
12.15 p.m.
DATES OF BOOK CLOSURE
August 19, 2010 and August 20, 2010
21
LISTINGS AT
STOCK EXCHANGE SCRIP CODE
BANGALORE STOCK EXCHANGE LIMITED UNITEDBRED
BOMBAY STOCK EXCHANGE LIMITED 532478
NATIONAL STOCK EXCHANGE OF INDIA LIMITED UBL
The Company has voluntarily de-listed its Securities from the following Stock Exchanges:
Cochin Stock Exchange Limited w.e.f. 23.05.2009
Calcutta Stock Exchange Assn. Limited w.e.f. 31.03.2009
Ludhiana Stock Exchange Limited w.e.f. 25.04.2009
Ahmedabad Stock Exchange w.e.f. 12.03.2009
Madras Stock Exchange Limited w.e.f. 21.12.2009
Delhi Stock Exchange Limited w.e.f. 07.09.2009
Market price data of the Company’s Equity Shares traded on the Bombay Stock Exchange Limited, (BSE)
during the period April 2009 to March 2010
Month High (Rs.) Low (Rs.) Close (Rs.) BSE Sensex-Close
April 2009 120.05 87.75 110.45 11403.25
May 2009 156.40 105.00 141.90 14625.25
June 2009 160.50 104.00 115.30 14493.84
July 2009 162.40 108.35 146.30 15670.31
August 2009 173.50 138.25 159.15 15666.64
September 2009 166.00 139.00 147.80 17126.84
October 2009 162.75 130.80 132.35 15896.28
November 2009 159.50 122.00 148.45 16926.22
December 2009 201.00 148.05 168.45 17464.81
January 2010 178.00 144.00 147.75 16357.96
February 2010 184.00 150.00 178.05 16429.55
March 2010 199.00 176.15 192.05 17527.77
(Market Price data source: www.bseindia.com)
Graphical representation of the Company’s Shares in comparison to broad-based indices i.e., BSE Sensex, is given below:
Report on Corporate Governance (contd.)
Comparison - UBL Stock Price Vs. BSE Sensex
11403.25
14625.25
14493.84
15670.31
15666.64
17126.84
15896.28
16926.22
17464.81
16357.96
16429.55
17527.77
110.45
141.9
115.3
146.3
159.15
147.8
132.35
148.45
168.45
147.75
178.05
192.05
0
50
100
150
200
250
300
Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10
Month
8000
10000
12000
14000
16000
18000
S
t
o
c
k

P
r
i
c
e

i
n

R
u
p
e
s
s
S
e
n
s
e
x
UBL Share Price BSE Senex
22
Report on Corporate Governance (contd.)
SHARE TRANSFER SYSTEM
All matters pertaining to Share Transfer are being handled by Alpha Systems Private Limited, the Registrar and Share Transfer
Agent of the Company. The Share Transfer requests received are processed by them and a Memorandum of Transfer is sent
to the Company for approval by the Committee. The average time taken for processing Share Transfer requests including
despatch of Share Certificates is 15 days, while it takes a minimum of 10-12 days for processing dematerialization requests.
The Company regularly monitors and supervises the functioning of the system so as to ensure that there are no delays or lapses
in the system.
The Company was offering the facility of transfer-cum-demat as per SEBI Guidelines. However, SEBI has vide its Circular No.SEBI/
MRD/Cir-10/2004 dated February 10, 2004, withdrawn transfer-cum-demat scheme. In line with the above, on receipt of transfer
requests the Company has discontinued issuing of option letters to the shareholders.
The distribution of shareholding as on March 31, 2010 is furnished below:
Category No. of
Shareholders
%
(Percentage)
No. of Shares
held
%
(Percentage)
(Rs.)
Up to 5000 35878 98.88 11278189 4.70
5001 – 10000 170 0.47 1224526 0.51
10001 – 20000 89 0.25 1260491 0.53
20001 – 30000 46 0.13 1144328 0.48
30001 – 40000 19 0.05 684957 0.29
40001 – 50000 10 0.03 466824 0.19
50001 – 100000 15 0.04 1075748 0.45
100001 and Above 56 0.15 222913192 92.86
TOTAL 36283 100.00 240048255 100.00
Shareholding Pattern as on March 31, 2010
Category No. of Shares held Percentage of Shareholding
Promoters
Indian
Foreign
89994960
89994960
37.49
37.49
Institutional Investors
Mutual Funds/UTI
Banks Financial Institutions
Central/State Governments
Insurance Companies
Foreign Institutional Investors
3683929
28380
660
1702757
30918545
1.53
0.01
0.00
0.71
12.88
Others
Bodies Corporate
Individuals
Trust
6793788
16681515
248761
2.83
6.95
0.10
Total 240048255 100.00
23
DEMATERIALIZATION OF SHARES
The Company has set up requisite facilities for dematerialization of its Equity Shares in accordance with the provisions of the
Depositories Act, 1996 with National Securities Depository Limited and Central Depository Services (India) Limited. The Company
has entered into agreements with both the Depositories for the benefit of Shareholders. The status of Dematerialization of the
Company’s Shares as on March 31, 2010 is as under:
Mode No. of Shares % age No. of Shareholders
Physical mode 7385740 3.08 15347
Electronic mode 232662515 96.92 20936
TOTAL 240048255 100.00 36283
74.98%
5.19%
6.95%
12.88%
Promoter & Group FIIs Others Individuals
Physical Mode Electronic Mode
96.92%
3.08%
Report on Corporate Governance (contd.)
Shareholding Pattern as on March 31, 2010
Shares held in physical & demat form as on March 31, 2010
24
For any assistance regarding Share Transfers, Transmissions, change of address, issue of duplicate / lost Share Certificates /
exchange of Share Certificate / Dematerialization and other relevant matters, please write to the Registrar and Share Transfer
Agent of the Company, at the address given below:
ALPHA SYSTEMS PRIVATE LIMITED
30, RAMANA RESIDENCY
4TH CROSS, SAMPIGE ROAD, MALLESWARAM
BANGALORE – 560 003.
Tel. No. : (080) 2346 0815 to 2346 0818 Fax No. : (080) 2346 0819
email: alfint@vsnl.com
Contact Persons: MR. VIJAYAGOPAL or MR. RAJARAMAN
Investors can also post their queries to ‘ublinvestor@ubmail.com’
OWN MANUFACTURING NETWORK
ANDHRA PRADESH – MALLEPALLY MAHARASHTRA – TALOJA
GOA – PONDA PUNJAB – LUDHIANA
KERALA – CHERTHALA & PALAKKAD WEST BENGAL – KALYANI
KARNATAKA – MANGALORE & NELMANGALA RAJASTHAN – CHOPANKI
ORISSA – KHURDA
CONTRACT MANUFACTURING NETWORK
In addition, the Company also has Manufacturing facilities through Associate Companies/Contract Breweries at Dharuhera,
Aurangabad, Kuthambakkam, Alwar, Lucknow, Ghaziabad, Daman, Thiruvallur, Bhopal, Indore, Srikakulam and Medak.
REGISTERED OFFICE
“UB TOWER”, UB CITY, 24, VITTAL MALLYA ROAD,
BANGALORE - 560 001
Phone: (91-80) 39855000, 22272806 & 22272807
Fax No. (91-80) 22211964, 22229488
Cable: UBEEGEE
B. NON-MANDATORY REQUIREMENTS
a) Chairman of the Board:
The Chairman of the Board is entitled to maintain a Chairman’s office at the Company’s expense and allowed reimbursement
of expenses incurred in performance of his duties.
b) Remuneration Committee:
The Company has set up a remuneration Committee.
c) Shareholder Rights:
The Company’s half yearly results are published in English and Kannada Newspapers having wide circulation and are
also displayed on the Company’s website. Press Releases are also issued which are carried by a few newspapers and also
displayed on the Company’s website. Hence, same are not sent to the shareholders.
d) Audit Qualifications:
There are no qualifications or adverse remarks in the Auditors’ Report which require any clarification or explanation.
e) Training of Board Members:
Having regard to the seniority and expertise in their respective areas of specialization, their training is not considered
necessary for the time being.
Report on Corporate Governance (contd.)
25
f) Mechanism for evaluating Non-Executive Directors:
The Board may at its discretion consider such requirement in future.
g) Whistle Blower Policy:
Though covered briefly in the code of conduct adopted by the Company, the Board may consider adopting a separate
mechanism for Whistle Blower Policy in future.
COMPLIANCE WITH CODE OF BUSINESS CONDUCT AND ETHICS
In accordance with Clause 49 sub-clause (I) (D) (ii) of the Listing Agreement, it is hereby confirmed that during
the year 2009-2010, all the members of the Board of Directors and Senior Managerial personnel have affirmed
their Compliance with the Company’s Code of Business Conduct and Ethics.
Place: Bangalore Kalyan Ganguly
Date: July 21, 2010 Managing Director
Report on Corporate Governance (contd.)
26
To the Members of
UNITED BREWERIES LIMITED
Certificate of Compliance with the conditions of Corporate Governance
as stipulated under Clause 49 of the Listing Agreement
We have examined the compliance of conditions of Corporate Governance by United Breweries Limited for the year ended on
March 31, 2010, as stipulated in Clause 49 of the Listing Agreement 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, save
and except the condition relating to number of independent Directors on the Board which stands complied as on the date of
this report.
We state that in respect of investor grievances received during the year ended on March 31, 2010, no grievances are pending
against the Company as per 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 or
effectiveness with which the management has conducted the affairs of the Company.
M R Gopinath
Company Secretary (In practice)
Bangalore
FCS 3812 CP 1030
COMPLIANCE CERTIFICATE
Date: July 21, 2010
Report on Corporate Governance (contd.)
27
For Price Waterhouse
Firm Registration Number – 007568 S
Chartered Accountants
J. Majumdar
Partner
Membership Number – F51912
Auditors’ Report
Place: Bangalore
Date: July 21, 2010
To the Members of United Breweries Limited
1. We have audited the attached Balance Sheet of United Breweries Limited (the “Company”) as at March 31, 2010 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 Company’s Management. Our
responsibility is to express an opinion on these financial statements based on our audit.
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 (Auditor’s Report) Order, 2003, as amended by the Companies (Auditor’s Report) (Amendment)
Order, 2004 (together the “Order”), issued by the Central Government of India in terms of sub-section (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 Order.
4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:
(a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary
for the purposes of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from
our examination of those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with
the books of account;
(d) 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;
(e) On the basis of written representations received from the directors, as on March 31, 2010 and taken on record by the
Board of Directors, none of the directors is disqualified as on March 31, 2010 from being appointed as a director in
terms of clause (g) of sub-section (1) of Section 274 of the Act;
(f) 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 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, 2010;
(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.
28
Annexure to Auditors’ Report
[Referred to in Paragraph 3 of the Auditors’ Report of even date to the members of United Breweries Limited on the financial statements for
the year ended March 31, 2010]
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 except for asset aggregating to Rs.701,796 (original cost in thousands) at one location of the Company, 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 of by the Company during the year.
ii. a) The inventory (excluding stocks with third parties) has been physically verified by the Management during the year. In respect of
inventory lying with third parties, these have substantially been confirmed by them. 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 the 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.
iii. 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, therefore, paragraphs 3(b), 3(c) and 3(d) 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, therefore, paragraphs 3(f) and 3(g) of the Order are not applicable.
iv. In our opinion and according to the information and explanations given to us, 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, 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.
v. 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 purchase of
services aggregating to Rs.66,180 thousands as there are no comparable market prices, which, however, are considered to be
of special nature as explained by the management of the Company.
vi. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the
rules framed there under.
vii. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.
viii. 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.
ix. 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 regular in depositing the undisputed statutory dues including provident fund, investor education and protection
fund, employees’ state insurance, income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material
statutory dues as applicable with the appropriate authorities.
b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of
dues of income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise duty and cess as at March 31, 2010 which have not
been deposited on account of a dispute, are given in Appendix 1.
x. The Company has no accumulated losses as at March 31, 2010 and it has not incurred any cash losses in the financial year ended
on that date or in the immediately preceding financial year.
xi. According to the records of the Company examined by us and the information and explanation 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.
xii. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other
securities.
xiii. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to the
Company.
xiv. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.
xv. 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.
xvi. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for
29
For Price Waterhouse
Firm Registration Number – 007568 S
Chartered Accountants
J. Majumdar
Partner
Membership Number – F51912
Annexure to Auditors’ Report (contd.)
Appendix 1 to the Auditors’ Report
Referred to in paragraph ix (b) of the Annexure to the Auditors’ report of even date to the members of United Breweries Limited
on the financial statements for the year ended March 31, 2010.
the purposes for which they were obtained.
xvii. 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.
xviii. 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.
xix. The Company has not issued debentures during the year and there are no debentures outstanding as at the year-end.
xx. The Management has disclosed the end use of money raised by public issues (Refer Note 1 on Schedule 19) which has been verified
by us.
xxi. 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.
Name of the statute Rs. In Thousands Forum where dispute is pending Year to which amount relates
Customs Act, 1962 4,148 Commissioner of Customs, Ludhiana 1991–92
2,033 High Court of Bombay 1991–92
2,972 High Court of Madras 1998–99
3,174 Deputy Commissioner of Customs, Siliguri 1998–99
Central Excise Act, 1944/ 4,253 High Court of Calcutta 1998–99
State Excise Acts 571 High Court of Andhra Pradesh 1992–98
1,866 High Court of Calcutta 1981– 82 &1987–88
8,076 High Court of Karnataka 2000–2001 to 2003–2004, 2005–06
1,229 High Court of Calcutta 1981–82
637 High Court of Calcutta 1988–89
2,955 High Court of Calcutta 1998–99
4,028 Commissioner of Excise 2000 to 2005
490 Commissioner (Appeals) Central Excise 2005–2007
277 Commissioner (Appeals) Central Excise 2007–2008
Sales Tax Acts 401 High Court of Andhra Pradesh 1997–98 to 1998–99
628 High Court of Kerala 1983–84 to 1986–87
38 High Court of Kerala 1990–91
4,225 High Court of Calcutta 1997–98
1,088 Sales Tax Appellate Tribunal, Karnataka 2002–03
90 Sales Tax Appellate Tribunal, Mumbai 1990–91
13 Assistant Commissioner (Assessment) Special Circle 2002–03
5,404 Sales Tax Appellate Tribunal / Deputy Commissioner (Appeals) 1975–76 to 1998–99, 2000–01 to 2001–02
69 Deputy Commissioner of Commercial Taxes (Appeals) Kollam 2001–02
130 Deputy Commissioner of Commercial Taxes (Appeals) Kollam 2000–01
107 Deputy Commissioner Appeals 1991–92
124 High Court of Kerala 1988–89
289 High Court of Kerala 1989–90
498 High Court of Kerala 1990–91
459 Court of Civil Judge, (Senior Division) Gurgaon 2001–02
185 Sales Tax Appellate Tribunal 1997–98
83 Sales Tax Appellate Tribunal 1998–99
841 Appellate Tribunal, Cherthala 1975 to 1994
Income Tax Act 61,340 Commissioner of Income Tax (Appeals) 2004–05
10,726 Commissioner of Income Tax (Appeals) 1997–98
2,968 Commissioner of Income Tax (Appeals) 1997–98
1,375 Commissioner of Income Tax (Appeals) 2000–01
5,853 Commissioner of Income Tax (Appeals) 2000–01
106,582 Commissioner of Income Tax (Appeals) 2006–07
Service Tax Act 34,510 Commissioner of Service Tax, Bangalore 2008–09
699 Commissioner of Service Tax, Mangalore 2005–06 (June’05) to 2009–10 (June’09)
193,905 The Customs, Excise and Service Tax Appellate Tribunal 2004–05 to 2007–08
Employee State Insurance Act 265 High Court of Kerala 1991–92
Place: Bangalore
Date: July 21, 2010
30
Balance Sheet as at March 31, 2010
Rs. in Thousands
For Price Waterhouse Kalyan Ganguly Guido de Boer
Firm Registration Number: 007568 S Managing Director Director & CFO
Chartered Accountants
J. Majumdar Govind Iyengar
Partner Company Secretary
Membership No. F51912
Bangalore, July 21, 2010 Bangalore, July 21, 2010
Schedule 2010 2009
SOURCES OF FUNDS Rs. Rs. Rs. Rs.
Shareholders’ Funds
Capital 1 2,709,048 2,709,048
Reserves and Surplus 2 8,888,712 11,597,760 8,106,431 10,815,479
Loan Funds 3
Secured Loans 4,960,341 4,410,559
Unsecured Loans 1,753,006 6,713,347 1,753,006 6,163,565
Deferred Tax Liability [Refer Schedule 19 Note 15] 216,306 173,122
18,527,413 17,152,166
APPLICATION OF FUNDS
Fixed Assets 4
Gross Block 10,966,546 9,272,547
Less:Accumulated Depreciation and Amortisation 3,158,670 2,294,917
Net Block 7,807,876 6,977,630
Capital Work in Progress 575,331 8,383,207 865,308 7,842,938
Investments 5 1,530,699 1,940,957
Current Assets, Loans and Advances
Inventories 6 1,960,165 1,630,376
Sundry Debtors 7 6,162,470 4,699,634
Cash and Bank Balances 8 833,169 417,733
Other Current Assets 9 354,491 140,769
Loans and Advances 10 2,769,404 2,728,788
12,079,699 9,617,300
Less: Current Liabilities and Provisions
Liabilities 11 3,212,170 2,065,734
Provisions 12 254,022 183,295
3,466,192 2,249,029
Net Current Assets 8,613,507 7,368,271
18,527,413 17,152,166
Significant Accounting Policies 18 - -
Notes on Accounts 19 -
The Schedules referred to above and the notes thereon form an integral part of the financial statements.
This is the Balance Sheet referred to in our report of even date.
31
Profit and Loss Account for the year ended March 31, 2010
The Schedules referred to above and the notes thereon form an integral part of the financial statements.
This is the Profit and Loss Account referred to in our report of even date.
Rs. in Thousands
Schedule 2010 2009
INCOME
Sales and Service 13 29,558,009 24,604,481
Less: Excise Duty 9,583,515 7,621,772
19,974,494 16,982,709
Other Income 14 776,834 20,751,328 492,991 17,475,700
EXPENDITURE
Cost of Sales 15 12,171,636 10,472,894
Other Expenses 16 5,630,706 4,327,570
Interest and Finance Charges 17 555,006 896,377
Depreciation and Amortisation 882,692 19,240,040 762,150 16,458,991
Profit before taxation 1,511,288 1,016,709
Provision for Taxation
[Refer Schedule 19 Note 15]
- Current Tax (498,395) (294,549)
- Fringe Benefit Tax — (14,400)
- Deferred Tax (Charge)/Write back (43,184) (541,579) (82,820) (391,769)
Profit after taxation 969,709 624,940
Less:
Dividends [Refer Schedule 19 Note 22] (187,428) (170,912)
Transfer to General Reserve (100,000) (65,000)
682,281 389,028
Earnings per share (Basic/Diluted)
[Refer Schedule 19 Note 13]
3.68 2.29
Significant Accounting Policies 18
Notes on Accounts 19
For Price Waterhouse Kalyan Ganguly Guido de Boer
Firm Registration Number: 007568 S Managing Director Director & CFO
Chartered Accountants
J. Majumdar Govind Iyengar
Partner Company Secretary
Membership No. F51912
Bangalore, July 21, 2010 Bangalore, July 21, 2010
32
Cash Flow Statement for the year ended March 31, 2010
Rs. in Thousands
2010 2009
A Cash Flow from Operating Activities
Profit before taxation 1,511,288 1,016,709
Adjustments for:
Interest Income (327,015) (147,143)
Depreciation and Amortisation 882,692 762,150
Interest Expenses (Net) 555,006 896,377
Dividend Income (3,861) (48,954)
Profit on sale of Investments (117,982) —
Provision for Doubtful Debts 1,184 2,710
Provision for Doubtful Advances — 928
Bad debts written off — 8,991
Bad advances written off 10,836 5,866
Provision for Doubtful Debts no longer required written back (117) —
(Profit)/Loss on Sale of Assets 3,426 1,004,169 2,185 1,483,110
Operating Profits before Working Capital changes 2,515,457 2,499,819
Adjustment for Working Capital Changes:
(Increase) / Decrease in Sundry Debtors (1,463,903) (1,489,798)
(Increase) / Decrease in Inventories (329,789) (461,209)
Increase / (Decrease) in Current Liabilities and Provisions 1,158,519 (208,833)
(Increase) / Decrease in Other Current Assets,
Loans and Advances (150,102) (785,275) (1,556,589) (3,716,429)
Cash Generated from Operations 1,730,182 (1,216,610)
Direct taxes (Income Tax and Fringe Benefit Tax) paid
(including TDS) (399,670) (309,292)
Net Cash Generated from Operating Activities 1,330,512 (1,525,902)
B Cash Flow from Investing Activities
Purchase of Fixed Assets (including acquisition on
amalgamation) (1,443,476) (1,441,519)
Sale of Fixed Assets 17,089 12,226
(Purchase) / Sale of Investments 528,240 (900,248)
Interest Income 113,293 9,547
Dividend Income 3,861 48,954
Net Cash used in Investing Activities (780,993) (2,271,040)
33
Cash Flow Statement for the year ended March 31, 2010 (contd.)
Rs. in Thousands
2010 2009
C Cash Flow from Financing Activities
(Repayment)/Proceeds from unsecured term loans (net) — 943,021
(Repayment)/Proceeds from Bank Borrowings (net) 552,053 (267,215)
Proceeds from Rights Issue — 4,248,854
Advance to subsidiary companies / others (74) (122)
Interest Paid (557,277) (756,990)
Dividend paid (including distribution tax) (128,785) (128,785)
Net Cash Generated from Financing Activities (134,083) 4,038,763
Net Increase / (Decrease) in cash and cash equivalents 415,436 241,821
Opening cash and cash equivalents
Cash on hand including Remittances in Transit 1,760 8,037
Bank Balances including cheques on hand 415,973 417,733 167,875 175,912
Closing cash and cash equivalents
Cash on hand including Remittances in Transit 2,838 1,760
Bank Balances including cheques on hand 830,331 833,169 415,973 417,733
Notes:
1. The above Cash Flow Statement has been compiled from and is based on the Balance Sheet as at March 31, 2010 and the
related Profit and Loss Account for the year ended on that date.
2. The above Cash Flow Statement has been prepared in consonance with the requirements of Accounting Standard (AS) - 3
on Cash Flow Statements as notified under Companies (Accounting Standards) Rules, 2006 and the reallocations required
for the purpose are as made by the Company.
3. Cash and cash equivalents include Rs.5,850 (2009: Rs.19,925) which are not available for use by the Company. [Refer
Note in Schedule 8]
4. Previous year’s figures have been regrouped / reclassified wherever necessary to conform with current year’s classification.
This is the Cash Flow Statement referred to in our report of even date.
For Price Waterhouse Kalyan Ganguly Guido de Boer
Firm Registration Number: 007568 S Managing Director Director & CFO
Chartered Accountants
J. Majumdar Govind Iyengar
Partner Company Secretary
Membership No. F51912
Bangalore, July 21, 2010 Bangalore, July 21, 2010
34
Schedules to Balance Sheet
Rs. in Thousands
2010 2009
SCHEDULE 1
CAPITAL
Authorised
300,000,000 (2009: 300,000,000) Equity shares of Re.1 each 300,000 300,000
25,000,000 (2009: 25,000,000) Preference Shares of Rs. 100 each 2,500,000 2,500,000
2,800,000 2,800,000
Issued, Subscribed and Paid-up
240,048,255 (2009: 240,048,255) Equity shares of Re.1 each fully paid
[Refer Schedule 19 Note 1]
240,048 240,048
3%, 17,283,000 Cumulative Redeemable Preference Shares of Rs.100 each fully paid - Series A
[The above shares are redeemable at par at the earliest on March 31, 2011 and are extendable
upto March 31, 2015 based on mutual agreement between the Company and Scottish and
Newcastle India Limited (the preference shareholder)]
1,728,300 1,728,300
3%, 7,407,000 Cumulative Redeemable Preference Shares of Rs.100 each fully paid - Series B
[The above shares are redeemable at par at the earliest on March 31, 2015]
740,700 740,700
2,709,048 2,709,048
SCHEDULE 2
RESERVES AND SURPLUS
Securities Premium Account 6,521,774 2,296,925
Add: Premium on Equity Shares issued [Refer Schedule 19 Note 1] — 4,224,849
6,521,774 6,521,774
General Reserve:
As per Last Balance Sheet 170,000 105,000
Transfer from Profit and Loss Account 100,000 65,000
270,000 170,000
Profit and Loss Account balance 1,414,657 1,025,629
Add: Profit for the year 682,281 389,028
2,096,938 1,414,657
8,888,712 8,106,431
SCHEDULE 3
SECURED LOANS [Refer Schedule 19 Note 2(a)]
Foreign Currency Loans
- Working Capital Loan from Banks 576,170 650,329
- External Commercial Borrowing from Banks 936,587 1,404,069
Term Loans from Banks 1,055,651 1,470,034
Other Loans
- Working Capital Loan / Cash Credit from Banks 2,368,960 860,883
Interest accrued and due 22,973 25,244
4,960,341 4,410,559
UNSECURED LOANS [Refer Schedule 19 Note 2(b)]
Long Term Loan From Bank 1,750,000 1,750,000
Other Loan 3,006 3,006
1,753,006 1,753,006
35
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36
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1
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3
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7

Schedules to Balance Sheet (contd.)
S
C
H
E
D
U
L
E

5
I
N
V
E
S
T
M
E
N
T
S

[
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o
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a
m
a
l
g
a
m
a
t
i
o
n
37
Schedules to Balance Sheet (contd.)
D
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t
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s

o
f

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t
m
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3
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3


3
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K
o
t
a
k

F
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2
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1
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,
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6


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5
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,
2
5
8








1
5
,
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2
6


1
5
0
,
2
5
8





R
e
l
i
a
n
c
e

B
l
e
n
d
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d

D
e
b
t

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R
e
l
i
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d

H
o
r
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d

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T
o
t
a
l

9
0
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,
2
5
8


8
9
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0

1
,
3
0
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2
5
8
4
9
0
,
0
0
0
38
Schedules to Balance Sheet (contd.)
Rs. in Thousands
2010 2009
SCHEDULE 6
INVENTORIES
Raw Materials 572,550 422,017
Packing Materials, Stores and Spares [Net of provisions Rs.5,914 (2009: Rs. 36,536)] 471,125 492,407
Work in Progress / Finished Goods (including Traded Goods) 856,550 677,309
Goods in transit 59,940 38,643
1,960,165 1,630,376
SCHEDULE 7
SUNDRY DEBTORS
(Unsecured, considered good unless otherwise stated)
Considered Good
- Over Six Months 69,920 174,000
- Others 6,092,550 4,525,634
Considered Doubtful
- Over Six Months 56,738 55,671
- Others — —
6,219,208 4,755,305
Less: Provision for Doubtful Debts (56,738) (55,671)
6,162,470 4,699,634
SCHEDULE 8
CASH AND BANK BALANCES
Cash on hand (including remittances in transit Rs.Nil (2009: Rs.Nil) 2,838 1,760
Balances with Scheduled Banks:
- in Current Account (including cheques on hand Rs.Nil (2009: Rs.7,537) [Refer Note 1 below] 818,484 396,131
- in Deposit Account [Refer Note 2 below] 11,847 19,842
833,169 417,733
Notes:
1. Includes balance in Unclaimed Dividend Account Rs.1,470 (2009: Rs.880)
2. Includes Rs.5,850 (2009: Rs.19,045) kept as margin against Letters of Credit and
Bank Guarantees.
SCHEDULE 9
OTHER CURRENT ASSETS
(Unsecured, considered good)
Income accrued on Investments and deposits 354,491 140,769
354,491 140,769
39
Schedules to Balance Sheet (contd.)
Rs. in Thousands
2010 2009
SCHEDULE 10
LOANS AND ADVANCES
(Unsecured, considered good unless otherwise stated)
Advance towards Contract Brewing Rights [Refer Schedule 19 Note 26] 1,550,000 1,550,000
Advances recoverable in cash or in kind or for value to be received
- Considered Good* 333,665 188,143
- Considered Doubtful 8,403 8,416
1,892,068 1,746,559
*[including: Rs.Nil (2009: Rs.36) due from Director of the Company –
maximum amount due during the year Rs.36 (2009: Rs.62)]
Less: Provision for Doubtful Advances (8,403) (8,416)
1,883,665 1,738,143
Advances to Subsidiary [Refer note below] 83,865 83,791
Balances with Excise Authorities 224,236 147,932
Other Deposits 551,273 633,832
Taxation [Net of Provisions] 26,365 125,090
2,769,404 2,728,788
Note: Represents advances to Associated Breweries and Distilleries Limited
[Maximum amount outstanding during the year Rs.83,873 (2009: Rs.83,791)]
SCHEDULE 11
LIABILITIES
Acceptances 10,441 63,986
Sundry Creditors
- Due to Micro, Small and Medium Enterprises [Refer Schedule 19 Note 7] 11,527 5,735
- Others 1,791,827 1,202,902
Other Liabilities 1,396,905 792,231
Unclaimed Dividend 1,470 880
3,212,170 2,065,734
SCHEDULE 12
PROVISIONS
Dividend Payable [including dividend distribution tax Rs.26,941 (2009: Rs.18,708)]
[Refer Schedule 19 Note 22] 187,428 128,785
Gratuity 7,265 20,893
Leave Entitlements 59,329 33,617
254,022 183,295
40
Schedules to Profit and Loss Account
Rs. in Thousands
2010 2009
SCHEDULE 13
SALES AND SERVICE
Sales 28,505,356 23,564,973
Income from Brand Franchise and Technical fees 1,052,653 1,039,508
29,558,009 24,604,481
SCHEDULE 14
OTHER INCOME
Guarantee Commission 21,322 21,300
Liabilities no longer required written back 54,725 51,059
Dividend Income 3,861 48,954
Interest Received (Gross) [Tax deducted at source Rs.31,271 (2009: Rs.2,103)] 327,015 147,143
Profit on sale of Investments 117,982 —
Provision for Doubtful Debts no longer required written back 117 1,304
Provision for Doubtful Advances no longer required written back 13 367
Miscellaneous 251,799 222,864
776,834 492,991
SCHEDULE 15
COST OF SALES
Manufacturing Expenses
Consumption of Raw Materials 2,521,576 2,141,148
Consumption of Packing Material and Stores and spares 5,115,279 3,951,047
Purchases of Finished Goods 2,006,411 2,087,358
Power and Fuel 491,102 575,268
Personnel Expenses
Salaries, Wages and Bonus 847,403 750,776
Contribution to Provident and Other funds 60,601 57,413
Staff Welfare 81,240 62,547
Others
Rent (including asset rentals) [Refer Schedule 19 Note 11] 82,608 80,307
Insurance 14,207 12,775
Repairs Building* 13,612 12,295
Repairs to Machinery* 126,671 99,318
Repairs Others 8,781 9,830
Travel and Conveyance 94,278 84,458
Communication Expenses 23,925 23,380
Rates and taxes 365,518 257,456
Legal and Professional fees 72,864 91,641
Miscellaneous 291,786 237,221
*Includes Materials consumed Rs.81,025 (2009: Rs.84,089)
41
Schedules to Profit and Loss Account (contd.)
Rs. in Thousands
2010 2009
Change in Inventory
Opening Stock 677,309 529,462
Closing Stock (856,550) (677,309)
Excise Duty on Opening Stock (366,473) (279,970)
Excise Duty on Closing Stock 499,488 366,473
12,171,636 10,472,894
SCHEDULE 16
OTHER EXPENSES
Selling and Promotion Expenses 5,592,406 4,288,278
Directors’ Sitting fees 15,666 11,772
Auditor’s Remuneration [Refer Schedule 19 Note 14] 7,188 6,809
Bad Debts Written Off — 8,991
Bad Advances Written Off 10,836 5,866
Provision for Doubtful Debts 1,184 2,710
Provision for Idle Assets — 31
Loss on sale of Assets (net) 3,426 2,185
Provision for Doubtful Advances — 928
5,630,706 4,327,570
SCHEDULE 17
INTEREST AND FINANCE CHARGES
Interest on Loans for a fixed period 458,673 394,522
Interest – Others
[Including exchange (Gain) / Loss on Foreign Currency Loans Rs.(74,159) (2009: Rs.139,486)]
84,716 292,329
Other Finance Charges 11,617 209,526
555,006 896,377
42
Significant Accounting Policies for the year ended March 31, 2010
Rs. in Thousands
SCHEDULE 18
1. Basis of Presentation of Financial Statements:
The Financial Statements of the Company have been prepared under historical cost convention, to comply in all material
aspects with the applicable accounting principles in India, the applicable accounting standards notified under Section 211(3C)
of the Companies Act, 1956 and to relevant provisions of the Companies Act, 1956.
2. Use of Estimates:
The preparation of the Financial Statements in conformity with Generally Accepted Accounting Policies (GAAP) in India
requires that the management makes estimates and assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent liabilities as at the date of the Financial Statements, and the reported amounts of revenue and
expenses during the reported period. Actual result could differ from those estimates.
3. Revenue Recognition:
Revenue from sale of goods is recognised in accordance with the terms of sale, on dispatch from the Breweries/warehouses of
the Company and is net of trade discount but includes Excise Duty. Income from brand franchise is recognised at contracted
rates on sale/production of the branded products by the franchisees. Dividend Income is recognised when the Company’s
right to receive the payment is established. Royalty from foreign entities (net of tax), technical advisory and management
fees is recognised as per the terms of agreement.
4. Borrowing Costs:
Borrowing costs incurred for the acquisition of qualifying assets are recognised as part of cost of such assets when it is
considered probable that they will result in future economic benefits to the Company while other borrowing costs are
expensed in the period in which they are incurred.
5. Fixed Assets:
Fixed assets are stated at their original cost of acquisition and subsequent improvements thereto including taxes, duties,
freight and other incidental expenses relating to acquisition and installation of such assets.
The cost of fixed assets acquired on amalgamation have been determined at fair values as on the respective dates of
amalgamation and as per the related Schemes of Arrangement and include taxes / duties thereof.
6. Investments:
Long term investments are carried at cost less provision made to recognise any decline, other than temporary in the values
of such investments. Current investments are carried at cost or net realisable value, whichever is lower.
7. Inventories:
Inventories are valued at lower of cost and net realisable value. Costs include freight, taxes, duties and appropriate production
overheads and are generally ascertained on the First in First Out (FIFO) basis. Excise/Customs duty on stocks in bond is
added to the cost. Due allowance is made for obsolete and slow moving items.
8. Foreign Currency Transactions:
a) Foreign currency transactions are recorded at the rates of exchange prevailing on the dates of such transactions.
All monetary items of foreign currency liabilities/ assets are restated at the rates ruling at the year end and all exchange
gains/ losses arising there from are adjusted to the Profit and Loss Account.
Exchange difference 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.
b) With retrospective effect from April 1, 2007 exchange differences on long term foreign currency monetary items (except for
exchange differences on items forming part of the company’s net investment in a non-integral foreign operation) are
i) adjusted to the cost of the asset in so far as they relate to the acquisition of a depreciable asset;
ii) accumulated in a “Foreign Currency Monetary Item Translation Difference Account” and amortised over the period
of the related long term foreign currency monetary item but not beyond March 31, 2011.
9. Depreciation and Amortisation:
Depreciation on fixed assets is provided on Straight Line Method based on the rates prescribed under Schedule XIV to the
Companies Act, 1956 except as indicated below:
43
Significant Accounting Policies for the year ended March 31, 2010 (contd.)
Rs. in Thousands
a) Plant and Machinery are depreciated at the rate of 10.34%. Further, depreciation is provided at higher rates in respect
of certain specific items of plant and machinery having lower useful life based on technical evaluation carried out by
the management.
b) Assets acquired on amalgamation (where original dates of acquisition are not readily available), are depreciated over
the remaining useful life of the assets as certified by an expert.
Cost of Goodwill arising on amalgamation is amortised over a period of 5 years.
Cost of Leasehold Land is amortised over the period of lease.
Assets individually costing less than Rs.5 are depreciated fully in the year of purchase.
10. Employee Retirement benefits:
(i) Defined-contribution plans:
Contributions to the Employees’ Provident Fund, Superannuation Fund, Employees’ State Insurance and Employees’
Pension Scheme are as per statute and are recognised as expenses during the period in which the employees perform
the services.
(ii) Defined-benefit plans:
Liability towards gratuity is determined on actuarial valuation using the Projected Unit Credit Method at the balance
sheet date. Actuarial Gains and Losses are recognised immediately in the Profit and Loss Account.
(iii) Other long term employee benefits:
Liability towards leave encashment and compensated absences are recognised at the present value based on actuarial
valuation at each balance sheet date.
(iv) Short term employee benefits:
Undiscounted amount of liability towards earned leave, compensated absences, performance incentives etc. are
recognised during the period when the employee renders the services.
11. Taxation:
Current tax is determined as per the provisions of the Income Tax Act, 1961.
Deferred tax is recognised, on timing differences, being the difference between taxable income and accounting income
that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not
recognised unless there is virtual certainty that sufficient future taxable income will be available against which such deferred
tax assets can be realised.
Fringe Benefit Tax is determined at current applicable rates on expenses falling within the ambit of “Fringe Benefit” as
defined under Income Tax Act, 1961.
12. Earnings per share:
Annualised earnings/ (Loss) per equity share (basic and diluted) is arrived at based on ratio of profit/ (loss) attributable to
equity shareholders to the weighted average number of equity shares.
13. Impairment of Assets:
At each Balance Sheet date, the Company assesses whether there is any indication that assets may be impaired. If any such
indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable
amount, an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable
amount.
14. Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognised when the company has a present obligation as a result of past events, for which it is probable
that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate
of the amount can be made. Provisions are reviewed regularly and are adjusted where necessary to reflect the current best
estimates of the obligation. When the company expects a provision to be reimbursed, the reimbursement is recognised as
a separate asset, only when such reimbursement is virtually certain.
A disclosure for contingent liability is made where there is a possible obligation or present obligation that may probably not
require an outflow of resources.
44
Notes on Accounts for the year ended March 31, 2010
SCHEDULE 19
Notes on Accounts
Rs. in Thousands
1. During the quarter ended June 30, 2008 the Company has raised Rs.4,248,854 through an issue of shares on rights basis
(Rights Issue).The proceeds of the Rights Issue have been utilised in the following manner:
a) Rs.2,026,980 (2009: Rs.3,197,096) for repayment of cash credit/overdraft accounts and for additional working capital
requirements.
b) Rs.1,731,874 (2009: Rs.501,500) for Capital Expenditure.
c) Pending utilisation the balance proceeds of Rs.490,000 (2009: Rs.550,258) have been invested in mutual funds.
2. Loan Funds:
Particulars 2010 2009
(a) Secured Loans
(i) Foreign Currency Loans [including interest accrued and due
Rs.17,920 (2009: Rs.19,923)]
Amount repayable within one year – Rs.886,570 (2009: Rs.960,729)
Foreign Currency Loan consists of External Commercial Borrowing (ECB)
from BNP Paribas and demand loan from Axis Bank. ECB from BNP Paribas
is secured by first charge on all moveable and immovable properties of
the Company except Taloja plant. Foreign currency demand loan from Axis
Bank is secured by first charge on the current assets namely, stock of raw
materials, work in progress and finished goods, stores and spares, bills
receivable and book debts.
1,530,677 2,074,321
(ii) Term Loan from Banks
Secured by First Charge over all moveable and immovable assets.
Amount repayable within one year – Rs.164,384 (2009: Rs.164,384)
493,151 657,534
(iii) Term Loan from Banks
Secured by Pari-passu charge on all moveable and immovable properties of
the Company except Taloja plant.
Amount repayable within one year – Rs.250,000 (2009: Rs.250,000)
562,500 812,500
(iv) From Banks [including interest accrued and due
Rs.5,053 (2009: Rs.5,321)]
Amount repayable within one year – Rs.2,374,013 (2009: Rs.866,204)
Secured by hypothecation of stock in trade, stores, raw materials, book debts
and a second charge on all the immovable properties of the Company.
2,374,013 866,204
(b) Unsecured Loans
(i) Loans from Banks [including interest accrued and due
Rs. Nil (2009: Rs.Nil)]
Amount repayable within one year – Rs.Nil (2009: Rs.Nil)
*Covered by personal guarantee of a director of the Company.
1,750,000* 1,750,000*
(ii) From Others
Amount repayable within one year – Rs.Nil (2009: Rs.Nil)
3,006 3,006
3. Fixed Assets:
Buildings amounting to Rs.53,030 (2009: Rs.49,619) and Plant and Machinery amounting to Rs.502,517 (2009: Rs.473,319)
are in premises not owned by the Company.
4. Investments:
The investments in Millennium Alcobev Private Limited and Maltex Malsters Limited are strategic in nature and the diminution
in their respective book values is considered temporary. The Company has obtained an independent valuations which are
in excess of the carrying costs of the respective investments, and hence, no provision for diminution in the value of the
investments is considered necessary.
45
Notes on Accounts for the year ended March 31, 2010 (contd.)
Rs. in Thousands
5. Upon expiry of earlier approval granted by the Central Government, fresh application under Section 314 of the Companies
Act, 1956 for payment of remuneration for the period November 1, 2009 to March 31, 2010 aggregating to Rs.1,650 to
an employee related to a Director of the Company is pending approval of the Central Government.
6. Investor Education and Protection Fund:
There are no overdue balances unremitted to the fund under section 205C of the Companies Act, 1956.
7. Disclosure of dues/ payments to micro and small enterprises to the extent such enterprises are identified by the
Company.
Sl.No. Particulars 2010 2009
(i) The principal amount remaining unpaid as at year end. 9,505 4,176
(ii) Interest due thereon remaining unpaid on year end. 42 44
(iii) The amount of interest paid by the buyer 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.
— —
(iv) 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.
— —
(v) The amount of interest accrued and remaining unpaid on year end. 1,980 1,515
(vi) 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.
2,022 1,559
The information given above and in Schedule 11 has been determined to the extent such parties have been identified by
the Company, on the basis of information disclosed by the creditors, which has been relied upon by the auditors.
8. Segmental Reporting:
The Company is engaged in manufacture, purchase and sale of beer including licensing of brands which constitutes a single
business segment. The Company operates only in India. Accordingly, primary and secondary reporting disclosures for business
and geographical segment as envisaged in AS-17 are not applicable to the company.
9. Capital Commitments:
Particulars 2010 2009
Estimated amount of Contracts remaining to be executed (net of capital advances) on
capital account and not provided for
257,321 689,134
10. Contingent Liabilities:
Particulars 2010 2009
a) Sales Tax/other taxes demands under appeal* 14,672 14,672
b) Employees State Insurance Demand* 265 265
c) Demand towards Water charges under appeal* — 133,019
d) Excise Duty/Customs Duty demands under appeal* 36,709 36,709
e) Income Tax demands under appeal* 188,844 82,262
f) Service Tax demands under appeal* 229,114 377,708
g) Claims against the Company not acknowledged as debt* 30,568 27,377
h) Letter of Credit outstanding 78,926 33,230
46
Notes on Accounts for the year ended March 31, 2010 (contd.)
Rs. in Thousands
i) Guarantees given by the company:
– on behalf of Subsidiaries of Joint Venture to third parties
Millennium Beer Industries Limited
United Millennium Breweries Limited
Empee Breweries Limited
– to third parties
800,000
600,000
730,000
19,060
800,000
600,000
730,000
28,348
j) Letter of undertaking to distributors towards countervailing duty for imports from
Nepal
38,500 38,500
*In the opinion of the management, the above demands / claims are not sustainable in law and accordingly no provision
has been made in the accounts.
11. Operating Lease:
The Company has entered into leasing arrangements for vehicles, computers, equipments, office premises and residential
premises that are renewable on a periodic basis, and cancellable/ non-cancellable in nature. Such leases are generally for a
period of 11 to 60 months with options of renewal against increased rent and premature termination of agreement through
notice period of 2 to 3 months, except in the case of certain leases where there is a lock-in period of 11 to 26 months.
Particulars 2010 2009
Lease payments during the year including Minimum lease payments
Rs. 4,999 (2009: Rs.4,999) on non-cancellable leases.
82,608 80,307
At the balance sheet date, future minimum lease rentals under non-cancellable
operating leases are as under:
Not later than one year 17,518 28,288
One to five years 15,374 12,887
Total 32,892 41,175
12. Related party disclosures:
A Name of the related parties:
(1) Subsidiary:
Associated Breweries & Distilleries Limited (ABDL)
Maltex Malsters Limited (MML)
(2) Associate:
United East Bengal Football Team Private Limited (UEBFTPL)
(3) Joint Venture:
Millennium Alcobev Private Limited (MAPL)
(4) Subsidiaries of the Joint Venture:
(a) Empee Breweries Limited (EBL)
(b) United Millennium Breweries Limited (UMBL)
(c) Millennium Beer Industries Limited (MBIL)
(5) Entity which has significant influence:
Scottish & Newcastle India Limited (SNIL)
(6) Others:
(a) Scottish & Newcastle Plc, (S & N), Holding Company of SNIL
(b) Scottish & Newcastle UK Limited (SNUK), Fellow Subsidiary of SNIL
(c) Scottish & Newcastle India Private Limited (SNIPL), Fellow Subsidiary of SNIL
(7) Key Management Personnel (KMP):
Mr. Kalyan Ganguly
Mr. Guido de Boer (Part of the year)
(8) Relative of Key Management Personnel:
Mrs. Suparna Bakshi Ganguly (Wife of Mr. Kalyan Ganguly)
47
Notes on Accounts for the year ended March 31, 2010 (contd.)
Rs. in Thousands
B. (i) Transactions with related parties during the year:
Particulars MBIL MAPL UMBL EMPEE UEBFTPL KMP MML
2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009
Purchase of goods 2,131,421 2,374,835 — — 7,489 4,304 31,004 6,061 — — — — — —
Sale of goods
[including sales taxes
/ VAT]
186,164 187,471 — — 94,181 86,994 82,898 76,336 — — — — — —
Receipts/(Payments)
against rendering
Services
45,363 30,671 — — 32,975 32,897 1,690 — — — — — — —
Brand Fees paid 25,398 18,021 — — — — — — — — — — — —
Technical, Advisory
and Management Fee
— 100,000 — — 40,000 40,000 160,000 100,000 — — — — — —
Sponsorship and other
payments
— — — — — — — — 52,042 56,767 — — — —
Guarantee
Commission received
8,022 8,000 — — 6,000 6,000 7,300 7,300 — — — — — —
Purchase of Assets 135 5,397 — — 15,249 2,386 — 26 — — — — — —
Sale of Assets /Spares 71 — — — 12,239 5,264 — 225 — — — — — —
Lease Rentals on
Machinery
3,223 2,798 — — — — — — — — — — 5,682 5,901
Interest Paid — — — — — — — — — — — — 1,720 2,021
Recovery of
employees Salaries (on
deputation)
18,259 18,690 — — 5,536 6,253 9,175 7,884 — — — — — —
Payments
(For Supplies including
loan in cash or kind)
2,320,534 2,602,249 19,130 15,315 116,033 19,649 (233,701) (211,572) 52,034 50,248 — — 8,841 8,499
Remuneration to
Directors*
— — — — — — — — — — 41,035 34,354 — —
Guarantees and
Collaterals
Refer Schedule 19 Note 10(i)
Amount Due From/(To) 1,163,240 745,006 65,469 46,339 731,685 447,458 102,358 106,001 (26) (18) — — (10,697) (12,136)
* Kalyan Ganguly: Rs.34,266 (2009: Rs.34,354)
[Including payment to relative of KMP and a firm in which such relative is a partner – Rs.Nil (2009: Rs.2,883)]
Guido de Boer: Rs.6,769 (2009: Rs.Nil)
Figures in bracket indicate amounts received
(ii) Transactions with Subsidiaries:
Balance due from ABDL – Rs.83,865 (2009: Rs.83,791)
C. Transactions with S & N Group
1. Transaction with S & N
Management F ees Rs. 45,000 (2009: Rs.Nil)
2. Transactions with SNUK
Interest on ECB Rs. Nil (2009: Rs.17,852)
Purchase of Raw Material Rs. 123 (2009: Rs.186)
3. Transactions with SNIL
Balance of Preference Share Capital Rs. 2,469,000 (2009: Rs.2,469,000)
Dividend on above Rs. 74,070 (2009: Rs.74,070)
Interim Dividend on Equity Shares Rs. Nil (2009: Rs.13,499)
Final Dividend on Equity Shares Rs. 13,499 (2009: Rs.Nil)
13. Earnings per Share:
Particulars 2010 2009
a) Profit after taxation as per profit and loss account 969,709 624,940
b) Less: Preference Dividend (including dividend distribution tax thereon) 86,658 86,658
c) Net Profit attributable to equity shareholders 883,051 538,282
d) Weighted average number of equity shares outstanding
(Face value of Re.1 per share)
240,048,255 234,589,624
e) Earnings per share (Basic / Diluted) 3.68 2.29
48
Notes on Accounts for the year ended March 31, 2010 (contd.)
Rs. in Thousands
14. Remuneration to Auditors:
Particulars 2010 2009
Fees 3,900 3,900
Tax Audit 560 560
Out of Pocket Expenses 167 287
Other Services 1,890 1,320
Service Tax 671 742
Total 7,188 6,809
15. Accounting for Taxes on Income:
Deferred Tax - The net deferred tax liability amounting to Rs. 216,306 (2009: Rs.173,122) has been arrived as follows:
Particulars 2010 2009
Deferred Tax Liability arising from:
Difference between carrying amount of fixed assets in the financial statements and
the Income Tax Return
263,947 213,433
Less: Deferred tax asset arising from:
Expenses charged in the financial statements but allowable as deductions in
future years under the Income Tax Act, 1961
25,500 18,528
Provision for Doubtful Debts 22,141 21,783
Net deferred tax liability 216,306 173,122
Movement during the year (43,184) (82,820)
Net Deferred tax charged off / (written back) in the profit and loss account (43,184) (82,820)
The tax impact for the above purpose has been arrived by applying a tax rate of 33.22% (2009: 33.99%) being the
substantively enacted tax rate for Indian Companies under the Income Tax Act, 1961.
16. Remuneration/Commission to Directors:
a) Remuneration to Executive Directors
Particulars 2010 2009
Salary and Allowances 32,480 23,762
Contribution to Provident and Other Funds 4,235 3,622
Perquisites 4,320 4,087
Total 41,035 31,471
Provision for contribution to employee retirement and other employee benefits which are based on actuarial valuation done
on an overall Company basis are excluded from the above disclosure.
b) Commission to Non Executive Directors – Rs.14,511 (2009: Rs.10,612)
c) Computation of net profits in accordance with Section 198 of the Companies Act, 1956:
Particulars 2010 2009
Net Profit after taxation 969,709 624,940
Add:
Depreciation and Amortisation (as per accounts) 882,692 762,150
Executive Directors’ Remuneration 41,035 31,471
Directors’ Fees 1,155 1,160
Commission to Non Executive Directors 14,511 10,612
Provision/(Write back) for doubtful debts and advances (net) 1,067 1,998
Book deficit /(surplus) on fixed assets sold, scrapped, etc. (net) 3,426 2,185
Taxation for the year 541,579 1,485,465 391,769 1,201,345
2,455,174 1,826,285
Less:
Depreciation as per Section 350 882,692 762,150
Deficit / (Surplus) on disposal of fixed assets (net) as per
Section 349
3,426 2,185
Profit on sale of Investment 117,982 —
Net Profit for Section 198 of the Companies Act, 1956 1,451,074 1,061,950
49
Notes on Accounts for the year ended March 31, 2010 (contd.)
Rs. in Thousands
Remuneration Limit to Executive Directors –
10% (2009: 5%) of Net Profit as computed above.
145,107 53,595
Commission to Non Executive Directors – 1% of Net Profit
as computed above.
14,511 10,620
Remuneration Paid:
Executive Directors 41,035 31,471
Non Executive Directors 14,511 10,612
17. Quantitative Details:
A. Quantitative Particulars
Particulars 2010 2009
Beer in
Hecto Litres
Value in Rs.
Beer in
Hecto Litres
Value in Rs.
Licensed Capacity* 8,585,000 5,995,000
Installed Capacity per annum* 7,030,000 6,110,000
Actual Production for the year 4,340,391 3,683,651
Sales – during the year 4,324,612 24,201,951 3,676,610 19,704,934
Malt Sales in Tonnes during the year 25,632 437,518 19,966 383,195
Opening Stock – Finished Goods 64,292 141,002 57,251 183,385
Closing Stock – Finished Goods 80,071 175,600 64,292 141,002
*Note: Licensing of products of the Company under the Industries (Development and Regulation) Act, 1951 is discontinued
and consequently the reported capacities are as per permissions obtained from the respective regulatory authorities on a
yearly basis. As regards installed capacity, the same has been certified by the Management and relied upon by the Auditors,
being a technical matter.
B. Particulars of Goods Traded by the Company
Particulars
2010 2009
Quantity in
Hecto Litres
Value in Rs.
Quantity in
Hecto Litres
Value in Rs.
Opening Stock 1,248 3,707 1 6
Purchases during the year 481,607 2,006,411 450,203 2,087,358
Sales during the year 477,012 3,865,887 448,956 3,476,844
Closing Stock 5,843 19,949 1,248 3,707
C. Consumption of Raw Materials
Particulars
2010 2009
Quantity in
Tonnes
Value in Rs.
Quantity in
Tonnes
Value in Rs.
Malt 53,880 1,205,383 45,660 1,082,006
Brewing Materials 36,274 1,145,253 30,302 910,637
Other Materials* 170,940 148,505
Total 2,521,576 2,141,148
* In view of the large number of items, individually comprising less than 10% of the total consumption, quantitative details
are not given.
18. Value of Imports during the year calculated on CIF basis:
Particulars 2010 2009
Raw Materials 366,030 208,882
Components and Spares 20,834 656,877
Capital Goods 31,294 97,196
50
Notes on Accounts for the year ended March 31, 2010 (contd.)
Rs. in Thousands
19. Consumption:
Particulars
2010 2009
Value
Percentage to total
Consumption
Value
Percentage to total
Consumption
Value of Imported Raw Materials Consumed 153,898 6 133,622 6
Value of indigenous Raw Materials
Consumed
2,367,678 94 2,007,526 94
Value of Imported Packing materials and
stores and Spares Consumed
360,763 7 854,216 21
Value of indigenous Packing materials and
stores and Spares Consumed
4,835,541 93 3,180,920 79
20. Expenditure in Foreign Currency:
Particulars 2010 2009
Foreign Travel expenses of employees and others (net of recoveries) 11,717 9,152
Management Fees 45,000 —
Selling and Distribution expenses 117,617 169,725
Interest and Finance charges 54,028 167,181
Others 4,214 1,028
21. Earnings in Foreign Exchange:
Particulars 2010 2009
Services – Royalty 9,422 10,043
22. Details of Dividend:
Particulars 2010 2009
Dividend payable on Preference Share Capital @3% 74,070 74,070
Dividend Distribution tax payable on above 12,588 12,588
Interim Dividend paid on Equity Shares @15% — 36,007
Dividend Distribution tax paid on above — 6,120
Final Dividend payable on Equity Shares @36% (2009: 15%) 86,417 36,007
Dividend Distribution tax payable on above 14,353 6,120
Total 187,428 170,912
23. Details of Dividend paid in Foreign Currency:
Particulars 2010 2009
Number of non-resident shareholders 1 1
Number of Equity Shares held on which dividend was due 89,994,960 89,994,960
Amount remitted 13,499 13,499
Number of Preference Share held on which dividend was due 24,690,000 24,690,000
Amount remitted 74,070 74,070
51
Notes on Accounts for the year ended March 31, 2010 (contd.)
Rs. in Thousands
24. (i) Disclosures envisaged in AS 15 in respect of gratuity are given below:
Particulars 2010 2009 2008
A) Reconciliation of opening and closing balances of
the present value of the defined benefit obligation:
Obligations at period beginning 153,948 142,593 116,056
Service Cost 8,369 13,052 43,502
Interest cost 11,818 9,601 9,284
Benefits settled (12,456) (10,881) (25,964)
Actuarial (gain)/loss (250) (417) (285)
Obligations at period end 161,429 153,948 142,593
B) Change in plan assets
Plan assets at period beginning, at fair value 133,055 136,455 116,056
Expected return on plan assets 10,155 10,657 9,284
Actuarial gain/(loss) (1,698) (7,569) 10,799
Contributions 25,109 4,393 26,280
Benefits settled (12,456) (10,881) (25,964)
Plan assets at period end, at fair value 154,165 133,055 136,455
C) Reconciliation of present value of the obligation and
the fair value of the plan assets:
Fair value of plan assets at the end of the year 154,165 133,055 136,455
Present value of the defined benefit obligations at the end
of the period
161,429 153,948 142,593
Liability recognised in the balance sheet (7,265) (20,893) (6,138)
D) Details of Gratuity cost
Service cost 8,369 13,052 43,502
Interest cost 11,818 9,601 9,284
Expected return on plan assets (10,155) (10,657) (9,284)
Prior Period Adjustment — — (23,739)
Actuarial (gain) / loss 1,447 6,243 6,243
Net gratuity/cost 11,479 18,239 26,006
E) Description of the basis used to determine the
overall expected rate of return on assets including
major categories of plan assets.
The expected return is calculated on the average fund
balance based on the mix of investments and the
expected yield on them.
Actual return on plan assets (Value) 12,371 7,001 23,997
Actual return on plan assets 8,457 3,087 20,083
F) Assumptions
Interest rate 8.00% 7.00% 8.00%
Discount factor 8.00% 7.00% 8.00%
Estimated rate of return on plan assets 8.00% 8.00% 8.00%
Salary Increase 5.00% 5.00% 5.00%
Attrition rate 1.00% 1.00% 1.00%
Retirement age 58 58 58
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and
other relevant factors such as supply and demand factors in the Employment market.
52
Notes on Accounts for the year ended March 31, 2010 (contd.)
Rs. in Thousands
(ii) Contribution to Provident and Other Funds under Manufacturing and Other Expenses (Schedule 15) includes Rs.49,122
(2009: Rs.39,174) being expenses debited under the following defined contribution plans:
Particulars 2010 2009 2008
Provident Fund 36,034 28,225 28,815
Superannuation 13,088 10,949 9,352
25. Disclosure Under Accounting Standard 21 and 27
a. The disclosure required with respect to the holdings in subsidiaries are given below:
Name
Country of
Incorporation
Percentage of
ownership interest at
March 31, 2010
Percentage of
ownership interest at
March 31, 2009
Associated Breweries & Distilleries
Limited (ABDL)
India 100 100
Maltex Malsters Limited (MML) India 51 51
The reporting date of the subsidiaries and the accounting polices of the subsidiaries are same as those of the holding
company.
b. The disclosure required with respect to the holdings in associates are given below:
Name
Country of
Incorporation
Percentage of
ownership interest at
March 31, 2010
Percentage of
ownership interest at
March 31, 2009
United East Bengal Football Team
Private Limited (UEBFTPL)
India 50 50
c. The Company’s interests, as a venturer, in jointly controlled entity (Incorporated Joint Venture) are:
Name
Country of
Incorporation
Percentage of
ownership interest at
March 31, 2010
Percentage of
ownership interest at
March 31, 2009
Millennium Alcobev Private Limited India 50* 50*
* of the 50% of ownership interest, 10% represents control exercised through the subsidiary Associated Breweries &
Distilleries Limited (ABDL)
The aggregate amounts of each of the assets, liabilities, income and expenses related to the Company’s interests in the
jointly controlled entity is as follows:
Particulars 2010 2009
Assets
Fixed Assets 887,322 955,019
Current Assets, Loans and Advances
Inventories 243,453 158,103
Sundry Debtors 532,311 294,630
Cash and Bank Balances 93,187 93,352
Loans and Advances 78,258 83,168
Liabilities
Secured Loans 1,018,398 1,248,766
Unsecured Loans 223,489 223,489
Current Liabilities and Provisions
Liabilities 1,601,224 1,093,005
Provisions 2,717 2,111
53
Notes on Accounts for the year ended March 31, 2010 (contd.)
Rs. in Thousands
Particulars 2010 2009
Income
Sales less excise duty 2,780,518 2,311,864
Other Income 54,729 42,826
Expenditure
Cost of Sales 1,882,475 1,563,138
Other Expenses 731,623 665,402
Interest and Finance Charges 111,888 159,637
Depreciation and Amortisation 154,057 129,402
Other Matters
Capital Commitments
- Estimated amount of Contracts remaining to be executed on
capital account and not provided for
8,896 46,348
Contingent Liabilities
- Sales Tax/other taxes demands under appeal 3,774 3,281
- ESIC / PF demands under appeal 845 898
- Bank Guarantee given to Commissioner of Excise for Export of Beer 10,155 5,855
- Demand towards Water charges under appeal — 26,250
- Interest for delayed payment of Interest Free Loans 1,169 4,829
- Dividend on 1% Non Convertible Cumulative Redeemable Preference Shares 27,750 18,500
- Income Tax* 5,055 22,028
Claims against the Company not acknowledged as debt 5,877 6,107
*Net of Deposit under appeal – Rs.3,789 (2009: Rs.1,018)
26. The Company does not own any brewing facility in Tamil Nadu, which is one of the major markets in India contributing
about 18% of the Company’s business. With an intention of ensuring supplies from Balaji Distilleries Limited (BDL), having
brewing facilities in Tamil Nadu, the Company has entered into an agreement with the promoters of BDL to secure to the
Company perpetual usage of the brewery owned by BDL, and has advanced an amount of Rs.1,550,000 to one of the
Promoter Companies of BDL, acting for and on behalf of the other Promoters also.
Subsequently, the Boards of Directors of BDL and United Spirits Limited (USL) have considered and approved a proposal for
merger of BDL into USL, which is subject to obtaining of the necessary regulatory approvals by both the Companies. The
Company has obtained a commitment from USL that the arrangement with Promoters will be adhered to on completion
of the proposed merger. The advance will be repaid upon the completion of the merger or in accordance with the terms of
the related Agreement, whichever is earlier.
In June 2009,BDL has allotted 90,000 Equity Shares upon conversion of warrants to certain parties.These parties have entered
into a supplemental agreement with the Company to the effect that they will be bound by the terms and conditions of the
earlier agreement between the Company and the promoters of BDL.
27. As the Company does not have any long term monetary item since April 1, 2007 till date, the change in the accounting
policy referred to in Schedule 18 note 8 (b) has no impact on the profit for the year.
28. All amounts disclosed in Notes to Account and other Schedules are in Rs. 000 except for:
i) Number of Shares / units in Notes on Schedule 1, Schedule 5, Note 13, Note 23, and Note 26.
ii) Basic and Diluted EPS in the Profit and Loss Account and in Note 13.
iii) Ouanlilalive dala in Nole !7.
29. The previous year’s figures have been regrouped to conform to current year’s classification.
For Price Waterhouse Kalyan Ganguly Guido de Boer
Firm Registration Number: 007568 S Managing Director Director & CFO
Chartered Accountants
J. Majumdar Govind Iyengar
Partner Company Secretary
Membership No. F51912
Bangalore, July 21, 2010. Bangalore, July 21, 2010.
54
Notes on Accounts for the year ended March 31, 2010 (contd.)
STATEMENT PURSUANT TO SECTION 212(1)(e) OF THE COMPANIES ACT, 1956 AS AT MARCH 31, 2010
Rs. in Thousands
a) No. of Equity
Shares at the end of
the financial year of
the Subsidiary
b) Extent of Holdings
Net aggregate Profit/(Loss) of the subsidiary so far
as it concerns the Members of the Company
Not dealt with in the
Accounts of the Company
Dealt with in the
Accounts of the Company
(i) (ii) (i) (ii)
Sl.
No.
Name of the
Subsidiary
United
Breweries
Limited
Other
Subsidiary
Companies
United
Breweries
Limited
Other
Subsidiary
Companies
For Subsidiary’s
Financial
Year ended
31.3.2010
For previous
Financial Years
of Subsidiary
since it became
a Subsidiary
For the
Subsidiary’s
Financial
Year ended
31.3.2010
For previous
Financial
Years of the
Subsidiary since
it became a
Subsidiary
1. Associated Breweries
& Distilleries Ltd.
10,000 — 100% — (145) (1,418) — —
2 Maltex Malsters
Limited
22,950 — 51% — 1,967 (972) — —
DISCLOSURE UNDER CLAUSE 32 OF THE LISTING AGREEMENT
Name of the listed Company: United Breweries Limited Rs. in Thousands
Name of the Company
Amount outstanding
as at March 31, 2010
Value of investments
as at March 31, 2010
Terms
Subsidiaries:
Associated Breweries & Distilleries Ltd. (ABDL) 83,865 1,000
No stipulation towards
repayment and interest
Maltex Malsters Limited (10,983) 450,000 —
Joint Venture:
Millennium Alcobev Pvt. Ltd. 65,469 589,529
No stipulation towards
repayment and interest
Associates:
United East Bengal Football Team Pvt. Ltd. — 50 —
55
COMPANY’S GENERAL BUSINESS PROFILE
Rs. in Thousands
I. Registration Details
Registration No. : 25195
State Code : 08
Balance Sheet Date : 31.03.2010
II. Capital Raised during the year
Public Issue : NIL
Right Issue : NIL
Bonus Issue : NIL
Private Placement : NIL
III. Position of Mobilisation and Deployment of Funds
Total Liabilities 18,527,413 Total Assets 18,527,413
Sources of Funds Application of Funds
Paid up Capital 2,709,048 Net Fixed Assets 8,383,207
Reserves & Surplus 8,888,712 Investments 1,530,699
Secured Loans 4,960,341 Net Current Assets 8,613,507
Unsecured Loans 1,753,006 Deferred Tax Assets NIL
Deferred Credit NIL Miscellaneous Expenditure NIL
Deferred Tax Liability 216,306

IV. Performance of Company
Turnover 20,751,328 Total Expenditure 19,240,040
(Includes non-recurring items)
Profit Before Tax 1,511,288 Profit After Tax 969,709
Earnings per Share 3.68 Dividend Rate 36%
V. Generic Names of three Principal Products/Services of the Company
Item Code – ITC Code 22030000
Product Description Beer made from Malt
Balance Sheet Abstract
56
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57
Auditors’ Report on Consolidated Financial Statements
TO THE BOARD OF DIRECTORS OF UNITED BREWERIES LIMITED
1. We have audited the attached Consolidated Balance Sheet of United Breweries Limited (the “Company”) and its subsidiaries
and joint venture hereinafter referred to as the “Group” (refer Note 1 on Schedule 19 to the attached consolidated financial
statements) as at March 31, 2010, the related Consolidated Profit and Loss Account and the Consolidated Cash Flow
Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These
consolidated financial statements are the responsibility of the Company’s Management. Our responsibility is to express an
opinion on these financial statements based on our audit.
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. We did not audit the financial statements of (i) two subsidiaries and included in the consolidated financial statements, which
constitute total assets of Rs.109,699 thousands and net assets of Rs.15,279 thousands as at March 31, 2010, total revenue
of Rs.37 thousands, net loss of Rs.4,948 thousands and net cash outflows amounting to Rs.7,608 for the year then ended;
and (ii) one associate company which constitute net results of Rs. Nil for the year then ended. These financial statements and
other financial information have been audited by other auditors whose reports have been furnished to us, and our opinion
on the consolidated financial statements to the extent they have been derived from such financial statements is based solely
on the report of such other auditors.
4. We report that the consolidated financial statements have been prepared by the Company’s Management in accordance
with the requirements of Accounting Standard (AS) 21 - Consolidated Financial Statements and Accounting Standard (AS)
27 - Financial Reporting of Interests in Joint Ventures notified under sub-section 3C of Section 211 of the Companies Act,
1956.
5. Based on our audit and on consideration of reports of other auditors on separate financial statements and on the other
financial information of the components of the Group as referred to above, and to the best of our information and according
to the explanations given to us, in our opinion, the attached consolidated financial statements give a true and fair view in
conformity with the accounting principles generally accepted in India:
(a) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2010;
(b) in the case of the Consolidated Profit and Loss Account, of the profit of the Group for the year ended on that date;
and
(c) in the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the year ended on that date.
For Price Waterhouse
Firm Registration Number – 007568 S
Chartered Accountants
J. Majumdar
Partner
Membership Number – F51912
Place: Bangalore
Date: July 21, 2010
58
Consolidated Balance Sheet as at March 31, 2010
The Schedules referred to above and the notes thereon form an integral part of the consolidated financial statements.
This is the Consolidated Balance Sheet referred to in our report of even date.
Rs. in Thousands
Schedule 2010 Joint Venture Total 2010 2009
SOURCES OF FUNDS Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.
Shareholders’ Funds
Capital 1 2,709,048 467,000 3,176,048 3,176,048
Reserves and Surplus 2 8,888,908 11,597,956 162,603 629,603 9,051,511 12,227,559 8,267,408 11,443,456
Loan Funds 3
Secured Loans 4,965,912 1,018,398 5,984,310 5,671,620
Unsecured Loans 1,753,706 6,719,618 223,489 1,241,887 1,977,195 7,961,505 1,977,195 7,648,815
Minority Interest [Refer Schedule 19 Note 5] 11,517 — 11,517 11,517
Deferred Tax Liability (Net) 215,804 20,310 236,114 175,963
[Refer Schedule 19 Note 12]
18,544,895 1,891,800 20,436,695 19,279,751
APPLICATION OF FUNDS
Goodwill [Refer Schedule 19 Note 4] 438,062 1,428,463 1,866,525 1,866,525
Fixed Assets
Gross Block 4 10,991,199 1,713,052 12,704,251 10,848,524
Less: Accumulated Depreciation and
Amortisation 3,167,124 854,768 4,021,892 3,003,529
Net Block 7,824,075 858,284 8,682,359 7,844,995
Capital Work in Progress 575,331 8,399,406 29,038 887,322 604,369 9,286,728 972,151 8,817,146
Investments 5 1,163,029 (672,854) 490,175 900,437
Foreign Currency Monetary Item Translation
Difference Account [Refer Schedule 19 Note 18]
— 10,864 10,864 40,792
Current Assets, Loans and Advances
Inventories 6 1,960,165 243,453 2,203,618 1,788,479
Sundry Debtors 7 6,162,487 532,311 6,694,798 5,005,981
Cash and Bank Balances 8 833,400 93,187 926,587 511,257
Other Current Assets 9 354,491 729 355,220 141,601
Loans and Advances 10 2,694,910 77,525 2,772,435 2,739,532
12,005,453 947,205 12,952,658 10,186,850
Less: Current Liabilities and Provisions
Liabilities 11 3,207,033 1,601,224 4,808,257 3,166,314
Provisions 12 254,022 2,717 256,739 185,271
3,461,055 1,603,941 5,064,996 3,351,585
Net Current Assets 8,544,398 (656,736) 7,887,662 6,835,265
Profit and Loss Account — 894,741 894,741 819,586
18,544,895 1,891,800 20,436,695 19,279,751
Significant Accounting Policies 18 — — — 0
Notes on Accounts 19 — — — —
For Price Waterhouse Kalyan Ganguly Guido de Boer
Firm Registration Number: 007568 S Managing Director Director & CFO
Chartered Accountants
J. Majumdar Govind Iyengar
Partner Company Secretary
Membership No. F51912
Bangalore, July 21, 2010 Bangalore, July 21, 2010
59
Consolidated Profit and Loss Account for the year ended March 31, 2010
Rs. in Thousands Rs. in Thousands
Schedule 2010 Joint Venture Total 2010 2009
INCOME
Sales and Service 13 29,558,009 3,923,936 33,481,945 27,853,325
Less: Excise Duty 9,583,515 1,143,418 10,726,933 8,558,750
19,974,494 2,780,518 22,755,012 19,294,575
Other Income 14 776,871 20,751,365 54,729 2,835,247 831,600 23,586,612 535,816 19,830,391
EXPENDITURE
Cost of Sales 15 12,167,650 1,882,473 14,050,123 12,030,743
Other Expenses 16 5,630,767 731,623 6,362,390 4,993,021
Interest and Finance Charges 17 553,319 111,888 665,207 1,054,338
Depreciation and Amortisation 886,357 19,238,093 154,057 2,880,041 1,040,414 22,118,134 896,347 18,974,449
Profit / (Loss) before taxation 1,513,272 (44,794) 1,468,478 855,942
Provision for Taxation
- Current tax (498,614) (13,337) (511,951) (296,072)
- Fringe Benefit Tax — — — (15,830)
- Deferred Tax (Charge)/Write back (43,127) (541,741) (17,024) (30,361) (60,151) (572,102) (88,248) (400,150)
Profit / (Loss) after taxation 971,531 (75,155) 896,376 455,792
Profit / (Loss) brought forward from
previous year
1,413,031 (819,586) 593,445 368,485
Adjustment on account of adoption
of Accounting Standard 11
on ‘Foreign exchange fluctuation’
— — — 5,080
2,384,562 (894,741) 1,489,821 829,357
Less: Appropriations
Transfer to General Reserve (100,000) — (100,000) (65,000)
Dividend
[Refer Schedule 19 Note 15]
(187,428) — (187,428) (170,912)
Balance carried to Balance Sheet 2,097,134 (894,741) 1,202,393 593,445
Earnings per share (Basic/Diluted)
[Refer Schedule 19 Note 14]
3.37 1.57
Significant Accounting Policies 18
Notes to Accounts 19
The Schedules referred to above and the notes thereon form an integral part of the consolidated financial statements.
This is the Consolidated Profit and Loss Account referred to in our report of even date.
For Price Waterhouse Kalyan Ganguly Guido de Boer
Firm Registration Number: 007568 S Managing Director Director & CFO
Chartered Accountants
J. Majumdar Govind Iyengar
Partner Company Secretary
Membership No. F51912
Bangalore, July 21, 2010 Bangalore, July 21, 2010
62
Schedules to Consolidated Balance Sheet
Rs. in Thousands
2010 Joint Venture Total 2010 2009
SCHEDULE 1
Capital
Authorised
300,000,000 (2009: 300,000,000) Equity shares of Re.1 each
300,000 — 300,000 300,000
25,000,000 (2009: 25,000,000) Preference Shares of Rs.100 each
2,500,000 — 2,500,000 2,500,000
2,800,000 — 2,800,000 2,800,000
Issued, Subscribed and Paid-up
240,048,255 (2009: 240,048,255) Equity shares of Re.1 each fully paid 240,048 — 240,048 240,048
3%, 17,283,000 (2009: 17,283,000) Cumulative Redeemable
Preference Shares of Rs.100 each - Series A
[The above shares are redeemable at par at the earliest on March 31, 2011 and
are ‘extendable upto March 31, 2015’ based on mutual agreement between the
company and ‘Scottish and Newcastle India Limited’ (the preference shareholder)]
1,728,300 — 1,728,300 1,728,300
3%, 7,407,000 (2009: 7,407,000) Cumulative Redeemable
Preference Shares of Rs.100 each - Series B
[The above shares are redeemable at par at the earliest on March 31, 2015]
740,700 — 740,700 740,700
Convertible Redemable Preference Shares
— 467,000 467,000 467,000
2,709,048 467,000 3,176,048 3,176,048
SCHEDULE 2
Reserves and Surplus
Capital Reserve — 1,204 1,204 1,204
Securities Premium Account 6,521,774 161,399 6,683,173 2,458,324
Premium received during the year — — — 4,224,849
General Reserve:
As per last Balance Sheet 170,000 — 170,000 105,000
Transfer from Profit and Loss Account 100,000 — 100,000 65,000
Profit and Loss Account balance 2,097,134 — 2,097,134 1,413,031
8,888,908 162,603 9,051,511 8,267,408
SCHEDULE 3
Secured Loans [Refer Schedule 19 Note 6]
Foreign Currency Loans
– Working Capital Loan from Bank 576,170 — 576,170 650,329
– Term Loan from Bank — 148,116 148,116 262,711
External Commercial Borrowings – From Banks 936,587 — 936,587 1,404,069
Term Loans from Banks 1,061,222 140,375 1,201,597 1,706,955
Other Loans —
– Working Capital Loan / Cash Credit from Banks 2,368,960 — 2,368,960 860,883
Interest accrued and due 22,973 1,644 24,617 28,220
From Others — 605,108 605,108 564,924
From Rabo Finance India Private Limited — 123,155 123,155 193,529
4,965,912 1,018,398 5,984,310 5,671,620
Unsecured Loans
[Refer Schedule 19 Note 6]
Long Term Loans from Banks 1,750,000 — 1,750,000 1,750,000
Others Loans 3,706 — 3,706 3,706
Deferred Sales Tax Loan — 223,489 223,489 223,489
1,753,706 223,489 1,977,195 1,977,195
63
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65
Schedules to Consolidated Balance Sheet (contd.)
Rs. in Thousands
2010 Joint Venture Total 2010 2009
SCHEDULE 6
Inventories
Raw Materials 572,550 23,601 596,151 456,556
Packing Material,Stores and Spares
[Net of provision Rs.7,656 (2009: Rs.38,640)]
471,125 83,825 554,950 539,818
Work In Progress / Finished Goods (including Traded Goods)
[Net of provision Rs.Nil (2009: Rs.63)]
856,550 120,663 977,213 741,839
Goods in transit 59,940 15,364 75,304 50,266
1,960,165 243,453 2,203,618 1,788,479
SCHEDULE 7
Sundry Debtors
(Unsecured, Considered good unless stated otherwise)
Considered Good
- Over Six Months 69,920 23,415 93,335 185,434
- Others 6,092,567 508,896 6,601,463 4,820,547
Considered Doubtful
- Over Six Months 56,738 35,039 91,777 88,944
- Others — — — —
6,219,225 567,350 6,786,575 5,094,925
Less: Provision for Doubtful Debts (56,738) (35,039) (91,777) (88,944)
6,162,487 532,311 6,694,798 5,005,981
SCHEDULE 8
Cash and Bank Balances
Cash on hand [including Remittances - in Transit Rs.Nil (2009: Rs.Nil)] 2,848 382 3,230 4,620
Balances with Scheduled Banks:
- in Current Account [including cheques on hand
Rs.1,566 (2009: Rs.10,125)]
818,705 80,502 899,207 474,055
- in Deposit account [Refer notes below] 11,847 12,303 24,150 32,582
833,400 93,187 926,587 511,257
Note: 1. Includes Rs.10,350 (2009: Rs.19,820) kept as margin against letter
of credit and bank guarantees.
2. Includes balance in Unclaimed dividend Account Rs.1,470 (2009: Rs.880)
SCHEDULE 9
Other Current Assets
Income accrued on Investments and deposits 354,491 729 355,220 141,601
354,491 729 355,220 141,601
66
Schedules to Consolidated Balance Sheet (contd.)
Rs. in Thousands
2010 Joint Venture Total 2010 2009
SCHEDULE 10
Loans and Advances
(Unsecured, Considered good unless otherwise stated)
Advance towards Contract Brewing unit [Refer Schedule 19 Note 8] 1,550,000 — 1,550,000 1,550,000
Advances recoverable in cash or in kind or for value to be received* 334,206 25,407 359,613 224,048
Considered Doubtful 8,403 43,647 52,050 51,674
1,892,609 69,054 1,961,663 1,825,722
Less: Provision for Doubtful Advances (8,403) (43,647) (52,050) (51,674)
1,884,206 25,407 1,909,613 1,774,048
*[including: Rs.Nil (2009: Rs.36) due from Director of the Company,
maximum amount due during the year Rs.36 (2009: Rs.62)]
Balances with Excise Authorities 224,308 20,818 245,126 163,930
Other Deposits 552,884 12,597 565,481 653,545
Advance Tax / Tax Deducted at Source (net) 33,512 18,703 52,215 148,009
2,694,910 77,525 2,772,435 2,739,532
SCHEDULE 11
Liabilities
Sundry Creditors
- Due to Micro, Small and Medium Enterprises 11,527 3,096 14,623 8,113
- Others 1,797,552 270,932 2,068,484 1,421,170
- Other Liabilities 1,386,043 1,324,811 2,710,854 1,669,780
Interest accrued but not due — 2,385 2,385 2,385
Unclaimed Dividend 1,470 — 1,470 880
Acceptances 10,441 — 10,441 63,986
3,207,033 1,601,224 4,808,257 3,166,314
SCHEDULE 12
Provisions
Dividend payable [Refer Schedule 19 Note 15] 187,428 — 187,428 128,785
Gratuity 7,265 1,872 9,137 22,098
Leave Entitlements 59,329 845 60,174 34,388
254,022 2,717 256,739 185,271
67
2010 Joint Venture Total 2010 2009
SCHEDULE 13
Sales and Service
Sales 28,505,356 3,884,431 32,389,787 26,789,900
Income from Brand Franchise and Technical Fees 1,052,653 39,505 1,092,158 1,063,425
29,558,009 3,923,936 33,481,945 27,853,325
SCHEDULE 14
Other Income
Guarantee Commission 21,322 — 21,322 21,300
Liability no longer required written back 54,740 7,433 62,173 56,594
Profit on sale of Assets — 220 220 26
Profit on sale of Investment (net) 117,982 — 117,982 2
Dividend Income 3,868 — 3,868 48,954
Interest Received [Gross]
{Tax deducted at source Rs.31,367 (2009: Rs.2,379)}
327,015 1,501 328,516 150,541
Provision for Doubtful Debts no longer required written back 117 55 172 1,880
Provision for Doubtful Advances no longer required written back 13 10 23 367
Miscellaneous Income 251,814 45,510 297,324 256,152
776,871 54,729 831,600 535,816
SCHEDULE 15
Cost of Sales
Manufacturing Expenses
Consumption of Raw Materials 2,521,576 514,378 3,035,954 2,573,527
Consumption of Packing material and Stores and spares 5,115,279 1,025,969 6,141,248 4,772,552
Purchases of finished goods 2,006,411 4,003 2,010,414 2,089,746
Power and Fuel 491,102 123,062 614,164 701,397
Personnel Expenses
Salaries, Wages and Bonus 847,439 72,302 919,741 813,100
Contribution to Provident and Other funds 60,601 3,528 64,129 61,211
Welfare Expenses 81,265 6,315 87,580 66,254
Others
Rent including Lease rent 77,520 2,074 79,594 75,134
Insurance 14,207 1,689 15,896 14,238
Repairs Building 13,617 7,850 21,467 14,453
Repairs to Machinery 126,671 38,462 165,133 127,915
Repairs - Others 8,781 1,556 10,337 10,955
Travel and Conveyance 94,682 4,513 99,195 89,461
Communication Expenses 23,975 750 24,725 24,161
Rates and taxes 365,529 49,749 415,278 303,766
Legal and Professional fees 73,013 7,819 80,832 97,718
Miscellaneous expenses 292,208 27,111 319,319 260,540
[includes material consumed Rs.107,894 (2009: Rs.107,781)]
Change in Inventory
Opening Stock 677,309 64,530 741,839 585,671
Closing Stock (856,550) (120,289) (976,839) (741,839)
Excise Duty on Opening Stock (366,473) (25,010) (391,483) (300,700)
Excise Duty on Closing Stock 499,488 72,112 571,600 391,483
12,167,650 1,882,473 14,050,123 12,030,743
Schedules to Consolidated Profit and Loss Account
Rs. in Thousands
68
Schedules to Consolidated Profit and Loss Account (contd.)
Rs. in Thousands
2010 Joint Venture Total 2010 2009
SCHEDULE 16
Other Expenses
Selling and Promotion Expenses 5,592,417 625,977 6,218,394 4,830,355
Technical Management Fee — 100,000 100,000 120,000
Directors Sitting fees 15,681 293 15,974 12,123
Auditors Remuneration 7,223 1,581 8,804 8,424
Bad debts written off — — — 9,699
Bad Advances written off 10,836 111 10,947 5,866
Provision for Doubtful Debts 1,184 1,821 3,005 2,716
Provision for Idle Assets / Fixed Assets written off — — — 31
Investment written off — 4 4 —
Inventory written off including provisions — 1,289 1,289 622
Loss on sale of Assets 3,426 148 3,574 2,185
Provision for Doubtful advances — 399 399 1,000
5,630,767 731,623 6,362,390 4,993,021
SCHEDULE 17
Interest and Finance Charges
Interest on Loans for a fixed period 458,766 96,992 555,758 507,306
Interest Others
[Including exchange (gain) / loss on foreign currency loans
Rs.(74,159) (2009: Rs.139,486)]
82,936 4,055 86,991 326,663
Finance Charges 11,617 10,841 22,458 220,369
553,319 111,888 665,207 1,054,338
69
Significant Accounting Policies for the year ended March 31, 2010
Rs. in Thousands
SCHEDULE 18
1. Basis of Presentation of Financial Statements:
The Financial Statements of the Company have been prepared under historical cost convention, to comply in all material
aspects with the applicable accounting principles in India, the applicable accounting standards notified under Section 211(3C)
of the Companies Act, 1956 and to relevant provisions of the Companies Act, 1956.
Basis of Consolidation:
The Financial Statements of the Subsidiaries and the Joint Venture (JV) used in the consolidation are drawn up to the same
reporting date as that of the parent company, i.e., year ended March 31, 2010.
Estimates:
The preparation of the Financial Statements in conformity with Generally Accepted Accounting Policies (GAAP) in India
requires that the management makes estimates and assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent liabilities as at the date of the Financial Statements, and the reported amounts of revenue and
expenses during the reported period. Actual result could differ from those estimates.
2. Principles of Consolidation:
i) The financial statement of the parent company and its subsidiaries have been consolidated on a line by line basis by
adding together the book values of like items of assets, liabilities, income and expenditure after eliminating intra group
balances and intra group transactions.
ii) The financial statements of the parent company and its subsidiaries have been consolidated using uniform accounting
policies for like transactions and other events.
iii) The financial statement of the Joint Venture has been consolidated using proportionate consolidation on the basis of
control exercised in the Joint Venture.
iv) Goodwill represents the difference between the company’s share in the networth and the cost of acquisition of subsidiary
and Joint Venture at each stage of acquisition of investment. Goodwill arising on consolidation is not amortised. Negative
goodwill is recognised as capital reserve on consolidation.
3. Revenue Recognition:
Revenue from sale of goods is recognised in accordance with the terms of sale, on dispatch from the Breweries/warehouses of
the Company and is net of trade discount but includes Excise Duty. Income from brand franchise is recognised at contracted
rates on sale/production of the branded products by the franchisees. Dividend Income is recognised when the Company’s
right to receive the payment is established. Royalty from foreign entities (net of tax), technical advisory and management
fees is recognised as per the terms of agreement.
4. Borrowing Costs:
Borrowing costs incurred for the acquisition of qualifying assets are recognised as a part of cost of such assets when it
is considered probable that they will result in future economic benefits to the Company while other borrowing costs are
expensed in the period in which they are incurred.
5. Fixed Assets:
Fixed assets are stated at their original cost of acquisition and subsequent improvements thereto including taxes, duties,
freight and other incidental expenses relating to acquisition and installation of such assets.
The cost of fixed assets acquired on amalgamation have been determined at fair values as on the respective dates of
amalgamation and as per the related Schemes of Arrangement and include taxes / duties thereof.
Assets identified and evaluated technically as obsolete and held for disposal are stated at their estimated net realisable
value.
6. Investments:
Long term investments are carried at cost less provision made to recognise any decline, other than temporary, in the values
of such investments. Current investments are carried at cost or net realisable value, whichever is lower.
7. Inventories:
Inventories are valued at lower of cost and net realisable value. Costs include freight, taxes, duties and appropriate production
overheads and are generally ascertained on the First in First Out (FIFO) basis. Excise/Customs duty on stocks in bond is added
to the cost. Due allowance is made for obsolete and slow moving items.
8. Foreign Currency Transactions:
a) Foreign currency transactions are recorded at the rates of exchange prevailing on the dates of such transactions.
All monetary items of foreign currency liabilities/ assets 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.
Exchange difference 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.
70
Significant Accounting Policies for the year ended March 31, 2010 (contd.)
Rs. in Thousands
b) With retrospective effect from April 1, 2007 exchange differences on long term foreign currency monetary items (except
for exchange differences on items forming part of the company’s net investment in a non-integral foreign operation),
are
(i) adjusted to the cost of the asset in so far as they relate to the acquisition of a depreciable asset;
(ii) accumulated in a “Foreign Currency Monetary Item Translation Difference Account” and amortised over the period
of the related long term foreign currency monetary item but not beyond March 31, 2011.
9. Depreciation and amortisation:
Depreciation on fixed assets is provided on Straight Line Method based on the rates prescribed under Schedule XIV to the
Companies Act, 1956 except as indicated below:
a) Plant and Machinery are depreciated at the rate of 10.34%. Further, depreciation is provided at higher rates in respect
of certain specific items of plant and machinery having lower useful life based on technical evaluation carried out by the
management.
b) Assets acquired on amalgamation (where original dates of acquisition are not readily available), are depreciated over the
remaining useful life of the assets as certified by an expert.
Cost of Goodwill arising on amalgamation is amortised over a period of 5 years.
Cost of Leasehold Land is amortised over the period of lease.
Assets individually costing less than Rs.5 are depreciated fully in the year of purchase.
10. Employee Retirement benefits:
(i) Defined-contribution plans:
Contributions to the Employees’ Provident Fund, Superannuation Fund, Employees’ State Insurance and Employees’
Pension Scheme are as per statute and are recognised as expenses during the period in which the employees perform
the services.
(ii) Defined-benefit plans:
Liability towards gratuity is determined on actuarial valuation using the Projected Unit Credit Method at the balance
sheet date. Actuarial Gains and Losses are recognised immediately in the Profit and Loss Account.
(iii) Other long term employee benefits:
Liability towards leave encashment and compensated absences are recognised at the present value based on actuarial
valuation at each balance sheet date.
(iv) Short term employee benefits:
Undiscounted amount of liability towards earned leave, compensated absences, performance incentives etc. are
recognised during the period when the employee renders the services.
11. Taxation:
Current tax is determined as per the provisions of the Income Tax Act, 1961.
Deferred tax is recognised, on timing differences, being the difference between taxable income and accounting income that
originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognised
unless there is virtual certainity that sufficient future taxable income will be available against which such deferred tax assets
can be realised.
Fringe Benefit Tax is determined at current applicable rates on expenses falling within the ambit of “Fringe Benefit” as defined
under Income Tax Act, 1961.
12. Earnings per share:
Annualised earnings/ (loss) per equity share (basic and diluted) is arrived at based on ratio of profit/ (loss) attributable to
equity shareholders to the weighted average number of equity shares.
13. Impairment of Assets:
At each Balance Sheet date, the Company assesses whether there is any indication that assets may be impaired. If any such
indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable
amount, an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable
amount.
14. Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognised when the company has a present obligation as a result of past events, for which it is probable
that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate
of the amount can be made. Provisions are reviewed regularly and are adjusted where necessary to reflect the current best
estimates of the obligation. When the company expects a provision to be reimbursed, the reimbursement is recognised as
a separate asset, only when such reimbursement is virtually certain.
A disclosure for contingent liability is made where there is a possible obligation or present obligation that may probably not
require an outflow of resources.
71
Notes on Consolidated Accounts for the year ended March 31, 2010
Rs. in Thousands
SCHEDULE 19
1. The Consolidated Financial Statement (CFS) presents the consolidated accounts of United Breweries Limited (the Company)
with its following Subsidiaries, Associates and Joint Venture (‘UBL Group’ or ‘Group’).
Particulars
Ownership Percentage
Country of Incorporation
2010 2009
Name of the Subsidiary
Associated Breweries & Distilleries Limited (ABDL) 100 100 India
Maltex Malsters Limited (MML) 51 51 India
Name of the Associate
United East Bengal Football Team Private Limited (UEBFTPL) 50 50 India
Name of the Joint Venture (JV)
Millennium Alcobev Private Limited (MAPL) 50* 50* India
*Of which 10% represents control exercised through the subsidiary ABDL.
2. During the quarter ended June 30, 2008 the Company has raised Rs.4,248,854 through an issue of shares on rights basis
(Rights Issue).The proceeds of the rights issue have been utilised in the following manner:
a. Rs.2,026,980 (2009: Rs.3,197,096) for repayment of cash credit/overdraft accounts and for additional working
capital requirements.
b. Rs.1,731,874 (2009: Rs.501,500) for Capital Expenditure.
c. Pending utilisation the balance proceeds of Rs.490,000 (2009: Rs.550,258) have been invested in mutual funds.
3. The Consolidated Financial Statements of Millennium Alcobev Private Limited (MAPL), represents consolidation of MAPL and
its subsidiaries Empee Breweries Limited (EBL), United Millennium Breweries Limited (UMBL) and Millennium Beer Industries
Limited (MBIL) as per Accounting Standard (AS) – 21.
4. The group evaluates the carrying value of its Goodwill whenever events or changes in circumstances indicate that its carrying
value may be impaired for diminution, other than temporary. The group has currently reassessed the circumstances that
could indicate the carrying amount of Goodwill may be impaired. As a consequence of such reassessment, the management
believes that the expected revenues and earnings of the acquired entities are sustainable in the foreseeable future, and hence
goodwill is not impaired.
5. Acquisition of Maltex Malsters Limited:
During the financial year ended March 31, 2008 the Company has acquired 22,950 equity shares of Rs.100 each in Maltex
Malsters Limited for a consideration of Rs.450,000 which is based on an independent valuation, resulting in a goodwill of
Rs.438,012 as detailed below.
Particulars Rs. Rs.
Fixed Assets (Net book value) 23,983
Deferred Tax Assets 2,587
Current Assets
Sundry Debtors 13,187
Cash & Bank Balances 94
Loans & Advances 11,567
24,848
Current Liabilities and Provision
Current Liabilities 8,072
Provisions 209
8,281
Net Current Asset 16,567
Loans
Secured Loans 18,932
Unsecured Loans 700 19,632
72
Notes on Consolidated Accounts for the year ended March 31, 2010 (contd.)
Rs. in Thousands
Particulars Rs. Rs.
Net Worth as on March 31, 2008 23,505
UBL’s Share - 51% 11,988
Purchase Consideration 450,000
Goodwill 438,012
Minority Interest 11,517
6. Loan Funds:
Particulars 2010 2009
Secured Loans
(a) Foreign Currency Loans Including Interest Accrued and due
Rs.18,848 (2009: Rs.21,839)
Loans repayable within one year – Rs.871,207 (2009: Rs.1,056,260)
Foreign Currency Loans consist of External Commercial Borrowing (ECB) from BNP
Paribas and Foreign Currency Loan from Axis Bank. ECB from BNP Paribas is secured
by first charge on all moveable and immovable properties of the Company except
Taloja plant. Foreign currency loan from Axis bank includes demand loan and term
loan which are secured by first Charge on the Fixed Assets of a subsidiary of joint
venture and current assets namely, Stock of Raw Material, Work In Progress & Finished
Goods, Stores & Spares, Bills Receivable and Book Debts of the Company and covered
by corporate guarantee isused by the Company.
1,679,721 2,338,948
(b) Term Loan from Bank
[including interest accrued and due Rs.716 (2009: Rs.1,060)]
Loan repayable within one year – Rs.84,250 (2009: Rs.84,250)
Secured against charge on all movable and immovable fixed assets of Empee Breweries
Limited and covered by a corporate guarantee issued by the Company.
141,091 225,685
Term Loan from Bank
Secured by way of hypothecation of all plant and machineries lying at factory or
elsewhere both present and future of MML, a subsidiary of the Company.
5,571 12,296
Term Loan from Bank
Loan repayable within one year – Rs. 164,384 (2009: Rs.164,384)
Secured by first charge on all moveable and immovable assets.
493,151 657,534
Term Loan from Bank
Loan repayable within one year – Rs. 250,000 (2009: Rs.250,000)
Secured by Pari-Passu charge on all moveable and immovable properties of the
Company except Taloja plant.
562,500 812,500
(c) From Banks [including interest accrued and due Rs.5,053 (2009: Rs.5,321)]
Amount repayable within one year – Rs.2,374,013 (2009: Rs.866,204)
Secured by hypothecation of stock in trade, stores, raw materials, book debts and a
second charge on all the immovable properties of the Company.
2,374,013 866,204
(d) From Others [including interest accrued and due Rs.Nil (2009: Rs.68,824)]
605,108 564,924
(e) From Rabo Finance India Private Limited
Amounts repayable within one year – Rs.70,374 (2009: Rs.70,431)
Secured by charge on all movable and immovable properties and current assets, both
present and future of the MBIL (a subsidiary of the Joint Venture) and covered by a
corporate guarantee issued by the Company.
123,155 193,529
Unsecured Loans
(i) Loans from Banks [including interest accrued and due Rs.Nil (2009: Rs. Nil)]
Amount repayable within one year – Rs.Nil (2009: Rs.Nil)
*Covered by personal guarantee of a Director of the Company.
1,750,000* 1,750,000*
(ii) From Others
Amount repayable within one year – Rs. Nil (2009: Rs.Nil) 227,195 227,195
73
Notes on Consolidated Accounts for the year ended March 31, 2010 (contd.)
Rs. in Thousands
7. Fixed Assets:
Buildings amounting to Rs.53,030 (2009: Rs.49,619) and Plant and Machinery amounting to Rs.502,517 (2009: Rs.473,319)
are in premises not owned by the Group.
8. The Company does not own any brewing facility in Tamil Nadu, which is one of the major markets in India contributing
about 18% of the Company’s business. With an intention of ensuring supplies from Balaji Distilleries Limited (BDL), having
brewing facilities in Tamil Nadu, the Company has entered into an agreement with the promoters of BDL to secure to the
Company perpetual usage of the brewery owned by BDL, and has advanced an amount of Rs.1,550,000 to one of the
Promoter Companies of BDL, acting for and on behalf of the other Promoters also.
Subsequently, the Boards of Directors of BDL and United Spirits Limited (USL) have considered and approved a proposal for
merger of BDL into USL, which is subject to obtaining of the necessary regulatory approvals by both the Companies. The
Company has obtained a commitment from USL that the arrangement with Promoters will be adhered to on completion
of the proposed merger. The advance will be repaid upon the completion of the merger or in accordance with the terms of
the related Agreement, whichever is earlier.
In June 2009, BDL has allotted 90,000 Equity Shares upon conversion of warrants to certain parties. These parties have
entered into a supplemental agreement with the Company to the effect that they will be bound by the terms and conditions
of the earlier agreement between the Company and the promoters of BDL.
9. Capital Commitments:
Particulars 2010 2009
Estimated amount of Contracts remaining to be executed on capital account and not
provided for.
257,321 689,134
Share of joint venture:
Particulars 2010 2009
Estimated amount of Contracts remaining to be executed on capital account and not
provided for.
8,896 46,348
10. Contingent Liabilities:
Particulars 2010 2009
a) Sales Tax/other taxes demands under appeal* 14,672 14,672
b) Employee State Insurance Demand* 265 265
c) Demand towards Water charges under appeal* — 133,019
d) Excise Duty/Customs Duty demands under appeal* 36,709 36,709
e) Income Tax demands under appeal 188,844 82,262
f) Service Tax demands under appeal* 229,114 377,708
g) Claims against the Company not acknowledged as debt* 30,568 27,377
h) Letter of Credit outstanding 78,926 33,230
i) Guarantees given by the company:
- on behalf of Subsidiaries of Joint Venture to third parties
Millennium Beer Industries Limited
United Millennium Breweries Limited
Empee Breweries Limited
- to third parties
800,000
600,000
730,000
19,060
800,000
600,000
730,000
28,348
j) Letter of undertaking to distributors towards countervailing duty for imports from
Nepal
38,500 38,500
Share of joint venture:
Particulars 2010 2009
a) Sales Tax/other taxes demands under appeal [Amount paid under dispute
Rs.223 (2009: Rs.22) and disclosed in loans and advances in Schedule 10]
3,774 3,281
b) ESIC / PF demands under appeal [Amount paid under dispute Rs.Nil (2009: Rs.53)
and disclosed in loans and advances in Schedule 10]
845 898
c) Bank Guarantees given* 10,155 5,855
d) Demand towards Water charges under appeal* — 26,250
74
Notes on Consolidated Accounts for the year ended March 31, 2010 (contd.)
Rs. in Thousands
e) Interest for delayed payment of Interest Free Loans* 1,169 4,829
f) Dividend on 1% Non Convertible Cumulative Redeemable Preference Shares 27,750 18,500
g) Income Tax
#
5,055 22,028
h) Claims against the subsidiaries of the joint venture not acknowledged as debt
[Amount paid under dispute Rs.78 (2009: Rs.78) and disclosed in loans and advances
in Schedule 10]
5,877 6,107
# Net of deposit under appeal – Rs.3,789 (2009: Rs.1,018)
* In the opinion of the management, the above demands / claims are not sustainable in law and accordingly no provision
has been made in the accounts.
11. Operating Lease:
The Group has entered into leasing arrangements for vehicles, computer, equipments, office premises and residential premises
that are renewable on a periodic basis, and cancelable/non-cancelable in nature. Such leases are generally for a period of
11 to 60 months with options of renewal against increased rent and premature termination of agreement through notice
period of 2 to 3 months, except in the case of certain leases where there is a lock-in period of 11 to 26 months.
Particulars 2010 2009
Lease payments during the year including Minimum lease payments
Rs. 4,999 (2009: Rs.4,999) on non-cancellable leases.
79,594 75,134
At the balance sheet date, future minimum lease rentals under non-cancellable operating
leases are as under:
Not later than one year 17,518 28,288
One to five years 15,374 12,887
Total 32,892 41,175
12. Accounting for Taxes on Income:
Deferred Tax - The net deferred tax liability amounting to Rs. 236,114 (2009: Rs.175,963) has been arrived as follows:
Particulars 2010 2009
Deferred Tax Liability arising from:
Difference between carrying amount of fixed assets in the financial statements and the
Income Tax Return
263,445 212,987
Less:
Deferred tax asset arising from:
Expenses charged in the financial statements but allowable as deductions in future years
under the Income Tax Act, 1961
25,500 18,528
Provision for Doubtful Debts 22,141 21,783
215,804 172,676
Share of Joint venture 20,310 3,287
Net deferred tax liability 236,114 175,963
Movement during the year (60,151) (88,248)
Net Deferred tax (charged off) / written back in the profit and loss account (60,151) (88,248)
The tax impact for the above purpose has been arrived by applying a tax rate of 33.22% (2009: 33.99%) being the substantively
enacted tax rate for Indian Companies under the Income Tax Act, 1961.
No deferred tax asset has been recognised, in case of loss making Joint Venture / subsidiaries, in the absence of virtual certainty
of future profits as per the explanation provided in Accounting Standard 22 notified under the Companies (Accounting
Standards) Rules, 2006.
13. Related Party Disclosures:
A. Name of the related parties:
(1) In Associates
United East Bengal Football Team Private Limited (UEBFTPL)
(2) Entity which has significant influence
Scottish & Newcastle India Limited (SNIL)
75
Notes on Consolidated Accounts for the year ended March 31, 2010 (contd.)
Rs. in Thousands
(3) Others:
(a) Scottish & Newcastle Plc, (S & N), Holding Company of SNIL
(b) Scottish & Newcastle UK Limited (SNUK), Fellow Subsidiary of SNIL
(c) Scottish & Newcastle India Private Limited (SNIPL), Fellow Subsidiary of SNIL
(4) Key Management Personnel (KMP):
Mr. Kalyan Ganguly
Mr. Guido de Boer (Part of the year)
(5) Relative of Key Management Personnel:
Mrs. Suparna Bakshi Ganguly (Wife of Mr. Kalyan Ganguly)
B. Transactions with related parties during the year:
Particulars
UEBFTPL KMP
2010 2009 2010 2009
Sponsorships and Other Payments 52,042 56,767 — —
Finance(including loan in cash or kind) 52,034 50,248 — —
Remuneration to Directors* — — 41,035 34,354
Amount Due From/(To) (26) (18) — —
* Kalyan Ganguly: Rs.34,266 (2009: Rs.34,354) [Including payment to relative of KMP and a firm in which such relative is
a partner - Rs.Nil (2009: Rs.2,883)].
Guido de Boer: Rs.6,769 (2009: Rs.Nil)
Figures in bracket indicate amounts received.
C. Transactions with S & N Group
i. Transaction with S & N
Management Fees Rs.45,000 (2009: Rs.Nil)
ii. Transactions with SNUK
Interest on ECB Rs.Nil (2009: Rs.17,852)
Purchase of Raw Material Rs.123 (2009: Rs.186)
iii. Transactions with SNIL
Balance of Preference Share Capital Rs.2,469,000 (2009: Rs.2,469,000)
Dividend on above Rs.74,070 (2009: Rs.74,070)
Interim Dividend on Equity Shares Rs.Nil (2009: Rs.13,499)
Final Dividend on Equity Shares Rs.13,499 (2009: Rs.Nil)
14. Earnings Per Share:
Particulars 2010 2009
a) Profit after taxation as per profit and loss account 896,376 455,792
b) Less: Preference Dividend (including dividend distribution tax thereon) 86,658 86,658
c) Net Profit attributable to equity shareholders 809,718 369,134
d) Weighted average number of equity shares outstanding
(Face value of Re.1 per share)
240,048,255 234,589,624
e) Earnings per share (Basic / Diluted) 3.37 1.57
15. Details of Dividend:
Particulars 2010 2009
Dividend payable on Preference Share Capital @3% 74,070 74,070
Dividend Distribution tax payable on above 12,588 12,588
Interim Dividend paid on Equity Shares @15% — 36,007
Dividend Distribution tax paid on above — 6,120
Final Dividend payable on Equity Shares @36% (2009: 15%) 86,417 36,007
Dividend Distribution tax payable on above 14,353 6,120
Total 187,428 170,912
76
Notes on Consolidated Accounts for the year ended March 31, 2010 (contd.)
Rs. in Thousands
16. Segmental Reporting:
The Group is engaged in manufacture, purchase and sale of beer including licensing of brands which constitutes a single
business segment. The Group operates only in India. Accordingly, primary and secondary reporting disclosures for business
and geographical segment as envisaged in AS-17 are not applicable to the Group.
17. (i) Disclosures envisaged in AS 15 in respect of gratuity are given below:
Particulars 2010 2009 2008
A) Reconciliation of opening and closing balances of the
present value of the defined benefit obligation
Obligations at the beginning of the year 157,316 144,890 118,048
Add: Transitional Obligation — — 101
Add: Current Service cost 9,902 14,268 43,745
Add: Interest cost 11,985 9,691 9,349
Add: Actuarial (gains)/ losses (500) (696) (333)
(Less): Benefits paid during the year (12,646) (10,837) (26,020)
Obligations at the end of the year 166,057 157,316 144,890
B) Reconciliation of opening and closing balances of the fair
value of plan assets
Fair Value of Plan assets at the beginning of the year 135,218 138,650 117,753
Add: Expected Return on Plan Assets 10,337 10,824 9,425
Add: Actuarial Gain (1,490) (7,776) 10,738
Add: Contributions 25,501 4,683 26,754
(Less): Benefits Paid (12,646) (11,163) (26,020)
Fair Value of Plan assets at the end of the year 156,920 135,218 138,650
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 as at March 31, 2010 166,057 157,316 144,890
(Less): Fair Value of Plan Assets as at March 31, 2010 156,920 135,218 138,650
Amount recognised in the Balance Sheet 9,137 22,098 6,240
D) Expenses recognised in Profit and Loss account under
“Employee Cost” in Schedule 15
Current service cost 9,902 14,268 43,745
Add: Interest cost 11,985 9,691 9,349
(Less): Expected Return on Plan Assets (10,337) (10,824) (9,425)
Prior period adjustment — — (23,739)
Add: Actuarial (gains) / losses 990 6,493 6,256
Net Gratuity Cost 12,540 19,628 26,186
E) Investment details of plan assets
Plan assets are invested in Government Securities, Private Sector Bonds, Managed Funds and others.
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 return.
F) Actual return on plan assets 12,760 7,269 24,077
G) Assumptions
Discount rate per annum 8.00% 7.00% 8.00%
Interest rate per annum 8.00% 7.00% 8.00%
Expected return on plan assets 8.00% 7.00 to 8.00% 8.00%
Expected salary increase per annum 5.00 to 6.00% 5.00 to 6.00 % 5.00%
Attrition Rate 1.00% 1.00% 1.00%
Retirement Age 58 58 58
Mortality rate - LIC (94-96) Ultimate Mortality Table
The estimates of future increase in salary, 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.
77
Notes on Consolidated Accounts for the year ended March 31, 2010 (contd.)
Rs. in Thousands
Particulars 2010 2009 2008
(ii) Contribution to Provident and Other Funds under Manufacturing and Other Expenses (Schedule 15) includes
Rs.51,589 (2009: Rs.41,583) being expenses debited under the following defined contribution plans:
Provident Fund 38,671 30,370 29,737
Superannuation 12,918 11,213 21,111
18. (i) Pursuant to notification dated March 31, 2009 issued by the Ministry of Corporate Affairs, the Group, with retrospective
effect from April 1, 2007 changed its accounting policy in respect of exchange differences on long term foreign currency
monetary items, with the exception of exchange differences on items forming part of the Group’s net investment in a non-
integral foreign operation. Consequently, the Group has accounted for unrealised exchange losses as given below:
(a) Unrealised foreign exchange loss amounting to Rs.5,080 (2008: Rs.Nil) recognised in the profit and loss account
during the year ended March 31, 2008 has been transferred to the Foreign Currency Monetary Item Translation
Difference Account (FCMITDA) by adjusting the opening balance of the profit and loss account. Rs.10,864 (2009:
Rs.2,032) being charge for the current year is recognised in the profit and loss account under Interest and Finance
Charges (Schedule 17). Balance amount of Rs.10,864 (2008: Rs. 3,048) is retained in the FCMITDA as at the year
end.
(b) Unrealised foreign exchange gain/ (losses) as of March 31, 2010 amounting to Rs.19,064 [2009: Rs.(56,616)] is
transferred to FCMITDA. Rs.9,532 [2009: Rs.(20,904)] being gain for the current year is recognised in the profit and
loss account under Interest and Finance Charges (Schedule 17). Balance amount of Rs.9,532 [2009: Rs.(37,744)] is
retained in the FCMITDA as at the year end.
(ii) Had the Group not opted to apply the aforesaid notification, consolidate profit for the year would have been higher by
Rs. 9,532 [2009: Rs.(37,744)] , having consequential impact on the net worth of the Group.
19. All amounts disclosed in Notes to Account and other Schedules are in Rs. 000 except for:
i) Number of Shares in Notes on Schedule 1, and in Note 14.
ii) Basic and Diluted EPS in the Profit and Loss Account and in Note 14.
20. The previous year’s figures have been regrouped to conform to current year’s classification.
For Price Waterhouse Kalyan Ganguly Guido de Boer
Firm Registration Number: 007568 S Managing Director Director & CFO
Chartered Accountants
J. Majumdar Govind Iyengar
Partner Company Secretary
Membership No. F51912
Bangalore, July 21, 2010 Bangalore, July 21, 2010
78

Report of the Directors
Your Directors have pleasure in presenting this Annual Report on the business and operations with audited accounts of your company for the year ended March 31, 2010. FINANCIAL RESULTS Your Company’s financial performance for the year ended March 31, 2010 is summarized below: (Rupees in Million) Particulars Net Income Profit before Interest & Depreciation Interest Depreciation Profit before non-recurring items Non-recurring items Profit before Taxation Provision for Taxation Profit after Tax available for appropriation Appropriation Dividend on Equity Shares (including Taxes thereon) Interim dividend paid Final dividend proposed Dividend on Preference Shares paid (including Taxes thereon) Transfer to General Reserve Balance your Directors propose to carry to the Balance Sheet 2009-2010 20751.3 2949.0 555.0 882.7 1511.3 — 1511.3 (541.6) 969.7 2008-2009 17475.7 2675.2 896.4 762.1 1016.7 — 1016.7 (391.8) 624.9

— 100.7 86.7 100.0 682.3

42.1 42.1 86.7 65.0 389.0

DIVIDEND Your Board of Directors take pleasure in declaring a dividend of 36% for the year ended March 31, 2010. Your Company paid a dividend on the Cumulative Redeemable Preference Shares (CRPS) at the rate of 3% under the terms of the issue of the 24.69 million CRPS held by Scottish & Newcastle. CAPITAL The Authorized Share Capital of the Company remained unchanged at Rs.2,800 million, comprising Equity Share Capital of Rs.300 million and Preference Share Capital of Rs.2,500 million. The Issued, Subscribed and Paid-up Share Capital as on March 31, 2010 stood at Rs.2,709 million, comprising of Equity Share Capital of Re.1 each aggregating to Rs.240 million and Cumulative Redeemable Preference Shares of Rs.100 each aggregating to Rs.2,469 million. ALLIANCE WITH HEINEKEN N.V. As a result of the acquisition of Sctottish & Newcastle by Heineken, the effective ownership of 37.49% of Equity holding in your Company now effectively vests in Heineken. Your Company has entered into a new Shareholders’ Agreement inter alia with Heineken. A comprehensive business partnership with Heineken has been agreed, thereby formalizing their entry into your Company as an equal promoter. The Parties have agreed upon key commercial terms for the production of ‘Heineken’ in India, which will accelerate the growth of the premium beer segment throughout India. At the same time, your Company will work with Heineken to expand the international presence of the ‘Kingfisher’ brand through Heineken’s global footprint.

MANAGEMENT DISCUSSION AND ANALYSIS INDUSTRY OVERVIEW The per capita consumption of beer in India continues to be very low compared to other countries. There has been a steady growth in the Indian Beer Industry of about 15% per year in the last five years, with Industry volumes crossing 200 million cases in financial year 2009-2010 from about 100 million cases in financial year 2003-2004. Considering the Indian demographics, with around 70% of the population below the age of 30 years, growing income and increasing international influence, the industry is expected to maintain if not exceed, its growth at present rate. While the Industry grew by 10% in volume terms during the last financial year your Company’s volumes grew by 20%.

1

Report of the Directors (contd.)
The Indian market infrastructure is a barrier to higher growth. In India, alcohol is available in around 65,000 outlets including shops, bars and restaurants which translates to roughly one outlet for every 18,000 residents, whereas the global average for the same is one outlet per 250 residents and the corresponding figure for China is one outlet for every 300 residents. For instance, in urban conglomeration like Greater Mumbai, there are around 2,500 outlets while in Shanghai, which has similar population base, the number of outlets selling alcohol is 18,000. An encouraging development is that in some cities, like Mumbai, the government has started to issue licenses for outlets to sell beer and wine only, delinking it from the sale of spirits. This development should facilitate future growth. Taxation is another major factor which adversely affects the Indian brewing industry. In India, all alcoholic beverages are taxed uniformly, irrespective of their alcohol content. Consequently, same rate of taxation is applied for spirits, lager beer, strong beer and other alcoholic beverages, resulting in higher price for beer relative to high alcohol beverages. Across the globe, levies on beer are typically at half the rate applicable to spirits, providing an incentive for consumers towards lower alcohol beverages. Due to the prevalent excise taxation structure, the majority of Indians who consume alcohol prefer to purchase spirits over beer as it contains higher alcohol at a similar price. Therefore in India, unlike most other countries, consumption of spirits is higher than beer. Some States have recently started to delink beer taxation from spirits, thereby promoting a logical growth in the future. Taxation & Regulation of alcohol being a State subject under the Constitution of India, each State has separate set of regulations, restrictions and taxation structure for alcoholic beverages. Some States also impose high export duties and restrictions on the export of beer outside the State. Even the sales & distribution structure varies from State to State as some markets are open while in most States primary sale is canalized through State controlled corporations. Over the last 5 years, a plethora of foreign brands have entered the country as 100% Foreign Direct Investment is permitted thereby increasing the choice of brands and competition. All major global brewers are now present in India. Despite this, your Company has been able to extend its market leadership position. OPERATIONS Volumes during 2009-2010 were buoyant in the Northern & Western markets, but sales in key Southern States were adversely affected. A change in taxation structure in Karnataka and the voluntary withdrawal of your Company’s brands in the first quarter of the year 2009-2010 from Andhra Pradesh, on account of a stand off on pricing between beer producers and the State Government, impacted sales in these key markets. Your Company has successfully commissioned its largest greenfield brewery with a capacity of 6 Lac HL per annum in the State of Andhra Pradesh which became operational in January 2010. The greenfield brewery has been built to international specifications and has adopted several international standards like HAZOP for safe operation, and HACCP, the worldwide standard for food certification. The brewery has been built with a commitment to the environment and your Company has taken various steps to reduce the overall carbon footprint. The latest equipment has been installed with a vision of productivity and environmental conscience. In keeping with its new mantra, ‘Conserve, Connect & Conquer’, your Company’s unique environmental initiative on inclusive water management, the plant design aims not just to deliver water consumption levels exceeding world class standards, but also to maintain the water table levels and the greenery around the brewery. In view of production at enhanced capacity at the new greenfield brewery and to achieve economies in scale of operation, the management has discontinued its operations at its Hyderabad brewery. Your Company received the prestigious Water Digest Award for the year 2009-2010 in the categories of Best Water Conserver – Waste Water Management Company, and Corporate Social Responsibility for water practices supported by UNESCO, PHDCCI and various Government of India agencies. The brewing unit of your Company at Palakkad has been awarded the State First Prize for ‘Pollution Control and Environmental Protection’ among medium scale industries in Kerala for 2008. This is the third consecutive year that the unit has received this coveted award. It earlier won the second prize in the same category in the year 2006 and the first prize in 2007. Acquisition of land at Nanjangud, Karnataka through KIADB has been completed and your company will commence setting up of a new brewery in this profitable State. Your Company has shifted from furnace oil fired boilers to solid fuel boilers in most of its breweries, leading to savings in the cost of fuel. To contain the increase in bottle cost, your Company has introduced dedicated design registered bottles in select markets. We expect the benefits of this initiative materialising from the financial year 2010-2011. Heineken owns breweries in Andhra Pradesh and Maharashtra. Your Company has now the benefit of utilization of capacity available at these two breweries. SALES Your Company continues to lead the beer market with a sale of 101 million cases and combined national market share crossing 50%. The net sales for the year 2009-2010 stood at Rs.19,975 million as against net sales of Rs.16,983 million in the

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5% of the net sales. The ubiquitous “Kingfisher” brand continues to be the largest selling beer brand in India while “Kingfisher Strong” has grown by 22%. Chennai and Bangalore. Your Company has entered into long term agreements for securing supply of malt & barley thereby minimizing the fluctuation in price of these ingredients.094 million constituting 5. 8. without any change in the taste of beer. and is twice the size of its nearest competitor. The breweries are continuously improving efficiencies in the brewing process as well as in packing thereby reducing the manufacturing costs. A significant increase in price of second hand bottles on account of hoarding by bottle traders has adversely affected manufacturing costs. This association was effectively leveraged both through communication as well as consumer and trade contacts. they cannot be used by other brewers and are to be necessarily supplied back to your Company. Since the bottles are patented and the name and logo of your Company are embossed on the bottles. ‘Kingfisher Red’ is developed following a unique process and can be consumed even at 14 to 17 degrees Celsius. MANUFACTURING EXPENSES Manufacturing expenses for the financial year 2009-2010 were Rs. The cost associated with accelerated investment in new patented bottles is expected to be recovered by a drop in the price of second hand bottles.10. Your Company along with its associates controls over 63% of the mild beer market and over 46% of the strong beer market in India. Orissa and North Eastern States. During the year. This spectacular result has been achieved despite impasse in supply to the Andhra Pradesh market during peak season and excise increases in Karnataka.1% of the net sales in the previous year. Kingfisher has strengthened its association with fashion by being a key sponsor to the India Couture Week. Your Company has launched a new super premium brand by the name ‘Kingfisher Ultra’ which has been widely acclaimed in the markets of its launch.693 million in the previous financial year which constituted 51. West Bengal. The Eastern markets grew by 70% on account of high growth in the States of Bihar. Personnel and other operating expenses were contained despite increased volumes during the year. The Western markets grew by 19% riding on growth in the States of Madhya Pradesh and Maharashtra and a decline in Daman & Diu. Jharkhand. This constituted 5% of the net sales as against 5.2% of the net sales. registering a growth of 18% over the comparable figure in the previous year. Wills Lifestyle India Fashion Week and the Lakme Fashion Week.5% of the net sales as against Rs. Kingfisher also continued its association with large city-based sporting events such as the Mumbai Marathon. Music has been another significant platform that Kingfisher has used over the years.088 million constituting 50. your Company continued its investments in brand building. The Southern markets grew by 7% as the growth in the States of Kerala and Tamil Nadu was offset by the de-growth of Karnataka market and halting of sales in Andhra Pradesh. The Brand ‘Kingfisher’ has been awarded the prestigious Gold Medal in the World Beer Championship 2009.2% of net sales spent in the previous year. Your Company has a market share that now stands at over 50%. Your Company has also launched an All Season beer by the name ‘Kingfisher Red’ in the North and East markets. Region wise. your Company has spent 28% of net sales on selling and brand promotion exercise as compared to 25. Kingfisher continues its high profile association with five of the eight IPL teams as their ‘Good Times Partner’. especially behind the Kingfisher Brand.989 million as compared to Rs. the Northern market grew by 33% particularly due to growth in the States of Rajasthan and Uttar Pradesh.871 million in the previous year.) financial year 2008-2009. Kingfisher continued to leverage on the excitement and glamour of Formula-1 by being a very visible and prominent sponsor of the Force India team. Other operating expenses amounted to Rs.1.Report of the Directors (contd. 3 . The Kingfisher Voice of Goa talent hunt has grown from strength to strength and has firmly entrenched Kingfisher extremely close to the hearts of Goans. Delhi Half Marathon and the World 10K race in Bangalore. SELLING AND BRAND PROMOTION EXPENSES During the period under review. Kingfisher and fashion have been synonymous for over a decade. During the year. Most of the units have installed solid fuel boilers which has resulted in a reduction of fuel cost. apart from the fashion weeks in Kolkata. Kingfisher further strengthened its association with football by signing on as the title sponsor of the Goa Professional League. the pub-based rock festival – ‘Kingfisher Pubrock Fest’ was extended to 20 cities and over 75 shows. PERSONNEL AND OTHER OPERATING EXPENSES Personnel expenses of your Company stood at Rs. Your Company has recently introduced patented bottles with a view to gain strategic control of this major item of cost.

Your Company has also collaborated with several agricultural universities for cultivation of identified crops with waste water from the Brewery being used for irrigation on a select basis. PROSPECTS While multinational companies are expected to increase competition in the premium beer segment. particularly those of your Company have the advantage of having an established brand equity. Your Company has the benefit of a strong route to market combined with India’s leading brands.675. Most of our units have a constraint on disposal of waste water. the objective is to ensure that quality education is 4 . In Education.1.1. PROFIT BEFORE INTEREST. On-trade sales are expected to grow considerably with growing affluence among young consumers together with the culture of frequenting pubs and clubs that is now spreading to second-tier cities. Depreciation has increased on account of continued investment in production capacities.2 million in the previous year. as a mixer with spent grain and pesticides. Also. This increase in PBIDT is resulting from strong revenue growth and sustained investment behind your Company’s brands. your Company has installed bottle washers incorporating the latest technology at all units and is encouraging rain water harvesting at these units.Report of the Directors (contd.4 million in the previous year.1 million in the previous year.949 million as compared to Rs. Depreciation for the year was Rs. The Profit After Taxation stood at Rs. SOCIAL INITIATIVES Social responsibility is integrated in the corporate philosophy of your Company and we have been able to positively impact the lives of the communities that we work in.2%. This is being done in addition to reducing pollutants which will in turn reduce load on the effluent treatment facility and thereby assist in conservation of the environment. resulting from the increase in disposable income and the growth of consumers entering the legal drinking age. Our teams work relentlessly to ensure that each of these meet the needs of the local people. This will in turn reduce need for acquisition of additional lands for waste water disposal.2.) The eighth edition of the much awaited and world acclaimed ‘Kingfisher Swimsuit Calendar’ was released in January to a tremendous response. Off-trade sales are meanwhile expected to be boosted by the gradual deregulation of beer retail through supermarkets/hypermarkets and beer & wine licenses. Several international brewers have currently built brand associations and are marketing their brands aggressively through various point-of-sale promotions throughout their distribution networks. ENVIRONMENTAL INITIATIVES Besides corporate social responsibility. expansion in Karnataka is expected to commence in the next financial year.7 million as compared to Rs.2%.016. These are implemented and monitored in partnership with representatives of the community. including the investment in the greenfield Andhra Pradesh brewery. Going ahead. Dry yeast recovery has also been earning revenue as an ingredient for probiotics. your Company is determined to focus on measures for reduction of process loss during production. the Company has embarked upon a plan to install sophisticated equipment and modification process so as to reduce consumption of water and its disposal. and therefore.882.511. There has been reduction in the interest cost as compared to the previous year due to exchange gains in the current year compared to losses in the previous year and the payment of a term loan commitment fee in the previous year.7 million in the previous year reflecting an increase of around 48. its importance has considerably increased. reduction of pollutants and other wastages and utilization of natural methods of root zone treatments such as usage of duck weed / water hyacinth as an economical method for water purification.896. water conservation has been our key focus area.624. Primary Health. Your Company’s association with India’s No. PROFIT BEFORE AND AFTER TAXATION The Profit Before Taxation for the year stood at Rs.6%.1 Lifestyle TV channel ‘NDTV Good Times’ continued into its third year. DEPRECIATION AND TAXATION (PBIDT) PBIDT for the year under review stood at Rs. INTEREST AND DEPRECIATION Interest paid during the year amounted to Rs. In order to augment capacities in critical markets.555 million as against Rs. Each initiative undertaken is long term and sustainable and addresses a specific need of the local community. reflecting an increase of 10. with the expected future growth.762.9 million in the previous year reflecting a growth of 55.7 million as against Rs. established domestic brands. As an environmental initiative.969.2.3 million as compared to Rs. as an environment friendly initiative. A double digit growth rate is expected for the coming years. Primary Education and Water are the three key areas for our interventions.

India is predominantly a spirits market and beer is a minority preference for those who consume beverage alcohol. Despite this influx of new entrants. to be in line with International best practices and to ensure proper corporate governance. as seen by consistent improvements to the Company’s national market share. inadequate market infrastructure and restrictions in interstate movement of beer. These are either in the form of Primary Health Centres set up by us or mobile health services where a qualified doctor travels in an ambulance to villages that do not have primary health facilities. control self assessment and legal compliance management systems. Your Company’s internal control systems are adequate and are routinely tested and certified by statutory and internal auditors. in the product. The internal control system evaluates adequacy of segregation of duties and reliability of management information systems.) imparted to children from the underprivileged strata of the society. These have been updated during the year under review. your Company has implemented risk assessment. Internal Audit reports to the Audit Committee and recommends control measures from time to time. the interventions have enhanced the quality of education for over 1000 students in 7 locations and we have been able to facilitate access to water for over 13000 locales in 6 locations. Your Company’s initiatives in Primary Health in 7 locations have benefitted over 6000 people. Your Company believes that the overall internal control system is dynamic. indigenous brands such as your company’s face increasing competition. In Education. However. In primary health. packaging and communication. and reflects the current requirements at all times. stationery and uniforms as well as deployment of teachers to enhance the quality of education. 5 . including controls in the area of authorization procedures and steps for safeguarding assets. International brewers have established breweries across India in order to extend their brand presence to more States. information technology risks. operative risks. Towards this end the company has identified risk categories under strategic risks. and have launched several new brands during the year under review. In order to continuously upgrade the internal control system. It is expected that gradually there will be a deregulation in the Indian beer industry too. consistent investments by your Company. local bodies and Governmental agencies. Planned periodic reviews are carried out for identification of control deficiencies and opportunities for bridging gaps with best practices along with formalization of action plans to minimize risks. Here your Company’s representatives work closely with local schools to provide better infrastructure. Internal Audit evaluates the functioning and quality of internal controls and provides assurance of its adequacy and effectiveness through periodic reporting. recorded and reported. The process adopted provides reasonable assurance regarding the effectiveness and efficiency of operations. RISK MANAGEMENT Your Company has evolved a framework for management of Business Risks. financial risks. Kingfisher Lager continues to not just maintain market share but indeed increased it beyond 50% during the period under report. International premium lager is growing steadily (though on a smaller base) as the companies have expanded their distribution across India. failures and reputational damage are focal points on the management’s agenda. Foreign brewers have been eyeing the Indian market for some years now as India is widely acknowledged to be the last untapped big growth market. OPPORTUNITIES & THREATS With growing demand. along with well established distribution. Continuity and sustainability of the business is as important to stakeholders as growing and operating the business. your Company’s endeavour has been to ensure that the community has access to primary healthcare.Report of the Directors (contd. your company has been able to upgrade and expand its capacities and also its brands. The low penetration in beer consumption in comparison to international levels offers the expectation of substantial and sustainable growth in demand for beer in years to come. This is audited regularly by the internal audit team. particularly given the youthful age of India’s populace. pose a great challenge for the industry. puts UB in a strong position. giving it a boost. Your Company’s initiatives in water have been to both conserve as well as provide potable water to the local community. mid day meals. These along with price regulation. With these international brands starting domestic production in India. Managing risks and protecting the business from the effects of disasters. INTERNAL CONTROL SYSTEM Your Company has established a robust system of internal controls to ensure that assets are safeguarded and transactions are appropriately authorized. the domestic production of beer is on the rise. RISKS AND CONCERNS The Indian beer industry is plagued with myriad taxes & levies that vary from State to State. These interventions have earned us the trust and appreciation of the community. in operating and monitoring practices are in place. reliability of financial reporting and compliance with applicable laws and regulations. hence ensuring that appropriate procedures and controls. With further investments.

It is important to realize that the beer sector can contribute immensely to the agricultural sector. etc. the emphasis this year was in identifying and developing people capability to ensure that we not only maintain but accelerate our rate of growth and performance. Non-inclusion of alcoholic beverages in purview of GST would be against the fundamental concept of GST and could have a material negative impact.) Unlike most developed countries where beer is less regulated and available freely. even if it is included there may be material negative impact on input cost. We continued to significantly improve our performance in the areas of productivity and safety by means of focused initiatives. the policy of uniform taxation has been a success because of inherent positive implications on Government revenue. it is imperative that it has right people in the right job equipped with the right set of skills. of its subsidiaries viz. as is in the case of other consumer goods. DEPOSITORY SYSTEM Your Company has entered into Agreement with National Securities Depository Limited and Central Depository Services (India) Limited in accordance with the provisions of the Depositories Act. SUBSIDIARY COMPANIES Associated Breweries & Distilleries Limited remains a wholly owned Subsidiary of your Company while your Company holds 51% of equity in Maltex Masters Limited. conducive and transparent culture that drives high level of performance. Statement pursuant to Section 212 (1) (e) also forms part of the Annual Report. is uncertain. Your Company maintained harmonious employee relations during the year. Additionally. as beer is an agro-based product. the total employee strength at United Breweries Limited stands at 1661. CONSOLIDATION As per the Listing Agreement. Your Company has received approval from the Central Government exempting your Company from attaching the Accounts etc. Globally. Associated Breweries & Distilleries Limited and Maltex Malsters Limited with the balance sheet of your Company. these Accounts will be provided on request to any member requiring to have a copy. As this challenge continues in the current financial year. This has had a direct bearing upon the Company’s profitability. high level of regulation and higher end consumer price hampers beer sales in India. As such. a uniform tax structure will also create increased agro linkages that are beneficial to a country like India. the Accounts. is affecting the growth and profitability of the industry as well as restricting Government revenues. it has resulted in a number of key markets becoming unattractive from a financial perspective. the continuing control on pricing as exercised by a number of State Governments has resulted in our inability to raise prices on roughly 60% of our sales. restrictions on advertising and licensing of retail outlets continue to present challenges to the Industry. Your Company believes in building a stimulating. If implemented.Report of the Directors (contd.. For a high performance organization. In terms of the approval so granted by the Central Government. Barley farmers particularly stand to benefit from the growth of the beer sector. Inclusion of alcoholic beverages into Goods and Service Tax (GST). The transition of workforce from the existing plant to the new greenfield also happened seamlessly. HUMAN RESOURCES People continue to be the focal point of the organization’s development. However. on receipt of such request by the Company Secretary at the Registered Office of the Company.. In addition. Consolidated Accounts conforming to applicable Accounting Standards are attached to this Annual Report. Your Directors place on record their sincere appreciation to all employees for their contribution towards the continuous success of the organization. This was to ensure right deployment of people and also identify their developmental needs that will strengthen and consolidate our leadership pipeline. The organization also completed the succession planning exercise that has also enabled us to fill critical positions internally. However. As on March 31. an in-depth evaluation of role requirement vis a vis the individual’s strength was carried out. it will help the beer industry by rationalizing end consumer prices in all States. 6 . In addition to economic contribution. 1996 and as per the directions issued by Securities and Exchange Board of India. 2010. There has been a continuing review of the long term strategy for procurement at an economical cost. Excessive regulation and further extensions of Government intervention. of the above subsidiaries are not required to be attached with the balance sheet of the holding company. With this intent. Uniform tax regime for beer in all States will be a boon for the industry. in the areas of distribution and pricing. Your Company has explored a variety of avenues to contain the risk of continued increase in basic costs and has entered into a number of long term agreements for sourcing vital inputs.

2010 is appended. 2010. ETC. 1956. – – ACKNOWLEDGEMENT Your Directors wish to place on record their appreciation for the continued support received from shareholders. proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act. Guido de Boer were inducted on Board with effect from December 07. PARTICULARS OF EMPLOYEES. AUDITORS AND AUDITORS’ REPORT M/s Price Waterhouse. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Section 217(2AA) of the Companies Act. your Directors wish to acknowledge the support and contribution on the part of all employees who constitute our most valuable asset. the Securities of your Company have been delisted from Stock Exchanges at Chennai and New Delhi upon application made in terms of special resolution passed by the members in this regard. A K Ravi Nedungadi and Mr. read with the Company’s (Particulars of Employees) Rules. Mr. Statutory Auditors hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. banks and financial institutions. By Authority of the Board. Kiran Mazumdar Shaw and Mr. CORPORATE GOVERNANCE A Report on Corporate Governance forms part of this Report along with the Certificate from the Company Secretary in practice. 2009. accounting policies have been selected and applied consistently and that the judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period. Madhav Bhatkuly have been inducted on Board as Independent Directors with effect from October 26.1956. John Nicolson opted out of the Board. 1956.: Information in accordance with sub-Section (2A) of Section 217 of the Companies Act. Mr. Mr. forms part of this Directors’ Report and is annexed.Report of the Directors (contd. During the year under review. 2010 Kalyan Ganguly Managing Director Guido de Boer Director & CFO 7 . The listing fees have been paid to all the Stock Exchanges for the year 2010-2011. Duco Reinout Hooft Graafland. Mrs. Mr. Sijbe Hiemstra and Mr. offer themselves for re-appointment. Finally. CASH FLOW STATEMENT A Cash Flow Statement for the year ended March 31. The Board places on record the contributions of outgoing Directors during their tenure on the Board of your Company. the applicable accounting standards have been followed along with proper explanation relating to material departures. LISTING REQUIREMENTS Your Company’s Equity Shares are presently listed at the Bombay Stock Exchange Limited. Particulars required under Section 217(1)(e) are also annexed. your Board of Directors report that: – – in the preparation of the Annual Accounts.) DIRECTORS The Board of Directors of your company has been reconstituted and broad based to comprise of 12 Directors with a balanced combination of Promoters and Independent Directors. 2009. John Hunt and Mr. FIXED DEPOSITS The Company has not invited any Fixed Deposits. Mr. Stephan Gerlich was appointed to the board on July 02. Sunil Alagh retire by rotation at the ensuing Annual General Meeting and being eligible. CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION. National Stock Exchange of India Limited and the Bangalore Stock Exchange Limited. the annual accounts have been prepared on a going concern basis. if any. Mr. Bangalore July 21. 1975. Chugh Yoginder Pal. Your Directors are also grateful to the Company’s business partners and customers for their continued support and patronage. There are no qualifications or adverse remarks in the Auditors’ Report which require any clarification or explanation. for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

Fuel Oil Consumption – – De-superheaters installed at Bangalore. D. After successful implementation of alternate fuel boilers at units located at Punjab. Heat recovery system installed in Mumbai to reduce fuel consumption and reduce heat emission into the atmosphere. Automation and Auto Blowdown installed in the boilers on selective basis. in Million) Foreign Exchange earned Foreign Exchange used : : 9. This has resulted in improved quality. Double Evacuation Filler commissioned in Cherthala unit. Foreign Exchange Inflow and Outflow (Rs. Kalyani & Palakkad units to reduce electricity consumption. Coil cooler installed for Diesel Generator (DG) sets at Mallepally unit in place of Radiators to increase efficiency of DG sets during longer running hours at high temperature regions. Environment – – – LED coupled with solar power & geo thermal office cooling system installed at Mallepally unit. Vapor Heat recovery systems are installed at Mumbai & Mallepally units. Commissioned CO2 recovery plant at all units. C. and Ludhiana units to ensure water conservation. West Bengal and Andhra Pradesh. Rainwater harvesting initiative is being undertaken at Mallepally unit in a phased manner to save water and enhance the ground water table. Lighting energy savers installed at Mumbai. reduced wastages and higher productivities on the line. This has reduced release of green house gases into atmosphere. Latest technology in labellers. Conservation of Energy Energy conservation measures taken by the Company: Electrical Energy – – – – – – – Vapour absorption machine is being commissioned at Bangalore unit for generating chilled water for wort cooling instead of using high electricity consuming reciprocating compressors. Installed variable frequency drives in Mumbai on high load motor to reduce energy consumption.30 8 . Orissa & Mangalore units. Focus on optimal work in process during the off season has reduced refrigeration load and consequently saved on energy consumption. Palakkad and Kalyani units to generate higher feed water temperature in boilers leading to reduced solid fuel consumption. B. Bangalore & Mangalore units. Auto PU controlled Pasteurizer and fillers for beer packaging has been implemented at Mallepally. Water Conservation – – Recycling of effluent treated water with programmable logic control operated reverse osmosis plant installed at Mallepally. Draft control on alternate fuel boilers installed to reduce electricity consumption at Palakkad. This has a positive impact on reduction in global warming. 1956 A. alternate fuel boilers are installed at all units except at Cherthala and Goa.42 738.Annexure to Directors’ Report STATEMENT UNDER SECTION 217(1)(e) OF THE COMPANIES ACT. Research and Development The Company has continued its Research & Development (R&D) programme in the area of development of two row malting variety of Barley. De-superheaters in Refrigeration compressor installed at Bangalore. The Company is expecting to shortly launch a flavoured beer in the market by utilizing the technology developed by our R&D department. This has reduced fuel cost substantially. Technology Absorption – – – – – First Mash filter & high speed 36000 BPH bottling line commissioned at Mallepally unit in Andhra Pradesh. Chilled water generation through CO2 evaporation implemented at Mumbai to reduce electrical consumption.

IIT ..Projects – Birla Management Corporation Senior Manager . (Mech.IIM .B. M. PGDM (T. General Manager – A W Faber Castel (I) Pvt. PGDM (Mech.UBL Rajasthan DVP . PGDM (T.Marketing & Sales McDowell & Co. PGDBM (XLRI) B. (Chem.MIS.Business Development B..Marketing Herbertsons Ltd.Tech. PGDBM .Goa Inst. Goa Group Leader for Business Analytics – Honeywell Technologies Solutions Labs G M Plant Operations – Pepsico India Holdings P. (Mech.A. Ltd. General Manager .). President EVP .UBL Goa & Contract Units DVP . ACS B. Strategic Planning & Business Analysis Educational Qualifications B. (Civil) .UBL Nelamangala AVP .) STATEMENT UNDER SECTION 217 (2A) OF THE COMPANIES ACT.. Marketing Manager – Castle Breweries Ltd.Sales GM-Instl.) (Jamshedpur Tech. Brewer – Indo Lowenbrau Breweries Ltd. of Mgmt. PGDM & IR B. Ltd.UBL Mumbai AVP .Com. EGMP (IIM-B) General Manager Sales .. Accounts Executive – BPL Sanyo Technologies Ltd.Sc. (Mech. of Mgmt..Finance General Manager Corporate Accounting General Manager Finance AVP .Com.. 9 . (Hons..Inst. Delhi.Sc.) B. Inst.E.Annexure to Directors’ Report (contd.).Sc. Engg. LLB.Tech.L. ME. Tech..IIT. 1 2 3 4 5 Name K Ganguly Shekhar Ramamurthy Cedric Vaz J Noronha Perry Goes Age 59 49 51 55 45 Date of Joining 1-Feb-79 15-May-89 15-May-06 15-Jul-91 14-Jun-04 Total Remuneration 33876106 18910553 9404063 8651142 7603786 Designation Managing Director Dy. MBA M.Engineering & Projects AVP .E. DVP .) PGDPM-IR (XLRI) B.).Com. Asst. (Mech.Tech.Srikakulam AVP .) B. 1975 (EMPLOYED FOR FULL YEAR) Sl.Sc.).. Inst.Commercial General Manager.E.Operations .A. in Business Admn.Com.Kolkata B. 6 7 8 9 10 11 12 13 Sudhir Jain Kiran Kumar Vivek Agnihotri Umesh Hingorani R K Jindal Govind Iyengar Govind Tiwari Sharad Dalmia 50 42 40 41 49 43 58 45 15-Jan-04 28-Apr-97 01-Mar-09 2-Feb-93 19-Mar-85 5-Feb-01 12-Feb-75 1-Feb-01 4529166 7489206 3082756 4191295 4925478 5047026 5304010 3629681 DVP . Dip.Indl.UBL Kalyani AVP – IT AVP .). Ltd.Sc.) B.Operations North & B. Chief Executive – Empee Breweries Ltd. Personnel Manager – The Oberoi Bogmalo Beach.Legal & Company Secretary DVP . Pai Mgmt.) & West University of Roorkee SVP . First Employment Company Secretary – Citurgia Biochemicals Ltd. PGDIFAT. 1956 READ WITH THE COMPANIES (PARTICULARS OF EMPLOYEES) RULES. & PGDMM B. in Comp. Marketing Manager – Herbertsons Ltd.Com.. PGDBM (Mktg-Fin & HR) . PGDBM IIM . Manager – Pepsico India Holdings First Employment First Employment Personnel Executive .E..A.Tech. PGD Business Mgmt.. Sales . Adv. Senior Manager . Ltd.Sc. MBA (Fin. No. F C A East and Malting DVP .University of Southern California 24 19 15 17 25 20 40 23 DVP .Com.). Masters in Brewing . ACA.UBL Mangalore AVP . Bio Engg.South B.. (Hons. Ltd. MBA (Marketing) BBA . Head Finance–Cipla Ltd.. Engg. Sales & Customer Mktg.E. Experience in Years 37 23 28 30 23 Previous Employment EVP . & Elec..UK 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 George Paul R Santosh Kumar Samrat Chadha Gurpreet Singh M R Srinivasan P A Poonacha R Raghupathy P L Murugappan Jayant Basu S Ramakrishnan Susheel Kumar Rakesh Chandra Gupta C Gouri Sankar A K Das A V Ganesh Ramu A Narayanan Nirmal Rajani 46 45 37 35 58 39 50 39 58 50 58 41 44 56 49 43 47 6-Jan-03 1-Jul-98 2-May-97 20-Apr-98 15-Jul-89 1-Jul-96 10-Jul-89 27-Sep-97 11-May-98 1-Jun-95 19-Apr-02 1-Jun-04 14-Mar-07 14-Jan-81 01-Mar-83 03-Nov-93 01-Jun-98 3775894 4835879 3673183 3544549 3135187 4241712 3349725 3409282 3491441 3882606 2931639 3058102 3136132 2716744 2449750 2573604 2494732 22 22 13 12 36 15 27 18 36 25 33 18 21 31 27 20 27 General Manager-Chennai B. Ltd. Mfg. Relations & Welfare – Cipla Ltd.E. MFM.Production – Asian Paints (I) Ltd. L.).Sc. Senior Manager . Dip. (Mech.West General Manager Marketing AVP .Human Resources SVP .Kanpur B.Manufacturing EVP .Aurangabad General Manager – Brewing & Technical B.. B. Head Operations – Cadbury India Ltd. (Mech. AICWA B.Com. B. Pai Mgmt. PGDCA B. Indo Lowenbrau Breweries Ltd. DBA. MBM (Asian Inst. Kingfisher Airlines Ltd.Com. (Bangalore Unit) Plant Manager – Pfizer Ltd. Faridabad General Manager – McDowell & Co. McDowell & Co.Com.. Master in SAP-PS. AICWA B. AICWA B.Ahmedabad B..) B.). Sc.Com. MDP B. Ltd. MSW (University of Mysore) B.Systems – McDowell & Co. Accounts Executive – Laurel Aromatics Pvt..Com.. PGDPMIR.South B. First Employment Skol Brewries Ltd.

Marketing Manager. MBA B. (Chem.E. 2010 Kalyan Ganguly Managing Director Guido de Boer Director & CFO “Persons constituting group coming within the definition “group” for the purpose of Regulation 3(1)(e)(i) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations.V.) 31 32 33 34 35 36 Shyamlal Mittal Prem Korah Madhusudhan Sharma Ajay Jairath Ramakrishnan S Eswar Van Sharma 50 36 39 46 46 41 02-May-01 20-May-04 01-Jul-05 09-Jan-07 22-Jan-07 06-Mar-08 2564511 2455282 2764484 2563912 3056879 2804086 General Technical Manager General Marketing Manager AVP ..Projects General Manager UBL Ludhiana AVP . DVP – Divisional Vice President. (Micro Biology) B. Ltd. MBA (Marketing) 13 18 20 Heineken International B. (Electronics). By Authority of the Board. Ltd. CFO – Chief Financial Officer.) MBDA (Intl.E. Ritu Mallya Kamsco Industries Private Limited The Gem Investment & Trading Company Private Limited Mallya Private Limited McDowell Holdings Limited United Breweries (Holdings) Limited Pharma Trading Company Private Limited Vittal Investments Private Limited Devi Investments Private Limited VJM Investments Private Limited Scottish & Newcastle India Limited Heineken International B. McCann Erickson Employed for part of the year and in receipt of remuneration in aggregate of not less than Rs. Cavincare Pvt. MBA (XIMB) B. Economics & Business B.) PGDM B.Marketing M. Engg. SVP – Senior Vice President. International Packaging Products Pvt.V. 1997 include the following:” Dr.E. 2009. Umesh Hingorani. Ltd. AVP – Assistant Vice President. Scottish and Newcastle India Private Limited 10 . Bangalore July 21.Annexure to Directors’ Report (contd. All the employees mentioned above are in full time employment with the Company. NOTES: the employees mentioned above is a relative of any Director of the Company except Mr.E. 24.A.Marketing SVP . Engg. Vijay Mallya Mr.E.000/.00.per annum 1 2 3 Guido de Boer* Ravikanth Sabnavis Samar Singh Shekhawat 38 41 44 01-Oct-09 12-Mar-07 09-Nov-09 6989448 2730898 2634407 M. *Mr.) PGDM (XIM) 27 10 15 23 23 16 Shaw Wallace & Co. Organics Aromatics Pvt. Sidhartha V Mallya Ms.. (Chem. who is related to Dr. G M R Beverages & Industries Ltd. None of the above mentioned employees holds more than 2% of the paid-up equity capital in the Company. Guido de Boer was appointed as Director & CFO effective December 7. Heineken N. Ltd. Heinz India Pvt.Sc.. EVP – Executive Vice President.Sc.V. Marketing) B. Spencers Retail Ltd.Tech. (Civil & Environmental Engg.UBL Palakkad General Manager Innovation Director & CFO DVP . Ltd. Vijay Mallya. MMS B.

John Nicolson* Mr. Guido de Boer** Mr. significant and material show cause notice and demands. operating plans. July 23. Beyond mere compliance we are committed towards taking all strategic initiatives to enhance Shareholders’ wealth in the long term. Duco Reinout Hooft Graafland** Mr. accountability and integrity in its dealings. A K Ravi Nedungadi Mr. BOARD OF DIRECTORS Your Company is managed and controlled through a professional Board of Directors. The Board comprises of a balanced combination of non-Executive and independent Directors in addition to the Managing Director and Chief Financial Officer. 2010.09. if any. Ind – Independent. risk management and updates thereof are regularly placed before the Board. Your Company’s Board consists of eminent persons with considerable professional expertise and experience. During the financial year ended on March 31.2009 YES YES YES YES — — YES YES YES — — — — — Names of the Directors Dr. Remuneration / Compensation Committee and Share Transfer Committee to look into the aspects of each Committee. Sijbe Hiemstra** Mr. CFO – Chief Financial Officer 11 . In addition to securing Board approvals for various matters prescribed under the Companies Act. 2009. 2009. December 07. control self assessment. 2009. 2009. Ind) Director (NE. minutes of Committee meetings. In pursuit of corporate goals. Chugh Yoginder Pal Mr. matters such as annual budget. Ind) Director (NE) Director (NE) Director (NE. the Company has constituted an Audit Committee. Internal Audit carried out by the Group Internal Audit team commensurate with the size of the organization. Investors’ Grievance Committee. Kiran Mazumdar Shaw# Mr. Matters of policy and other relevant and significant information are regularly made available to the Board. ATTENDANCE AT BOARD MEETINGS AND ANNUAL GENERAL MEETING (AGM) Number of Board Meetings held 6 6 6 6 6 6 6 6 6 6 6 6 6 6 Number of Board Meetings attended 5 6 5 1 1 2 5 6 6 2 2 1 1 — Attendance at the last AGM held on 10. Madhav Bhatkuly# Mr.Report on Corporate Governance A. Our philosophy on Corporate Governance is driven towards welfare of all the Stakeholders and the Board of Directors remains committed towards this end. October 26. 1956. 6 Board Meetings were held on April 09. April 28. In order to ensure better Corporate Governance and transparency. John Hunt* Mr. Ind) Director (NE. Vijay Mallya Mr. 2010. Kalyan Ganguly Mr. 2009 and January 22. the Company accords high importance to transparency. MANDATORY REQUIREMENTS COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE As manifested in the Company’s vision United Breweries Limited has always strived for excellence in Corporate Governance. Ind) NE – Non-Executive. Stephan Gerlich@ Notes: Category Chairman (NE) Managing Director Director (NE) Director (NE) Director (NE) Director (CFO) Director (NE. Ind) Director (NE. Sunil Alagh Mr. Chhaganlal Jain Ms. There is comprehensive management reporting systems involving the preparation of operating results and their review by senior management and by the Board. The Board of Directors supports the broad principles of Corporate Governance and lays strong emphasis on its role to align and direct the actions of the Company in achieving its objectives. Ind) Director (NE.

Kiran Mazumdar Shaw and Mr. Out of 21 other Companies in India in which Dr. 1 is a Private Limited Company. 2009. Duco Reinout Hooft Graafland have been appointed as non-executive Directors on the Board of the Company with effect from December 07. Vijay Mallya is a Director. d. Kiran Mazumdar Shaw is a Director. Ms. Mr. 12 . Mr. 2 are Private Limited Companies. John Nicolson have resigned from the Board with effect from December 07. f. ** Mr. @ Mr. Vijay Mallya Mr. Mazumdar is also on the Board of 3 Overseas Companies. Sunil Alagh is a Director. A K Ravi Nedungadi is also on the Board of 9 Overseas Companies. Kalyan Ganguly is a Director. Duco Reinout Hooft Graafland is a director in 1 Private Limited Company. Sunil Alagh Mr. A K Ravi Nedungadi is a Director. Out of 9 other Companies in which Mr. g. Madhav Bhatkuly have been appointed as non-executive Directors in independent capacity with effect from October 26. Bhatkuly is also on the Board of 2 Overseas Companies. Mr. Out of 3 other Companies in which Mr. 1 is a Private Limited Company. Mr. 2 are Private Limited Companies. Duco Reinout Hooft Graafland Mr. 8 are Private Limited Companies and 2 are Section 25 Companies. ** Audit & Investors’ Grievance Committees *** Remuneration. i. Mr. Hooft Graafland is also on the Board of 1 Overseas Company. 2009. Mr. Out of 7 other Companies in which Mr. 3 are Private Limited Companies and 1 is a Section 25 Company. Sijbe Hiemstra and Mr. Kalyan Ganguly is also on the Board of 1 Overseas Company. j. Mr. Madhav Bhatkuly is Director.Report on Corporate Governance (contd. Chugh Yoginder Pal Mr. 1 is a Private Limited Company. Guido de Boer was appointed as Director & CFO with effect from December 07. h. Out of 4 other Companies in which Mr. 2009. Stephan Gerlich The above position is as on the date of this Report and in respect of their Directorships only in Indian Companies. Chhaganlal Jain Mr. Chugh Yoginder Pal is a Director. Kiran Mazundar Shaw Mr. Hiemstra is also on the Board of 22 Overseas Companies. Out of 8 other Companies in which Ms.) # * Ms. John Hunt and Mr. Madhav Bhatkuly Mr. Mr. b. 2010. e. Out of 6 other Companies in which Mr. Sijbe Hiemstra is a director in 1 Private Limited Company. c. Mr. Stephan Gerlich has been appointed as non-executive Director in independent capacity with effect from July 02. Chhaganlal Jain is a Director. Vijay Mallya is also on the Board of 36 Overseas Companies. A K Ravi Nedungadi Mr. Dr. Out of 4 other Companies in which Mr. Share Transfer & Other Committees NOTES: a. MEMBERSHIP IN BOARDS AND BOARD COMMITTEES – OTHER THAN UNITED BREWERIES LIMITED (UBL) Membership in Board Committees other than UBL Names of the Directors Membership in Boards other than UBL 21 6 9 1 1 4 4 7 NIL 8 3 2 Prescribed for reckoning the limits under Clause 49 of the Listing Agreement ** NIL 2 (Chairman of 2 Committees) 5 (Chairman of 1 Committee) NIL NIL 4 (Chairman of 3 Committees) 1 (Chairman of 1 Committee) 4 (Chairman of 1 Committee) NIL 1 1 1 Other Committees not so prescribed *** 1 (Chairman of 1 Committee) 2 (Chairman of 2 Committees) 2 NIL NIL 2 2 3 NIL 1 NIL 2 (Chairman of 2 Committees) Dr. 2009 in view of reconstitution of the Board of Directors of the Company. Guido de Boer Ms. 4 are Private Limited Companies. Kalyan Ganguly Mr. Sijbe Hiemstra Mr.

Sc. As of 1997 he continues his career at Heineken’s Corporate Office as Director Corporate Marketing to become Director of Heineken Export Group in 2001. ‘Technology Pioneer’ recognition by World Economic Forum and The Indian Chamber of Commerce Lifetime Achievement Award. the Economic Times ‘Businesswoman of the Year’. Express Pharmaceutical Leadership Summit Award 2009 for Dynamic Entrepreneur. Mr Bhatkuly was a country partner of Arisaig Partners from 1999 to 2005. He has been featured on several TV shows including “CNBC’s wizards of Dalal Street”. He is credited to have been amongst Audit Committee the first institutional investors in many small companies which have gone on Motilal Oswal Financial Services Limited to become some of India’s leading names. Kiran Mazumdar Shaw Ms. an Autonomous Body of the Government of India. She is a member of the Prime Minister’s Council on Trade and Industry and also serves as a Member. Doctor of Technology from the University of Abertay Dundee. she completed her post-graduate degree in malting and brewing from Ballarat College. 2009 for Regional Growth. Other Boards Mr. Melbourne University in 1975. (UK) TCI to set up a dedicated India Fund. Edinburgh. Kiran Mazumdar Shaw. 2007. She has been awarded with several honorary degrees including Honorary Doctorate of Science from Ballarat University.. After graduating in B. Doctor of Science from the University of Glasgow. Madhav Bhatkuly has a Masters Degree in Commerce from Sydenham College. Governing Body and general Body of the Indian Pharmacopoeia Commission. She is the recipient of several awards. She heads several biotechnology task forces including the Karnataka Vision Group on Biotechnology.V. and has been invited to speak at many business schools such as the Indian Institute of Management. Duco Reinout Hooft Graafland Other Boards Motilal Oswal Financial Services Limited New Horizon Financial Research Private Limited New Horizon Wealth Management Private Limited 13 . Other Directorships & Committee Memberships in India Other Boards Biocon Limited Syngene International Limited Clinigene International Limited Biocon Biopharmaceuticals Private Limited Biocon Research Limited Glenloch Properties Private Limited Narayana Institute For Advance Research Private Limited Narayana Hrudayalaya Private Limited She is a founder promoter and has led Biocon Limited since its inception in Investors’ Grievance Committee 1978. He is a recipient of the Foreign and Commonwealth Scholarship from the British Government. 2008. Bombay and a Masters Degree in Economics from the London School of Economics. Then Rene returned to the Netherlands as Marketing Director for Heineken Nederland. Indianomics. is a first generation entrepreneur with more than 32 years experience in the field of biotechnology. Mr. the ‘Veuve Clicquot Initiative for Economic Development For Asia’. became brand manager for Vrumona. the most noteworthy being the ’Padmabhushan’ Award (one of the highest civilian awards in India) in 2005 Biocon Limited conferred by the President of India. and by many organizations such as the Confederation of India Industries (CII). 2004. Heineken’s soft drink company and continued as Area Export Manager for Central and West Africa. an initiative by the Government of Karnataka and the National Taskforce on Biotechnology for the Confederation of Indian Industry (CII). He partnered with Chris Hohn of The Children’s Investment Fund. He started his career as a Management Trainee with Heineken Nederland in 1981.) from Bangalore University in 1973. Duco Reinout Hooft Graafland studied Business Administration at the Millennium Alcobev Private Limited Erasmus University in Rotterdam and finished the Post-Graduate study for Chartered Accountant. Prior to that. The experience with the African market prompted his move to Kinshasha. the Nikkei Asia Prize. he was associated with SG Securities and ICICI Bank Limited. the Karan Thapar Show etc. In 2002 he was appointed Member of the Executive Board and CFO Heineken N. in recognition of pre-eminent contribution to the field of Biotechnology. Madhav Bhatkuly Mr. Mr.Report on Corporate Governance (contd. Ernst & Young’s Entrepreneur of the Year Award for Life Sciences & Healthcare. (Zoology Hons. Goldman Sachs etc.) PROFILE OF NEW DIRECTORS Brief resume Ms. where he worked as Financial Director for Heineken’s operations for three years from 1987-1989. 2008 and Doctor of Science from the Heriot-Watt University. In 1993 he went to Indonesia as President Director of Multi Bintang.

In 1985 he was appointed Export Manager Softdrinks with Heineken Export Department/Vrumona. Mr. Hiemstra started his overseas career as Country Manager of Heineken Export in Seoul. and business development strategy. In 1998 he was appointed Regional Director SEA/Oceania with Asia Pacific Breweries Ltd in Singapore. Mr. The first six years he worked with Gedistilleerd en Wijngroep Nederland. Having worked on acquisition and business due diligence projects in countries like Russia. Mr. Gerlich returned to the Bayer Headquarters in Leverkusen. Germany as Regional Marketing Manager for Engineering Plastics Division and later designated as Global Marketing Manager in 1992. business due diligence projects. In 2004. In 2001 he became Director of Heineken Technical Services in Zoeterwoude. In 1994. Mr. In October 2005 he was appointed Regional President. advising corporations on M&A and Equity Capital Markets transactions in the Food & Beverages and Media Industries. ultimately as Director at MeesPierson Corporate Finance & Capital Markets. Chugh Yoginder Pal. After 3 years in France. A K Ravi Nedungadi retire at the ensuing Annual General Meeting and being eligible. Gerlich started his career with Bayer in 1978 and shortly afterwards moved to a subsidiary in France. Nigeria and China. in consortium with Carlsberg. Sijbe Hiemstra has Bachelor’s degree in Business Administration at the School Millennium Alcobev Private Limited of Higher Economic Studies. He is Country Group Speaker for the Bayer Group in India and Vice Chairman and Managing Director of Bayer CropScience Limited and Chairman & Managing Director of Bayer MaterialScience Private Limited. Other Boards Bayer CropScience Limited Bayer MaterialScience Private Limited Investors’ Grievance Committee Bayer CropScience Limited Mr. De Boer led the Heineken deal team in the public offer for Scottish & Newcastle. Sunil Alagh and Mr. Colombia. Mr. Guido de Boer has a Masters Degree in Economics and Business from Nil Erasmus University Rotterdam. Brand and Category Manager. Guido de Boer Other Boards Mr. he became Vice President in charge of sale in USA & Canada for Dystar. Hiemstra joined Heineken in 1978. Stephan Gerlich is a Wirtschaftassistent from Industrial Chambers of Commerce. Mr. Mr. possessing broad business skills. Brief particulars of Mr. A K Ravi Nedungadi are mentioned below: 14 . He started in various commercial and logistic projects. Mr. Based at the headquarters in Mumbai. Gerlich took over as Director Sales and Marketing and Key Account Manager in Bayer France and in 1995 he was made President / CEO of the Bayer / Hoechst Joint Venture. Dystar. he brings the experience of a finance professional. Mr. In 1989 Mr. for an enterprise value in excess of EUR 15 bn. based in North Carolina. He started his career in investment banking. Sijbe Hiemstra Other Boards Mr. Koeln Germany. This was followed by several years as Commercial Manager with South Pacific Holdings in Papua New Guinea and as General Manager of Brasseries de Bourbon in ILLe de La Reunion. he joined Heineken’s Group Business Development department where he was involved in acquisitions. Stephan Gerlich Mr. culminating in Product. South Korea. Chugh Yoginder Pal. In 2000. Sunil Alagh and Mr.Report on Corporate Governance (contd. he joined the Bayer operations in Mexico. in Mexico. and an understanding of diverse emerging markets. Rotterdam and has attended various International Management programmes.) Mr. In 1991. In 1995 he returned to the Netherlands to take up the position of Deputy Director Central Africa for Heineken’s Africa/Middle East Cluster. Gerlich has been responsible for the Bayer Group business activities in India since July 2003. have offered themselves for re-appointment. Mr. He has completed various Executive Development Programs at INSEAD-Fontainebleau and IMD-Lausanne.

He is a member of the Indian Advisory Board of Schindler and on the Governing Body of IIM Bangalore & Indore. 2002.. which included the paint giant Berger Jenson and Nicholson. Early position at Macneill & Magor Ltd. enabling the entry of institutional investors and rerating of the industry itself. He started his career at TELCO in 1958 & was trained in Industrial Engineering after which he moved to Hindustan Lever Limited in 1960.) PROFILE OF DIRECTORS RETIRING BY ROTATION Brief resume Mr. Jagatjit Industries Limited and Britannia Industries Limited. Mr. a diversified conglomerate and Pentagon Fasteners Ltd. the youngest to have been elevated to such a position in the Group. a Business Advisory / Consultancy firm with a focus on Marketing and Brand building strategies. Managing Director (1983-1987). National Institute of Design. Since his appointment as the President and Group CFO in 1998. Factory and General Management roles and was the head of Corporate Materials Management (1975-1977). Chairman & Managing Director (1987-1994). Executive Chairman (1994-1997). Other Boards Aventis Pharma Limited Bayer CropScience Limited Kingfisher Airlines Limited Idea Streamz Consultants Private Limited Pie Education Limited Millenea Vision Advertising (P) Limited Millennium Alcobev Private Limited Shaw Wallace Breweries Limited Audit Committee Aventis Pharma Limited Bayer CropScience Limited Kingfisher Airlines Limited Investors’ Grievance Committee Aventis Pharma Limited Bayer CropScience Limited (Chairman) Other Directorships & Committee Memberships Other Boards Cadbury India Limited Aptech Limited Sriram Pistons & Rings Limited Renfro India Private Limited Audit Committee Cadbury India Limited (Chairman) Aptech Limited (Chairman) Sriram Pistons & Rings Limited Investors’ Grievance Committee Cadbury India Limited (Chairman) Other Boards GATI Limited Indofil Organic Industries Limited Tamara Capital Advisors Private Limited SKA Advisors Private Limited Investors’ Grievance Committee Indofil Organic Industries Limited 15 . It also became the Number 1 Food Brand in India. on areas of core competence and global reach. Mr. Ahmedabad and the Indian Institute of Foreign Trade. which had a conglomerate approach. Mr. Delhi set the stage for an outstanding track record with current employer. This saw the group focus on three verticals – Brewing. 2005. In addition. Within two years. Government of India. Distilling & Aviation. He has worked with ITC Limited.Report on Corporate Governance (contd. 2005. Nedungadi set early academic records by qualifying in the final of the Chartered Accountancy Exam at age 20. Sunil Alagh Mr. he is a member of the Round Table on Higher Education of the Ministry of HRD. During this tenure. He was instrumental in listing the Berger group companies on London and Singapore bourses. Chugh Yoginder Pal Mr. he was transferred to London as Group Finance Director of the Group’s international business managing the businesses of UB International. He was a finalist for the Ernst and Young Entrepreneur of the Year Award. where he held various positions starting as an Industrial Engineer & moving up quickly in the Management hierarchy in a variety of Production. Pal brings with him great expertise & understanding of the Indian business environment. A K Ravi Nedungadi A trained Chartered Accountant. Mr. Alagh is on the Board of UBL since April 29. Mr. Chugh Yoginder Pal is a Graduate in Engineering with First Class (Distinction) from Delhi University. He is a graduate in Economics (Hons. He was also responsible for opening up the beverage alcohol sector to Global Best Practices and Transparency. each area presenting clear leadership within India and global significance too. Sunil Alagh is Chairman of SKA Advisors.) with MBA from IIM Calcutta. He continues to be the Chairman (Non-Executive) at Cadbury India Limited. Mr. He then joined Cadbury India Limited & held various positions as Technical Director (1977-1982). He was Managing Director and CEO of Britannia Industries Limited from 1989 to 2003. spanning 27 countries. Britannia figured in the Forbes Magazine list of 300 Best Small Companies in the world for 3 years. he led his way to sharpening the focus of the Group. He was honoured with the ‘Gold Medal Kashlkar Memorial Award 2000’ for outstanding contribution to the food processing industry in India. Delhi. Pal is on the Board of UBL since April 29. He joined the UB Group in 1990 as the Corporate Treasurer.

Mr. 2002. Further. None of the Directors are related inter-se. The Committee also reviews periodically the financial accounts. 16 . adequacy of Internal Control Systems. Air Deccan in India etc. the IMA Award for CFO of the year (2007). Memberships in esteemed organizations like Who’s Who of Professionals only reinforce the above testimonials. iv) Reviewing. The Chairmanship of the Committee vests with Mr. coverage and frequency of internal audit. all of whom are independent Directors. as under: i) Oversee the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct. performance of Statutory and Internal Auditors. Nedungadi is the recipient of many awards of excellence including the Udyog Ratan Award. COMMITTEES OF DIRECTORS The Board has constituted Committees of Directors to deal with matters which need quick decisions and timely monitoring of the activities falling within their terms of reference. Bouvet Ladubay. NOTE: Committee Memberships of Directors mentioned above includes only those Committees prescribed for reckoning of limits under Clause 49 of the Listing Agreement. a leading Grant making Art Philanthropy. India. Chugh Yoginder Pal. Mr. if any. reporting structure. The Board Committees are as follows: AUDIT COMMITTEE The Audit Committee comprises of Mr. sufficient and credible. iii) Approval of payment to statutory auditors for any other services rendered by the statutory auditors. Scotland. v) Reviewing with the Management the quarterly financial statements before submission to the Board for approval. Sunil Alagh and Mr. which bears testimony to the successful accomplishment of business restructuring. adequacy of internal audit function. His interest in social work and the arts engage his free time. staffing and seniority of the official heading the department. 1956. viii) Discussing with Internal Auditors any significant findings and follow up there on. Mr. the CNBC Award for India’s best CFO in the FMCG & Retail Sector (2007). CNBC TV 18’s – CFO of the year – M&A (2006). Nedungadi was key to concluding the acquisition of Shaw Wallace & Co.Report on Corporate Governance (contd. consolidation and enhanced shareholder value. compliance with accounting standards and other areas within its terms of reference. re-appointment and.) Under his leadership the market capitalization of the 3 principal Group Companies has crossed US$ 7 billion. vi) Reviewing with the Management. etc. the Annual Financial Statements before submission to the Board for approval. As the principle leadership resource of UB Group.. disclosure requirements and matters relating to Internal Control System. vii) Reviewing the adequacy of internal audit function. Nedungadi joined the Board on August 9. each of which has contributed to the value creation for all stake holders. France. he is on the Board of Directors of several companies. including the structure of the internal audit department. with particular reference to: of Clause 2AA of Section 217 of the Companies Act. with the Management. the replacement or removal of the statutory auditor and the fixation of Audit fee. Mr. Chugh Yoginder Pal. Chhaganlal Jain as members. He is an active Rotarian and is a Trustee of India Foundation for Arts. Whyte & Mackay. the appointment. The Committee oversees the financial reporting process. if required. ii) Recommending to the Board. both in India and overseas.

Management letters / letters of internal control weaknesses issued by the Statutory Auditors. To look into the reasons for substantial defaults in the payment to Depositors. 2009. SHARE TRANSFER COMMITTEE The Share Transfer Committee comprises of Mr. have been entrusted to Alpha Systems Private Limited. 2009. To review the function of the Whistle Blower mechanism. dispute. issue of Duplicate Certificates. ATTENDANCE AT AUDIT COMMITTEE MEETINGS Names of the Directors Mr. 2009. Discussing with Statutory Auditors before the audit commences. about the nature and scope of Audit as well as post-audit discussion to ascertain any area of concern. 2009. and 5. Registrar and Transfer Agent and the same are being processed and approved on fortnightly basis. September 08. 2. Statement of significant related party transactions submitted by the management. During the year ended March 31. 4. 2010. October 26. is the Chairman of the Committee. 2010. A K Ravi Nedungadi and Mr. The Terms of reference are as under: /Central Depository Services (India) Limited.. The Audit Committee mandatorily reviews the following information: 1. 2010 the Committee met 9 times on April 16. difficulty or doubt that may arise in regard to the matters arising out of the aforesaid acts. July 23. 2009. The appointment. July 16. 2010 for approving the transactions falling within the Terms of reference mentioned above. 17 . Nedungadi. June 30. 4 Audit Committee Meetings were held on April 28. Transmission. 2009. Chhaganlal Jain Category CHAIRMAN MEMBER MEMBER Number of Audit Committee Meetings held 4 4 4 Number of Audit Committee Meetings attended 4 4 4 The Company Secretary was present in all the Meetings of Audit Committee.) ix) x) xi) xii) Reviewing the findings of any internal investigations by the Internal Auditors into matters where there is suspected fraud or irregularity or failure of Internal Control Systems of a material nature and reporting the matter to the Board. removal and terms of remuneration of the Chief Internal Auditor. Management discussion and analysis of financial conditions and results of operations. September 30. Debenture-holders and Creditors. and January 22. Kalyan Ganguly as Members. December 31. In order to facilitate prompt and efficient service to the Shareholders all the transactions in connection with Transfer. and usual or proper and to settle any question. Shareholders (in case of non-payment of declared Dividends). 2009 and January 22. in case the same is existing. and xiii) Carrying out any other function as may be mentioned in the terms of reference of the Audit Committee from time to time.Report on Corporate Governance (contd. etc. 2009. Sunil Alagh Mr. 3. Mr. November 16. a non-executive Director. During the Year ended March 31. 2009. Chugh Yoginder Pal Mr. Internal audit reports relating to internal control weaknesses. 2009. June 01. 2009.

who can act severally in the above matter.945 144. The Compliance Officer is Mr. etcetera.. Mr. non-receipt of Share certificates.2010 as the process of transfer of shares was in progress. Mr. Sunil Alagh and Mr. Govind Iyengar. 2 Investors’ Grievance Committee Meetings were held on October 26.113 720. INVESTORS’ GRIEVANCE COMMITTEE The Investors’ / Shareholders’ Grievance Committee comprises of Mr. pay and perquisites to other Senior Employees. 18 . 2012. Mr.694. Kalyan Ganguly was re-appointed as Managing Director for a further period of 5 years effective August 09. and During the year ended March 31. The Company’s Remuneration Policy is designed to ensure that the remuneration applicable to Managers in the Company is comparable with multinational Companies operating in the Brewing or similar industry in India. Mr. Managing Director and Mr.448 Perquisites 2.03. Kalyan Ganguly.125.094. 1956 and other related Regulations from time to time.000 Retiral Benefits 4. Chugh Yoginder Pal is the Chairman of the Committee. 2010. 2010.) The Board of Directors has. 2009 and January 22. as Managing Director. Mr. Mr. These shares were subsequently transferred after completion of due procedures.048 6. Chugh Yoginder Pal. Guido de Boer 27. 2010 which were attended by all the members. upto 5000 shares to the Managing Director and the Company Secretary. The Committee is authorized inter alia: Wholetime Directors of the Company and set guidelines for the salary. Sunil Alagh is the Chairman of the Committee. For the financial year ended March 31. 2 Meetings of Remuneration Committee were held on October 26. Chhaganlal Jain as Members. 2009 for a period of three years and his remuneration mentioned above reflects remuneration paid for part of the year only.087. Guido de Boer. Sunil Alagh and Mr.. performance. During the year ended March 31. Demat Credit.) Number of complaints not solved to the satisfaction of the Shareholders Number of pending Share transfers 34 Nil Two transfer cases for 400 shares were kept pending as on 31. REMUNERATION POLICY The Company carries out periodic reviews of comparable Companies and through commissioned survey ascertains the remuneration levels prevailing in these Companies. 2007 till August 08. Divisional Vice President – Legal and Company Secretary. 2010. 2009 which were attended by all the Members. The Terms of Reference for the Committee include inter alia specifically to look into the redressing of Shareholders’ and Investors’ complaints like non-receipt of Balance Sheet. REMUNERATION / COMPENSATION COMMITTEE (A NON MANDATORY REQUIREMENT) The Remuneration Committee comprises of Mr. Number of Shareholders’ complaints received from 1-4-2009 to 31-3-2010 (These Complaints pertained mainly to non-receipt of Share Certificates upon transfer. non-receipt of declared Dividends. Kalyan Ganguly Mr. and operate in terms of the provisions of the Listing Agreement and/or the provisions as may be prescribed under the Companies Act. non-receipt of Dividend etc. delegated the power to approve transfers / transmission etc. 2004. Mr. Chhaganlal Jain as Members. Director & CFO were paid remuneration as under: (Rupees) Salary & Allowance Mr. Guido de Boer was appointed as Director of the Company with effect from December 07. 2009 and December 07. by a resolution by circulation passed on May 5.Report on Corporate Governance (contd. non-receipt of Annual Report. Chugh Yoginder Pal.000 After his initial term of 5 years.

St.414. 2008 11.000/1. 2009 11. 2. A K Ravi Nedungadi Mr.000/. 8.000/250. Vijay Mallya Mr. Sunil Alagh Commission 6. John Hunt Mr. Good Shepherd Auditorium.000/20. Sheshagiri Hedge (Consultant & Expert) was held on July 23.000/180. Sunil Alagh Mr. 3. Duco Reinout Hooft Graafland Ms.30 p. 1. Bangalore-560 025. The particulars of Equity Shares of the Company held by the Directors are furnished below: Sl. Sunil Alagh.170.) SITTING FEES PAID TO DIRECTORS DURING 2009-2010 (Rupees) Sl. Joseph’s Pre-University College. 2. No. No stock options are granted to any of the Directors so far. St.000/40. COMMISSION PAID TO DIRECTORS DURING 2009-2010 (Rupees) Sl. September 28. No.10.m. Vijay Mallya Mr.for attending other Committee Meetings. Opp.000/.00 a.for attending Board and Audit Committee Meetings and Rs. Residency Road. 7.Report on Corporate Governance (contd.000/20. 2007 12. 4. Good Shepherd Auditorium. No. Chugh Yoginder Pal Mr.414. 3. 4. Sunil Alagh Number of Equity Shares held As on March 31.367. 5.000/230. Vijay Mallya Mr.m.439/1.000/40.000/20. Special Resolutions Passed One Three Three September 10.m. Kiran Mazumdar Shaw Mr.986/1. Name of the Director Dr. Chhaganlal Jain Mr. Joseph’s Pre-University College. 3. 2009 21353620 21353620 14690 14690 6800 6800 GENERAL BODY MEETINGS The previous three Annual General Meetings of the Company were held on the dates. 2. Chhaganlal Jain Mr. Kalyan Ganguly Mr. Bangalore-560 025. Bangalore-560 025. Residency Road. John Nicolson Mr.986/- OTHER COMMITTEE MEETINGS A Meeting of the Special Committee (Selection Committee) comprising of Mr. 9. Opp.414. Residency Road. 10.000/20. time and venue as given below: Date Time Venue Good Shepherd Auditorium. September 10.986/1. Madhav Bhatkuly Total Name of the Director Sitting Fees paid 100. 1. Name Dr.20.000/250. St. 6. 2010 As on March 31. 19 . Mr. Opp. Chhaganlal Jain and Mr. which was attended by all the members. 11 Dr. Sijbe Hiemstra Mr. 1. 2009 to consider the re-appointment of Mr.00 a. All the Resolutions set out in respective Notices including Special Resolutions were passed by the Members at the above Annual General Meetings.000/- Sitting fees are being paid @ Rs. Umesh Hingorani (a relative of the Chairman of the Company) as Divisional Vice President – Business Development. Chugh Yoginder Pal Mr. Joseph’s Pre-University College.

The Company has complied with the mandatory requirements of Clause 49. Residency Road. Management Discussion and Analysis form part of the Directors’ Report. GENERAL SHAREHOLDER INFORMATION The Company’s financial year begins on April 1 and ends on March 31 of immediately subsequent year. 2010 August 19. TIME 12. Division of Financial Calendar 1 st Declaration of Unaudited Results 1 st April 1 to June 30 July 1 to September 30 October 1 to December 31 January 1 to March 31 By August 14th By November 14th By February 14th By May 15th 2nd 3rd 4th 2nd 3rd 4th In terms of amendment to the Listing Agreements. 2010. 2010 (12. official Press release and presentation to analysts are posted on the Company’s Web-site “www. Bangalore 560 025. August 20. 1956. Ernst Willem Arnold ven de Weert as his alternate on the Board and Mr.15 p.com for the purpose of registering complaints by the investors. The investors can post their grievances by sending a mail to the said email ID. Duco Reinout Hooft Grafland has appointed Mr. Details of related party transaction form part of Notes on Accounts. 2010 VENUE Good Shepherd Auditorium.m. 2010 August 18. In line with the requirement of clause 47 (f) of the Listing Agreement. DATES OF BOOK CLOSURE August 19.) DISCLOSURES During the financial year ended March 31. Opp. Sijbe Hiemstra has appointed Mr. 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. as on date of this report.15 p.Report on Corporate Governance (contd. treatment as prescribed in Accounting Standards has been followed. Mr. the unaudited results of the Company are to be declared with 45 days of the end of the quarter. ublinvestor@ubmail. The Company did not suffer from any levies and there were no strictures on any Capital market related matters since incorporation. St. MEANS OF COMMUNICATION The Company has its own Web-site and all vital information relating to the Company and its performance involving quarterly results.com”. there were no materially significant related party transactions with the Company’s Directors or their relatives. 2010 July 27. In preparation of financial statements for the year under review. 2010 20 . 2010 and August 20. Kenneth Choo Tay Siam as his alternate on the Board. In terms of Section 313 of the Companies Act. 2010 and August 20. The Company has also constituted a Remuneration Committee which is a non-mandatory requirement. the Company has designated an exclusive email ID viz. 2010 July 21.m.kingfisherworld. performance are being published in The Financial Express and Kannada Prabha Newspapers. Joseph’s Pre-University College.) August 20. ANNUAL GENERAL MEETING INFORMATION Board Meeting for Consideration of Accounts Posting of Annual Report Book Closure dates Last date for receiving proxy Date of AGM ANNUAL GENERAL MEETING ON Friday.

40 173.05 144.f.28 16926.50 201.25 14493.75 105.f.bseindia.45 147.e.84 15896.28 16357.96 16429.05 12000 100 50 0 10000 8000 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Month UBL Share Price BSE Senex Feb-10 Mar-10 Sensex 192.04.3 168.f.2009 w.) LISTINGS AT STOCK EXCHANGE BANGALORE STOCK EXCHANGE LIMITED BOMBAY STOCK EXCHANGE LIMITED NATIONAL STOCK EXCHANGE OF INDIA LIMITED The Company has voluntarily de-listed its Securities from the following Stock Exchanges: Cochin Stock Exchange Limited Calcutta Stock Exchange Assn.15 146.05.81 16357.00 184.00 148.00 (Market Price data source: www.00 162..00 176. BSE Sensex. 21.84 15670.e.f. BSE Sensex 300 17126.75 159.2009 SCRIP CODE UNITEDBRED 532478 UBL Market price data of the Company’s Equity Shares traded on the Bombay Stock Exchange Limited.03. Limited Ludhiana Stock Exchange Limited Ahmedabad Stock Exchange Madras Stock Exchange Limited Delhi Stock Exchange Limited w.35 148.2009 w.45 168.55 17527.f.75 178.80 132.e.96 16429.2009 w.22 17464.50 166.2009 w.com) Graphical representation of the Company’s Shares in comparison to broad-based indices i.25 139.50 162.00 104.84 15670.30 159.64 15896. (BSE) during the period April 2009 to March 2010 Month April 2009 May 2009 June 2009 July 2009 August 2009 September 2009 October 2009 November 2009 December 2009 January 2010 February 2010 High (Rs.31 15666.77 March 2010 199.45 141.00 Low (Rs. 23. 25.e.Report on Corporate Governance (contd.00 108.UBL Stock Price Vs.f.8 132.09.35 148. 07.31 15666.) 87.35 138.15 147.40 160.9 115.64 17126.15 Close (Rs.00 178.) 110.05 156. 12.25 14493.2009 w.00 130.75 178.3 11403.25 14625.45 147.05 BSE Sensex-Close 11403. 31.77 18000 250 Stock Price in Rupess 200 150 110.e.30 146.25 14625.00 150.45 147.90 115.45 141.) 120.84 16926. is given below: Comparison .03.22 17464.55 16000 159.81 17527.05 192.e.12.e.05 14000 21 .80 122.

2004. of Shares held 11278189 1224526 1260491 1144328 684957 466824 1075748 222913192 240048255 % (Percentage) 4.53 0. of Shareholders 35878 170 89 46 19 10 15 56 36283 % (Percentage) 98.49 No.83 6. The Share Transfer requests received are processed by them and a Memorandum of Transfer is sent to the Company for approval by the Committee.01 0.Report on Corporate Governance (contd. 2010 is furnished below: Category (Rs.71 12. The average time taken for processing Share Transfer requests including despatch of Share Certificates is 15 days. the Registrar and Share Transfer Agent of the Company.00 Shareholding Pattern as on March 31. of Shares held Percentage of Shareholding 22 . In line with the above.03 0.) Up to 5000 5001 – 10000 10001 – 20000 20001 – 30000 30001 – 40000 40001 – 50000 50001 – 100000 100001 and Above TOTAL No. The distribution of shareholding as on March 31.48 0.47 0.88 0.70 0.53 0.04 0.25 0. SEBI has vide its Circular No. while it takes a minimum of 10-12 days for processing dematerialization requests.95 0. withdrawn transfer-cum-demat scheme.86 100.51 0.SEBI/ MRD/Cir-10/2004 dated February 10.) SHARE TRANSFER SYSTEM All matters pertaining to Share Transfer are being handled by Alpha Systems Private Limited.15 100. 2010 Category Promoters Indian Foreign Institutional Investors Mutual Funds/UTI Banks Financial Institutions Central/State Governments Insurance Companies Foreign Institutional Investors Others Bodies Corporate Individuals Trust Total 6793788 16681515 248761 240048255 2.88 89994960 89994960 37. on receipt of transfer requests the Company has discontinued issuing of option letters to the shareholders.00 No.13 0. However.29 0.00 3683929 28380 660 1702757 30918545 1. The Company was offering the facility of transfer-cum-demat as per SEBI Guidelines.10 100.49 37.45 92.00 0. The Company regularly monitors and supervises the functioning of the system so as to ensure that there are no delays or lapses in the system.19 0.05 0.

00 No. of Shareholders 15347 20936 36283 Shares held in physical & demat form as on March 31. 2010 is as under: Mode Physical mode Electronic mode TOTAL No.Report on Corporate Governance (contd.19% 12.98% Promoter & Group FIIs Others Individuals DEMATERIALIZATION OF SHARES The Company has set up requisite facilities for dematerialization of its Equity Shares in accordance with the provisions of the Depositories Act.) Shareholding Pattern as on March 31. of Shares 7385740 232662515 240048255 % age 3. The status of Dematerialization of the Company’s Shares as on March 31.92% Physical Mode Electronic Mode 23 . The Company has entered into agreements with both the Depositories for the benefit of Shareholders.95% 5.92 100. 2010 3.88% 74.08 96. 2010 6.08% 96. 1996 with National Securities Depository Limited and Central Depository Services (India) Limited.

BANGALORE . SAMPIGE ROAD.Report on Corporate Governance (contd. please write to the Registrar and Share Transfer Agent of the Company. VIJAYAGOPAL or MR. Alwar. b) Remuneration Committee: The Company has set up a remuneration Committee. at the address given below: ALPHA SYSTEMS PRIVATE LIMITED 30. NON-MANDATORY REQUIREMENTS a) Chairman of the Board: The Chairman of the Board is entitled to maintain a Chairman’s office at the Company’s expense and allowed reimbursement of expenses incurred in performance of his duties. Hence. d) Audit Qualifications: There are no qualifications or adverse remarks in the Auditors’ Report which require any clarification or explanation. REGISTERED OFFICE “UB TOWER”. Ghaziabad. issue of duplicate / lost Share Certificates / exchange of Share Certificate / Dematerialization and other relevant matters. their training is not considered necessary for the time being. : (080) 2346 0819 email: alfint@vsnl. VITTAL MALLYA ROAD. e) Training of Board Members: Having regard to the seniority and expertise in their respective areas of specialization.com’ OWN MANUFACTURING NETWORK ANDHRA PRADESH – MALLEPALLY GOA – PONDA KERALA – CHERTHALA & PALAKKAD KARNATAKA – MANGALORE & NELMANGALA MAHARASHTRA – TALOJA PUNJAB – LUDHIANA WEST BENGAL – KALYANI RAJASTHAN – CHOPANKI ORISSA – KHURDA CONTRACT MANUFACTURING NETWORK In addition. Indore. Srikakulam and Medak. Aurangabad. 22272806 & 22272807 Fax No. Tel. c) Shareholder Rights: The Company’s half yearly results are published in English and Kannada Newspapers having wide circulation and are also displayed on the Company’s website. : (080) 2346 0815 to 2346 0818 Fax No.560 001 Phone: (91-80) 39855000. MALLESWARAM BANGALORE – 560 003. Transmissions. RAJARAMAN Investors can also post their queries to ‘ublinvestor@ubmail. Press Releases are also issued which are carried by a few newspapers and also displayed on the Company’s website. Bhopal. Daman. 24.) For any assistance regarding Share Transfers. UB CITY. No.com Contact Persons: MR. RAMANA RESIDENCY 4TH CROSS. (91-80) 22211964. 24 . 22229488 Cable: UBEEGEE B. Kuthambakkam. Lucknow. change of address. the Company also has Manufacturing facilities through Associate Companies/Contract Breweries at Dharuhera. Thiruvallur. same are not sent to the shareholders.

the Board may consider adopting a separate mechanism for Whistle Blower Policy in future. COMPLIANCE WITH CODE OF BUSINESS CONDUCT AND ETHICS In accordance with Clause 49 sub-clause (I) (D) (ii) of the Listing Agreement. g) Whistle Blower Policy: Though covered briefly in the code of conduct adopted by the Company. 2010 Kalyan Ganguly Managing Director 25 . it is hereby confirmed that during the year 2009-2010.) f) Mechanism for evaluating Non-Executive Directors: The Board may at its discretion consider such requirement in future.Report on Corporate Governance (contd. Place: Bangalore Date: July 21. all the members of the Board of Directors and Senior Managerial personnel have affirmed their Compliance with the Company’s Code of Business Conduct and Ethics.

Our examination was limited to procedures and implementation thereof. We state that in respect of investor grievances received during the year ended on March 31. We further state that such compliance is neither an assurance as to future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. 2010 FCS 3812 CP 1030 26 . no grievances are pending against the Company as per records maintained by the Company and presented to the Shareholders’/Investors’ Grievance Committee. save and except the condition relating to number of independent Directors on the Board which stands complied as on the date of this report.) COMPLIANCE CERTIFICATE To the Members of UNITED BREWERIES LIMITED Certificate of Compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement We have examined the compliance of conditions of Corporate Governance by United Breweries Limited for the year ended on March 31. It is neither an audit nor an expression of opinion on the financial statements of the Company. The compliance of conditions of Corporate Governance is the responsibility of the management. M R Gopinath Company Secretary (In practice) Bangalore Date: July 21. as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges in India. 2010. 2010. In our opinion and to the best of our information and according to the explanations given to us.Report on Corporate Governance (contd. we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. adopted by the Company for ensuring the compliance of the conditions of Corporate Governance.

An audit includes examining. none of the directors is disqualified as on March 31. proper books of account as required by law have been kept by the Company so far as appears from our examination of those books. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 2003. As required by the Companies (Auditor’s Report) Order. (f) 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. (b) In our opinion. (c) The Balance Sheet. on a test basis. 2010 J. Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account. 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. issued by the Central Government of India in terms of sub-section (4A) of Section 227 of ‘The Companies Act. These financial statements are the responsibility of the Company’s Management. 2010 and taken on record by the Board of Directors. of the state of affairs of the company as at March 31. 4. as amended by the Companies (Auditor’s Report) (Amendment) Order. Further to our comments in the Annexure referred to in paragraph 3 above. 3. We believe that our audit provides a reasonable basis for our opinion. 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act. We have audited the attached Balance Sheet of United Breweries Limited (the “Company”) as at March 31. as on March 31. and (iii) in the case of the Cash Flow Statement. 2010. were necessary for the purposes of our audit. which we have signed under reference to this report. the information required by the Act. (e) On the basis of written representations received from the directors. as well as evaluating the overall financial statement presentation. we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. 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. in the case of the Profit and Loss Account. of the profit for the year ended on that date. 2010 and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) (ii) in the case of the Balance Sheet. the Balance Sheet. 2004 (together the “Order”). 2. Our responsibility is to express an opinion on these financial statements based on our audit. in the prescribed manner. We conducted our audit in accordance with the auditing standards generally accepted in India. Majumdar Partner Membership Number – F51912 27 . For Price Waterhouse Firm Registration Number – 007568 S Chartered Accountants Place: Bangalore Date: July 21. An audit also includes assessing the accounting principles used and significant estimates made by Management.Auditors’ Report To the Members of United Breweries Limited 1. (d) In our opinion. to the best of our knowledge and belief. evidence supporting the amounts and disclosures in the financial statements. we report that: (a) We have obtained all the information and explanations which. of the cash flows for the year ended on that date.

viii. a) The Company has not granted any loans. customs duty. the Company has an internal audit system commensurate with its size and nature of its business. firms or other parties covered in the register maintained under Section 301 of the Act and. are given in Appendix 1. income-tax. x. cess and other material statutory dues as applicable with the appropriate authorities. to companies. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to the Company. are not prejudicial to the interest of the Company. In our opinion.180 thousands as there are no comparable market prices. fixed assets and for the sale of goods and services. secured or unsecured. a substantial part of fixed assets has not been disposed of by the Company during the year. vii. c) In our opinion and according to the information and explanations given to us. 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. paragraphs 3(f) and 3(g) of the Order are not applicable. the term loans have been applied for 28 . and according to the information and explanations given to us. wealth-tax. b) In our opinion. excise duty. 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. 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. are considered to be of special nature as explained by the management of the Company. iv. 2010] 1. In our opinion and according to the information and explanations given to us. debentures and other securities. of fixed assets. firms or other parties covered in the register maintained under Section 301 of the Act and. xii. In our opinion. v. iii. xvi. secured or unsecured. ii. 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. therefore. a) The Company is maintaining proper records showing full particulars. xiii. the terms and conditions of the guarantees given by the Company. paragraphs 3(b). sales-tax. The discrepancies noticed on physical verification of inventory as compared to book records were not material. for loans taken by others from banks or financial institutions during the year. ix. in our opinion. b) In our opinion and according to the information and explanations given to us.796 (original cost in thousands) at one location of the Company. The Company has no accumulated losses as at March 31. employees’ state insurance. 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year. therefore. b) According to the information and explanations given to us and the records of the Company examined by us. the Company is regular in depositing the undisputed statutory dues including provident fund. a) In our opinion and according to the information and explanations given to us. these have substantially been confirmed by them. in our opinion. customs duty. In our opinion.701. securities. sales-tax. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under. xi. The Company has not granted any loans and advances on the basis of security by way of pledge of shares. 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 no material discrepancies between the book records and the physical inventory have been noticed. excise duty and cess as at March 31. b) The Company has not taken any loans. wealth tax. vi. investor education and protection fund. debentures and other investments. on an overall basis. In respect of inventory lying with third parties. 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. is reasonable having regard to the size of the Company and the nature of its assets. In our opinion. however. the particulars of dues of income-tax. c) On the basis of our examination of the inventory records. from companies. including quantitative details and situation. the Company is maintaining proper records of inventory. xiv. on the basis of our examination of the books and records of the Company. xv. in our opinion. a) The inventory (excluding stocks with third parties) has been physically verified by the Management during the year. the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date. 3(c) and 3(d) of the Order are not applicable. a) According to the information and explanations given to us and the records of the Company examined by us. the frequency of verification is reasonable.Annexure to Auditors’ Report [Referred to in Paragraph 3 of the Auditors’ Report of even date to the members of United Breweries Limited on the financial statements for the year ended March 31. According to the records of the Company examined by us and the information and explanation given to us. the Company is not a dealer or trader in shares. In our opinion and according to the information and explanations given to us.66. which. 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 purchase of services aggregating to Rs. Further. Pursuant to the programme. 2010 which have not been deposited on account of a dispute. a portion of the fixed assets has been physically verified by the Management during the year except for asset aggregating to Rs. service-tax. service tax.

we have neither come across any instance of fraud on or by the Company.968 1. there are no funds raised on a short-term basis which have been used for long-term investment. 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.726 2. carried out in accordance with the generally accepted auditing practices in India.582 34. in our opinion and according to the information and explanations given to us. Cherthala Commissioner of Income Tax (Appeals) Commissioner of Income Tax (Appeals) Commissioner of Income Tax (Appeals) Commissioner of Income Tax (Appeals) Commissioner of Income Tax (Appeals) Commissioner of Income Tax (Appeals) Commissioner of Service Tax. On the basis of an overall examination of the balance sheet of the Company.) the purposes for which they were obtained.088 90 13 5.148 2.972 3.955 4. Mumbai Assistant Commissioner (Assessment) Special Circle Sales Tax Appellate Tribunal / Deputy Commissioner (Appeals) Deputy Commissioner of Commercial Taxes (Appeals) Kollam Deputy Commissioner of Commercial Taxes (Appeals) Kollam Deputy Commissioner Appeals High Court of Kerala High Court of Kerala High Court of Kerala Court of Civil Judge.033 2. 1962 Rs. (Senior Division) Gurgaon Sales Tax Appellate Tribunal Sales Tax Appellate Tribunal Appellate Tribunal. 2000–01 to 2001–02 2001–02 2000–01 1991–92 1988–89 1989–90 1990–91 2001–02 1997–98 1998–99 1975 to 1994 2004–05 1997–98 1997–98 2000–01 2000–01 2006–07 2008–09 2005–06 (June’05) to 2009–10 (June’09) 2004–05 to 2007–08 1991–92 Central Excise Act. Mangalore The Customs.229 637 2. xviii. 1944/ State Excise Acts Sales Tax Acts Income Tax Act Service Tax Act Employee State Insurance Act 29 . 2010.404 69 130 107 124 289 498 459 185 83 841 61. In Thousands 4. xxi.225 1. For Price Waterhouse Firm Registration Number – 007568 S Chartered Accountants Place: Bangalore Date: July 21.510 699 193. noticed or reported during the year. Karnataka Sales Tax Appellate Tribunal. Bangalore Commissioner of Service Tax.866 8.174 4. 2010 J.853 106.340 10. Excise and Service Tax Appellate Tribunal High Court of Kerala Year to which amount relates 1991–92 1991–92 1998–99 1998–99 1998–99 1992–98 1981– 82 &1987–88 2000–2001 to 2003–2004.905 265 Forum where dispute is pending Commissioner of Customs. Ludhiana High Court of Bombay High Court of Madras Deputy Commissioner of Customs. and according to the information and explanations given to us. During the course of our examination of the books and records of the Company. Siliguri High Court of Calcutta High Court of Andhra Pradesh High Court of Calcutta High Court of Karnataka High Court of Calcutta High Court of Calcutta High Court of Calcutta Commissioner of Excise Commissioner (Appeals) Central Excise Commissioner (Appeals) Central Excise High Court of Andhra Pradesh High Court of Kerala High Court of Kerala High Court of Calcutta Sales Tax Appellate Tribunal. 2005–06 1981–82 1988–89 1998–99 2000 to 2005 2005–2007 2007–2008 1997–98 to 1998–99 1983–84 to 1986–87 1990–91 1997–98 2002–03 1990–91 2002–03 1975–76 to 1998–99. xix. xx.076 1. The Management has disclosed the end use of money raised by public issues (Refer Note 1 on Schedule 19) which has been verified by us.028 490 277 401 628 38 4. nor have we been informed of such case by the Management. xvii. Name of the statute Customs Act.Annexure to Auditors’ Report (contd.375 5.253 571 1. Majumdar Partner Membership Number – F51912 Appendix 1 to the Auditors’ Report Referred to in paragraph ix (b) of the Annexure to the Auditors’ report of even date to the members of United Breweries Limited on the financial statements for the year ended March 31. The Company has not issued debentures during the year and there are no debentures outstanding as at the year-end.

788 9.547 2.294.630 865.491 2.048 8.404 12.470 833.630.807.876 575.022 3.977.960.597.699 1.Balance Sheet as at March 31.479 2010 Rs.162.530.957 1 2 3 4.306 18.006 6.006 6.212.709.300 5 4 10.166 2. 2010 Guido de Boer Director & CFO 30 .331 8.888.815. in Thousands Schedule SOURCES OF FUNDS Shareholders’ Funds Capital Reserves and Surplus Loan Funds Secured Loans Unsecured Loans Deferred Tax Liability [Refer Schedule 19 Note 15] APPLICATION OF FUNDS Fixed Assets Gross Block Less:Accumulated Depreciation and Amortisation Net Block Capital Work in Progress Investments Current Assets.960.249.699 9.966. This is the Balance Sheet referred to in our report of even date.166 6 7 8 9 10 1.158.169 354.842.709.617.733 140.065.029 7.271 17.565 173. July 21.048 8.760 2.106.769.376 4.347 216.917 6.527.712 11.165 6.192 8.272.753. The Schedules referred to above and the notes thereon form an integral part of the financial statements.559 1. 2010 Rs.152. July 21.734 183.295 2.713. Rs.170 254.079.938 1.413 4.753.466. Rs. 2010 Kalyan Ganguly Managing Director Govind Iyengar Company Secretary Bangalore.699.122 17.670 7.368.383. For Price Waterhouse Firm Registration Number: 007568 S Chartered Accountants J.769 2.613.431 10. F51912 Bangalore.152. 2009 Rs.341 1.413 2.527.507 18.546 3. Majumdar Partner Membership No.410.940.728. 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 Significant Accounting Policies Notes on Accounts 18 19 11 12 3.308 7.207 1.634 417.163.

in Thousands Schedule INCOME Sales and Service Less: Excise Duty 13 29.29 (498.636 5.68 (170.769) 624.006 882.000) 389. Majumdar Partner Membership No.028 2.288 10.240. This is the Profit and Loss Account referred to in our report of even date. July 21.458.472.184) (541.Profit and Loss Account for the year ended March 31. 2010 Rs.692 19.709 The Schedules referred to above and the notes thereon form an integral part of the financial statements.630.604. F51912 Bangalore. 2010 Guido de Boer Director & CFO 31 .377 762.281 Earnings per share (Basic/Diluted) [Refer Schedule 19 Note 13] Significant Accounting Policies Notes on Accounts 18 19 3.894 4.481 7. For Price Waterhouse Firm Registration Number: 007568 S Chartered Accountants J.709 492.400) (82.549) (14.709 (294.395) — (43.475.016.834 20.328 24.040 1.579) 969.171.974.621.570 896.009 9.982.327.700 2010 2009 EXPENDITURE Cost of Sales Other Expenses Interest and Finance Charges Depreciation and Amortisation Profit before taxation Provision for Taxation [Refer Schedule 19 Note 15] .511.751.428) (100.912) (65. 2010 Kalyan Ganguly Managing Director Govind Iyengar Company Secretary Bangalore.000) 682.820) (391. July 21.940 15 16 17 12.991 17.991 1.558.706 555.515 19.150 16.772 16.Deferred Tax (Charge)/Write back Profit after taxation Less: Dividends [Refer Schedule 19 Note 22] Transfer to General Reserve (187.494 Other Income 14 776.Current Tax .583.Fringe Benefit Tax .

511.292) (1.110 2.833) (1.216. 2010 Rs.089 528.Cash Flow Statement for the year ended March 31.512 (1.993) (1.902) (327.288 1.463.515.143) 762. in Thousands 2010 A Cash Flow from Operating Activities Profit before taxation Adjustments for: Interest Income Depreciation and Amortisation Interest Expenses (Net) Dividend Income Profit on sale of Investments Provision for Doubtful Debts Provision for Doubtful Advances Bad debts written off Bad advances written off Provision for Doubtful Debts no longer required written back (Profit)/Loss on Sale of Assets Operating Profits before Working Capital changes Adjustment for Working Capital Changes: (Increase) / Decrease in Sundry Debtors (Increase) / Decrease in Inventories Increase / (Decrease) in Current Liabilities and Provisions (Increase) / Decrease in Other Current Assets.457 (147.861) (117.004.150 896.954 (2.240 113.377 (48.443.169 2.158.519 (150.547 48.483.836 (117) 3.015) 882.519) 12.226 (900.716.670) 1.182 (399.903) (329.476) 17.556.589) (3.426 1.692 555.819 1.429) (1.798) (461.184 — — 10.709 2009 32 .209) (208.441.248) 9.954) — 2.861 (780.610) (309.525.991 5.040) (1.185 1.499.016.789) 1. Loans and Advances Cash Generated from Operations Direct taxes (Income Tax and Fringe Benefit Tax) paid (including TDS) Net Cash Generated from Operating Activities B Cash Flow from Investing Activities Purchase of Fixed Assets (including acquisition on amalgamation) Sale of Fixed Assets (Purchase) / Sale of Investments Interest Income Dividend Income Net Cash used in Investing Activities (1.866 — 2.330.730.293 3.982) 1.102) (785.275) 1.489.271.710 928 8.006 (3.

925) which are not available for use by the Company.053 — (74) (557.083) 415.875 175.785) 4. 2010 Kalyan Ganguly Managing Director Govind Iyengar Company Secretary Bangalore.990) (128.277) (128. 2010 and the related Profit and Loss Account for the year ended on that date.Cash Flow Statement for the year ended March 31.248. [Refer Note in Schedule 8] 4. 2006 and the reallocations required for the purpose are as made by the Company. F51912 Bangalore. July 21.169 1.331 833.) Rs. The above Cash Flow Statement has been prepared in consonance with the requirements of Accounting Standard (AS) . July 21.436 943.821 2009 This is the Cash Flow Statement referred to in our report of even date. 2010 (contd.037 167. 2010 Guido de Boer Director & CFO 33 . Previous year’s figures have been regrouped / reclassified wherever necessary to conform with current year’s classification.5.021 (267.760 415. 2.733 1.763 241.038. Cash and cash equivalents include Rs.760 415. 3. For Price Waterhouse Firm Registration Number: 007568 S Chartered Accountants J.19.733 8. Majumdar Partner Membership No.785) (134.838 830.850 (2009: Rs. 2.854 (122) (756.912 — 552.3 on Cash Flow Statements as notified under Companies (Accounting Standards) Rules.973 417.215) 4. The above Cash Flow Statement has been compiled from and is based on the Balance Sheet as at March 31.973 417. in Thousands 2010 C Cash Flow from Financing Activities (Repayment)/Proceeds from unsecured term loans (net) (Repayment)/Proceeds from Bank Borrowings (net) Proceeds from Rights Issue Advance to subsidiary companies / others Interest Paid Dividend paid (including distribution tax) Net Cash Generated from Financing Activities Net Increase / (Decrease) in cash and cash equivalents Opening cash and cash equivalents Cash on hand including Remittances in Transit Bank Balances including cheques on hand Closing cash and cash equivalents Cash on hand including Remittances in Transit Bank Balances including cheques on hand Notes: 1.

414.028 1.048 1.750.000 65. 2011 and are extendable upto March 31.006 2.000.000.025. 2015 based on mutual agreement between the Company and Scottish and Newcastle India Limited (the preference shareholder)] 3%.368.712 SCHEDULE 3 SECURED LOANS [Refer Schedule 19 Note 2(a)] Foreign Currency Loans .000 Profit and Loss Account balance Add: Profit for the year 1.000 3.000 1.657 682.000 300.750.034 105.960 22.281 2.048 740.000. 17.657 8.000 Cumulative Redeemable Preference Shares of Rs.960.170 936. in Thousands 2010 SCHEDULE 1 CAPITAL Authorised 300.255 (2009: 240.224.244 4.521.414.000 2009 740.Series A [The above shares are redeemable at par at the earliest on March 31.Working Capital Loan from Banks .728.470.048 SCHEDULE 2 RESERVES AND SURPLUS Securities Premium Account Add: Premium on Equity Shares issued [Refer Schedule 19 Note 1] General Reserve: As per Last Balance Sheet Transfer from Profit and Loss Account 170.000 (2009: 300.000 3.000 2.100 each fully paid .500.774 2.774 34 .Schedules to Balance Sheet Rs.521.521.000 2.800.883 25. 100 each Issued.296.283.1 each fully paid [Refer Schedule 19 Note 1] 3%.006 1.888.431 6.849 6.925 4.709.300 300.000 2.410.973 4.774 — 6.000 270.255) Equity shares of Re.048.709.006 1.700 2.404.329 1.External Commercial Borrowing from Banks Term Loans from Banks Other Loans .000 2.629 389. 7.341 860.000 Cumulative Redeemable Preference Shares of Rs.559 576.000 100.728.000 170.938 8.000.048 1.048.700 2.753.069 1.651 650.407.1 each 25.000) Equity shares of Re.000 (2009: 25. 2015] 240.000) Preference Shares of Rs.Working Capital Loan / Cash Credit from Banks Interest accrued and due UNSECURED LOANS [Refer Schedule 19 Note 2(b)] Long Term Loan From Bank Other Loan 1.100 each fully paid .500.753.006 1.800. Subscribed and Paid-up 240.300 240.Series B [The above shares are redeemable at par at the earliest on March 31.587 1.106.096.055.

938 35 .221 16.299.105.195 882. 476.807.970 20.977.733 (2009: Rs.300 2.000 — 40.Freehold 253.741.853 5.261. 2010 Intangible 623.963.487 10.917 1.715 — 1.955 — 1.536 58.852 30.604 499.779 9.349 — — — — — 16.479 Land .645 2.015 265 1.271 Vehicles 6.557 Laboratory Equipments 37.294.013 10.000 124.842.508 2.707 3.331 39. 2009 Particulars Gross Value of Deletions / Assets as at Additions Adjustments March 31.256 45.988 — 3.205 Goodwill 320.105.383.869.150 — 19.601 280.057 396.037 80.730 Office Equipments 154.458. 2009 Gross Value of Assets as at March 31.742 155.547 — — 6.912 352 6. 2010 Net Value of Assets as at March 31.293 1.821 7.917 575.207 1.294.928 212. 2010 Depreciation FIXED ASSETS [Refer Schedule 19 Note 3] Net Value of Assets as at March 31.901 1.625)] 7.394 Land .876 Schedules to Balance Sheet (contd.893 31.453 2.670 2.394 270.822 51.547 7.921 5.057 Leasehold Improvements 3.413.565 12.399 67.151.548 8.262 54. in Thousands Cost As at March 31.407 337.719 — 124.308 Capital work in Progress [including capital advances Rs.837 110.546 9.846 2.231 13.511 18.032 Buildings 4.301 51.487 59.692 762.037 Licenses Tangible 1.192 3.630 2009 865.SCHEDULE 4 Rs.349 250.123 47.331 8.307 329.712.350 566.616.924 374.152.674 47.186 53.350 1.966.646 1.954.Leasehold 1.677 6.491 4.272.000 — — 623.832.924 400.705 17.037 249.755 — — 270.) 1.865 105.733.742 Plant and Machinery 57.906 70.037 — — 400. 2009 on Deletions for the year As at March 31.939 14.126 Furniture and Fittings 38.398 585 5.407 4. 615.221 1.323 120.265 5.074 184 170 — 2.577 175.299 246.547.149.158.758 150.700 1.261.454 29.392 158.272.

258 50.940.000 3.000 — 200.000.252 50 50 1.000 450.000 Equity Preference Equity Equity 6.000 200.000 15.000.000 100.000 300.295 70 1.000 22. in Thousands 2010 Particulars Class of Shares Face Value CostRs.025.000 150.000 — — Equity Equity 10. Face Value Number of Shares/Units Number of Shares/Units 2009 Cost.400 300. — — — — — — 48.135 10 — — 490.957 SCHEDULE 5 INVESTMENTS [Refer Schedule 19 Note 4] CURRENT INVESTMENTS INVESTMENT IN MUTUAL FUNDS – UNQUOTED HDFC FMP 370D June 2008 VIII .000.000 100.000.140.000 22.999 2.000 300.000 100.000 — — — 20.000 61.000 50 25 256.Growth Plan Reliance Blended Debt Plus-Hybrid Option -Series XIV Plan Reliance Fixed Horizon Fund-IX .950 70 1.000 450.846.000 — 10.000 4.Institutional Growth Plan INVESTMENT IN MUTUAL FUNDS – QUOTED HDFC Cash Management Fund -Treasury Advantage Plan Wholesale .000 3.000 50 25 256.Series 2 .Daily Dividend LONG TERM INVESTMENTS (UNQUOTED. LONG TERM) IN GOVERNMENT AND TRUSTEE SECURITIES – FULLY PAID National savings certificate IN SUBSIDIARY COMPANIES – FULLY PAID SHARES Associated Breweries & Distilleries Limited Maltex Malsters Limited NON TRADE: IN JOINT VENTURE Millennium Alcobev Private Limited Millennium Alcobev Private Limited IN ASSOCIATES: United East Bengal Football Team Private Limited IN OTHERS: Zorastrian Co-operative Bank Limited* TOTAL Schedules to Balance Sheet (contd.000 2.000.252 50 50 1.950 70 1.000 10.000 61.295 70 1.140.000 4.277 333.000 3.400 300.000 — — — — — — — — 10.277 333.36 Rs.258 50.000 100.999 2.Wholesale Plan Growth IDFC FMP Yearly Series 22 Plan B Growth I-Growth Capital Protection Portfolio Kotak FMP 12M Series 7 Institutional .000 150.000 2.530.820 500.699 6.) *Acquired on amalgamation .

Wholesale .000 1.SCHEDULE 5 INVESTMENTS (contd.258 100.000 Reliance Fixed Horizon Fund . 2010 Cost 490.000 300.258 — — 300.000 100. of Units in ‘000s 48.000 Cost — 88.) Details of Investments In Mutual Funds during the year Rs.300.000 10.846 Sold during the year Balance as at March 31.026 0.000 39.000 — — 20.874 400.000 — — 10.026 0.000 200.000 Total 37 .000 HDFC FMP 370D June 2008 VIII Wholesale Plan Growth — — — — — — — — — — IDFC FMP Yearly Series 22 Plan B Growth I-Growth Capital Protection Portfolio Schedules to Balance Sheet (contd.000 — — 3 15.000 Balance as at April 1.000 — — 890. in Thousands Purchased during the year No.258 50.720 No.000 — — 150.Series 2 Institutional Growth Plan 10.258 — — 490. of Units in ‘000s Cost — Name of Mutual Fund HDFC Cash Management Fund .IX .Treasury Advantage Plan . of Units in ‘000s No.Daily Dividend 20.50 100.) Kotak FMP 12M Series 7 Institutional . 2009 No. of Units in ‘000s Cost 890.000 100.000 3 15.000 200.50 50.000 900.Growth Reliance Blended Debt Plus-Hybrid Option Series XIV 10.000 150.

525.7.Over Six Months .850 (2009: Rs.769 818.) Rs.5.407 677.in Current Account (including cheques on hand Rs.1.Nil (2009: Rs.914 (2009: Rs.738 — 6.092. Includes Rs.484 11. Includes balance in Unclaimed Dividend Account Rs.208 (56. SCHEDULE 9 OTHER CURRENT ASSETS (Unsecured.169 396.847 833.760 38 . considered good) Income accrued on Investments and deposits 354.Over Six Months .470 (2009: Rs.309 38.769 140.131 19.536)] Work in Progress / Finished Goods (including Traded Goods) Goods in transit 572.in Deposit Account [Refer Note 2 below] Notes: 1.491 140.634 SCHEDULE 8 CASH AND BANK BALANCES Cash on hand (including remittances in transit Rs.537) [Refer Note 1 below] .880) 2.017 492.755.045) kept as margin against Letters of Credit and Bank Guarantees.470 55.491 354.305 (55.634 69.219.550 59. Stores and Spares [Net of provisions Rs.125 856.671) 4.671 — 4.Others Less: Provision for Doubtful Debts 56.000 4.838 1.Nil) Balances with Scheduled Banks: .733 2.376 2009 SCHEDULE 7 SUNDRY DEBTORS (Unsecured.162.19.738) 6.Schedules to Balance Sheet (contd. 36.940 1.550 174.630.699.Nil (2009: Rs.Others Considered Doubtful .5. in Thousands 2010 SCHEDULE 6 INVENTORIES Raw Materials Packing Materials.842 417.550 471. considered good unless otherwise stated) Considered Good .165 422.920 6.643 1.960.

295 5.365 2.941 (2009: Rs.665 Advances to Subsidiary [Refer note below] Balances with Excise Authorities Other Deposits Taxation [Net of Provisions] 83.416) 1.441 63. in Thousands 2010 SCHEDULE 10 LOANS AND ADVANCES (Unsecured.827 1. Small and Medium Enterprises [Refer Schedule 19 Note 7] .000 2009 39 .708)] [Refer Schedule 19 Note 22] Gratuity Leave Entitlements 187.905 1.785 20.Due to Micro.36 (2009: Rs.734 10.83.236 551.892.329 254.202.Schedules to Balance Sheet (contd.832 125.022 128.428 7.738.143 8.404 Note: Represents advances to Associated Breweries and Distilleries Limited [Maximum amount outstanding during the year Rs. considered good unless otherwise stated) Advance towards Contract Brewing Rights [Refer Schedule 19 Note 26] Advances recoverable in cash or in kind or for value to be received .26.617 183.36) due from Director of the Company – maximum amount due during the year Rs.791)] SCHEDULE 11 LIABILITIES Acceptances Sundry Creditors .265 59.932 633.Considered Doubtful 333.902 792.865 224.000 1.396.143 83.550.Considered Good* .273 26.Nil (2009: Rs.) Rs.065.728.170 SCHEDULE 12 PROVISIONS Dividend Payable [including dividend distribution tax Rs.527 1.791.559 1.403 1.788 188.986 (8.665 8.893 33.416 1.883.068 *[including: Rs.231 880 2.Others Other Liabilities Unclaimed Dividend 11.18.090 2.62)] Less: Provision for Doubtful Advances (8.746.83.470 3.791 147.873 (2009: Rs.403) 1.769.212.550.735 1.

456 91.458 23.148 3.521.518 72.564.413 62.954 147.786 80.087.81.039.304 367 222.221 847.356 1. in Thousands 2010 SCHEDULE 13 SALES AND SERVICE Sales Income from Brand Franchise and Technical fees 28.358 575.Schedules to Profit and Loss Account Rs.207 13.781 94.973 1.830 84.052.318 9.403 60.006.776 57.141.481 2009 SCHEDULE 14 OTHER INCOME Guarantee Commission Liabilities no longer required written back Dividend Income Interest Received (Gross) [Tax deducted at source Rs.047 2.2.601 81.300 51.508 24.671 8.31.861 327.279 2.558.271 (2009: Rs.641 237. Wages and Bonus Contribution to Provident and Other funds Staff Welfare Others Rent (including asset rentals) [Refer Schedule 19 Note 11] Insurance Repairs Building* Repairs to Machinery* Repairs Others Travel and Conveyance Communication Expenses Rates and taxes Legal and Professional fees Miscellaneous *Includes Materials consumed Rs.612 126.834 SCHEDULE 15 COST OF SALES Manufacturing Expenses Consumption of Raw Materials Consumption of Packing Material and Stores and spares Purchases of Finished Goods Power and Fuel Personnel Expenses Salaries.411 491.608 14.025 (2009: Rs.009 23.864 492.951.059 48.380 257.307 12.089) 82.240 750.576 5.115.295 99.102 2.982 117 13 251.799 776.143 — 1.991 40 .725 3.015 117.322 54.547 2.278 23.925 365.604.775 12.84.268 21.864 291.505.653 29.103)] Profit on sale of Investments Provision for Doubtful Debts no longer required written back Provision for Doubtful Advances no longer required written back Miscellaneous 21.

617 555.184 — 3.309 (856.329 209.706 SCHEDULE 17 INTEREST AND FINANCE CHARGES Interest on Loans for a fixed period Interest – Others [Including exchange (Gain) / Loss on Foreign Currency Loans Rs.488 12.666 7.473) 499.278 11.592.188 — 10.836 1.710 31 2.377 4.473 10.970) 366.185 928 4.) Rs.673 84.159) (2009: Rs.522 292.(74.550) (366.327.288.630.526 896.636 SCHEDULE 16 OTHER EXPENSES Selling and Promotion Expenses Directors’ Sitting fees Auditor’s Remuneration [Refer Schedule 19 Note 14] Bad Debts Written Off Bad Advances Written Off Provision for Doubtful Debts Provision for Idle Assets Loss on sale of Assets (net) Provision for Doubtful Advances 5.991 5. in Thousands 2010 Change in Inventory Opening Stock Closing Stock Excise Duty on Opening Stock Excise Duty on Closing Stock 677.716 11.472.570 529.462 (677.Schedules to Profit and Loss Account (contd.486)] Other Finance Charges 458.171.809 8.866 2.406 15.426 — 5.006 394.139.772 6.894 2009 41 .309) (279.

Use of Estimates: The preparation of the Financial Statements in conformity with Generally Accepted Accounting Policies (GAAP) in India requires that the management makes estimates and assumptions that affect the reported amounts of assets and liabilities. All monetary items of foreign currency liabilities/ assets are restated at the rates ruling at the year end and all exchange gains/ losses arising there from are adjusted to the Profit and Loss Account. Rs. 2007 exchange differences on long term foreign currency monetary items (except for exchange differences on items forming part of the company’s net investment in a non-integral foreign operation) are i) ii) 9. Investments: Long term investments are carried at cost less provision made to recognise any decline. 4. adjusted to the cost of the asset in so far as they relate to the acquisition of a depreciable asset. Current investments are carried at cost or net realisable value. The cost of fixed assets acquired on amalgamation have been determined at fair values as on the respective dates of amalgamation and as per the related Schemes of Arrangement and include taxes / duties thereof. freight and other incidental expenses relating to acquisition and installation of such assets. Actual result could differ from those estimates. taxes. Inventories: Inventories are valued at lower of cost and net realisable value. in Thousands Depreciation and Amortisation: Depreciation on fixed assets is provided on Straight Line Method based on the rates prescribed under Schedule XIV to the Companies Act. to comply in all material aspects with the applicable accounting principles in India. whichever is lower. 2. Due allowance is made for obsolete and slow moving items.Significant Accounting Policies for the year ended March 31. 7. Foreign Currency Transactions: a) Foreign currency transactions are recorded at the rates of exchange prevailing on the dates of such transactions. duties. duties and appropriate production overheads and are generally ascertained on the First in First Out (FIFO) basis. 8. 3. 2010 SCHEDULE 18 1. technical advisory and management fees is recognised as per the terms of agreement. Exchange difference on forward contracts are recognised in the Profit and Loss Account in the reporting period in which the exchange rates change. Excise/Customs duty on stocks in bond is added to the cost. Borrowing Costs: Borrowing costs incurred for the acquisition of qualifying assets are recognised as part of cost of such assets when it is considered probable that they will result in future economic benefits to the Company while other borrowing costs are expensed in the period in which they are incurred. 2011. 1956. 6. other than temporary in the values of such investments. Fixed Assets: Fixed assets are stated at their original cost of acquisition and subsequent improvements thereto including taxes. the applicable accounting standards notified under Section 211(3C) of the Companies Act. accumulated in a “Foreign Currency Monetary Item Translation Difference Account” and amortised over the period of the related long term foreign currency monetary item but not beyond March 31. b) With retrospective effect from April 1. on dispatch from the Breweries/warehouses of the Company and is net of trade discount but includes Excise Duty. and the reported amounts of revenue and expenses during the reported period. Costs include freight. 1956 and to relevant provisions of the Companies Act. Basis of Presentation of Financial Statements: The Financial Statements of the Company have been prepared under historical cost convention. 5. 1956 except as indicated below: 42 . disclosure of contingent liabilities as at the date of the Financial Statements. Any profit or loss arising on cancellation or renewal of such forward contracts is recognised as income or expense for the year. Income from brand franchise is recognised at contracted rates on sale/production of the branded products by the franchisees. Revenue Recognition: Revenue from sale of goods is recognised in accordance with the terms of sale. Dividend Income is recognised when the Company’s right to receive the payment is established. Royalty from foreign entities (net of tax).

Cost of Leasehold Land is amortised over the period of lease. the reimbursement is recognised as a separate asset. are recognised during the period when the employee renders the services. the Company assesses whether there is any indication that assets may be impaired. 1961. Provisions. 10. on timing differences. Assets acquired on amalgamation (where original dates of acquisition are not readily available). Fringe Benefit Tax is determined at current applicable rates on expenses falling within the ambit of “Fringe Benefit” as defined under Income Tax Act.Significant Accounting Policies for the year ended March 31. A disclosure for contingent liability is made where there is a possible obligation or present obligation that may probably not require an outflow of resources. Taxation: Current tax is determined as per the provisions of the Income Tax Act. Earnings per share: Annualised earnings/ (Loss) per equity share (basic and diluted) is arrived at based on ratio of profit/ (loss) attributable to equity shareholders to the weighted average number of equity shares. Provisions are reviewed regularly and are adjusted where necessary to reflect the current best estimates of the obligation.5 are depreciated fully in the year of purchase. 13. Further.) Rs. 43 . an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable amount. Cost of Goodwill arising on amalgamation is amortised over a period of 5 years. depreciation is provided at higher rates in respect of certain specific items of plant and machinery having lower useful life based on technical evaluation carried out by the management. 12. only when such reimbursement is virtually certain. If the carrying amount of the asset exceeds its recoverable amount. Superannuation Fund. Assets individually costing less than Rs.34%. compensated absences. Employees’ State Insurance and Employees’ Pension Scheme are as per statute and are recognised as expenses during the period in which the employees perform the services. b) (ii) Defined-benefit plans: Liability towards gratuity is determined on actuarial valuation using the Projected Unit Credit Method at the balance sheet date. 14. Contingent Liabilities and Contingent Assets: Provisions are recognised when the company has a present obligation as a result of past events. Employee Retirement benefits: (i) Defined-contribution plans: Contributions to the Employees’ Provident Fund. Deferred tax is recognised. being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. in Thousands a) Plant and Machinery are depreciated at the rate of 10. When the company expects a provision to be reimbursed. (iii) Other long term employee benefits: Liability towards leave encashment and compensated absences are recognised at the present value based on actuarial valuation at each balance sheet date. 2010 (contd. Impairment of Assets: At each Balance Sheet date. (iv) Short term employee benefits: Undiscounted amount of liability towards earned leave. If any such indication exists. are depreciated over the remaining useful life of the assets as certified by an expert. 11. for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made. 1961. the Company estimates the recoverable amount. performance incentives etc. Deferred tax assets are not recognised unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Actuarial Gains and Losses are recognised immediately in the Profit and Loss Account.

750.750. stores and spares.886. Fixed Assets: Buildings amounting to Rs.920 (2009: Rs.500 493. Nil (2009: Rs.3.000* 1.501.550. work in progress and finished goods.1.321 2010 2009 Rs.Nil) *Covered by personal guarantee of a director of the Company. 2.248. bills receivable and book debts.006 1.250.502. raw materials.854 through an issue of shares on rights basis (Rights Issue). and hence.053 (2009: Rs. (ii) Term Loan from Banks Secured by First Charge over all moveable and immovable assets.384) (iii) Term Loan from Banks Secured by Pari-passu charge on all moveable and immovable properties of the Company except Taloja plant.250.874 (2009: Rs. (b) Unsecured Loans (i) Loans from Banks [including interest accrued and due Rs. Foreign currency demand loan from Axis Bank is secured by first charge on the current assets namely.030 (2009: Rs.4.321)] Amount repayable within one year – Rs. b) Rs.Nil (2009: Rs.013 (2009: Rs.17. Amount repayable within one year – Rs.729) Foreign Currency Loan consists of External Commercial Borrowing (ECB) from BNP Paribas and demand loan from Axis Bank.074.534 1.013 866.53. 4. ECB from BNP Paribas is secured by first charge on all moveable and immovable properties of the Company except Taloja plant. c) Pending utilisation the balance proceeds of Rs.5.731.374. The Company has obtained an independent valuations which are in excess of the carrying costs of the respective investments.19.960.258) have been invested in mutual funds.151 657.204 562.Nil (2009: Rs.500 812.866.473. no provision for diminution in the value of the investments is considered necessary. Loan Funds: Particulars (a) Secured Loans (i) Foreign Currency Loans [including interest accrued and due Rs.164.500) for Capital Expenditure. 2008 the Company has raised Rs.384 (2009: Rs.49. stores.000 (2009: Rs.000) (iv) From Banks [including interest accrued and due Rs.Nil) 3.570 (2009: Rs. book debts and a second charge on all the immovable properties of the Company.517 (2009: Rs.5.619) and Plant and Machinery amounting to Rs.490.530.006 3.319) are in premises not owned by the Company. Investments: The investments in Millennium Alcobev Private Limited and Maltex Malsters Limited are strategic in nature and the diminution in their respective book values is considered temporary.677 2.197.204) Secured by hypothecation of stock in trade.000 (2009: Rs. stock of raw materials. 2010 SCHEDULE 19 Notes on Accounts 1.000* 2.096) for repayment of cash credit/overdraft accounts and for additional working capital requirements.374.026.980 (2009: Rs. During the quarter ended June 30.Notes on Accounts for the year ended March 31. 3. (ii) From Others Amount repayable within one year – Rs. Amount repayable within one year – Rs.The proceeds of the Rights Issue have been utilised in the following manner: a) Rs. in Thousands 44 .2.923)] Amount repayable within one year – Rs.164.2.Nil)] Amount repayable within one year – Rs.

fresh application under Section 314 of the Companies Act.559 The information given above and in Schedule 11 has been determined to the extent such parties have been identified by the Company.505 42 2009 4. 2010 9.Notes on Accounts for the year ended March 31. 2006. 2010 aggregating to Rs. in Thousands 5. Upon expiry of earlier approval granted by the Central Government. Sl. Contingent Liabilities: Particulars a) Sales Tax/other taxes demands under appeal* b) Employees State Insurance Demand* c) Demand towards Water charges under appeal* d) Excise Duty/Customs Duty demands under appeal* e) Income Tax demands under appeal* f) Service Tax demands under appeal* g) Claims against the Company not acknowledged as debt* h) Letter of Credit outstanding 2010 14. The amount of interest accrued and remaining unpaid on year end. which has been relied upon by the auditors. along with the amount of the payment made to the supplier beyond the appointed day during each accounting year. 9. Accordingly. Investor Education and Protection Fund: There are no overdue balances unremitted to the fund under section 205C of the Companies Act. 1956 for payment of remuneration for the period November 1. Segmental Reporting: The Company is engaged in manufacture.134 45 . Interest due thereon remaining unpaid on year end. 2010 (contd. Small and Medium Enterprises Development Act.) Rs.515 1.650 to an employee related to a Director of the Company is pending approval of the Central Government. (i) (ii) (iii) Particulars The principal amount remaining unpaid as at year end.1.709 82.022 1. Small and Medium Enterprises Development Act. 6.672 265 133. 2006.708 27.262 377.230 2010 257.321 2009 689. 2006. for the purpose of disallowance as a deductible expenditure under section 23 of the Micro.No. 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. 2009 to March 31.377 33. on the basis of information disclosed by the creditors.926 2009 14. The Company operates only in India.114 30. The amount of further interest remaining due and payable even in the succeeding years.709 188.980 2. 7. Capital Commitments: Particulars Estimated amount of Contracts remaining to be executed (net of capital advances) on capital account and not provided for 10. The amount of interest paid by the buyer in terms of section 16 of the Micro. until such date when the interest dues as above are actually paid to the small enterprise. Disclosure of dues/ payments to micro and small enterprises to the extent such enterprises are identified by the Company. 8.176 44 — — (iv) — — (v) (vi) 1. primary and secondary reporting disclosures for business and geographical segment as envisaged in AS-17 are not applicable to the company.844 229. purchase and sale of beer including licensing of brands which constitutes a single business segment. Small and Medium Enterprises Development Act.672 265 — 36. 1956.568 78.019 36.

288 12. the above demands / claims are not sustainable in law and accordingly no provision has been made in the accounts.608 2009 80.999) on non-cancellable leases.307 46 .999 (2009: Rs. in Thousands i) Guarantees given by the company: – on behalf of Subsidiaries of Joint Venture to third parties Millennium Beer Industries Limited United Millennium Breweries Limited Empee Breweries Limited – to third parties Letter of undertaking to distributors towards countervailing duty for imports from Nepal 800.Notes on Accounts for the year ended March 31. (S & N).892 28.000 28. Particulars Lease payments during the year including Minimum lease payments Rs. Kalyan Ganguly) 17. future minimum lease rentals under non-cancellable operating leases are as under: Not later than one year One to five years Total 12.500 800. Suparna Bakshi Ganguly (Wife of Mr. office premises and residential premises that are renewable on a periodic basis.) Rs.060 38. Fellow Subsidiary of SNIL (7) Key Management Personnel (KMP): Mr. Holding Company of SNIL (b) Scottish & Newcastle UK Limited (SNUK).348 38.887 41.4.000 600. Guido de Boer (Part of the year) (8) Relative of Key Management Personnel: Mrs. 11.500 j) *In the opinion of the management. except in the case of certain leases where there is a lock-in period of 11 to 26 months.175 2010 82. Such leases are generally for a period of 11 to 60 months with options of renewal against increased rent and premature termination of agreement through notice period of 2 to 3 months. and cancellable/ non-cancellable in nature. Related party disclosures: A Name of the related parties: (1) Subsidiary: Associated Breweries & Distilleries Limited (ABDL) Maltex Malsters Limited (MML) (2) Associate: United East Bengal Football Team Private Limited (UEBFTPL) (3) Joint Venture: Millennium Alcobev Private Limited (MAPL) (4) Subsidiaries of the Joint Venture: (a) Empee Breweries Limited (EBL) (b) United Millennium Breweries Limited (UMBL) (c) Millennium Beer Industries Limited (MBIL) (5) Entity which has significant influence: Scottish & Newcastle India Limited (SNIL) (6) Others: (a) Scottish & Newcastle Plc.374 32.000 600. computers. At the balance sheet date.000 730.518 15. equipments. Fellow Subsidiary of SNIL (c) Scottish & Newcastle India Private Limited (SNIPL). Kalyan Ganguly Mr.000 730.000 19. Operating Lease: The Company has entered into leasing arrangements for vehicles. 4. 2010 (contd.

181 2009 4.469.458 102.004 82.34. (i) Transactions with related parties during the year: Particulars 2010 Purchase of goods Sale of goods [including sales taxes / VAT] Receipts/(Payments) against rendering Services Brand Fees paid Technical. Advisory and Management Fee Sponsorship and other payments Guarantee Commission received Purchase of Assets Sale of Assets /Spares Lease Rentals on Machinery Interest Paid Recovery of employees Salaries (on deputation) 186.682 1.Notes on Accounts for the year ended March 31.300 — — — — 9.469.767 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 5.164 MBIL 2009 187.000 — 6.300 26 225 — — 7.398 — — 8. in Thousands B.994 EMPEE 2010 31.34.021 100.74.336 UEBFTPL 2010 — — 2009 — — 2010 — — KMP 2009 — — MML 2010 — — 2009 — — 45.658 883.6.000 — 6.374.658 538.186) Rs.Nil) Rs.033 19.051 240.354 — — Refer Schedule 19 Note 10(i) 65.000 (2009: Rs.000 2. 13.304 86.709 86. Nil (2009: Rs.000 (2009: Rs.006 — — 19.489 94.701) (211.499 — — — — — — — — 41.798 — 18.000 100.2. 2.791) C.469 46.048.898 2009 6.363 30.841 8.397 — 2.035 34.034 50.901 2.354) [Including payment to relative of KMP and a firm in which such relative is a partner – Rs. 45.264 — — 6.Nil) 47 . 74.883)] Guido de Boer: Rs.1 per share) Earnings per share (Basic / Diluted) 2010 969.589.240 745.940 86.061 76.021 — 40.975 32.248 — — 8. Transactions with SNUK Interest on ECB Purchase of Raw Material 3. Nil (2009: Rs.130 15.897 1.471 2.070 (2009: Rs.320.000 15.602.255 3.249 (For Supplies including loan in cash or kind) Remuneration to Directors* Guarantees and Collaterals Amount Due From/(To) 1.690 — — — — — — — 25.249 12.13.266 (2009: Rs.769 (2009: Rs.534 2.136) * Kalyan Ganguly: Rs.223 — 18.83.042 — — — — — — — — 56.720 — — — — — — — 5.000 5. Transaction with S & N Management ees F 2.572) 52.83.000) Rs.358 106.339 731.000 — 8.29 Rs.499 (2009: Rs.131.282 234.253 — 7.17.685 447.315 116.Nil) Figures in bracket indicate amounts received (ii) Transactions with Subsidiaries: Balance due from ABDL – Rs.421 2. Transactions with SNIL Balance of Preference Share Capital Dividend on above Interim Dividend on Equity Shares Final Dividend on Equity Shares 13.386 5.624 2.Nil (2009: Rs.000 160.649 (233.259 18.690 — — — — — — — — — — — — — — — — — — — 40.2.865 (2009: Rs.884 Payments 2.499) Rs.001 (26) (18) — — (10.070) Rs.022 135 71 3.536 — — — — — 52.68 2009 624. Earnings per Share: a) b) c) d) e) Particulars Profit after taxation as per profit and loss account Less: Preference Dividend (including dividend distribution tax thereon) Net Profit attributable to equity shareholders Weighted average number of equity shares outstanding (Face value of Re.671 — — 32. Transactions with S & N Group 1.163.852) Rs.239 — — 5.697) (12. 123 (2009: Rs. 2010 (contd.) Rs.175 — 7.835 MAPL 2010 — — 2009 — — UMBL 2010 7.

(net) Taxation for the year Less: Depreciation as per Section 350 Deficit / (Surplus) on disposal of fixed assets (net) as per Section 349 Profit on sale of Investment Net Profit for Section 198 of the Companies Act. 1961. scrapped.511 1.141 21.426 541. in Thousands 14.306 173.320 41.900 560 287 1.10.500 18.612) c) Computation of net profits in accordance with Section 198 of the Companies Act.160 10.950 48 . 1961 Provision for Doubtful Debts 22.320 742 6.306 (2009: Rs.809 15. Remuneration/Commission to Directors: a) Remuneration to Executive Directors Particulars Salary and Allowances Contribution to Provident and Other Funds Perquisites Total 2010 32.820) Net Deferred tax charged off / (written back) in the profit and loss account (43.692 41.22% (2009: 33. b) Commission to Non Executive Directors – Rs.185 — 1. Remuneration to Auditors: Particulars Fees Tax Audit Out of Pocket Expenses Other Services Service Tax Total 2010 3.692 3.485.900 560 167 1. 16.184) (82.998 2.511 (2009: Rs.465 2.528 future years under the Income Tax Act.201.709 882.826.99%) being the substantively enacted tax rate for Indian Companies under the Income Tax Act.612 1.622 4.185 391.173. 216.455.087 31.762 3.783 Net deferred tax liability 216.426 117.14.Notes on Accounts for the year ended March 31.035 1.The net deferred tax liability amounting to Rs.067 3.035 2009 23.174 882.150 2.471 Provision for contribution to employee retirement and other employee benefits which are based on actuarial valuation done on an overall Company basis are excluded from the above disclosure.345 1.890 671 7.) Rs.122 Movement during the year (43. 1956 2010 969.122) has been arrived as follows: Particulars 2010 2009 Deferred Tax Liability arising from: Difference between carrying amount of fixed assets in the financial statements and 263.188 2009 3. 1956: Particulars Net Profit after taxation Add: Depreciation and Amortisation (as per accounts) Executive Directors’ Remuneration Directors’ Fees Commission to Non Executive Directors Provision/(Write back) for doubtful debts and advances (net) Book deficit /(surplus) on fixed assets sold.061.579 762.074 1.155 14. etc.480 4.820) The tax impact for the above purpose has been arrived by applying a tax rate of 33.471 1.150 31.451.184) (82.433 the Income Tax Return Less: Deferred tax asset arising from: Expenses charged in the financial statements but allowable as deductions in 25.235 4.769 2009 624.982 1. 2010 (contd.947 213.940 1.285 762. Accounting for Taxes on Income: Deferred Tax .

844 3.471 10.995. Value of Imports during the year calculated on CIF basis: Particulars Raw Materials Components and Spares Capital Goods 2010 366. in Thousands Remuneration Limit to Executive Directors – 10% (2009: 5%) of Net Profit as computed above.651 3.511 31.934 383.145.511 53.865. 1. Remuneration Paid: Executive Directors Non Executive Directors 17.000 4. Particulars of Goods Traded by the Company 2010 Particulars Opening Stock Purchases during the year Sales during the year Closing Stock C.660 30.610 19.082. Quantitative Details: A.002 2009 Value in Rs. individually comprising less than 10% of the total consumption.205.411 3.000 3. 18.294 2009 208.302 2009 Value in Rs.030.632 64.956 1.951 437.071 24.391 4. Consumption of Raw Materials 2010 Particulars Malt Brewing Materials Other Materials* Total Quantity in Tonnes 53.612 25. the same has been certified by the Management and relied upon by the Auditors.843 Value in Rs.030 20.087.385 141.248 2009 Value in Rs.505 2.274 Value in Rs.834 31.882 656.292 80.576 Quantity in Tonnes 45.940 2.110. 1951 is discontinued and consequently the reported capacities are as per permissions obtained from the respective regulatory authorities on a yearly basis.195 183.012 5.707 * In view of the large number of items.000 6.148 Quantity in Hecto Litres 1.600 2010 Value in Rs. quantitative details are not given.521.006.141.324.887 19.251 64. B.585.000 7.196 49 .637 148. 6 2.340.607 477.002 175.107 14.518 141.704.966 57.880 36.253 170.612 145.292 19.358 3. 3. Beer in Hecto Litres 5.383 1. 2010 (contd.676. 1.595 10.Notes on Accounts for the year ended March 31.035 14. Commission to Non Executive Directors – 1% of Net Profit as computed above.949 Quantity in Hecto Litres 1 450.707 2.006 910.) Rs.476.203 448. 41.248 481. being a technical matter. As regards installed capacity.620 *Note: Licensing of products of the Company under the Industries (Development and Regulation) Act.683.201.877 97. Quantitative Particulars Particulars Beer in Hecto Litres Licensed Capacity* Installed Capacity per annum* Actual Production for the year Sales – during the year Malt Sales in Tonnes during the year Opening Stock – Finished Goods Closing Stock – Finished Goods 8.

Notes on Accounts for the year ended March 31, 2010 (contd.)
Rs. in Thousands 19. Consumption: 2010 Particulars Value of Imported Raw Materials Consumed Value of indigenous Raw Materials Consumed Value of Imported Packing materials and stores and Spares Consumed Value of indigenous Packing materials and stores and Spares Consumed 20. Expenditure in Foreign Currency: Particulars Foreign Travel expenses of employees and others (net of recoveries) Management Fees Selling and Distribution expenses Interest and Finance charges Others 2010 11,717 45,000 117,617 54,028 4,214 2009 9,152 — 169,725 167,181 1,028 Value 153,898 2,367,678 360,763 4,835,541 Percentage to total Consumption 6 94 7 93 Value 133,622 2,007,526 854,216 3,180,920 2009 Percentage to total Consumption 6 94 21 79

21. Earnings in Foreign Exchange: Particulars Services – Royalty 22. Details of Dividend: Particulars Dividend payable on Preference Share Capital @3% Dividend Distribution tax payable on above Interim Dividend paid on Equity Shares @15% Dividend Distribution tax paid on above Final Dividend payable on Equity Shares @36% (2009: 15%) Dividend Distribution tax payable on above Total 23. Details of Dividend paid in Foreign Currency: Particulars Number of non-resident shareholders Number of Equity Shares held on which dividend was due Amount remitted Number of Preference Share held on which dividend was due Amount remitted 2010 1 89,994,960 13,499 24,690,000 74,070 2009 1 89,994,960 13,499 24,690,000 74,070 2010 74,070 12,588 — — 86,417 14,353 187,428 2009 74,070 12,588 36,007 6,120 36,007 6,120 170,912 2010 9,422 2009 10,043

50

Notes on Accounts for the year ended March 31, 2010 (contd.)
Rs. in Thousands 24. (i) Disclosures envisaged in AS 15 in respect of gratuity are given below: Particulars A) Reconciliation of opening and closing balances of the present value of the defined benefit obligation: Obligations at period beginning Service Cost Interest cost Benefits settled Actuarial (gain)/loss Obligations at period end B) Change in plan assets Plan assets at period beginning, at fair value Expected return on plan assets Actuarial gain/(loss) Contributions Benefits settled Plan assets at period end, at fair value C) Reconciliation of present value of the obligation and the fair value of the plan assets: Fair value of plan assets at the end of the year Present value of the defined benefit obligations at the end of the period Liability recognised in the balance sheet D) Details of Gratuity cost Service cost Interest cost Expected return on plan assets Prior Period Adjustment Actuarial (gain) / loss Net gratuity /cost E) Description of the basis used to determine the overall expected rate of return on assets including major categories of plan assets. The expected return is calculated on the average fund balance based on the mix of investments and the expected yield on them. Actual return on plan assets (Value) Actual return on plan assets F) Assumptions Interest rate Discount factor Estimated rate of return on plan assets Salary Increase Attrition rate Retirement age 8.00% 8.00% 8.00% 5.00% 1.00% 58 7.00% 7.00% 8.00% 5.00% 1.00% 58 8.00% 8.00% 8.00% 5.00% 1.00% 58 12,371 8,457 7,001 3,087 23,997 20,083 8,369 11,818 (10,155) — 1,447 11,479 13,052 9,601 (10,657) — 6,243 18,239 43,502 9,284 (9,284) (23,739) 6,243 26,006 154,165 161,429 (7,265) 133,055 153,948 (20,893) 136,455 142,593 (6,138) 133,055 10,155 (1,698) 25,109 (12,456) 154,165 136,455 10,657 (7,569) 4,393 (10,881) 133,055 116,056 9,284 10,799 26,280 (25,964) 136,455 153,948 8,369 11,818 (12,456) (250) 161,429 142,593 13,052 9,601 (10,881) (417) 153,948 116,056 43,502 9,284 (25,964) (285) 142,593 2010 2009 2008

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the Employment market.

51

Notes on Accounts for the year ended March 31, 2010 (contd.)
Rs. in Thousands (ii) Contribution to Provident and Other Funds under Manufacturing and Other Expenses (Schedule 15) includes Rs.49,122 (2009: Rs.39,174) being expenses debited under the following defined contribution plans: Particulars Provident Fund Superannuation 25. Disclosure Under Accounting Standard 21 and 27 a. The disclosure required with respect to the holdings in subsidiaries are given below: Country of Incorporation India India Percentage of ownership interest at March 31, 2010 100 51 Percentage of ownership interest at March 31, 2009 100 51 2010 36,034 13,088 2009 28,225 10,949 2008 28,815 9,352

Name Associated Breweries & Distilleries Limited (ABDL) Maltex Malsters Limited (MML)

The reporting date of the subsidiaries and the accounting polices of the subsidiaries are same as those of the holding company. b. The disclosure required with respect to the holdings in associates are given below: Name United East Bengal Football Team Private Limited (UEBFTPL) Country of Incorporation India Percentage of ownership interest at March 31, 2010 50 Percentage of ownership interest at March 31, 2009 50

c. The Company’s interests, as a venturer, in jointly controlled entity (Incorporated Joint Venture) are: Country of Incorporation India Percentage of ownership interest at March 31, 2010 50* Percentage of ownership interest at March 31, 2009 50*

Name Millennium Alcobev Private Limited

* of the 50% of ownership interest, 10% represents control exercised through the subsidiary Associated Breweries & Distilleries Limited (ABDL) The aggregate amounts of each of the assets, liabilities, income and expenses related to the Company’s interests in the jointly controlled entity is as follows: Particulars Assets Fixed Assets Current Assets, Loans and Advances Inventories Sundry Debtors Cash and Bank Balances Loans and Advances Liabilities Secured Loans Unsecured Loans Current Liabilities and Provisions Liabilities Provisions 1,601,224 2,717 1,093,005 2,111 1,018,398 223,489 1,248,766 223,489 243,453 532,311 93,187 78,258 158,103 294,630 93,352 83,168 887,322 955,019 2010 2009

52

Notes on Accounts for the year ended March 31, 2010 (contd.)
Rs. in Thousands Particulars Income Sales less excise duty Other Income Expenditure Cost of Sales Other Expenses Interest and Finance Charges Depreciation and Amortisation Other Matters Capital Commitments - Estimated amount of Contracts remaining to be executed on capital account and not provided for Contingent Liabilities - Sales Tax/other taxes demands under appeal - ESIC / PF demands under appeal - Bank Guarantee given to Commissioner of Excise for Export of Beer - Demand towards Water charges under appeal - Interest for delayed payment of Interest Free Loans - Dividend on 1% Non Convertible Cumulative Redeemable Preference Shares - Income Tax* Claims against the Company not acknowledged as debt *Net of Deposit under appeal – Rs.3,789 (2009: Rs.1,018) 26. The Company does not own any brewing facility in Tamil Nadu, which is one of the major markets in India contributing about 18% of the Company’s business. With an intention of ensuring supplies from Balaji Distilleries Limited (BDL), having brewing facilities in Tamil Nadu, the Company has entered into an agreement with the promoters of BDL to secure to the Company perpetual usage of the brewery owned by BDL, and has advanced an amount of Rs.1,550,000 to one of the Promoter Companies of BDL, acting for and on behalf of the other Promoters also. Subsequently, the Boards of Directors of BDL and United Spirits Limited (USL) have considered and approved a proposal for merger of BDL into USL, which is subject to obtaining of the necessary regulatory approvals by both the Companies. The Company has obtained a commitment from USL that the arrangement with Promoters will be adhered to on completion of the proposed merger. The advance will be repaid upon the completion of the merger or in accordance with the terms of the related Agreement, whichever is earlier. In June 2009,BDL has allotted 90,000 Equity Shares upon conversion of warrants to certain parties.These parties have entered into a supplemental agreement with the Company to the effect that they will be bound by the terms and conditions of the earlier agreement between the Company and the promoters of BDL. 27. As the Company does not have any long term monetary item since April 1, 2007 till date, the change in the accounting policy referred to in Schedule 18 note 8 (b) has no impact on the profit for the year. 28. All amounts disclosed in Notes to Account and other Schedules are in Rs. 000 except for: i) Number of Shares / units in Notes on Schedule 1, Schedule 5, Note 13, Note 23, and Note 26. ii) Basic and Diluted EPS in the Profit and Loss Account and in Note 13. 29. The previous year’s figures have been regrouped to conform to current year’s classification.
For Price Waterhouse Firm Registration Number: 007568 S Chartered Accountants J. Majumdar Partner Membership No. F51912 Bangalore, July 21, 2010. Kalyan Ganguly Managing Director Govind Iyengar Company Secretary Bangalore, July 21, 2010. Guido de Boer Director & CFO

2010 2,780,518 54,729 1,882,475 731,623 111,888 154,057

2009 2,311,864 42,826 1,563,138 665,402 159,637 129,402

8,896

46,348

3,774 845 10,155 — 1,169 27,750 5,055 5,877

3,281 898 5,855 26,250 4,829 18,500 22,028 6,107

53

No.950 — — 100% 51% — — (145) 1. Ltd.Notes on Accounts for the year ended March 31.865 (10. in Thousands Terms No stipulation towards repayment and interest — No stipulation towards repayment and interest 83.418) (972) 1.983) 1.2010 — — (ii) For previous Financial Years of the Subsidiary since it became a Subsidiary — — United Other United Other For Subsidiary’s For previous Breweries Subsidiary Breweries Subsidiary Financial Financial Years Limited Companies Limited Companies Year ended of Subsidiary 31.2010 since it became a Subsidiary 10.967 (1.469 589.529 — 50 — 54 . Associated Breweries & Distilleries Ltd. of Equity Shares at the end of the financial year of the Subsidiary Net aggregate Profit/(Loss) of the subsidiary so far as it concerns the Members of the Company b) Extent of Holdings Not dealt with in the Accounts of the Company (i) Sl.000 22.) STATEMENT PURSUANT TO SECTION 212(1)(e) OF THE COMPANIES ACT. Name of the Subsidiary (ii) Dealt with in the Accounts of the Company (i) For the Subsidiary’s Financial Year ended 31. 2010 (contd.000 65. 2010 Rs. 2 Maltex Malsters Limited DISCLOSURE UNDER CLAUSE 32 OF THE LISTING AGREEMENT Name of the listed Company: United Breweries Limited Name of the Company Subsidiaries: Associated Breweries & Distilleries Ltd. Ltd. 1956 AS AT MARCH 31. (ABDL) Maltex Malsters Limited Joint Venture: Millennium Alcobev Pvt. Associates: United East Bengal Football Team Pvt.3. in Thousands a) No. Amount outstanding as at March 31.3. 2010 Value of investments as at March 31.000 450. 2010 Rs.

753.413 IV. Position of Mobilisation and Deployment of Funds Total Liabilities Sources of Funds Paid up Capital Reserves & Surplus Secured Loans Unsecured Loans Deferred Credit Deferred Tax Liability 2.712 4.511.240.207 1.613.306 18.709 36% V.2010 II.699 8.530. State Code Balance Sheet Date : : : 25195 08 31. Performance of Company Turnover Profit Before Tax Earnings per Share 20.383.960.03.68 Total Expenditure (Includes non-recurring items) Profit After Tax Dividend Rate 19.527.507 NIL NIL 18.Balance Sheet Abstract COMPANY’S GENERAL BUSINESS PROFILE Rs.288 3.751. Capital Raised during the year Public Issue Right Issue Bonus Issue Private Placement : : : : NIL NIL NIL NIL III.040 969.527.888.709.048 8. in Thousands I. Registration Details Registration No. Generic Names of three Principal Products/Services of the Company Item Code – ITC Code Product Description 22030000 Beer made from Malt 55 .328 1.341 1.413 Total Assets Application of Funds Net Fixed Assets Investments Net Current Assets Deferred Tax Assets Miscellaneous Expenditure 8.006 NIL 216.

763 31. No.500 20.563 22 (145) — Total Liabilities Profit before Taxation Provision for Taxation 1.2010 Rs.865 83. in Thousands Issued & Subscribed Reserves & Share Surplus Capital Total Assets Investments Turnover 84.06.000 — (145) Profit & Loss Account Debit Balance Profit after Taxation Proposed Dividend — 4. Associated Breweries & Distilleries Limited 2 Maltex Malsters Limited Note: The Annual Report along with related information of the above companies shall be made available for investors of the Company and its subsidiaries seeking the Report/ information at any point of time.56 SUMMERISED FINANCIALS OF SUBSIDIARY COMPANY AS REQUIRED IN TERMS OF APPROVAL UNDER SECTION 212(8) OF THE COMPANIES ACT.948 2. The Annual Report is also available for inspection of investors at the Registered Office of the Companies.380 1.534 — — 6. VIDE LETTER DATED 15. MINISTRY OF CORPORATE AFFAIRS.967 — Sl. Name of the Subsidiary 1. GRANTED BY THE GOVERNMENT OF INDIA.534 31.129 (162) 1. . 1956.865 84.

of the profit of the Group for the year ended on that date. We did not audit the financial statements of (i) two subsidiaries and included in the consolidated financial statements. net loss of Rs. which constitute total assets of Rs. 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: (a) in the case of the Consolidated Balance Sheet. (b) in the case of the Consolidated Profit and Loss Account.948 thousands and net cash outflows amounting to Rs. These financial statements and other financial information have been audited by other auditors whose reports have been furnished to us.4. on a test basis. 2010. For Price Waterhouse Firm Registration Number – 007568 S Chartered Accountants Place: Bangalore Date: July 21.15. An audit includes examining.Consolidated Financial Statements and Accounting Standard (AS) 27 . 4. 1956. Majumdar Partner Membership Number – F51912 57 . as well as evaluating the overall financial statement presentation. the related Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement for the year ended on that date annexed thereto. We report that the consolidated financial statements have been prepared by the Company’s Management in accordance with the requirements of Accounting Standard (AS) 21 . evidence supporting the amounts and disclosures in the financial statements. of the state of affairs of the Group as at March 31. An audit also includes assessing the accounting principles used and significant estimates made by management. 2010. of the cash flows of the Group for the year ended on that date. in our opinion.109.Auditors’ Report on Consolidated Financial Statements TO THE BOARD OF DIRECTORS OF UNITED BREWERIES LIMITED 1. 3. 2010 J. We believe that our audit provides a reasonable basis for our opinion. total revenue of Rs. and (c) in the case of the Consolidated Cash Flow Statement.608 for the year then ended. Based on our audit and on consideration of reports of other auditors on separate financial statements and on the other financial information of the components of the Group as referred to above.Financial Reporting of Interests in Joint Ventures notified under sub-section 3C of Section 211 of the Companies Act. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.279 thousands as at March 31. We conducted our audit in accordance with the auditing standards generally accepted in India. These consolidated financial statements are the responsibility of the Company’s Management. which we have signed under reference to this report. 5. Our responsibility is to express an opinion on these financial statements based on our audit. 2010. and our opinion on the consolidated financial statements to the extent they have been derived from such financial statements is based solely on the report of such other auditors.37 thousands.7. We have audited the attached Consolidated Balance Sheet of United Breweries Limited (the “Company”) and its subsidiaries and joint venture hereinafter referred to as the “Group” (refer Note 1 on Schedule 19 to the attached consolidated financial statements) as at March 31. 2. and (ii) one associate company which constitute net results of Rs. Nil for the year then ended.699 thousands and net assets of Rs.

163.286.166.804 1.719.751 0 — 6 7 8 9 10 1. 2010 Kalyan Ganguly Managing Director Govind Iyengar Company Secretary Bangalore. July 21.453 243.559 3. Rs.792 438.850 5 4 10.271 3. July 21.601 2.977.257 141.310 1.062 1. For Price Waterhouse Firm Registration Number: 007568 S Chartered Accountants J. Majumdar Partner Membership No.055 8.489 1.706 6.603 629.461.064.848.048 9. Total 2010 Rs.005.800 20.995 972.981 511.224 2.203.195 7.205 2. F51912 Bangalore. The Schedules referred to above and the notes thereon form an integral part of the consolidated financial statements.618 11.601.399.525 1.768 858.739.018.824.491 2.124 7.717 1.808.895 APPLICATION OF FUNDS Goodwill [Refer Schedule 19 Note 4] Fixed Assets Gross Block Less: Accumulated Depreciation and Amortisation Net Block Capital Work in Progress Investments Foreign Currency Monetary Item Translation Difference Account [Refer Schedule 19 Note 18] Current Assets. Rs.892 8.772.176.817.227. 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 Profit and Loss Account 11 12 3.695 19.005.400 354.048 8.525 947.741 20.176.618 6. 2009 Rs.162.736) 894.187 729 77.597.359 604.532 10.695 — — 3.895 Significant Accounting Policies Notes on Accounts 18 19 — — 1.887 — 20.311 93.662 894.866.310 5.408 11.265 819.910 12.279.544.241.888. Joint Venture Rs.165 6.443.544.479 5.505 11.487 833.257 256.835.887.891.051.251 4.620 1.398 223.437 40.788.284 29.963 2.960.351. 2010 Rs.331 8.728 490.908 11.798 926.713.463 1.864 10.751 1 2 3 4.033 254.322 (672.587 355.864 12.586 19.436.544.682.912 1.003.694.965. This is the Consolidated Balance Sheet referred to in our report of even date.369 9.038 887. 2010 Rs.207.406 1.151 8.267.022 3.956 467.186.694.021.844.741 1.984.525 1.671.114 5.279.709.453 532.952.866.941 (656.585 6.658 1. 2010 Guido de Boer Director & CFO 58 .529 7.996 7.052 854.753.648.048 8.991.146 900.456 Rs.704.854) 10.961.800 — — 4.511 12.314 185.517 236.Consolidated Balance Sheet as at March 31.167.029 — 1.977.517 215.517 175.000 162.739 5.075 575.603 3.199 3.524 3. in Thousands Schedule SOURCES OF FUNDS Shareholders’ Funds Capital Reserves and Surplus Loan Funds Secured Loans Unsecured Loans Minority Interest [Refer Schedule 19 Note 5] Deferred Tax Liability (Net) [Refer Schedule 19 Note 12] 18.436.891.195 7.603.435 12. Rs.428.815 11.175 10.220 2.398 — 18.

485 15 16 17 12.816 19.057 2.741) 1.012 831.741) 971.449 855.586.093 1.853.630.325 8.207 1.393 3.729 2.391 2010 Joint Venture Total 2010 2009 — 2.933 22.384.Current tax .134 (894.750 19.000) (187.143.030.097.009 9.726.319 886.Consolidated Profit and Loss Account for the year ended March 31.558.155) (819.054.993.945 10.821 5.134 1.623 111.951) — (60.428) (65.767 553.936 1.072) (15.390 665.414 22. in Thousands Schedule INCOME Sales and Service Less: Excise Duty 13 29.418 2.871 20.024) (30.562 — (894.57 The Schedules referred to above and the notes thereon form an integral part of the consolidated financial statements.080 829.365 3.830.583. July 21.37 593.942 14 776.000) (187. 2010 Rs.882.743 4.481.248) (400.040.880.755.780.558. 2010 Guido de Boer Director & CFO 59 .835.445 (296.513.888 154.515 19.473 731.118.151) (572.150) 455.912) 2.247 33.741) — 1.586) (511.478 12.202.031 (13.357 Less: Appropriations Transfer to General Reserve Dividend [Refer Schedule 19 Note 15] Balance carried to Balance Sheet Earnings per share (Basic/Diluted) [Refer Schedule 19 Note 14] Significant Accounting Policies Notes to Accounts 18 19 (100.361) (75.612 27.376 593.792 368.337) — (17. 2010 Kalyan Ganguly Managing Director Govind Iyengar Company Secretary Bangalore.021 1.000) (170.923.518 54.428) — — (100.974.468.445 1.272 1.050.489. This is the Consolidated Profit and Loss Account referred to in our report of even date.357 19.600 23.413.575 535.338 896.830) (88. For Price Waterhouse Firm Registration Number: 007568 S Chartered Accountants J.362.Deferred Tax (Charge)/Write back Profit / (Loss) after taxation Profit / (Loss) brought forward from previous year Adjustment on account of adoption of Accounting Standard 11 on ‘Foreign exchange fluctuation’ (498.494 Other Income EXPENDITURE Cost of Sales Other Expenses Interest and Finance Charges Depreciation and Amortisation Profit / (Loss) before taxation Provision for Taxation .294.167.127) (541.Fringe Benefit Tax .102) 896. July 21.974.041 (44.123 6.650 5.347 18.614) — (43.794) 14. Majumdar Partner Membership No.238.531 1.751. F51912 Bangalore.

.

.

204 6.048 467.706 — — 223.500.000) Cumulative Redeemable Preference Shares of Rs.706. 7.000 1.375 — 1.220 564.706 223.750.728.324 4.300 3%.489 1.170 148.399 — — — — 162.310 650.1 each fully paid 3%.603 1.644 605.Series B [The above shares are redeemable at par at the earliest on March 31.031 8.965.960 22.500.489 1.204 161.000 3.398 576.000 3.912 — 148.000 467.116 — 140.100 each Issued.000 (2009: 300.800.061.700 740.000 2.195 62 .620 1.283.000) Equity shares of Re.706 223.051.500.407.750.100 each .048 — 6.155 5.000) Preference Shares of Rs.413.300 — — — — — 300.000 2.368.000 240.170 — 936.267.924 193.700 — 740.222 — 2.984.000 2.753.000 2.977.000 100.728. 2015’ based on mutual agreement between the company and ‘Scottish and Newcastle India Limited’ (the preference shareholder)] 300.888.671.587 1.048 467.529 5.458. 17.000 3.955 860.1 each 25.521.774 — 170.108 123.000 3.000.908 1.000) Cumulative Redeemable Preference Shares of Rs.069 1.000 100. in Thousands 2010 Joint Venture Total 2010 2009 SCHEDULE 1 Capital Authorised 300.116 936.000 2.018.195 1.617 605.176.000.000 (2009: 7.108 123.173 — 170.048.097.587 1.849 105.706 — 1.000 (2009: 25.255 (2009: 240.511 1.048 1.134 9.255) Equity shares of Re.204 2.201.329 262.224.100 each .048.Series A [The above shares are redeemable at par at the earliest on March 31.048 1. Subscribed and Paid-up 240.368.960 24.000.683.000 65.000 240.000 (2009: 17.000 2.883 28.489 1.728.404.000 240.048 1.000 2.750.300 300.800. 2015] 740.973 — — 4.Schedules to Consolidated Balance Sheet Rs. 2011 and are ‘extendable upto March 31.711 1.000 2.407.283.700 Convertible Redemable Preference Shares SCHEDULE 2 Reserves and Surplus Capital Reserve Securities Premium Account Premium received during the year General Reserve: As per last Balance Sheet Transfer from Profit and Loss Account Profit and Loss Account balance SCHEDULE 3 Secured Loans [Refer Schedule 19 Note 6] Foreign Currency Loans – Working Capital Loan from Bank – Term Loan from Bank External Commercial Borrowings – From Banks Term Loans from Banks Other Loans – Working Capital Loan / Cash Credit from Banks Interest accrued and due From Others From Rabo Finance India Private Limited Unsecured Loans [Refer Schedule 19 Note 6] Long Term Loans from Banks Others Loans Deferred Sales Tax Loan — 2.000 467.097.597 2.155 1.489 223.000.408 576.000 3.709.176.977.800.134 8.

686 159.297 16.414 896.463.221 1.261.928 213.688 1.037 Licenses Tangible 1.000 — — 623.075 858.176 Share of Joint Venture Schedules to Consolidated Balance Sheet (contd.728 1.231 122.284 8.124 854.118)] 8.458 250.892 51.261 55.971 6.336 2.577 — — 6.357 154.734.166 1.911 70.568.601 280.398 585 396.995 2009 865.945 3.879.529 2.293 1.199 2.057 Leasehold .221 16. 2009 Particulars Gross Value of Assets as at March 31.765 Office Equipments 154.013 7.211.562 31.152.912 352 59.991.323 120.747.052 1.955 — 1. in Thousands Net Value of Assets as at March 31.768 4.924 374.021.970 20.407 4. 2010 Additions Deletions / Adjustments Gross Value of Assets as at March 31.924 400.) 7.848.809 12.359 1.712 703.350 — 337.331 29.855 5.167.551.121 9.817 3.205 Goodwill 320.536 42.742 — 3.407 2.819 848.909 1.417.057 1.531 1.476.960.286.759 67.851 31.704.550 5.000 124.Leasehold 1.047 105.SCHEDULE 4 Consolidated Fixed Assets (Refer Schedule 19 Note 7) Cost Depreciation / Amortisation As at March 31.682.625)] 106.235 13.691 47.707 3.Improvements 3.348 329.993 10.843 Share of Joint Venture [including capital advances Rs.312.556 Laboratory Equipments 37.1.848.539 Vehicles 6.265 5.2009 on Deletions for the year Net Value of Assets as at As at March 31.414 3.996.308 Capital work in Progress [including capital advances Rs.730.583 1. 2010 Rs.331 51.003.615.713.524 8.604 499.269 45.821 8.565 6.750 Plant and Machinery 57.700 1.080 184 170 — 2.000 — 40.105.817.105.003.479 Land .271 886.051 104.898.844.355 1.098 47.511 18.261.202 2.106 22.122 39.529 575.252 (2009: Rs.850.524 164.705 17.787 Buildings 4.342 3.141 Furniture and Fittings 38.458 — — — — 19.892 3.503 Land .355 12.038 9.579 10. 2009 Intangible 623.015 265 110.040.251 10.146 63 .299.824.184 — — — 270.454 10.296.186 54.Freehold 253.520 4.504 175.037 — — 400.719 — 124.715 — 1.733 (2009: Rs.582 2.622.921 5.970.788 150.403.037 80.503 270. 2010 March 31.037 249.347 155.796 58.310 246.350 569.

) Total . of Units in ‘000s 88.025.000 1.000 — — — 15.820 — — 3.000 300. in Thousands Particulars Number of Shares / Units Cost Number of Shares / Units Class of Shares 2010 Face Value 2009 Face Value Cost — — — — — — 48.000.Series 2 .999 50 — 100 490.000 50.000 25 5 4.258 50.Treasury Advantage Plan .000 — — 20.175 9 4.720 — — — — — — Cost 890.000.000 150.258 — 20.000 100.437 Balance as at April 1.300.000 150.Daily Dividend LONG TERM INVESTMENTS (unquoted.000 — — 70 70 — 70 70 Equity Equity 4.000 150.000 300.000 900.Treasury Advantage Plan .135 10 490.026 Purchased during the year No.000 100.IX .000 Cost 400.Unquoted.000 SCHEDULE 5 Investments CURRENT INVESTMENTS Investment in Mutual Funds .000 200.258 50.Institutional Growth Plan HDFC Cash Management Fund .874 20.000 100. of Units in ‘000s Cost — 200.000 100.999 4.50 10.258 50.846 — — — — — — Cost 490.000 3 15.IX .000 300. Non Trade HDFC FMP 370D June 2008 VIII -Wholesale Plan Growth IDFC FMP Yearly Series 22 Plan B Growth I-Growth Capital Protection Portfolio Kotak FMP 12M Series 7 Institutional .50 10.258 0. long term) In government and trustee securities .000 50 25 — 100 900. 2009 No.170 5 490.000 — — — — 500.000 3 15.026 0.Growth Reliance Blended Debt Plus-Hybrid Option Series XIV Reliance Fixed Horizon Fund .000 100.64 Rs.Series 2 .000 10.000 100.000 — 200.000 — — 10.428 9 900.000 — — — — — — 490.Wholesale .000 200.258 Balance as at March 31.000 — — — — — — 890.000.Fully paid National savings certificate Non trade: In Associates United East Bengal Football Team Private Limited In Others Zorastrian Co-operative Bank Limited* Sub total Share in Joint Venture Investments TOTAL * Acquired on Amalgamation Details of Investments In Mutual Funds during the year Name of Mutual Fund HDFC Cash Management Fund .000 300.000 Sold during the year No.000 100. of Units in ‘000s 48.846.Wholesale .Institutional Growth Plan Schedules to Consolidated Balance Sheet (contd.000 100.000 10.Daily Dividend HDFC FMP 370D June 2008 VIII Wholesale Plan Growth IDFC FMP Yearly Series 22 Plan B Growth I-Growth Capital Protection Portfolio Kotak FMP 12M Series 7 Institutional .000 150.Growth Plan Reliance Blended Debt Plus-Hybrid Option -Series XIV Plan Reliance Fixed Horizon Fund.000 10. of Units in ‘000s 39. 2010 No.

10.203.219.575 (91.587 474.981 2.092.335 6.Nil (2009: Rs.925 (88.10.38.162.125 856.350 (2009: Rs.940 1.798 185.220 355.960.303 93.470 (2009: Rs.225 (56.415 508.582 511.839 50.601 65 .005.502 12.207 24.1. Includes balance in Unclaimed dividend Account Rs.in Current Account [including cheques on hand Rs.125)] .944) 5.618 456. Considered good unless stated otherwise) Considered Good .434 4.896 35.777 — 6.950 977.786.400 80.620 818.039) 532.738 — 6.Stores and Spares [Net of provision Rs.19.818 741.601 141.230 4.788.257 SCHEDULE 9 Other Current Assets Income accrued on Investments and deposits 354. in Thousands 2010 Joint Venture Total 2010 2009 SCHEDULE 6 Inventories Raw Materials Packing Material.Others Considered Doubtful .Nil (2009: Rs.920 6.547 88.151 554.566 (2009: Rs.848 382 3.694.705 11.Others Less: Provision for Doubtful Debts SCHEDULE 8 Cash and Bank Balances Cash on hand [including Remittances .Over Six Months . 2.550 59.880) 572.491 354.820) kept as margin against letter of credit and bank guarantees.7.663 15.364 243.656 (2009: Rs.479 69.777) 6.in Transit Rs.311 93.in Deposit account [Refer notes below] Note: 1.350 (35.Schedules to Consolidated Balance Sheet (contd.601 83.213 75.601.847 833.039 — 567.491 729 729 355.825 120.Nil)] Balances with Scheduled Banks: .567 56.63)] Goods in transit SCHEDULE 7 Sundry Debtors (Unsecured.304 2.487 23.556 539.266 1.Over Six Months .550 471.453 596.220 141.) Rs.738) 6.820. Includes Rs.640)] Work In Progress / Finished Goods (including Traded Goods) [Net of provision Rs.094.463 91.1.165 23.150 926.944 — 5.187 899.055 32.

388 185.Nil (2009: Rs.694.910 20.000 359.435 163.271 66 .000 224.532 11.174 256.113 1.043 — 1.Others .674) 1.613 52.825.385 — — 1.961.137 60.808.308 552.717 187.Schedules to Consolidated Balance Sheet (contd.647) 25.403) 1.166.512 2.314 187.257 8.385 880 63.050) 1.324.545 148.265 59.Other Liabilities Interest accrued but not due Unclaimed Dividend Acceptances SCHEDULE 12 Provisions Dividend payable [Refer Schedule 19 Note 15] Gratuity Leave Entitlements 224.050 1.550.710.930 653.386.206 8.403 1.484 2.207.609 (8. maximum amount due during the year Rs.739 128.703 77.550.550.098 34.774.126 565.009 2.785 22.428 9.407 1.329 254.739.428 7.797.048 51.986 3.872 845 2.780 2.601.892.884 33.674 1.647 69.206 — 25.613 1.811 2.481 52.623 2.62)] Joint Venture Total 2010 2009 1.033 3.068.818 12.722 (51. in Thousands 2010 SCHEDULE 10 Loans and Advances (Unsecured.884.054 (43.772.552 1.36 (2009: Rs.385 1.224 14.470 10.000 334.170 1. Small and Medium Enterprises .669.36) due from Director of the Company.407 43.663 (52.) Rs.048 Balances with Excise Authorities Other Deposits Advance Tax / Tax Deducted at Source (net) SCHEDULE 11 Liabilities Sundry Creditors . Considered good unless otherwise stated) Advance towards Contract Brewing unit [Refer Schedule 19 Note 8] Advances recoverable in cash or in kind or for value to be received* Considered Doubtful Less: Provision for Doubtful Advances *[including: Rs.527 1.Due to Micro.441 4.096 270.022 — 1.597 18.854 2.470 10.441 3.909.421.525 245.932 1.215 2.

in Thousands 2010 SCHEDULE 13 Sales and Service Sales Income from Brand Franchise and Technical Fees SCHEDULE 14 Other Income Guarantee Commission Liability no longer required written back Profit on sale of Assets Profit on sale of Investment (net) Dividend Income Interest Received [Gross] {Tax deducted at source Rs.003 123.982 3.309 (856.325 21.397 813.576 5.741 64.600 21.880 367 256.884.134 14.322 54.207 13.050.158 33.617 126.529 73.682 23.211 66.Schedules to Consolidated Profit and Loss Account Rs.367 (2009: Rs.378 1.164 919.671 8.882.141.896 21.700) 391.528 6.513 750 49.816 2.414 614.010.152 535.743 67 .010) 72.915 10.853.520 14.411 491.102 847.2.453 127.718 260.107.530 (120.31.074 1.322 62.467 165.167.300 56.839) (391.319 2.789.006.483 12.302 3.173 220 117.431 39.594 15.265 77.969 4.868 328.473) 499.389.558.527 4.013 292.573.975 365.278 80.208 514.982 3.540 677.766 97.850 38.089.063.425 27.238 14.195 24.650 64.356 1.035.580 79.689 7.923.062 72.781)] Change in Inventory Opening Stock Closing Stock Excise Duty on Opening Stock Excise Duty on Closing Stock Joint Venture Total 2010 2009 28.324 831.600 14.671 (741.945 26.337 99.483) 571.505 3.601 81.819 27.871 — 7.749 7.009 3. Wages and Bonus Contribution to Provident and Other funds Welfare Expenses Others Rent including Lease rent Insurance Repairs Building Repairs to Machinery Repairs .787 1.279 2.133 10.839 (976.894 (2009: Rs.107.254 75.473 741.955 89.025.954 6.510 54.725 415.594 26 2 48.030.505.814 776.161 303.488 12.740 — 117.248 2.111 3.772.100 61.653 29.781 94.112 1.550) (366.521.461 24.379)} Provision for Doubtful Debts no longer required written back Provision for Doubtful Advances no longer required written back Miscellaneous Income SCHEDULE 15 Cost of Sales Manufacturing Expenses Consumption of Raw Materials Consumption of Packing material and Stores and spares Purchases of finished goods Power and Fuel Personnel Expenses Salaries.481.552 2.Others Travel and Conveyance Communication Expenses Rates and taxes Legal and Professional fees Miscellaneous expenses [includes material consumed Rs.746 701.839) (300.501 55 10 45.433 220 — — 1.556 4.129 87.516 172 23 297.868 327.315 2.052.541 1.439 60.115.954 150.832 319.729 21.462 1.900 1.289) (25.092.123 585.936 32.015 117 13 251.

426 — 5.) Rs.699 5.866 2.888 22.574 399 6.338 68 . in Thousands 2010 SCHEDULE 16 Other Expenses Selling and Promotion Expenses Technical Management Fee Directors Sitting fees Auditors Remuneration Bad debts written off Bad Advances written off Provision for Doubtful Debts Provision for Idle Assets / Fixed Assets written off Investment written off Inventory written off including provisions Loss on sale of Assets Provision for Doubtful advances 5.424 9.054.991 507.Schedules to Consolidated Profit and Loss Account (contd.804 — 10.184 — — — 3.000 12.159) (2009: Rs.767 625.766 82.306 326.993.623 6.207 220.362.123 8.592.947 3.319 10.681 7.185 1.758 86.005 — 4 1.000 4.139.355 120.841 111.936 96.716 31 — 622 2.458 665.581 — 111 1.486)] Finance Charges 458.000 15.(74.218.630.394 100.289 3.055 555.992 4.390 4.821 — 4 1.289 148 399 731.417 — 15.021 Joint Venture Total 2010 2009 SCHEDULE 17 Interest and Finance Charges Interest on Loans for a fixed period Interest Others [Including exchange (gain) / loss on foreign currency loans Rs.223 — 10.836 1.830.663 11.369 1.000 293 1.617 553.977 100.974 8.

iii) The financial statement of the Joint Venture has been consolidated using proportionate consolidation on the basis of control exercised in the Joint Venture.. other than temporary. income and expenditure after eliminating intra group balances and intra group transactions. Investments: Long term investments are carried at cost less provision made to recognise any decline. Actual result could differ from those estimates. Inventories: Inventories are valued at lower of cost and net realisable value. Estimates: The preparation of the Financial Statements in conformity with Generally Accepted Accounting Policies (GAAP) in India requires that the management makes estimates and assumptions that affect the reported amounts of assets and liabilities. Revenue Recognition: Revenue from sale of goods is recognised in accordance with the terms of sale. All monetary items of foreign currency liabilities/ assets 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. 7. in the values of such investments. 5. 6. disclosure of contingent liabilities as at the date of the Financial Statements. ii) The financial statements of the parent company and its subsidiaries have been consolidated using uniform accounting policies for like transactions and other events. Goodwill arising on consolidation is not amortised. Foreign Currency Transactions: a) Foreign currency transactions are recorded at the rates of exchange prevailing on the dates of such transactions. Costs include freight. Negative goodwill is recognised as capital reserve on consolidation. Principles of Consolidation: i) The financial statement of the parent company and its subsidiaries have been consolidated on a line by line basis by adding together the book values of like items of assets. Excise/Customs duty on stocks in bond is added to the cost. on dispatch from the Breweries/warehouses of the Company and is net of trade discount but includes Excise Duty. Dividend Income is recognised when the Company’s right to receive the payment is established. 1956. to comply in all material aspects with the applicable accounting principles in India. Fixed Assets: Fixed assets are stated at their original cost of acquisition and subsequent improvements thereto including taxes. in Thousands 1. Royalty from foreign entities (net of tax). duties and appropriate production overheads and are generally ascertained on the First in First Out (FIFO) basis. duties. 1956 and to relevant provisions of the Companies Act. Borrowing Costs: Borrowing costs incurred for the acquisition of qualifying assets are recognised as a part of cost of such assets when it is considered probable that they will result in future economic benefits to the Company while other borrowing costs are expensed in the period in which they are incurred. year ended March 31. Income from brand franchise is recognised at contracted rates on sale/production of the branded products by the franchisees. and the reported amounts of revenue and expenses during the reported period. iv) Goodwill represents the difference between the company’s share in the networth and the cost of acquisition of subsidiary and Joint Venture at each stage of acquisition of investment. the applicable accounting standards notified under Section 211(3C) of the Companies Act. whichever is lower. Basis of Presentation of Financial Statements: The Financial Statements of the Company have been prepared under historical cost convention. Assets identified and evaluated technically as obsolete and held for disposal are stated at their estimated net realisable value. Exchange difference on forward contracts are recognised in the Profit and Loss Account in the reporting period in which the exchange rates change. 4. 2010. 69 . i. taxes. Current investments are carried at cost or net realisable value. 8. Due allowance is made for obsolete and slow moving items. Basis of Consolidation: The Financial Statements of the Subsidiaries and the Joint Venture (JV) used in the consolidation are drawn up to the same reporting date as that of the parent company. 3. Any profit or loss arising on cancellation or renewal of such forward contracts is recognised as income or expense for the year. 2. 2010 SCHEDULE 18 Rs.Significant Accounting Policies for the year ended March 31. technical advisory and management fees is recognised as per the terms of agreement. The cost of fixed assets acquired on amalgamation have been determined at fair values as on the respective dates of amalgamation and as per the related Schemes of Arrangement and include taxes / duties thereof. liabilities. freight and other incidental expenses relating to acquisition and installation of such assets.e.

Actuarial Gains and Losses are recognised immediately in the Profit and Loss Account. Deferred tax is recognised. 9. 2011. (iii) Other long term employee benefits: Liability towards leave encashment and compensated absences are recognised at the present value based on actuarial valuation at each balance sheet date. 1956 except as indicated below: a) Plant and Machinery are depreciated at the rate of 10. (ii) Defined-benefit plans: Liability towards gratuity is determined on actuarial valuation using the Projected Unit Credit Method at the balance sheet date. If the carrying amount of the assets exceeds its recoverable amount.5 are depreciated fully in the year of purchase. A disclosure for contingent liability is made where there is a possible obligation or present obligation that may probably not require an outflow of resources. Taxation: Current tax is determined as per the provisions of the Income Tax Act. in Thousands b) With retrospective effect from April 1. the Company estimates the recoverable amount. (ii) accumulated in a “Foreign Currency Monetary Item Translation Difference Account” and amortised over the period of the related long term foreign currency monetary item but not beyond March 31.34%. b) Assets acquired on amalgamation (where original dates of acquisition are not readily available). Further. only when such reimbursement is virtually certain. When the company expects a provision to be reimbursed. on timing differences. Cost of Leasehold Land is amortised over the period of lease. an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable amount. (iv) Short term employee benefits: Undiscounted amount of liability towards earned leave. 2007 exchange differences on long term foreign currency monetary items (except for exchange differences on items forming part of the company’s net investment in a non-integral foreign operation). the Company assesses whether there is any indication that assets may be impaired. Fringe Benefit Tax is determined at current applicable rates on expenses falling within the ambit of “Fringe Benefit” as defined under Income Tax Act. the reimbursement is recognised as a separate asset. Impairment of Assets: At each Balance Sheet date. Assets individually costing less than Rs.) Rs. Employees’ State Insurance and Employees’ Pension Scheme are as per statute and are recognised as expenses during the period in which the employees perform the services. are (i) adjusted to the cost of the asset in so far as they relate to the acquisition of a depreciable asset. Contingent Liabilities and Contingent Assets: Provisions are recognised when the company has a present obligation as a result of past events. 1961. 10. 1961. 11. are recognised during the period when the employee renders the services. 13. 14. are depreciated over the remaining useful life of the assets as certified by an expert. Deferred tax assets are not recognised unless there is virtual certainity that sufficient future taxable income will be available against which such deferred tax assets can be realised. depreciation is provided at higher rates in respect of certain specific items of plant and machinery having lower useful life based on technical evaluation carried out by the management. Employee Retirement benefits: (i) Defined-contribution plans: Contributions to the Employees’ Provident Fund. If any such indication exists. Cost of Goodwill arising on amalgamation is amortised over a period of 5 years. performance incentives etc. 12. 2010 (contd. being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Depreciation and amortisation: Depreciation on fixed assets is provided on Straight Line Method based on the rates prescribed under Schedule XIV to the Companies Act. Provisions are reviewed regularly and are adjusted where necessary to reflect the current best estimates of the obligation. for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made. Earnings per share: Annualised earnings/ (loss) per equity share (basic and diluted) is arrived at based on ratio of profit/ (loss) attributable to equity shareholders to the weighted average number of equity shares. Superannuation Fund.Significant Accounting Policies for the year ended March 31. compensated absences. Provisions. 70 .

731.1.501.980 (2009: Rs. the management believes that the expected revenues and earnings of the acquired entities are sustainable in the foreseeable future. in Thousands 1. Acquisition of Maltex Malsters Limited: During the financial year ended March 31. 2008 the Company has raised Rs. The group has currently reassessed the circumstances that could indicate the carrying amount of Goodwill may be impaired.932 700 19.281 16. The group evaluates the carrying value of its Goodwill whenever events or changes in circumstances indicate that its carrying value may be impaired for diminution.026.3.438. other than temporary.012 as detailed below.500) for Capital Expenditure.2.072 209 8.The proceeds of the rights issue have been utilised in the following manner: a.874 (2009: Rs.567 18.Notes on Consolidated Accounts for the year ended March 31. United Millennium Breweries Limited (UMBL) and Millennium Beer Industries Limited (MBIL) as per Accounting Standard (AS) – 21.4.096) for repayment of cash credit/overdraft accounts and for additional working capital requirements.550.450.248.197.632 71 . 2. 2010 SCHEDULE 19 Rs.587 13.187 94 11.100 each in Maltex Malsters Limited for a consideration of Rs. b. and hence goodwill is not impaired.854 through an issue of shares on rights basis (Rights Issue). Ownership Percentage Particulars Name of the Subsidiary Associated Breweries & Distilleries Limited (ABDL) Maltex Malsters Limited (MML) Name of the Associate United East Bengal Football Team Private Limited (UEBFTPL) Name of the Joint Venture (JV) Millennium Alcobev Private Limited (MAPL) 50* 50* India 50 50 India 100 51 100 51 India India 2010 2009 Country of Incorporation *Of which 10% represents control exercised through the subsidiary ABDL.567 24.983 2. During the quarter ended June 30. Particulars Fixed Assets (Net book value) Deferred Tax Assets Current Assets Sundry Debtors Cash & Bank Balances Loans & Advances Current Liabilities and Provision Current Liabilities Provisions Net Current Asset Loans Secured Loans Unsecured Loans Rs.258) have been invested in mutual funds.950 equity shares of Rs. 3. represents consolidation of MAPL and its subsidiaries Empee Breweries Limited (EBL).000 which is based on an independent valuation. Rs. 5. 4. 2008 the Company has acquired 22. Pending utilisation the balance proceeds of Rs. 23. As a consequence of such reassessment.490. The Consolidated Financial Statements of Millennium Alcobev Private Limited (MAPL). resulting in a goodwill of Rs. c.848 8. Rs. The Consolidated Financial Statement (CFS) presents the consolidated accounts of United Breweries Limited (the Company) with its following Subsidiaries. Rs. Associates and Joint Venture (‘UBL Group’ or ‘Group’).000 (2009: Rs.

Term Loan from Bank Loan repayable within one year – Rs.84.500 812.948 2010 2009 Rs.18.000* 1.1.51% Purchase Consideration Goodwill Minority Interest 6.Nil (2009: Rs. (d) From Others [including interest accrued and due Rs. Work In Progress & Finished Goods. a subsidiary of the Company.250 (2009: Rs.374.) Rs.012 11.716 (2009: Rs.260) Foreign Currency Loans consist of External Commercial Borrowing (ECB) from BNP Paribas and Foreign Currency Loan from Axis Bank. Nil)] Amount repayable within one year – Rs.296 493.924 193. 23. 164.151 657.013 (2009: Rs. Stock of Raw Material.431) Secured by charge on all movable and immovable properties and current assets.108 123. 2008 UBL’s Share .5.164.517 141.091 225. (b) Term Loan from Bank [including interest accrued and due Rs.384) Secured by first charge on all moveable and immovable assets.321)] Amount repayable within one year – Rs.013 866.204 1.Nil) 227. Stores & Spares.Nil) *Covered by personal guarantee of a Director of the Company. Bills Receivable and Book Debts of the Company and covered by corporate guarantee isused by the Company. both present and future of the MBIL (a subsidiary of the Joint Venture) and covered by a corporate guarantee issued by the Company.500 72 .338.053 (2009: Rs. Unsecured Loans (i) Loans from Banks [including interest accrued and due Rs. 250. ECB from BNP Paribas is secured by first charge on all moveable and immovable properties of the Company except Taloja plant.534 562.685 5. Nil (2009: Rs.195 1. Loan Funds: Particulars Secured Loans (a) Foreign Currency Loans Including Interest Accrued and due Rs.250) Secured against charge on all movable and immovable fixed assets of Empee Breweries Limited and covered by a corporate guarantee issued by the Company.000 (2009: Rs.866.824)] (e) From Rabo Finance India Private Limited Amounts repayable within one year – Rs.Nil (2009: Rs.70.1.056.000 438.000* 605. Foreign currency loan from Axis bank includes demand loan and term loan which are secured by first Charge on the Fixed Assets of a subsidiary of joint venture and current assets namely.84. raw materials. (c) From Banks [including interest accrued and due Rs.21. in Thousands Particulars Net Worth as on March 31.679.5. Rs. Term Loan from Bank Secured by way of hypothecation of all plant and machineries lying at factory or elsewhere both present and future of MML.871.374.2.839) Loans repayable within one year – Rs.155 564.529 2.195 227.571 12.204) Secured by hypothecation of stock in trade.70. (ii) From Others Amount repayable within one year – Rs.Nil (2009: Rs.384 (2009: Rs.250.Notes on Consolidated Accounts for the year ended March 31.505 11.988 450. stores. Term Loan from Bank Loan repayable within one year – Rs.68. 2010 (contd.750. book debts and a second charge on all the immovable properties of the Company.750.000) Secured by Pari-Passu charge on all moveable and immovable properties of the Company except Taloja plant.060)] Loan repayable within one year – Rs.374 (2009: Rs.207 (2009: Rs.721 2.848 (2009: Rs.

which is one of the major markets in India contributing about 18% of the Company’s business. 10.Notes on Consolidated Accounts for the year ended March 31.708 27. which is subject to obtaining of the necessary regulatory approvals by both the Companies.855 26. Share of joint venture: Particulars Estimated amount of Contracts remaining to be executed on capital account and not provided for. BDL has allotted 90.500 800.060 38.672 265 — 36. in Thousands 7.281 898 5.) Rs. Capital Commitments: Particulars Estimated amount of Contracts remaining to be executed on capital account and not provided for.53.500 Share of joint venture: a) b) c) d) Particulars Sales Tax/other taxes demands under appeal [Amount paid under dispute Rs. and has advanced an amount of Rs.473.on behalf of Subsidiaries of Joint Venture to third parties Millennium Beer Industries Limited United Millennium Breweries Limited Empee Breweries Limited .000 Equity Shares upon conversion of warrants to certain parties.000 28.000 730.000 19. In June 2009.134 800.377 33.230 2010 8.262 377.517 (2009: Rs. Subsequently.709 188.926 2009 14.844 229.896 2009 46. The Company has obtained a commitment from USL that the arrangement with Promoters will be adhered to on completion of the proposed merger.502.709 82. having brewing facilities in Tamil Nadu. the Boards of Directors of BDL and United Spirits Limited (USL) have considered and approved a proposal for merger of BDL into USL.114 30.to third parties j) Letter of undertaking to distributors towards countervailing duty for imports from Nepal 2010 14.155 — 2009 3. acting for and on behalf of the other Promoters also. whichever is earlier. the Company has entered into an agreement with the promoters of BDL to secure to the Company perpetual usage of the brewery owned by BDL.348 2010 257.223 (2009: Rs.000 600.619) and Plant and Machinery amounting to Rs.49.1.774 845 10.250 73 .53) and disclosed in loans and advances in Schedule 10] Bank Guarantees given* Demand towards Water charges under appeal* 2010 3.000 to one of the Promoter Companies of BDL.672 265 133.321 2009 689.348 38. The advance will be repaid upon the completion of the merger or in accordance with the terms of the related Agreement. 8.22) and disclosed in loans and advances in Schedule 10] ESIC / PF demands under appeal [Amount paid under dispute Rs.Nil (2009: Rs. With an intention of ensuring supplies from Balaji Distilleries Limited (BDL).030 (2009: Rs.568 78.000 600. 2010 (contd. 9. Contingent Liabilities: a) b) c) d) e) f) g) h) i) Particulars Sales Tax/other taxes demands under appeal* Employee State Insurance Demand* Demand towards Water charges under appeal* Excise Duty/Customs Duty demands under appeal* Income Tax demands under appeal Service Tax demands under appeal* Claims against the Company not acknowledged as debt* Letter of Credit outstanding Guarantees given by the company: . The Company does not own any brewing facility in Tamil Nadu. Fixed Assets: Buildings amounting to Rs. These parties have entered into a supplemental agreement with the Company to the effect that they will be bound by the terms and conditions of the earlier agreement between the Company and the promoters of BDL.550.019 36.000 730.319) are in premises not owned by the Group.

151) (60. in case of loss making Joint Venture / subsidiaries.789 (2009: Rs.134 25.518 15.248) (88.018) * In the opinion of the management.028 6.445 2009 212. (1) (2) Name of the related parties: In Associates United East Bengal Football Team Private Limited (UEBFTPL) Entity which has significant influence Scottish & Newcastle India Limited (SNIL) 74 . 236.175. 4.107 # Net of deposit under appeal – Rs.141 215. 11.3.500 22. Operating Lease: The Group has entered into leasing arrangements for vehicles. 1961 Provision for Doubtful Debts Share of Joint venture Net deferred tax liability Movement during the year Net Deferred tax (charged off) / written back in the profit and loss account 2010 263.310 236.829 18.22% (2009: 33.999 (2009: Rs.676 3.987 17. except in the case of certain leases where there is a lock-in period of 11 to 26 months. future minimum lease rentals under non-cancellable operating leases are as under: Not later than one year One to five years Total 12. equipments.99%) being the substantively enacted tax rate for Indian Companies under the Income Tax Act. Related Party Disclosures: A.963) has been arrived as follows: Particulars Deferred Tax Liability arising from: Difference between carrying amount of fixed assets in the financial statements and the Income Tax Return Less: Deferred tax asset arising from: Expenses charged in the financial statements but allowable as deductions in future years under the Income Tax Act.887 41.169 27. and cancelable/non-cancelable in nature. At the balance sheet date. office premises and residential premises that are renewable on a periodic basis.374 32.288 12.151) 18.4.248) The tax impact for the above purpose has been arrived by applying a tax rate of 33. computer.804 20.055 5. the above demands / claims are not sustainable in law and accordingly no provision has been made in the accounts. in Thousands e) f) g) h) Interest for delayed payment of Interest Free Loans* Dividend on 1% Non Convertible Cumulative Redeemable Preference Shares Income Tax# Claims against the subsidiaries of the joint venture not acknowledged as debt [Amount paid under dispute Rs. 2006.594 2009 75.Notes on Consolidated Accounts for the year ended March 31. 2010 (contd.963 (88.78) and disclosed in loans and advances in Schedule 10] 1.114 (60. Such leases are generally for a period of 11 to 60 months with options of renewal against increased rent and premature termination of agreement through notice period of 2 to 3 months.877 4. 1961.783 172. Accounting for Taxes on Income: Deferred Tax .750 5.500 22.175 2010 79. No deferred tax asset has been recognised.The net deferred tax liability amounting to Rs.78 (2009: Rs.892 28.114 (2009: Rs. Particulars Lease payments during the year including Minimum lease payments Rs.287 175.528 21. 13.) Rs. in the absence of virtual certainty of future profits as per the explanation provided in Accounting Standard 22 notified under the Companies (Accounting Standards) Rules.1.999) on non-cancellable leases.

070 (2009: Rs.428 2009 74.74.000 (2009: Rs. Transactions with related parties during the year: Particulars Sponsorships and Other Payments Finance(including loan in cash or kind) Remuneration to Directors* Amount Due From /(To) UEBFTPL 2010 2009 52.034 50. 2010 (contd.34.042 56.13.912 75 .417 14.000 (2009: Rs.353 187.2.74.2.Nil) 15.376 86. Guido de Boer: Rs.34.Nil (2009: Rs.048.57 Rs.658 369. Holding Company of SNIL (b) Scottish & Newcastle UK Limited (SNUK).718 240.134 234. in Thousands (3) Others: (a) Scottish & Newcastle Plc.Rs.Nil (2009: Rs. Fellow Subsidiary of SNIL Key Management Personnel (KMP): Mr. Earnings Per Share: a) b) c) d) e) Particulars Profit after taxation as per profit and loss account Less: Preference Dividend (including dividend distribution tax thereon) Net Profit attributable to equity shareholders Weighted average number of equity shares outstanding (Face value of Re.883)].769 (2009: Rs. Fellow Subsidiary of SNIL (c) Scottish & Newcastle India Private Limited (SNIPL). Transactions with S & N Group i.007 6. Suparna Bakshi Ganguly (Wife of Mr.Nil (2009: Rs.186) Rs.000) Rs.Notes on Consolidated Accounts for the year ended March 31.035 — 2009 — — 34.123 (2009: Rs. Transactions with SNUK Interest on ECB Purchase of Raw Material iii. Kalyan Ganguly Mr.17.792 86.255 3.354) [Including payment to relative of KMP and a firm in which such relative is a partner .767 52.499) Rs.070 12.2.007 6. (S & N).354 — * Kalyan Ganguly: Rs.624 1. Transactions with SNIL Balance of Preference Share Capital Dividend on above Interim Dividend on Equity Shares Final Dividend on Equity Shares 14.499 (2009: Rs.) Rs.Nil) Figures in bracket indicate amounts received.6.120 170.658 809.266 (2009: Rs.852) Rs.37 2009 455. Kalyan Ganguly) (4) (5) B.588 36. Guido de Boer (Part of the year) Relative of Key Management Personnel: Mrs.588 — — 86.13.469.Nil) Rs.469.070 12.120 36.070) Rs. Details of Dividend: Particulars Dividend payable on Preference Share Capital @3% Dividend Distribution tax payable on above Interim Dividend paid on Equity Shares @15% Dividend Distribution tax paid on above Final Dividend payable on Equity Shares @36% (2009: 15%) Dividend Distribution tax payable on above Total 2010 74.1 per share) Earnings per share (Basic / Diluted) 2010 896.248 — — (26) (18) KMP 2010 — — 41.45. C.589. Transaction with S & N Management Fees ii.

00% Attrition Rate 1.048 Add: Transitional Obligation — — 101 Add: Current Service cost 9.00% 7.337 10.098 6.776) 10.163) (26.00% 8.00% 5.691 9.628 26.00% 1.493 6.218 138.00 % 5. (i) Disclosures envisaged in AS 15 in respect of gratuity are given below: Particulars 2010 2009 2008 A) Reconciliation of opening and closing balances of the present value of the defined benefit obligation Obligations at the beginning of the year 157. Managed Funds and others.00% Expected salary increase per annum 5.057 157.890 118.902 14.646) (10.077 G) Assumptions Discount rate per annum 8.650 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 as at March 31. 76 .745 Add: Interest cost 11.753 Add: Expected Return on Plan Assets 10. 17.Notes on Consolidated Accounts for the year ended March 31.490) (7.00% 7.218 138.269 24. Based on the above allocation and the prevailing yields on these assets. purchase and sale of beer including licensing of brands which constitutes a single business segment. Segmental Reporting: The Group is engaged in manufacture.760 7.337) (10.650 117.020) Obligations at the end of the year 166.425) Prior period adjustment — — (23.650 Amount recognised in the Balance Sheet 9. Private Sector Bonds. primary and secondary reporting disclosures for business and geographical segment as envisaged in AS-17 are not applicable to the Group.186 E) Investment details of plan assets Plan assets are invested in Government Securities. the long term estimate of the expected rate of return on fund assets has been arrived at.890 B) Reconciliation of opening and closing balances of the fair value of plan assets Fair Value of Plan assets at the beginning of the year 135.902 14.00 to 6.540 19.316 144.683 26.739) Add: Actuarial (gains) / losses 990 6. Assumed rate of return on assets is expected to vary from year to year reflecting the return. have been taken on account of inflation. promotion and other relevant factors such as supply and demand in the employment market.349 Add: Actuarial (gains)/ losses (500) (696) (333) (Less): Benefits paid during the year (12.754 (Less): Benefits Paid (12.646) (11.137 22. The Group operates only in India.057 157.LIC (94-96) Ultimate Mortality Table The estimates of future increase in salary.890 (Less): Fair Value of Plan Assets as at March 31.00% Retirement Age 58 58 58 Mortality rate .824) (9. Accordingly. 2010 166.00% 8.00 to 8.837) (26.240 D) Expenses recognised in Profit and Loss account under “Employee Cost” in Schedule 15 Current service cost 9. in Thousands 16.349 (Less): Expected Return on Plan Assets (10.738 Add: Contributions 25.920 135. F) Actual return on plan assets 12.745 Add: Interest cost 11.268 43.501 4. seniority.00% 1. 2010 (contd.691 9.) Rs.020) Fair Value of Plan assets at the end of the year 156.256 Net Gratuity Cost 12.00% 8.985 9.00% Interest rate per annum 8.00% Expected return on plan assets 8.985 9. 2010 156.824 9.218 138. considered in the actuarial valuation.920 135.316 144.316 144.425 Add: Actuarial Gain (1.268 43.00% 7.00 to 6.

2010 amounting to Rs. The previous year’s figures have been regrouped to conform to current year’s classification. the Group has accounted for unrealised exchange losses as given below: (a) Unrealised foreign exchange loss amounting to Rs.9.111 18.583) being expenses debited under the following defined contribution plans: Provident Fund 38. consolidate profit for the year would have been higher by Rs. July 21. 2009 issued by the Ministry of Corporate Affairs.616)] is transferred to FCMITDA. Majumdar Partner Membership No.532 [2009: Rs.589 (2009: Rs.Notes on Consolidated Accounts for the year ended March 31. 2007 changed its accounting policy in respect of exchange differences on long term foreign currency monetary items.(20.19.) Rs. (ii) Had the Group not opted to apply the aforesaid notification. Balance amount of Rs. Rs. the Group.737 Superannuation 12.048) is retained in the FCMITDA as at the year end. 9.(37. July 21.5.064 [2009: Rs. All amounts disclosed in Notes to Account and other Schedules are in Rs. (b) Unrealised foreign exchange gain/ (losses) as of March 31.744)] is retained in the FCMITDA as at the year end.10. 2010 Guido de Boer Director & CFO 77 .(37. 2010 (contd.744)] . ii) Basic and Diluted EPS in the Profit and Loss Account and in Note 14.41.904)] being gain for the current year is recognised in the profit and loss account under Interest and Finance Charges (Schedule 17). 3.9. 20.864 (2008: Rs.2.532 [2009: Rs. having consequential impact on the net worth of the Group. 19. and in Note 14. 2010 Kalyan Ganguly Managing Director Govind Iyengar Company Secretary Bangalore. For Price Waterhouse Firm Registration Number: 007568 S Chartered Accountants J.(56.10.918 11.213 21.51. Balance amount of Rs. Consequently. in Thousands Particulars 2010 2009 2008 (ii) Contribution to Provident and Other Funds under Manufacturing and Other Expenses (Schedule 15) includes Rs.864 (2009: Rs.080 (2008: Rs. 2008 has been transferred to the Foreign Currency Monetary Item Translation Difference Account (FCMITDA) by adjusting the opening balance of the profit and loss account. Rs.532 [2009: Rs.Nil) recognised in the profit and loss account during the year ended March 31.671 30. (i) Pursuant to notification dated March 31. with retrospective effect from April 1.032) being charge for the current year is recognised in the profit and loss account under Interest and Finance Charges (Schedule 17). 000 except for: i) Number of Shares in Notes on Schedule 1.370 29. F51912 Bangalore. with the exception of exchange differences on items forming part of the Group’s net investment in a nonintegral foreign operation.

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