Notes to the Consolidated Financial Statements (contd.)

Transcription

Board of Directors
N. Srinivasan
S. G. Ruparel
V. K. Rekhi
B. S. Patil
Sidhartha V. Mallya
M.S. Kapur
Dr. Vijay Mallya
Chairman
The Team
Dr. Vijay Mallya
Chairman
A. Harish Bhat
Managing Director
Kaushik Majumder
Corporate Vice President Legal & Company Secretary
CONTENTS
Report of the Directors
1
Report on Corporate Governance
8
Auditor’s Report
21
Balance Sheet
24
Statement of Profit and Loss
25
Cash Flow Statement
26
Notes to the Financial Statements
28
Consolidated Financial Statement
58
Left to Right: Subhash R. Gupte, Ravi Nedungadi, V. Shashikanth and Anil Pisharody.
Notice of Annual General Meeting
NOTICE is hereby given of the Ninety-Sixth Annual General Meeting of the Members of UNITED BREWERIES [HOLDINGS]
LIMITED to be held at Good Shepherd Auditorium, Opp. St. Joseph’s Pre-University College, Residency Road, Bangalore
560 025, on Thursday, September 27, 2012 at 11.30.a.m. to transact the following business:
Ordinary Business
1. To consider and adopt the Audited Accounts for the year ended March 31, 2012 and the Reports of the Auditors
and Directors thereon.
2. To appoint a Director in the place of Mr. Sidhartha V Mallya, who retires by rotation and, being eligible, offers
himself for re-appointment.
3. To appoint a Director in the place of Mr. S G Ruparel, who retires by rotation and, being eligible, offers himself for
re-appointment.
4. To appoint Auditors for the ensuing year and fix their remuneration. The retiring Auditors are eligible for
re-appointment.
Special Business
5. To consider and, if thought fit, to pass with or without modification, the following Resolution as an Ordinary
Resolution :
“RESOLVED THAT Mr. V. K. Rekhi be and is hereby appointed as a Director of the Company liable to retire by
rotation.”
Registered Office:
UB Tower, Level 12, UB City No.24, Vittal Mallya Road
Bangalore – 560 001
Mumbai
August 24, 2012
By Order of the Board
Kaushik Majumder
Corporate Vice President – Legal
& Company Secretary
Notes:
1. A Member entitled to attend and vote at the Meeting is entitled to appoint a Proxy to attend and vote instead of
himself / herself and such proxy need not be a Member of the Company.
2. [a] The instrument appointing a Proxy must be deposited with the Company at its Registered Office not less than 48 hours before the time of holding the meeting.
[b]Corporate Members intending to send their authorized representative to attend the meeting are
requested to send a certified copy of the Board Resolution authorizing their representative to attend and vote
on their behalf at the Meeting.
3. The Register of Members and the Share Transfer Books of the Company will remain closed from September 25, 2012
to September 27, 2012 [both days inclusive].
4. Members who have opted for the e-mailing of the Annual Report and the Accounts are kindly requested to bring
the print out thereof when they attend the Annual General Meeting.
5. Members / Proxies are requested to bring their copy of the Annual Report and Attendance/Proxy Slip sent herewith
duly filled in for attending the meeting to avoid inconvenience and delay at the time of registration and avoid
being accompanied by non-members and children. Copies of Annual Report and Attendance slip will NOT be
available for distribution at the venue of the Meeting.
6. The trading in the Company’s Shares has been made compulsory in dematerialized form effective August 28, 2000
for all class of investors. To enable us to serve our investors better, we request Members whose shares are in physical
mode to dematerialize shares and to update their bank accounts with the respective depository participants.
1
Notice (contd.)
7. Members are requested to quote the Folio Number / Client ID /DP ID in all correspondence. The Company has
designated an e-mail ID of the Compliance Officer viz., [email protected] exclusively for the purpose of
registering complaints, if any, by Investors.
8. Members are requested to notify change in their address, quoting Folio number to the Company’s Registrars and
Share Transfer Agents viz., Integrated Enterprises (India) Limited,30, Ramana Residency, 4th Cross, Sampige Road,
Malleswaram, Bangalore 560 003.
9. Members holding shares in dematerialised form should address all their correspondence including change of
address, nominations, ECS mandates, bank details to be incorporated on dividend warrants, powers of attorney,
etc. to their Depository Participant.
10. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number
(PAN) by every participant in securities market. Members holding shares in electronic form are, therefore, requested
to submit the PAN to their Depository Participants with whom they are maintaining their demat accounts. Members
holding shares in physical form can submit their PAN details to the Company/Registrar and Share Transfer Agents.
11. As per the provisions of the amended Companies Act, 1956 facility for making nominations is now available for
Members in respect of the shares held by them. Nomination forms can be obtained from the Registrars and Transfer
Agents.
12. The relevant information relating to the Directors seeking appointment/re-appointment viz., Mr. Sidhartha V
Mallya, Mr. S G Ruparel and Mr. V. K. Rekhi, are given in the Annexure to the Notice.
Registered Office:
UB Tower, Level 12, UB City
No.24, Vittal Mallya Road
Mumbai
August 24, 2012
Kaushik Majumder
Corporate Vice President – Legal
& Company Secretary
EXPLANATORY STATEMENT as required under Section 173 of the Companies Act, 1956.
Item No. 5
Mr. V. K. Rekhi who was appointed Director by the Board w.e.f. August 2, 2011, to fill in the casual vacancy caused by
the resignation of Mr. R. N. Pillai in terms of the Companies Act,1956 and the Articles of Association of the Company,
vacates office at the ensuing Annual General Meeting.
A Notice in writing has been received by the Company from a Member under Section 257 of the Companies Act, 1956,
proposing the appointment of Mr. V. K. Rekhi as a Director of the Company at this meeting. Mr. V. K. Rekhi offers
himself for appointment as a Director at this meeting having filed his consent with the Company to act as Director. Your
Directors, therefore, feel that it will be in the interest of the Company to re-appoint him as a Director of the Company
and accordingly recommend his re-appointment.
2
Particulars of Directors seeking Appointment/Re-Appointment:
Name, brief Resume and Functional
Expertise of the Director
Mr. Sidhartha V Mallya
Annexure to Notice
Committee positions held in
other Companies
Appointment/
Directorships held in
Investor
ReAudit
other Companies
Grievance/
Appointment
Committee
Share Transfer
Committee
ReKamsco Industries Private Limited
appointment Mallya Private Limited
on retirement
by rotation Royal Challengers Sports Private
Limited
Resume
Qualification
Expertise
: B.Sc. Queen Mary University, London
: Marketing and Brand Development
Director
: Since 2005
The Gem Investment & Trading
Company Private Limited
Shareholding in the
Company
: 28,25,358 shares held jointly with Dr. Vijay
Mallya
United Mohun Bagan Football
Team Private Limited
Relationship with
any Director
: Son of Chairman, Dr. Vijay Mallya
Mr. S G Ruparel
Resume
Qualification
Experience
: Master’s Degree in Arts (Oxon) & Master’s
Degree in Science (London)
: Mr. S G Ruparel was the former Managing
Director of Kolhapur Sugar Mills and on the
Board of State Bank of India for 18 years. Held
Chairmanship of various Companies and Joint
Business of various bilateral business counsels.
Expertise
: Corporate Management
Director
: Since 1991
Shareholding in the
Company
: Nil
Relationship with
any Director
: None
Mr. V K Rekhi
Resume
Qualification
Experience
Expertise
-
-
-
Chairman
-
Member
-
Samrat Bottlers Private Limited
-
-
Royal Challengers Sports Private
Limited
-
-
Royal Orchid Hotels Limited
-
-
-
-
-
-
Whyte and Mackay Limited, UK
-
-
Whyte and Mackay Group
Limited, UK
-
-
Whyte and Mackay Warehousing
Limited, UK
-
-
Liquidity Inc., USA
-
-
-
-
ReMangalore Chemicals and
appointment Fertilizers Limited
on retirement McDowell Holdings Limited
by rotation
Pioneer Distilleries Limited
Appointment
as a Director of
the Company
: Bachelor of Arts (Hons) in Economics; Master’s liable to retire
Degree in Business Administration from the by rotation
Indian Institute of Management, Ahmedabad;
Master’s Degree in Economics from the Delhi
School of Economics.
: Mr.V.K.Rekhi has been associated with the UB
Group for over 39 years including its overseas
operations and has had vast experience in
the manufacturing, marketing and general
management, particularly in the liquor
industry. Mr. Rekhi has held senior positions
in the Group including as President and
Managing Director of United Spirits Limited.
: Manufacturing, marketing and general
management in liquor industry.
-
Four Seasons Wines Limited
United Spirits Nepal Private
Limited, Nepal (formerly known
as McDowell Nepal Limited)
Bouvet Ladubay SA, France
Director
: Since 2011
United Spirits (Shanghai) Trading
Company Limited, China.
Shareholding in the
Company
: Nil
Relationship with
any Director
The Associated Chambers of
Commerce and Industry of India,
New Delhi.
: None
Member
3
UNITED BREWERIES [HOLDINGS] LIMITED
Directors
Dr. Vijay Mallya, Chairman
Mr. N Srinivasan
Mr. S G Ruparel
Mr. Piyush G Mankad [up to February 18, 2012]
Mr. B S Patil
Mr. M S Kapur
Mr. V K Rekhi
Mr. A Harish Bhat, Managing Director
Executive Vice Chairman
The UB Group
Mr. S R Gupte
President & Chief Financial Officer
The UB Group
Mr. Ravi Nedungadi
Company Secretary and Compliance Officer
Mr. Kaushik Majumder
Auditors
M/s Vishnu Ram & Co.,
Chartered Accountants
No.12, Margosa Road,
Malleswaram,
Registered Office
UB Tower, Level 12, UB City,
No.24, Vittal Mallya Road,
Registrars and Transfer Agents
Integrated Enterprises (India) Limited
No. 30, Ramana Residency, 4th Cross,
Malleswaram, Bangalore – 560 003
1
Your Directors have pleasure in presenting the 96th Annual Report of your Company together with the Audited Accounts
for the year ended March 31, 2012.
FINANCIAL RESULTS
The summary of financial results of the Company for the financial year ended March 31, 2012 is as under:
2011-2012
2010-2011
The working for the year resulted in
• Profit from Operations
185.315
720.186
Less:
• Depreciation
• Taxation
102.328
6.499
101.335
201.963
Profit after tax
76.488
416.887
Profit for the year
76.488
416.887
-
66.819
11.099
-
76.488
338.970
Your Directors have made the following appropriations:
• Proposed Dividend
• Tax on Proposed Dividend
• Transfer to General Reserve
Surplus carried to the Balance Sheet
DIVIDEND
SALE OF PROPERTY
With a view to conserve resources for working capital,
your Directors do not recommend any dividend for the
year ended March 31, 2012.
During the year, the Company sold Commercial Space
OPERATIONS
EXPORT BUSINESS
The Company’s revenues comprise of sale/lease rentals of
property at UB City, Bangalore, Export Sales, Trademark
License Fees, Dividends, Guarantee Commission and
Interest on Loans and Deposits.
UB Global, the Export division of the Company was again
PROPERTY DEVELOPMENT
Karnataka Chambers of Commerce & Industry (FKCCI)
The construction work for development of a luxury
residential building named as “Kingfisher Towers –
Residences at UB City” on the available land in UB City is
progressing fast. The super built up area of the building
would be 7,67,870 sq. ft. The super built up area falling to
the share of the Company would be 4,18,388 sq. ft. When
built, this residential development will become a landmark
building in Bangalore and will also augment revenues by
sale of the residential units.
conferred the “Special Recognition Certificate – Merchant
Arising from the economic slow down, several Lessees of
rental space especially the retail lessees have re-negotiated
the rentals. This has impacted the potential revenue of the
2
(` in million) Company.
measuring 43,822.61 sq.ft. of saleable super built up
commercial area in UB City.
awarded the “Golden Trophy” by APEDA, in continued
appreciation of its dominant export performance in
the Beverage Alcohol category. Also, the Federation of
Category” on UB Global, in recognition of its export
excellence.
The Export division registered its highest ever Revenues
and Profits, despite severe economic volatility in key
markets such as Europe and currency swings. High level
of domestic inflation continues to remain a concern, as it
increases input costs.
The
beverage
alcohol
business
registered
its
highest ever sales Volume, Revenue and Profits. The
distribution of Kingfisher Bohemia Wines was further
widened, increasing its footprint in several developed
markets.
Report of the Directors (contd.)
During the year, the apparel business performed
exceedingly well and with the second factory in operation
for the full year, turnover increased by 67%.
The Company’s investments in Leather footwear business
has continued in Ambur, the hub of Leather industry in
South India. This has enabled manufacturing of high
quality shoes.
SUBSIDIARIES
The following are the subsidiaries of the Company:
A. Indian Subsidiary Companies
1. Bangalore Beverages Limited
2. Bestride Consultancy Private Limited
3. City Properties Maintenance Company
Bangalore Limited
4. Kingfisher Finvest India Limited [Formerly
Kingfisher Radio Limited]
5. Kingfisher Training and Aviation Services Limited
[Formerly Kingfisher Airlines Limited]
6. Kingfisher Aviation Training Limited [Formerly
Kingfisher Training Academy Limited]
7. Kingfisher Goodtimes Private Limited
8. UB Electronic Instruments Limited
9. UB Infrastructure Projects Limited
10. UB International Trading Limited
11. UB Sports Limited
B.Overseas Subsidiary Companies
12. Inversiones Mirabel, S.A.
13. Mendocino Brewing Co. Inc, USA
14. Rubic Technologies Inc
15. Rigby International Corp
16. Releta Brewing Company LLC
17. UB Overseas Limited
18. UBHL [BVI] Limited
19. United Breweries of America Inc., Delaware
20. United Breweries International [UK] Limited
21. Kingfisher Beer Europe Limited (Formerly UBSN
Limited)
A summary of performance of all the above mentioned
subsidiaries including turnover, profit before and after
taxation are available in the statement under the heading
Summarized Financials of Subsidiary Companies 2011 -12
is included in the Annual Report. The Company had
invested in the above subsidiaries besides significant
advances to them over the years. Being strategic long term
investment and considering the respective business plans
of the respective subsidiaries, no impairment is presently
addressed.
The Ministry of Corporate Affairs, Government of India,
vide General Circular No. 2/2011 dated February 8, 2011 has
issued directions under Section 212(8) of the Companies
Act, 1956 granting general exemption from applicability
of the provisions of Section 212 of the Companies Act,
1956 in relation to the Subsidiary Companies, subject to
fulfillment of the conditions specified in the said circular.
The Company has availed the benefit of general exemption
provided by the aforesaid circular and accordingly, the
documents mentioned in Section 212(a) to (d) of the
Companies Act, 1956 relating to the Company’s subsidiaries
are not attached to the Accounts of the Company. In
terms of the said circular, your Company shall fulfill the
prescribed conditions, make the requisite disclosures
and further undertake that the Annual Accounts of the
Subsidiary Companies and the related detailed information
shall be made available to Shareholders of the Company
and its Subsidiary Companies seeking such information.
These documents will also be available for inspection
during business hours at the Registered Office of the
Company and of the respective Subsidiary Companies
concerned.
Kingfisher Airlines Limited
Kingfisher Airlines Limited [KFA] has ceased to be
Company’s subsidiary as on February 18, 2012 consequent
upon it allotting shares against Optionally Convertible
Debentures. However, the Company is exposed to
significant guarantees given on behalf of KFA. It is to be
stated that till date no such guarantees has ultimately
devolved on the Company.
The Indian airline industry and KFA in particular is currently
exposed to one of the toughest operating environments and is expected to struggle with profitability pressures. One of the highest prices for Jet Fuel in the world, high
tax structure, recent depreciation of the rupee, and high
cost of borrowing all contribute to the challenges facing
domestic aviation. The Government of India is committed
to usher in fiscal measures and reforms that will make the
operating environment more conducive for a sustainable
business.
When
these
initiatives
are
implemented
by
the
Government, KFA will undertake a phased and pragmatic
approach to re-induction of capacity as well as further
market expansion in future.
3
DIRECTORS
Mr. Piyush G Mankad resigned as Director of the Company
with effect from February 19, 2012. The Board placed
on record the valuable services rendered by Mr. Mankad
during his tenure as a Director of the Company.
Mr. V K Rekhi who was appointed as Director of the
Company in the casual vacancy caused by the resignation of
Mr. R N Pillai with effect from August 2, 2011 vacates office
at the ensuing Annual General Meeting. The Company has
received a notice under Section 257 of the Companies Act,
1956 from a Member signifying his intention to propose
Mr. V. K. Rekhi as a candidate for the office of the Director
of the Company liable to retire by rotation.
Mr. Sidhartha V Mallya and Mr. S G Ruparel, Directors,
retire by rotation and, being eligible, offer themselves for
re-appointment, as Directors liable to retire by rotation.
A brief resume of the Directors proposed to be appointed/
re-appointed is given in the Annexure to the Notice.
Pursuant to Clause 49 of the Listing Agreements with
the Stock Exchanges, Management Discussion and
Analysis Report is appended and forms an integral part of
the Report on Corporate Governance which is appended.
FIXED DEPOSITS
The Fixed Deposits accepted from the Public and
Shareholders stood at ` 850.797 million as on March 31,
2012 (including an amount of ` 128.54 million accepted
during the year under review).
A sum of ` 0.498 million from Public and Shareholders
remained unclaimed as at March 31, 2012.
There have been no defaults in the repayment of fixed
deposits during the year excepting occasional short delay
for which interest had been paid along with matured
deposits.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION
FUND
re-appointment.
Pursuant to the provisions of Section 205A[5] and 205C of
the Companies Act, 1956, an amount of ` 0.167 million
[Previous Year ` 0.367 million] being the aggregate of the
Unclaimed Dividend and Deposits, remaining unclaimed
and unpaid for more than 7 years, have been transferred
to the Investor Education and Protection Fund.
With reference to observations in the Auditors Report
PARTICULARS OF EMPLOYEES
regarding accrual of Guarantee/security commission from
The information as are required to be provided in terms
of Section 217[2A] of the Companies Act, 1956 read with
the Companies [Particulars of Employees] Rules, 1975 is
enclosed.
AUDITORS AND AUDITORS’ REPORT
Messrs. Vishnu Ram & Co., Chartered Accountants, retire
as Auditors of the Company at the conclusion of the
forthcoming Annual General Meeting and are eligible for
an Associate Company (erstwhile subsidiary), inclusion of
interest from Subsidiaries and Associates, non-provision
for loans & advances to certain Subsidiaries an Associate
Company and for decline in value of investment in certain
Subsidiaries an Associate Company, the relevant notes to
the accounts comprehensively explain the management’s
views on such matters.
LISTING OF SHARES OF THE COMPANY
The shares of your Company are listed on Bangalore Stock
Exchange Limited [Regional Exchange], The Bombay Stock
Exchange Limited, Mumbai and National Stock Exchange
of India Limited.
4
MANAGEMENT DISCUSSION AND ANALYSIS
CORPORATE GOVERNANCE
A report on Corporate Governance is annexed separately
as part of the report along with a Certificate of Compliance
from the Statutory Auditor. Necessary requirements of
obtaining certifications / declarations in terms of Clause 49
of the Listing Agreements have been complied with.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
OUTGO
Particulars of Conservation of Energy, Technology Absorption
The Provisions of Section 217[1][e] of the Act relating to
conservation of energy and technology absorption do not
apply to this Company since it is not engaged in manufacturing
activities.
Foreign Exchange Earnings and outgo
The particulars are given in the Notes to the Audited
Accounts.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217[2AA] of the
Companies Act, 1956 the Board of Directors hereby state that:
(i) in the preparation of the Annual Accounts, the
applicable accounting standards have been followed
along with proper explanation relating to material
departures.
(ii) accounting policies have been selected and applied
consistently and the judgments and estimates made
are reasonable and prudent so as to give a true and
fair view of the state of affairs of the Company at
the end of the financial year and of the profit of the
Company for that period.
(iii) 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 prevention and detection of fraud and other
irregularities.
(iv) the Annual Accounts have been prepared on a going
concern basis.
GREEN INITIATIVE
Annual Report is transmitted through Emails to
those identifiable members while print version of
the Annual Report are posted to others. The other
details are available in the Company’s website
www.theubgroup.com.
ACKNOWLEDGEMENT
Your Directors place on record the support received
from Group Companies, shareholders, depositors, banks,
financial institutions and employees.
Mumbai
August 24, 2012
Dr. Vijay Mallya
Chairman
5
Annexure to Directors’ Report
Statement under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules, 1975.
Employed throughout the year and in receipt of remuneration in aggregate of not less than ` 60,00,000 per annum.
Sl.
No.
1.
2.
3.
4.
5.
Name
Age
Total
Remuneration
(`. in lacs)
Anand Deepak
63
330.36
Ashoke Roy
55
Shashikanth V
D. Banerjee
K.V. Sreenath
Educational
Qualifications
Experience
in years
Previous Employment
President
B.A. (Eco.)
(Hons), A.C.A.
38
Director, A F Ferguson
& Co, Mumbai
125.30
Deputy President
– Internal Audit
B.Com., A.C.A.,
ICMA, ICSA
28
51
141.00
Deputy President
– Overseas
Business
B.E., PGDIT
28
Project Director,
Bharat Forge Limited,
Pune
53
80.70
Sr. Vice President
B.Tech (Hons.)
PGDM
28
United Spirits Limited
62.70
Senior General
ManagerChairman’s
Office
B.Com
36
First Employment
56
Designation
Senior Auditor, Philips
India Limited
Employed for part of the year and in receipt of remuneration at the rate of not less than ` 5,00,000 per month
Sl.
No.
1.
Name
Ramanujam S
Age
60
Total
Remuneration
(` in lacs)
Designation
148.50*
Executive Vice
President –
Taxation
Educational
Qualifications
B.Sc., A.C.A.
Experience
Previous Employment
in years
34
Manager, Group
Taxation, Investment
Trust of India Limited,
Chennai
*includes retirement benefits
Notes:
1. Remuneration shown above includes Salary, Allowance, Medical Leave, Travel Expenses and monetary value of perquisites as per Income Tax Rules.
2. None of the employees mentioned above is a relative of any Director of the Company.
3. None of the above mentioned employees is holding more than 2% of the Paid up Equity Capital of the Company.
6
Annexure to Directors’ Report (contd.)
Statement pursuant to Section 212(1)(e) of the Companies Act, 1956 as at March 31, 2012
(` in million)
No. of equity shares at
the end of the financial
year of the Company
Percentage of
holding
Net Aggregate Profit/(Loss) of the Subsidiary so far
as it concerns the Shareholders of the Company
a) Not dealt with in the
Accounts of the Company
Sl.
No.
Name of the Subsidiary
1
2
1 Bangalore Beverages Limited
2
3
4
5
6
City Properties Maintenance
Company Bangalore Limited
Kingfisher Finvest India Limited
Bestride Consultancy Private
Limited
Kingfisher Training and Aviation
Services Limited
Kingfisher Aviation Training
Limited
(i)
United
Breweries
(Holdings)
Limited
United
Other
Other
Breweries
Subsidiary
Subsidiary
(Holdings)
Companies
Companies
Limited
3
5
50,000
-
100.00
50,000
-
55.00
-
50,000
-
100.00
-
10,000
33,216
2,747
3,000,000
7 UB Electronic Instruments Limited.
280,976
8 UB Infrastructure Projects Limited.
9 UB International Trading Limited.
50,000
50,002
(ii)
(1.891)
6
4.061
7
8
-
-
-
-
4.411
1.002
-
(787.552)
(604.841)
-
-
-
100.00
0.124
-
-
-
66.43
5.49
(17.048)
(13.778)
-
-
(0.278)
(0.107)
-
-
3.324
2.977
-
-
3.487
(1.093)
(0.055)
2.974
-
-
100.00
6,410
(i)
For
For the
For previous
For the
previous
subsidiary’s year of the subsidiary’s
year
financial
subsidiary
financial
of the
year ended
since it
year ended subsidiary
March 31,
became a
March 31,
since it
2012
subsidiary
2012
became a
subsidiary
4
-
(ii)
b) Dealt with in the
Accounts of the
Company
96.25
2.19
100.00
100.00
10 UB Sports Limited
50,000
100
(0.080)
(6.055)
-
-
Kingfisher Goodtimes Private
11
Limited
9,960
99.6
(0.004)
(0.004)
-
-
100.00
-
(0.102)
(0.089)
-
-
12 Rigby International Corp.
13 UB Overseas Limited
15,115,488
-
50
950
5.00
95.00
(32.842)
(45.029)
-
-
5,500,000
-
100.00
-
(0.010)
(0.051)
-
-
15 UBHL (BVI) Limited
United Breweries
16
International ( UK) Limited
17 Kingfisher Beer Europe
Limited
United Breweries of America
18
Inc., Delaware
238,370
-
100.00
-
(195.674)
(44.902)
-
-
-
100,000
-
100.00
0.205
0.710
-
-
-
100,000
-
100.00
(1.996)
(34.611)
-
-
-
14,542
-
92.49
1.195
(0.548)
-
-
19 Relata Brewing Company LLC
-
100
-
100.00
3.044
(0.174)
-
-
20 Inversiones Mirabel, S.A.
Mendicino Brewering
21
Company Inc. USA
-
2
-
100.00
(0.153)
(0.134)
-
-
-
8,587,818
-
68.10
0.615
12.873
-
-
14 Rubic Technologies Inc.
August 24, 2012
Dr. Vijay Mallya
Chairman
7
1. COMPANY’S POLICY ON CORPORATE GOVERNANCE
The Company has always endorsed the principles of good Corporate Governance and has endeavored to follow
these principles in their true letter and spirit. The Board of the Company, which is charged with the responsibility
of ensuring true Corporate Governance, is always striving to ensure that the management protects the long term
interests of all the stake-holders of the Company.
2. BOARD OF DIRECTORS
Composition and Category of Directors
In compliance of Clause 49 of the Listing Agreements with the Stock Exchanges, the Board consists of 4 Independent
Directors and 4 Non-Independent Directors (including a Non Executive Chairman and a Managing Director). The
requirement of the Listing Agreement that 50% of the Board should comprise of Independent Directors is met.
The Company held Seven Board Meetings during 2011-12 and the gap between two meetings did not exceed four
months. The Board Meetings were held on April 28, 2011, May 22, 2011, August 2, 2011, August 25, 2011, September
28, 2011, November 8, 2011 and February 13, 2012.
The details of attendance of Directors at the Board meetings during the financial year 2011-12 and at the last Annual
General Meeting (AGM) held on September 28, 2011, and also the number of Directorships and Committee positions
held by them in other Companies as on date are given below:
Name
Category
No. of Board
Meetings
Attended
Attendance Directorship
at the last
in Other
AGM held Public Limited
on 28.9.2011 Companies
No. of Committees
(other than the
Company) in which
Member/Chairman
Dr. Vijay Mallya
Non-Executive Chairman
7
Yes
11
Nil
Non-Executive Director
6
Yes
1
Nil
Mr. N Srinivasan
Independent Director
7
Yes
14
9
(Chairman of 4)
Mr. S G Ruparel
6
Yes
3
2
(Chairman of 1)
Mr. B S Patil
6
Yes
9
6
(Chairman of 1)
Mr. M S Kapur
6
Yes
9
8
(Chairman of 3)
Mr. Piyush G Mankad*
4
No
-
-
Mr. V K Rekhi
Non-Executive Director
2
Yes
3
Nil
Mr. A Harish Bhat
Executive/ Managing Director
7
Yes
10
3
(Chairman of 1)
*Mr. Piyush G Mankad resigned w.e.f. February 19, 2012.
Notes:
1. Except Dr. Vijay Mallya and Mr. Sidhartha V Mallya none of the other Directors are inter-related.
2. None of the Directors has any business relationships with the Company.
3. The above numbers exclude Directorships in Private Limited Companies, Companies incorporated under Section
25 of the Act, Chamber and Committee.
8
Directors seeking Re-appointment
The brief particulars of the Directors of the Company, seeking re-appointment at the ensuing Annual General
Meeting are given in the Annexure to the Notice.
Report on Corporate Governance (contd.)
3. COMMITTEES OF THE BOARD
The Board of Directors has constituted Mandatory Committees viz., Audit Committee, and Shareholders’ and Investors’
Grievance Committee and Non-Mandatory Committees i.e. Remuneration Committee and General Committee of
Directors. The functions of these Committees are summarized below.
AUDIT COMMITTEE
The powers of the Audit Committee are as mentioned in Clause 49(II) [c] and [d] of the Listing Agreement and
Section 292A of the Companies Act, 1956. The terms of reference of this Committee are wide enough covering the
matters specified for Audit Committees under the Listing Agreement. The Committee acts as a link between the
Management, the Statutory and the Internal Auditors on one side and the Board of Directors of the Company on the
other side and oversees the financial reporting process.
The Executive Vice Chairman- The UB Group, The Chief Financial Officer-The UB Group, the Managing Director and
the Internal Auditors are permanent invitees of the Audit Committee. The Statutory Auditors are also invited to
attend the meetings. The Company Secretary acts as the Secretary to the Committee.
Five Meetings of the Audit Committee were held during 2011-12 i.e., on April 28, 2011, August 2, 2011, August 25,
2011, November 8, 2011, and February 13, 2012. The composition and attendance of Members at the Meetings of
the Audit Committee held during 2011-12 are as follows:
Name
Designation
Mr. N Srinivasan
Mr. S G Ruparel
Mr. B S Patil
Chairman
Member
Member
Meetings held during
2011-12
5
5
5
Category
Meetings
attended
5
5
4
SHAREHOLDERS’ / INVESTORS’ GRIEVANCE COMMITTEE
The Shareholders’ / Investors’ Grievance Committee oversees the transfer of shares lodged for transfer, transmission,
dematerialization / rematerialization, split and stock option allotments and complaints received from shareholders
and other statutory bodies. The Company’s Registrars and Share Transfer Agents viz., Integrated Enterprises (India)
Limited Bangalore, have adequate infrastructure to process the above mentioned activities. Majority of the complaints from Shareholders are received directly by Integrated Enterprises (India) Limited, Registrars
& Share Transfer Agents, and those received by the Company are forwarded to them for immediate redressal.
Six Meetings of the Shareholders’ / Investors’ Grievance Committee were held during 2011-12 i.e., on April 28, 2011,
June 30, 2011, August 2, 2011, November 8, 2011, December 30, 2011, and February 13, 2012. The composition and
attendance of Members at the Meetings of the Shareholders’/ Investors’ Grievance Committee held during 2011-12
are as follows:
Name
Designation
Mr. S G Ruparel
Mr. B S Patil
Mr. A Harish Bhat
Chairman
Member
Member
Category
Non-Independent Director
Meetings held
during 2011-12
6
6
6
Meetings attended
4
5
4
Mr. Kaushik Majumder, Corporate Vice President-Legal & Company Secretary is the Compliance Officer.
Details of complaints resolved during the financial year 2011-12 are as follows:
No. of Complaints
Received during 2011-12
Resolved during 2011-12
Closing
As per SEBI Category
20
20
Nil
Other Correspondences
1059
1059
Nil
None of the complaints were kept pending for more than one month. As on March 31, 2012, no share transfer
requests or complaints were pending at our end.
9
REMUNERATION / COMPENSATION COMMITTEE
The Remuneration / Compensation Committee of the Board recommends to the Board, from time to time,
compensation package for Whole-Time Directors.
Composition of Remuneration Committee
Name
Designation
Category
Mr. S G Ruparel
Chairman
Mr. N Srinivasan
Member
Mr. B S Patil
Member
There was no occasion for the Remuneration Committee to meet during the year 2011-12.
Remuneration to Managing Director
Mr. Harish Bhat, Managing Director of the Company does not draw any remuneration and perquisites from the
Company.
Remuneration to Non-Executive Directors
Non-Executive Directors are being paid sitting fees of `20,000 per meeting of the Board and Audit Committee
and ` 10,000 per meeting of the other Committees attended by them.
The details of sitting fees paid to the Directors of the Company for attending the Board and Committee Meetings
for the year 2011-12 are as follows:
Name
Fees Paid (`)
Dr. Vijay Mallya
1,40,000
Mr. N Srinivasan
2,40,000
Mr. S G Ruparel
2,60,000
1,20,000
Mr. Piyush G Mankad*
80,000
Mr. B S Patil
2,50,000
Mr. M S Kapur
1,20,000
Mr. V .K. Rekhi
40,000
Mr. R.N. Pillai**
30,000
Total
12,80,000
*paid up to February 18, 2012; **paid up to August 2, 2011.
The particulars of Equity Shares of the Company currently held by the Directors are furnished below:
Name
As on March 31, 2012
As on March 31, 2011
Dr. Vijay Mallya
5,284,978
5,284,978
Mr. N Srinivasan
120
120
Mr. S G Ruparel
Nil
Nil
600
600
Mr Sidhartha V Mallya
Nil
Nil
Mr. B S Patil
Nil
Nil
Mr. M S Kapur
Nil
Nil
Mr. V K Rekhi
Nil
Nil
Mr. A Harish Bhat
10
Number of Shares held
GENERAL COMMITTEE OF DIRECTORS
In view of the difficulties in convening Board Meeting[s] with requisite quorum at short notice, for matters requiring
immediate and prompt action, on behalf of the Company, the Board constituted a Committee of Directors on October
26, 2006 which was reconstituted on August 2, 2011.
The powers to be delegated to the Committee of Directors consisting of Mr. N Srinivasan, Mr. A Harish Bhat and Mr. B
S Patil are regulated by the Board of Directors from time to time. There was no occasion for the General Committee
to meet during the year 2011-12.
4. SECRETARIAL AUDIT
As required under Listing Agreement, Secretarial Audit was carried out by a qualified Practicing Company Secretary
for reconciling the total admitted capital with National Securities Depository Limited [NSDL] and Central Depository
Services (India) Limited and the total issued and listed capital. The audit confirms that the total issued/paid up
capital is in agreement with the total number of shares held in physical form and the total number of dematerialized
shares held with NSDL and CDSL.
This audit is carried out every quarter and the report thereon is submitted to the Stock Exchanges, NSDL and CDSL
and is also placed before the Board of Directors.
5. COMPLIANCE OFFICER
Mr. Kaushik Majumder, the Company Secretary has been functioning as Compliance Officer for the purpose of
complying with various provisions of Securities and Exchange Board of India Regulations, Listing Agreements with
Stock Exchanges, Registrar of Companies and for monitoring the share transfer process etc. His email address is
[email protected].
6. GENERAL BODY MEETINGS
The last three Annual General Meetings (AGMs) of the Company were held on the following dates, time and venue:
Financial Year
93rd Annual General
Meeting April 2008 – March
2009
Date
Thursday,
September
10, 2009
94th Annual General
2010
Thursday,
September
30, 2010
Time
Venue
Special Resolutions passed
3.15.p.m. Good Shepherd
1. Alteration of Clause 112 of the Articles of
Auditorium,
Association to increase the minimum number
Residency Road,
of directors from 3 to 9.
Bangalore 560 025 2. To restrict the FII limits at 26% and authorize
the Board to amend or modify the percentage
of FII investment as may be warranted.
10.30.a.m Good Shepherd
1. Re-appointment of Mr. R N Pillai as
Auditorium,
Managing Director of the Company,
Residency Road,
without remuneration, from March 18,
Bangalore 560 025
2010 up to the close of business of August
20, 2010.
2. Appointment of Mr. A Harish Bhat as
Managing Director of the Company,
without remuneration, from the close
of business hours of August 20, 2010
for a period of three years or date of
superannuation whichever is earlier.
3. Conversion of loans given by the
Company to Kingfisher Airlines Limited,
into convertible instrument which is
compulsorily convertible into equity shares.
95th Annual General
2011
Wednesday,
September
28, 2011
2.30.p.m. Good Shepherd
Auditorium,
Residency Road,
Bangalore 560 025
Nil
11
Postal Ballot
Pursuant to Section 192A of the Companies Act, 1956, an Ordinary Resolution was passed by the Members through
Postal Ballot:
Date of Notice of
Postal Ballot
September 28, 2011
Date of Passing
November 14,
2011
Description
(i)
by an Ordinary Resolution in Carried
terms of Section 293(1)(d) of the majority
Companies Act, 1956 for increase
in the borrowing powers up to an
aggregate limit of ` 3500 crores and
for creation of mortgage(s) and/
or charge(s) in favour of banker(s),
financial
institution(s),
Mutual
Fund(s) or other lender(s) to secure
the above borrowings in terms of
Section 293(1)(a) of the Companies
Act, 1956;
(ii) by a Special Resolution in terms of Carried
Result
with
requisite
with
requisite
Section 372A of the Companies Act, majority
1956 for investment in UB Realty
Limited up to a sum not exceeding `10 crores.
The Postal Ballot exercise, under Section 192A of the Act, was conducted by Mr. M R Gopinath, a Company Secretary
in practice, Scrutinizer appointed for the purpose.
There is no Special Resolution at this meeting, which is required to be passed by way of Postal Ballot.
7. DISCLOSURES
12
Materially significant related party transactions
All details relating to financial and commercial transactions where Directors may have a pecuniary interest are provided
to the Board, and the interested Directors neither participate in the discussion, nor do they vote on such matters.
Transactions with related parties as per the requirements of Accounting Standards 18 issued by The Institute of
Chartered Accountants of India are disclosed in the relevant Schedule of Notes to Annual Accounts.
Details of non-compliance
There has been no instance of non-compliance with any legal requirements nor have there been any strictures passed
by Stock Exchanges or SEBI, on any matters relating to the capital market over the last three years.
Code of Conduct
The Company has adopted a Code of Ethics for Board Members and Senior Management Personnel. This code is in
addition to the Company’s Code of Business Conduct, applicable to all the designated employees of the Company.
A copy of the said Code of Ethics for Board Members and Senior Management Personnel is available at the Company’s
website, www.theubgroup.com.
All the members of the Board and Senior Management Personnel have affirmed compliance with the Code of Ethics
for Board Members and Senior Management Personnel and the Code of Business Conduct, as on March 31, 2012. Pursuant to the requirements of SEBI (Prohibition of Insider Trading) Regulations, 1992, the Company adopted a
“Code of Conduct for Dealing in Securities” at the meeting of the Board of Directors held on September 30, 2002.
The Company has updated the Code as per the requirements of SEBI and has made it applicable to all Directors and
designated employees. The Code ensures prevention of dealing in shares by persons having access to unpublished
price sensitive information.
Details of compliance with mandatory requirements and adoption of the non mandatory requirements of this
clause
The Company has complied with all the mandatory requirements of Clause 49 of the Listing Agreement. The details
of these compliances have been given in the relevant sections of this Report. The status of compliance with the Non
mandatory requirements is given at the end of the Report.
8. MEANS OF COMMUNICATION
Website
The Company has its own web-site and all vital information relating to the Company and its performance, including
quarterly results, official press releases and presentation to analysts are posted on the web-site. The Company’s
website address is www.theubgroup.com.
Other means of communication
Quarterly Results
The Company’s quarterly results are published in English and Kannada
newspapers. Press Releases are also issued which are carried by other
newspapers. Hence, same are not sent to the residence of Shareholders.
Newspapers in which Results are normally i) The Financial Express
published in
ii) Times of India/Kannada Prabha (Kannada) [a regional daily published
from Bangalore]
Any website where displayed
www.theubgroup.com
Whether it also displays official news releases Yes
and the presentations made to Institutional
Investors or to the analysts
Whether Management Discussion and Analysis Yes
is a part of the Annual Report
Designated e-mail Address for Investor Services
In terms of Clause 47[f] of the Listing Agreement, the designated e-mail address for investor complaints is
[email protected].
9. GENERAL SHAREHOLDER INFORMATION
The particulars of the Annual General Meeting for the year ended March 31, 2012 is as under:
Date of 96th Annual
General Meeting
September 27, 2012
Book Closure
From
Venue
Time
Good Shepherd Auditorium, Opp. St. Joseph’s Pre-University
College, Residency Road, Bangalore 560 025
11.30 a.m.
September 25, 2012
To
September 27, 2012
The Company’s financial year begins on April 1 and ends on March 31 of the following year:
Financial Calendar
1st Quarter
April 1 to June 30
2nd Quarter
July 1 to September 30
3rd Quarter
October 1 to December 31
4th Quarter
January 1 to March 31
Declaration of Unaudited Results
By August 14th
By November 14th
By February 14th
By May 15th
13
Unclaimed Dividend
Section 205A of the Companies Act, 1956, mandates that Companies transfer dividend that has been unclaimed for
a period of seven years from the unpaid dividend account to the Investor Education and Protection Fund [IEPF]. In
accordance with the following schedule, the dividend for the years mentioned below, if unclaimed within a period
of seven years, will be transferred to IEPF.
Financial
Year
Type of dividend
2003-04
Due date for transfer
No Dividend Declared
2004-05
-
-
2005-06
Interim / Final
` 0.50 per share
September 30, 2006
October 28, 2013
2006-07
Final
` 1.00 per share
November 28, 2007
December 26, 2014
2007-08
Final
` 1.00 per share
December 26, 2008
January 24, 2015
2008-09
-
2009-10
Final
` 1.00 per share
September 30, 2010
October 29, 2017
2010-11
Final
` 1.00 per share
September 28, 2011
October 27, 2018
The Company has sent communications to the concerned shareholders, advising them to lodge their claims with
respect to unclaimed dividend. Shareholders are advised that once unclaimed dividend is transferred to IEPF, no claim
shall lie in respect thereof, either against the Company or against IEPF.
Equity Shares in the Suspense Account
As on March 31, 2012 there were 294770 unclaimed (returned undelivered) Equity Shares, in accordance with Clause
5A (I) of the Listing Agreement. The Registrars and Share Transfer Agent [Integrated Enterprises (India) Limited] had
issued 3 reminder notices at the addresses of 8948 such shareholders, and as on the date of this report 988 responses
for 44347 shares have been received from the concerned shareholders and the relevant share certificates were
returned back to the said shareholders.
Listing on Stock Exchanges and Stock Codes
The Company’s Shares are currently listed and traded on the following Stock Exchanges:
Sl.
No.
14
Date of declaration
Dividend per Share (`)
Name of the Stock Exchanges
Address
No. 51, Stock Exchange Towers, Ist
Cross, J C Road, Bangalore 560 027
Scrip Name, Scrip Code &
Scrip ID
UNITEDBRED
1
Bangalore Stock Exchange Limited
[Regional Exchange]
2
The Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers, Dalal
Street, Mumbai 400 001
United Brewr / 507458/
UBHOLDING
3
National Stock Exchange of India Bandra Kurla Complex, Bandra East,
Limited
Mumbai 400 051
UBHOLDINGS
The Listing Fees for the year 2012-2013 has been paid to all the above Stock Exchanges.
Market Price Data
The details of market price of the shares of the Company at the Bombay Stock Exchange Limited and National
Stock Exchange of India Limited during the period from April 1, 2011 to March 31, 2012 are provided in the table
hereunder.
BSE
Months
High
Low
`
NSE
Volume
`
High
Low
`
`
Volume
April, 2011
223.80
183.00
13,51,858
223.90
212.00
6,71,061
May, 2011
197.35
165.10
25,00,536
197.30
181.35
16,62,572
June, 2011
186.30
140.15
10,97,104
186.30
182.70
7,51,248
July, 2011
163.00
134.40
12,31,686
162.70
154.10
6,87,654
August, 2011
139.50
110.15
8,50,840
139.00
130.90
10,01,928
September, 2011
124.50
104.30
8,67,726
124.00
118.60
5,78,178
October, 2011
123.55
92.70
10,36,721
118.00
111.10
11,65,655
November, 2011
105.50
71.85
9,39,879
78.00
72.25
6,75,953
December, 2011
91.25
57.55
7,84,207
94.25
78.35
6,80,910
January, 2012
81.85
58.40
25,14,812
81.40
78.55
14,83,997
February, 2012
110.05
67.50
37,59,852
108.00
101.30
12,93,387
80.60
64.25
20,16,830
80.05
74.70
9,08,223
March, 2012
BSE Sensex
Share Price
NSE Nifty
Share Price
15
The stock performance in comparison to BSE Sensex and NSE Nifty are provided in the chart below.
Registrars and Share Transfer Agents
During the year under review, Integrated Enterprises India Limited, Bangalore, continued as the Company’s Registrars
and Share Transfer Agents.
All matters pertaining to Share Transfers / Transmissions were handled by Integrated Enterprises India Limited. Share
Transfer requests were processed by them and a Memorandum of Transfer along with relevant documents sent to
the Company for approval by the Investors’ / Shareholders’ Grievances Committee.
Shares sent for physical transfer were effected after giving a 15 day notice to the seller for confirmation of the sale. The average time taken for processing Share Transfer requests including dispatch of Share Certificates was 21 days,
while 10-12 days were required for processing dematerialisation requests.
Share Transfer System
The power of approving transfers up to 5000 shares has been delegated to the Company Secretary and two Directors.
Transfers are approved every fortnight. Share transfers above 5000 shares are approved by the Board of Directors.
Dematerialization of shares and liquidity
United Breweries [Holdings] Limited shares are tradable compulsorily in electronic form and through Integrated
Enterprises India Limited, Registrars and Share Transfer Agents. The Company has established connectivity with
both the depositories i.e., National Securities Depository Limited [NSDL] and Central Depository Services (India)
Limited [CDSL]. The International Securities Identification Number [ISIN] allotted to the Company’s Shares under the
Depository System is INE696A01025.
Percentage of Shares held in Physical & Electronic form as on March 31, 2012
Sl. No.
Particulars
1
Demat Mode
2
No. of Shares
%
NSDL
22458
61424960
91.93
CDSL
7826
3646407
5.46
Total
30284
65071367
97.39
Physical Mode
16231
1747154
2.61
Grand Total
46515
66818521
100.00
ECS (Electronic Clearing Service) / Mandates / Bank Details
Members may please note that ECS details contained in the BENPOS downloaded from the Depositories would be
reckoned for payment of dividend. In order to avoid fraudulent encashment of dividend, please register either ECS
mandate or Bank details for payment of dividend.
Distribution of Shareholding as on March 31, 2012
Category
Up to 5,000
5,001 - 10,000
10,001 - 20,000
20,001 - 30,000
30,001 - 40,000
40,001 - 50,000
50,001 - 1,00,000
1,00,001 and above
16
No. of Share Holders
Total
Number of
Shareholders
46185
137
76
29
8
7
29
44
99.29
0.29
0.16
0.06
0.02
0.02
0.06
0.10
7730709
981586
1088447
720867
287866
314272
2123233
53571541
11.57
1.47
1.63
1.08
0.43
0.47
3.18
80.17
46515
100.00
66818521
100.00
%
Number of Shares
%
Total Foreign Share Holding as on March 31, 2012 is 27996900 Equity Shares i.e. 41.90% [FDI comprising of 27919563
Equity Shares representing 41.78 %] of total paid up Capital.
Outstanding Global Depository Receipts (GDRs) / American Depository Receipts (ADRs) / Warrants or Convertible
Bonds
- Not Applicable -
Shareholding Pattern as on March 31, 2012
Categories of Shareholding
%
Indian Promoters
Dr. Vijay Mallya and his relatives
7.91
Kamsco Industries Private Limited
3.62
Mallya Private Limited
3.62
The Gem Investments and Trading Company Private Limited
1.60
Pharma Trading Company Private Limited
0.63
Vittal Investments Private Limited
0.15
Devi Investments Private Limited
0.69
McDowell Holdings Limited
7.87
Ganapathy Mallya Investments Private Limited
-
Rossi & Associates Private Limited
-
VJM Investments Private Limited
-
Foreign Promoters
Watson Limited
FirStart Inc
21.19
4.22
Total Promoters’ Holdings
51.50
Foreign Institutional Investors
15.91
Mutual Funds / UTI
7.07
Financial Institutions / Banks
0.03
Insurance Companies
1.18
Other Bodies Corporate
7.77
Individuals holding up to ` 1 lakh in nominal capital
Individuals holding more than ` 1 lakh in nominal capital
Others
NRIs
Total Non-Promoter’s Holdings
Grand Total
11.35
3.90
0.72
0.57
48.50
100.00
17
Plant Location
The Company has no plants.
Address for Correspondence
For any assistance regarding Share Transfers, Transmissions, change of address, non- receipt of dividends, duplicate /
misplaced Share Certificates and other relevant matters, shareholders may write to:
Address for correspondence with Registrars
and Share Transfer Agents
Integrated Enterprises (India) Limited
30, Ramana Residency, 4th Cross,
Sampige Road, Malleswaram,
Tel.No. : 080 – 23460815 – 18
Fax No. : 080 – 23460819 Contact Persons
Mr. S Vijayagopal / Mr. S Rajaraman / Mr. Ramesh Chandra
e-mail address
[email protected]; [email protected];
[email protected]
Address for correspondence with the Company The Company Secretary
United Breweries (Holdings) Limited
“UB Tower”, Level 12, UB City
No.24, Vittal Mallya Road, Bangalore 560 001.
Tel. No.: 080 - 3985 6079 / 3985 6097 / 3985 6094
Fax No.: 080 – 2227 4890
Address for correspondence for shareholders Shareholders holding shares in dematerialized form should address
holding shares in dematerialised form
all their correspondence (including change of address, nominations,
ECS mandates, bank details to be incorporated on dividend
warrants, powers of attorney, etc.) to their Depository Participant. 10. NON MANDATORY PROVISIONS
Chairman of the Board
The Chairman’s Office is maintained by the Company.
Remuneration Committee
The Company has in place a Remuneration Committee.
18
Shareholders Rights
The Company’s half yearly results are published in English and Kannada newspapers. Hence the same are not sent to
the shareholders.
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.
Mechanism for evaluating non-executive Board Members
The Board of Directors may consider adopting such a requirement in the future.
Whistle Blower Policy
The Board may consider adopting a separate mechanism for Whistle Blower Policy in future.
CEO/ CFO Certificate
In terms of the requirement of the amended Clause 49, the certificates from CEO/ CFO have been obtained.
Mumbai
August 24, 2012
On behalf of the Board of Directors
A Harish Bhat
Managing Director
Annexure
Corporate Governance Report of United Breweries [Holdings] Limited
Compliance with Code of Business Conduct and Ethics
In accordance with Clause 49 of the Listing Agreements with the Stock Exchanges, the Board Members and Senior
Management Personnel of the Company have confirmed compliance with the Code of Business Conduct and Ethics for
the financial year ended March 31, 2012.
Mumbai
August 24, 2012 A Harish Bhat
Managing Director
CERTIFICATE
To the Members of
United Breweries (Holdings) Limited
We have examined the compliance of conditions of Corporate Governance by United Breweries [Holdings] Limited
(“the Company”), for the year ended on March 31,2012, as stipulated in Clause 49 of the Listing Agreement of the said
Company with Stock Exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the management of the Company. Our
examination was limited to a review of the procedures and implementation thereof, adopted by the Company for
ensuring the compliance with 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 and representations made
by the Directors and the management of the Company, we certify that the Company has complied with the conditions of
Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement.
We state that no investor grievance is pending for a period exceeding one month as on March 31, 2012 against the
Company as per the records maintained by the Shareholders / Investors Grievance Committee.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency
or effectiveness with which the management has conducted the affairs of the Company.
For Vishnu Ram & Co
Firm Registration No. 004742S
Mumbai August 24, 2012 S Vishnumurthy
Proprietor
Membership No. : 22715
19
MANAGEMENT DISCUSSION AND ANALYSIS 1.
OVERVIEW OF THE COMPANY
The Company is the principal Holding Company of the UB Group, through which the Promoters and the Promoter
Group own controlling interest in a number of Companies collectively forming the UB Group that have marketleading positions in a fast-growing consumer market. Through its holdings in United Spirits Limited and United
Breweries Limited, the Company is one of the leading conglomerates in the consumer-oriented products and
services industry in India, with leading market share in spirits and beer industries besides fertilizers market. The
Company also holds a major stake in Kingfisher Airlines Limited, the aviation area of the Group. While the Company
is primarily the investment arm of the UB Group, which is in the business of investing and funding various Group
Companies, it also facilitates the UB Group’s entry into new business ventures. The Company also has a presence
in the property development, fertilizer and engineering industries through UB City, Mangalore Chemicals and
Fertilizers Limited, McDowell Holdings Limited and UB Engineering Limited. The Company derives income mainly
from export sales, lease rentals, property development, dividend from Investee Companies, licensing fees, interest
and guarantee commissions from Investee Companies. The Company owns several brands and trademarks, including
the UB “Pegasus” and the “Kingfisher” brand under certain classes of the Trade Marks Act, 1999.
2.
RISKS, CONCERNS AND MITIGATIONS
a)
Risk Identification process
The Company has put in place a risk identification and mitigation process. This process generally involves the
following steps:
•
•
•
•
•
b)
Risks & Concerns
Identifying risks inherent in the Group strategy
Selecting the appropriate risk management strategy
Implementing controls to manage the risks
Monitoring the effectiveness of risk management processes and controls
Periodically reviewing the Internal control effectiveness and effecting improvements to give reassurance to the Audit Committee.
The Company is exposed to the following risks and concerns:
i) Dividend distribution by Subsidiaries and Associate Companies would largely depend upon their dividend
policy and development plans. The profitability of UB Global is subject to world economic scenario and
volatility of various currencies including Indian rupees. Property values could reflect overall consumer
sentiment. All these factors would have some bearing on the company’s future profitability.
ii) The Holding Company is called upon to execute guarantees on behalf of Subsidiaries and Associate
Companies. Although the Company has not been put to any financial loss on this account, such exposure
could be a cause for concern.
iii) Certain Subsidiaries for reasons beyond their control could incur financial losses impairing the carrying
value of their equity. These investments are strategic in nature and close continuous monitoring is required
to improve their performance which would also ensure that the advances given to them over a period of
time are adequately protected together with the interest.
iv) Even though part of Company’s investments in a Subsidiary and Associate Companies are under pledge
with lending institutions, this by itself should not be a cause of concern since their intrinsic values are far
above their carrying values.
v) All the above issues of concerns are but common in holding – subsidiary relationships. The Company has
in place adequate mechanism and checks and balances supported by effective internal control and audit.
20
c)
Risk Mitigation
The Chairman and the Managing Director oversee the functioning and performance of individual companies in the Group.
3.
INTERNAL CONTROL SYSTEM
The adequacy of the internal control system is reviewed by the Audit Committee of the Board of Directors. The
Group Internal Audit Department evaluates the functioning and quality of internal controls and provides assurance
of its adequacy and effectiveness through periodic reporting. Your Board believes that appropriate procedures,
controls and monitoring assessment procedures are in place and considered adequate.
Auditors' Report
To
The members of
United Breweries (Holdings) Limited.
1. We have audited the attached Balance Sheet of United Breweries (Holdings) Limited, Bangalore (“the Company”), as at 31st
March 2012, the Statement of Profit and Loss and also the Cash Flow Statement for the year ended on that date, annexed
thereto. 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 auditing standards generally accepted in India. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by the management,
as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Government of India in terms of sub-section (4A)
of Section 227 of the Companies Act, 1956 (1 of 1956), we enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said order.
4. Attention is invited to the following:
(i) Note no 39 regarding inclusion in the income for the year, an amount of Rs. 521.143 million of guarantee/security
commission charged to Kingfisher Airlines Limited (KFA). KFA has not accrued the charge in view of the restrictions
imposed by its lenders for the period commencing from 1.1.2011. The total of such charge, accrued by the company
for the period from 1.1.2011 to 31.3.2012 is Rs. 646.770 million.
(ii) Note no 35 regarding inclusion in the income for the year, interest of Rs. 1,285.272 million charged to certain subsidiaries
and associates, the ultimate realization of which may take protracted period of time.
(iii) Note no 40 regarding significant financial exposure to KFA in the form of investments in equity, loans and advances and
guarantees. KFA has considerably scaled down its operations and it is under severe financial stress. No provision has been
made in the accounts for the probable loss that may arise due to non recovery of loans and advances and other receivables,
decline in the value of investments and invocation of guarantees
(iv) Note no 32(f) and Note no 34 regarding non provision for significant decline in the value of investments aggregating
Rs. 700.610 million in certain subsidiaries whose networth is eroded/partially eroded besides non provision for probable loss
that may arise due to non-recovery of outstanding Loans and advances of Rs. 1,627.300 million due from such subsidiaries.
5.
Further to our comments in the annexure referred to in paragraph 3 above, we report that:
i
we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary
for the purpose of our audit;
ii
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;
iii
the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement
with the books of account;
iv
In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report
comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;
v
on the basis of written representations received from the directors and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on 31-03-2012 from being appointed as a director in terms of clause (g)
of sub-section (1) of section 274 of the Companies Act, 1956; and
vi
in our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together
with the notes thereon and except for the effects of paragraph 4 above, which according to the management, is presently not
quantifiable, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view
in conformity with accounting principles generally accepted in India;
(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31-03-2012;
(b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Place: Mumbai
Date : 24.08.2012
For Vishnu Ram & Co.,
Chartered Accountants,
(S. Vishnumurthy)
Proprietor.
Membership No.22715
21
Annexure to the Auditor’s Report
(Referred to in paragraph 3 of our report of even date)
Re: United Breweries (Holdings) Limited
(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation
of its fixed assets
(b) Most of the assets have been physically verified by the management during the year. Some of the assets have
not been verified. However, there is a regular programme of physical verification where under, every asset gets
verified atleast once every three years. In our opinion, such verification is reasonable having regard to the size
of the company and the nature of its assets. Discrepancies noticed on verification during the year have been
properly dealt with in the books of account.
(c) During the year, the company has disposed off a portion of its land and building. In our opinion, this transaction
has not affected the “going concern” status of the company.
(ii) (a) As explained to us, the inventory has been physically verified during the year by the management. In our
opinion, the frequency of such verification is reasonable.
(b) In our opinion and according to the information and explanations given to us, the procedures of physical
verification of inventories followed by the management are reasonable and adequate in relation to the size of
the company and nature of its business.
(c) In our opinion and according to the information and explanations given to us, the company is maintaining proper
records of its inventory. The discrepancies noticed on physical verification of inventory have been properly dealt
with in the books of account.
(iii) (a) According to the information and explanations given to us, the company has granted unsecured loans to parties
covered in the register maintained under section 301 of the Companies Act, 1956. Maximum amount involved
during the year is Rs. 944.188 million. The amount of such loans outstanding as at 31-3-2012 is Rs. 1,396.742
million. In our opinion, the rate of interest and other terms and conditions of loans given by the company are
prima facie not prejudicial to the interest of the company. The repayments of the dues are in accordance with
terms and conditions stipulated.
(b) According to the information and explanations given to us, the company has taken unsecured loans from parties
covered in the register maintained under section 301 of the Companies Act, 1956. Maximum amount involved
during the year is Rs. 2,510.389 million. The amount of loans outstanding as at 31-3-2012 is Rs. 2,401.279 million.
In our opinion, the rate of interest and other terms and conditions of loans taken by the company are prima
facie not prejudicial to the interest of the company. The repayments of the dues are in accordance with terms
and conditions stipulated.
(iv)In our opinion and according to the information and explanations given to us, there exists in the company an
adequate internal control system commensurate with the size of the company and the nature of its business
with regard to purchases of inventory, fixed assets and with regard to sale of goods and services. During the
course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal
control system of the company.
(v) (a) In our opinion and according to the information and explanations given to us, the particulars of all contracts
or arrangements that need to be entered into the register maintained under section 301 of the Companies Act,
1956 have been so entered.
(b) In our opinion and according to the information and explanation given to us, the transactions made in pursuance
of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956
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.
(vi)
In our opinion and according to the information and explanations given to us, the company has complied
with the provisions of section 58A and 58AA and other relevant provisions of the Companies Act, 1956 and
the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No
order has been passed by the Company Law Board or Reserve Bank of India or any Court or any other Tribunal
in relation to the deposits accepted by the company.
(vii)In our opinion and according to the information and explanations given to us, the company has an internal audit
system commensurate with the size and nature of its business.
(viii)
22
In our opinion and according to the information and explanations given to us the provisions of section 209(1)(d)
of the Companies Act, 1956 with regard to maintenance of cost records are not applicable to the company.
(ix) (a) In our opinion and according to the information and explanations given to us, the company is generally regular
in depositing with appropriate authorities undisputed statutory dues including dues in respect of provident
fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax and
other material statutory dues except service tax amounting to Rs. 24.254 million and custom duty of Rs. 0.700 million
both of which are outstanding for more than six months.
Annexure to the Auditor’s Report (contd.)
(b) According to the information and explanations given to us, following is the list of dues on account of taxes,
which have not been deposited on account of disputes.
Name of the Statute
Nature of dues
Income Tax Act, 1961
Foreign Trade
(Development &
Regulation) Act, 1992
Income tax for the A.Y. 1997-98.
Interest for A.Y 2001-02
Penalty
Disputed amount
(Rs. in million)
31.998
1.929
130.340
171.040
106.510
5.000
Forum where dispute is
pending.
Supreme Court
High Court of Karnataka
CIT (Appeals)
CIT (Appeals)
CIT (Appeals)
High Court of Judicature,
Madras
(x)
The company does not have any accumulated losses. The company has not incurred cash losses during the financial year
covered by our audit and during the immediately preceding financial year.
(xi)
Based on our audit procedures and as per the information and explanations given to us, the company has defaulted in repayment of
dues to a financial institution and banks. The unpaid overdue installments and interest to banks and financial institutions as at March
31, 2012 were Rs. 91.740 million. The same has been paid in April 2012. The company has not issued any debentures.
(xii)
In our opinion and according to the information and explanations given to us, the company has not granted any loans on
the basis of security by way of pledge of shares, debentures and other securities. Therefore, the provisions of clause 4(xii) of
the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.
(xiii)
In our opinion and according to the information and explanations given to us, the company is not a chit fund or a nidhi/
mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 are
not applicable to the company.
(xiv)
In our opinion and according to the information and explanations given to us, the company is not dealing in or trading in
shares, securities, debentures or other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditor’s
Report) Order, 2003 are not applicable to the company.
(xv)
In our opinion and according to the information and explanations given to us, the terms and conditions on which the
company has given guarantees for loans taken by others from banks or financial institutions are not prejudicial to the
interest of the company.
(xvi)
In our opinion and according to the information and explanations given to us, the term loans raised during the year have
been applied for the purposes for which they were raised.
(xvii)
In our opinion and according to the information and explanations given to us and on an overall examination of the balance
sheet of the company, we report that amount of Rs. 2,580.389 million raised on short-term basis have been used for granting
long-term loans and advances.
(xviii)
According to the information and explanations given to us, the company has not made any preferential allotment of shares
during the year to any parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore,
the provisions of clause 4(xviii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.
(xix)
According to the information and explanations given to us, the company has not issued any debentures during the year.
Therefore, the provisions of clause 4(xix) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.
(xx)
According to the information and explanations given to us, the company has not raised any money during the year by public
issue. Therefore, the provisions of clause 4(xx) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the
company.
(xxi)
According to the information and explanations given to us, no fraud on or by the company has been noticed or reported
during the course of our audit.
Mumbai
August 24, 2012
Chartered Accountants,
(S. Vishnumurthy)
Proprietor.
Membership No.22715
23
Balance Sheet as at March 31, 2012
` in million
Note No.
As at March 31, 2012
2
668.185
668.185
Reserves and surplus
3
15,161.256
15,345.849
Non-current liabilities
Long term borrowings
Other long term liabilities
4
5
17,258.360
3,695.529
16,421.288
3,104.720
Long term provisions
6
71.261
61.248
7
8
9
10
3,958.005
300.431
4,979.812
1,006.966
4,099.411
422.777
3,047.806
1,077.821
47,099.805
44,249.105
11
2,041.948
1,033.068
2,166.456
925.627
Non current investments
Long term loans and advances
Other non current assets
12
13
14
16,464.497
22,583.267
68.852
18,636.024
19,502.533
65.690
Current assets
Current investments
Inventories
Trade receivables
Cash and cash equivalents
Short term loans and advances
Other current assets
15
16
17
18
19
20
26.512
255.817
303.549
408.364
1,407.794
2,506.137
431.701
74.651
393.785
769.264
1,211.075
72.299
47,099.805
44,249.105
Equity and Liabilities
Shareholders’ funds
Share capital
Current liabilities
Short term borrowings
Trade payables
Other current liabilities
Short term provisions
Assets
Non-current assets
Fixed assets
Tangible assets
Capital work in progress
Significant Accounting Policies and other
notes
1, 28 to 59
The accompanying notes are integral part of the accounts.
This is the Balance Sheet referred to in our report of even date.
24
Dr. Vijay Mallya
N. Srinivasan
A. Harish Bhat
Chairman Director Managing Director Mumbai Kaushik Majumder August 24, 2012 Company Secretary For Vishnu Ram and Co.,
Firm Registration No.004742S
S.Vishnumurthy
Proprietor
Membership No. 22715
Statement of Profit and Loss for the year ended March 31, 2012
` in million
Note No.
For the year ended
March 31, 2012
March 31, 2011
Revenue
Revenue from operations
21
5,020.475
3,881.949
Other income
22
1,610.393
1,245.061
6,630.868
5,127.010
1,922.262
1,438.144
Expenses
Purchase of traded goods
Cost of packing materials consumed
23
220.507
88.083
Change in inventories
24
(155.420)
(31.099)
Employee benefit expenses
25
233.857
189.285
Finance costs
26
3,516.672
2,226.330
Depreciation
11
102.328
101.335
Other expenses
27
707.675
496.083
6,547.881
4,508.161
82.987
618.849
Current tax
6.043
158.663
Earlier year
0.456
43.300
76.488
416.886
1.14
6.24
Profit before taxation
Tax expense:
Profit for the year
Basic / Diluted Earnings Per Share (Face value of ` 10 each)
Significant Accounting Policies and other notes
1, 28 to 59
This is the Statement of Profit and Loss referred to in our report of even date.
Dr. Vijay Mallya
N. Srinivasan
A. Harish Bhat
S.Vishnumurthy
Proprietor
25
Cash Flow Statement for the year ended March 31, 2012
` in million
For the year ended
March 31, 2012
For the year ended
March 31, 2011
A: Cash Flow from Operating Activities
Net profit before taxes
82.987
618.849
Adjustments for :
Depreciation
102.328
101.335
Dividend income
(112.735)
(99.655)
Profit on sale of investments (other than short term
investments)
(163.663)
-
(0.378)
(0.113)
Property development
(500.959)
(361.929)
Interest and finance charges
3,516.672
2,226.330
(1,309.155)
(1,169.899)
(36.323)
-
-
5.403
(274.419)
4.199
Profit on sale of old assets
Interest income
Liabilities no longer required written back
Provision for doubtful debts
Unrealised exchange fluctuation (gain) / loss
Loss on assets discarded
Provision for diminution in value of Investments
0.022
0.118
-
26.558
Operating profit before working capital changes
1,221.390
732.347
1,304.377
1,351.196
Adjustments for :(Increase)/decrease in trade and other receivables
(Increase) /decrease in inventories
(Decrease) / increase in trade payable / other liabilities
65.390
(212.008)
(181.166)
(20.843)
276.050
103.212
160.274
(129.639)
Cash from operations
1,464.651
1,221.557
Direct taxes paid
(200.768)
(256.344)
Net cash from operating activities
1,263.883
965.213
B: Cash Flow from Investing Activities
Purchase of fixed assets (including changes in capital work in
progress)
(172.200)
(1,036.015)
Sale of assets / advance for residential units
1,349.153
413.330
(1,745.209)
(4,947.121)
Loans given (net)
Purchase of investments
-
(8,304.225)
Sale of investments (other than short term investments)
172.605
-
Dividend income
112.735
99.655
(Increase)/ decrease in fixed deposits with bank
(61.509)
554.473
Net cash used in investing activities
26
(344.425)
(13,219.903)
Cash Flow Statement for the year ended March 31, 2012 (contd.)
For the year ended
March 31, 2011
For the year ended
March 31, 2012
C: Cash Flow from Financing Activities
Interest and finance charges
Interest received
Dividend and dividend distribution tax paid
Short term borrowings: increase / (decrease)
Bank borrowings : increase / (decrease)
Long term borrowings and provisions : increase / (decrease)
(3,096.779)
(2,001.646)
23.883
8.708
(77.918)
(77.918)
(1,254.691)
4,060.678
897.543
2,612.413
1,760.906
7,322.934
Net cash (used in) / generated from financing activities
(1,747.056)
11,925.168
Net increase / (decrease) in cash and cash equivalents
(827.598)
(329.522)
Cash and cash equivalents at the beginning of the year
1,183.056
1,512.578
355.458
1,183.056
0.238
0.154
328.708
751.201
26.512
431.701
355.458
1,183.056
408.364
769.264
Less : Deposits maturing beyond 3 months
79.418
17.909
Add : Current investments
26.512
431.701
355.458
1,183.056
Closing balance of cash and cash equivalents
Cash and Cash equivalents comprises of:
Cash in hand (including foreign currencies)
Balance with banks in current accounts
Current investments
Reconciliation of cash and cash equivalents as per Balance
Sheet and Cash flow statement
Cash and cash equivalents as per balance sheet
Notes to the Cash Flow Statement
1. Short term investments represents amounts invested in mutual funds which are readily convertible into cash.
2. Balances with banks include ` 3.313 million being balances in unpaid dividend account which can not be used by the Company except for payment of unpaid dividend / transfer to Invester Education and Protection Fund.
This is the cash flow statement referred to in our report of even date.
Firm Registration No. : 004742S
Dr. Vijay Mallya
Chairman
N. Srinivasan
Director
Mumbai
August 24, 2012
A. Harish Bhat
Managing Director
Kaushik Majumder Company Secretary
S. Vishnumurthy
Proprietor
Membership No.: 22715
27
Notes to the Financial Statements
1. ACCOUNTING POLICIES
i.
Basis of preparation of financial statements:
The financial statements of the Company have been prepared, unless otherwise stated, under historical cost
convention, having due regard to the fundamental accounting assumptions of going concern, consistency, accrual and
in compliance with the mandatory Accounting Standards as specified in the Companies (Accounting Standards) Rules,
2006.
ii. Use of estimates:
The preparation of financial statements in conformity with the Generally Accepted Accounting Principles requires
Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities at the date of the financial statements and the results of operations during the
reporting year end. Although these estimates are based upon Management’s best knowledge of current events and
actions, actual results could differ from these estimates.
iii. Revenue recognition:
Revenues are generally recognized on accrual basis except where there is an uncertainty of ultimate realization.
a. Sales are recognized when the property in goods are transferred for a price and their collection is expected within
the agreed time.
b. Lease income from non-cancellable operating leases are recognized in the statement of Profit & Loss, on straight
line basis, over the lease term. In respect of other operating leases, lease income is recognized in accordance with
the terms of the lease deeds as modified based on negotiations from time to time.
c. Interest is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.
d. Dividends and royalty income are accounted for, when the right to receive the payment is established.
iv. Valuation of Inventories:
Inventories are valued at lower of weighted average cost and net realizable value. Cost of inventories comprises of
cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and
condition.
v. Fixed Assets:
Fixed assets are stated at cost less depreciation, wherever applicable. The land in Bangalore is stated at the revalued
amount as adjusted in accordance with the revaluation done in August 2001 at the market value determined by
approved valuers. All costs relating to the acquisition and installation of fixed assets are capitalised and such costs
include borrowing cost relating to borrowed funds attributable to the acquisition of qualifying assets for the period
upto the date of acquisition / installation.
vi. Borrowing Cost:
Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized
as part of cost of such assets till such time as the asset is ready for its intended use or sale. A qualifying asset is an asset
that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs
are recognized as an expense in the period in which they are incurred.
vii. Depreciation:
28
Depreciation has been provided under written down value method at the rates prescribed under Schedule XIV to the
Companies Act, 1956.
Notes to the Financial Statements (contd.)
viii.Effects of changes in Foreign Exchange rates :
a. Transactions in foreign currencies are translated applying the following exchange rates:
In respect of export transactions, at the average exchange rate prevailing in the month preceding month in which
the transaction takes place.
In respect of all other transactions at the rate of exchange prevailing on the date of transaction.
b. Monetary assets and liabilities denominated in foreign currency are translated at the rates of exchange at the
Balance Sheet date and the resultant gain or loss is recognized in the Statement of Profit & Loss except exchange
differences arising on reporting of long term foreign currency monetary items which are accumulated in a Foreign
Currency Monetary Item Translation Difference Account and amortised over the balance period of such long term
asset/liability but not beyond March 31, 2020.
c. Non monetary items are carried at historical cost denominated in foreign currency and these are translated using
the exchange rate prevailing on the date of transaction.
ix. Accounting for Government Grants :
Government grants available to the Company are considered for inclusion in the accounts, where there is reasonable
assurance that the Company will comply with the conditions attached to them and where such benefits have been
earned by the Company and it is reasonably certain that the ultimate collection will be made. Grants of revenue nature
are recognized in the Statement of Profit and Loss.
x. Investments :
i)
Current investments refer to the investments that are readily realizable and intended to be held for not more than
a year.
ii) Trade investments refer to the investments made with the aim of enhancing the group’s business interest.
iii) Long term investments are stated at cost. All expenses relating to acquisition of investments are capitalized. Diminution in the value of investments, if considered permanent, is provided for.
iv) Current investments are stated at lower of cost and fair value on the Balance Sheet date.
xi. Employee Benefits:
a) Defined-contribution plans :
These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal
or informal obligation to pay additional sums. These comprise of contributions to the Employees’ Provident Fund,
Superannuation Fund, Employees’ Pension Scheme and certain state plans like Employees’ State Insurance. The
Company’s payments to the defined contribution plans are recognized as expenses during the period in which the
employees perform the services that the payment covers.
b) Defined-benefit plans:
Gratuity: The Company provides for gratuity, a defined benefit plan (Gratuity Plan), to certain categories of
employees. Liability with regard to gratuity plan is accrued based on actuarial valuation, based on Projected Unit
Credit Method, carried out by an independent actuary, at the Balance Sheet date. Actuarial Gains and Losses
comprise experience adjustments and the effect of changes in the actuarial assumptions and are recognized
immediately in the Statement of Profit and Loss as income or expense.
c) Other long term employee benefits:
Compensated absences which are not expected to occur within twelve months after the end of the period in
which the employee renders the related services are recognized as a liability at the present value of the defined
benefit obligation at the Balance Sheet date based on actuarial valuation carried out at each Balance Sheet date.
29
d) Short term employee benefits:
Undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered
by the employees is recognized during the period when the employee renders the services. These benefits include
compensated absences such as paid annual leave and performance incentives.
xii. Segment reporting:
The operations of the Company are divided into alcoholic beverages, leather products, readymade garments investments,
guarantee services, property development and other activities. Accordingly, the primary segment reporting comprises
the performance under these segments and the secondary segment reporting is based on geographical locations of
customers.
xiii.Related Party disclosures:
Transactions between related parties are disclosed as per Accounting Standard 18- “Related Party Disclosures”.
Accordingly, disclosures regarding the name of the transacting related party, description of the relationship between
the parties, nature of transactions and the amount outstanding as at the end of the accounting year, are made.
xiv.Taxes on Income:
Provision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amount of tax
payable in respect of taxable income for the year.
Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year
and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.
Deferred tax assets are recognized and carried forward to the extent that there is reasonable / virtual certainty that
sufficient future taxable income will be available against which such deferred tax asset can be realized.
xv. Impairment of assets:
The Company evaluates all its assets for assessing any impairment and accordingly recognises the impairment, wherever
applicable, as provided in Accounting Standard 28- “Impairment of Assets”.
xvi.Provisions and Contingencies:
A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that
an out flow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on Management estimates required to
settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect
the current Management estimates.
xvii. Earnings per share:
30
Earnings per equity share (basic / diluted) is arrived at by dividing the Net Profit or Loss for the year attributable to the
equity shareholders by the weighted average number of equity shares outstanding during the year.
` in million
2.
As at
As at
March 31, 2012
March 31, 2011
Share capital
Authorised
100,000,000 (2011: 100,000,000 ) Equity Shares of
` 10/- each
Issued, Subscribed and Paid-up
66,818,521 (2011: 66,818,521) Equity Shares of ` 10/each fully paid up.
a.
1,000.000
1,000.000
1,000.000
1,000.000
668.185
668.185
668.185
668.185
Reconciliation of equity shares outstanding at the beginning and at the end of the reporting year
As at the beginning of the year
Issued during the year
Outstanding at the end of the year
No. of Shares
66,818,521
66,818,521
Amount No. of Shares
668.185
66,818,521
-
Amount
668.185
-
668.185
668.185
66,818,521
b.
Terms and rights attached to equity shares
The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General
Meeting. The rights of shareholder is governed by the Articles of Association of the Company and the Companies Act,
1956.
c.
Details of shareholders holding more than 5% shares in the company
31-03-2012
Dr. Vijay Mallya
Watson Limited
Platinum Investment Management Limited
Birla Sunlife Trustee Company Pvt Ltd
d.
Number of
shares
5,284,978
5,260,002
14,159,986
% holding
7,213,505
-
31-03-2011
7.91
7.87
21.19
Number of
shares
5,284,978
5,260,002
14,159,986
10.80
-
8,283,635
3,627,344
% holding
7.91
7.87
21.19
12.40
5.43
Aggregate number of shares issued for consideration other than cash during the period of five years
immediately preceding the reporting date
The Company has issued 29,720,949 bonus shares during the year 2006-07.
31
` in million
3.
As at
As at
March 31, 2012
March 31, 2011
Reserves and Surplus
Capital reserve
Securities premium account
Fixed assets revaluation reserve :
At the beginning of the year
Less: Adjustment on sale of land and building
511.365
511.365
8,331.975
8,331.975
1,090.511
46.027
1,123.179
32.668
1,044.484
Foreign currency monetary item translation difference
account
(215.054)
General reserve
Surplus as per Statement of Profit and Loss :
Add: profit for the year
Less: Appropriations:
Proposed dividend
Tax on proposed dividend
32
1,090.511
75.000
75.000
5,336.998
76.488
5,413.486
4,998.029
416.887
5,414.916
-
66.819
11.099
5,413.486
5,336.998
15,161.256
15,345.849
` in million
As at
March 31, 2012 March 31, 2011
4
Secured
From banks
From others
Unsecured
Fixed deposits
From bank
From group companies
From others
2,207.486
15,949.711
2,423.228
13,928.093
850.793
500.000
450.000
895.652
20,853.642
1,343.843
500.000
880.652
19,075.816
62.616
2,468.116
145.198
1,573.316
564.550
500.000
3,595.282
936.014
2,654.528
17,258.360
16,421.288
Less: Current maturities
Secured
From bank
From others
Unsecured
Fixed deposits
From bank
a.
Nature of security and terms of repayment for secured borrowings
Nature of security
Terms of repayment
(1) Vehicle loan from HDFC Bank amounting to
` 8.201 million (Pr year ` nil) is secured by
hypothecation of vehicle.
Repayable in 60 equated monthly instalments from the
date of loan (May 2011) along with interest of 10.25%
p.a. Last instalment due on April 2016.
(2) Loan from The Lakshmi Vilas Bank Limited
amounting to `
289.789 million (Pr year `
323.228 million) is secured by assignment of future
receivables for use of Pegasus logo by group
companies.
Repayable in 84 equated monthly instalments from
the date of loan (February 2009) along with interest at
the rate of BPLR + 0.75% (presently @ 18% p.a.) Last
instalment due on December 2016. Overdue EMI of
` 16.618 million is since repaid.
(3) Loan from Yes Bank Limited amounting to
` 1,424.496 million (Pr year ` 2,001.429 million) is
secured by subservient charge on all current assets
and movable fixed assets of the company, both
present and future, deposit in debt service reserve
account equal to the total amount of scheduled
interest payment due for one month and pledge
of 1,285,000 shares in United Spirits Limited held
by the company.
Repayment of ` 91.100 million on March 31, 2014 and
repayment of ` 166.67 million every 3 months there after
till March 30, 2016. Interest @ 3.50% above the Yes Bank
Base rate prevailing from time to time (presently 14%
p.a.).
33
34
Nature of security
(4) Loan from Yes Bank Limited amounting to ` 485
million (Pr year ` nil) (for securities refer point no.
3 above).
Terms of repayment
Moratorium of 24 months followed by 12 equal quarterly
instalments from the date of each respective disbursement
i.e. March 31, 2012. Interest @ 3.50% above the Yes
Bank Base rate prevailing from time to time (presently
14% p.a.).
(5) Loan from Future Capital Holdings Limited
amounting to ` 950 million (Pr Year ` 1,009.321
million) is secured by the pledge of 1,279,688 shares
in United Spirits Limited held by the company and
1,171,312 shares in United Spirits Limited held by a
subsidiary company.
Repayment of ` 450 million on March 31, 2013 and
` 500 million on June 30, 2013. Rate of interest @ 13.5%
p.a.
(6) Loan from L&T Finance Limited amounting to
` 23.909 million (Pr year ` 33.578 million) is secured
by the fixed assets for which the loan was taken.
Repayable in monthly instalments. Last instalment due on
March 31, 2014. Rate of interest @ 14.01% p.a.
(7) Loan from ECL Finance Limited amounting to
` 1,000 million (Pr year ` 500 million) is secured
by the pledge of 2,215,000 share in United Spirits
Limited held by the company.
Repayable on the last day of 18th month period
commencing from 1st drawdown date i.e May 4th, 2011.
Rate of interest @ 15.25% p.a. Overdue interest of ` 6.657
million is since repaid.
(8) Loan from Religare Finvest Limited amounting to `
970 million(Pr year ` 1,000 million) is secured by the
pledge of 2,052,683 shares in United Spirits Limited
held by the company.
Repayable on 14th October 2012. Rate of interest
@ 17% p.a.
(9) Loan from IFCI Limited amounting to ` 2,500
million(Pr year ` 2,500 million) is secured by the
and 7,673,422 shares in United Breweries Limited
held by the company and 1,467,523 shares in
United Spirits Limited held by a subsidiary company.
Repayable in 4 equal instalments of ` 625 million on April
15, 2013, July 15, 2013 October 15,2013 and January 15,
2014. Rate of interest @ 14.5% p.a. Overdue interest of `
69.101 million is since paid.
(10) Loan from IL & FS Financial Services Limited of
` 1,400 million (Pr year ` 1,000 million) is secured
by the pledge of 2,319,000 shares in United Spirits
Limited held by the company and 875,647 shares in
United Spirits Limited held by a subsidiary company.
Repayment of ` 1,000 million in Nov 2015 and
` 400 million in March 2015. Rate of interest
@ 15.75% p.a.
(11) Loan from Sicom Limited amounting to ` 540
million (Pr year ` 540 million) is secured by pledge
of 400,000 shares in Kingfisher Airlines Limited,
9,000,000 shares in Mangalore Chemicals and
Fertilizers Limited and 5,500,000 shares in UB
Engineering Limited held by the company and
20,800,000 shares in Kingfisher Airlines Limited
held by a subsidiary company.
Repayment of ` 100 million in June 2013 and ` 440
million in May 2013. Rate of interest @ 15.75% p.a. on
` 100 million and 15.60% on ` 440 million.
Nature of security
(12) Loans from HDFC Limited amounting to
` 8,565.802 million (Pr year ` 6,854.515 million)
are secured by the pledge of 1,585,154 shares in
United Spirits Limited, 317,030 shares in McDowell
Holdings Limited held by the company, mortgage
by deposit of title deed of the company’s land
in Bangalore, the superstructure thereon and
assignment of the rent receivables from the property
let out, securitisation of future sale proceeds from
the luxury residential building “Kingfisher Towers
- Residences in UB City”, now under construction,
and 35,222,231 shares in Kingfisher Airlines Limited
held by a subsidiary company.
b.
Terms of repayment
Loan of ` 1886.500 million repayable in 120 monthly
instalments from February 2012. Loan of ` 613.500
million is repayable in 119 monthly instalments
starting from February 2012. Loan of ` 700 million is
repayable in instalment of ` 400 million in September
2013 and ` 300 million in March 2014. Loan of USD
103.640 million repayable in 12 quarterly instalments
commencing from April 2013. Overdue interest of
` 39.200 million is since paid. ( Rate of interest on loan
of ` 5,369.816 million - 7.75% p.a., on loan of ` 700.00
million - 14.5% p.a., on ` 2,495.986 - 13.75% p.a.)
(also refer note 41).
Terms of repayment for unsecured borrowings
(1) Loan from The Lakshmi Vilas Bank Limited
amounting to ` 500 million (Pr year ` 500 milion)
(2) Loan from group companies
a) Amounting to ` 250 million
b) Amounting to ` 20 million
c) Amounting to ` 180 million
(3) Loan from others
a) Amounting to ` 15 million
b) Amounting to ` 880. 652 million
4)
Public deposits ` 850.793
Repayable in 2 instalments of ` 250 million each in April
2012 and July 2012. Interest at the rate of Base rate + 4.5%
(presently 18% p.a.)
Repayable in November 2013. Rate of interest
@ 15.50% p.a.
Repayable in October 2014. Rate of interest @ 12% p.a.
Repayable in August 2013. Rate of interest @ 12% p.a.
Repayable in December 2013. Rate of interest @ 12% p.a.
Amount realised over and above ` 20,000 per sft from sale
of owner units. Rate of interest @ 12% p.a.
Repayable within 1 to 3 years from the date of deposit and
not on demand or notice except at the sole discretion of the
company. Rate of interest is 11, 11.5% p.a.
As at
March 31, 2012 March 31, 2011
5.
6.
Other long term liabilities
Trademark licence security deposits
Lease security deposits
Interest accrued but not due
Refundable deposit
Instalments from allottees for residential units
For legal cases
Leave encashment
2,425.000
350.617
25.487
67.500
826.925
2,035.000
885.883
96.337
67.500
20.000
3,695.529
3,104.720
37.428
33.833
37.428
23.820
71.261
61.248
35
` in million
As at
March 31, 2012 March 31, 2011
7.
Short term borrowings
Secured
Working capital loan / cash credit from banks
From others
1,261.726
375.000
148.441
-
Unsecured
From a group company
Inter corporate deposits
1,971.279
350.000
3,950.970
-
3,958.005
4,099.411
a.
Nature of security and terms of repayment for secured borrowings
Nature of security
Terms of repayment
1) Loan from Religare Finvest Limited amounting to Repayable in instalments of ` 125 million on 16.3.2012
` 375 million (Pr year ` Nil) (for security details, refer and ` 250 million on 8.5.2012. Overdue principal
point no. 8 under Note no. 4)
repayment of ` 125 million is partly paid and overdue
interest of ` 5.160 million is since paid. Rate of interest
@ 18.01% p.a.
2) Working capital loan from Bank is secured by pledge Averages rate of interest @ 13.5% p.a.
of 662,103 shares in United Spirits Limited, 4,753,881
shares in Mangalore Chemicals and Fertilizers Limited
held by the company, first charge on movable fixed
assets i.e. plant and machinery, furniture and fixtures
valued at ` 370 million.
b.
Terms of repayment for unsecured borrowings
1) Loan from a group company ` 1,971.279 million
2) Intercorporate deposits of ` 350 million
8.
36
Trade payables
Trade creditors
Repayment of ` 460 million on 7.9.2012, ` 729.6 million
on 27.9.2012, ` 277.3 million on 27.11.2012, ` 504.3
million on 31.3.2013. Rate of interest @ 17.5% p.a. on
` 460 million and balance @ 12% p.a.
Rate of interest @ 18% p.a.
300.431
422.777
300.431
422.777
` in million
As at
March 31, 2012 March 31, 2011
9.
Current maturities of long term borrowings
Interest accrued and due
Statutory dues
Employee dues
Security deposit
Advertisement and sales promotion expenses payable
Advances received from customers
Claims payable
Other liabilities
Provision for expenses
Investor Education and Protection Fund:
Unclaimed public deposits/interest
Unclaimed dividends
Creditors for capital goods
10. Short-term provisions
Proposed dividend
Income tax
Wealth tax
3,595.282
2,654.528
419.856
199.234
113.206
0.864
0.100
114.540
148.236
14.973
313.881
43.140
98.169
30.178
79.473
0.734
0.100
15.283
54.994
14.117
38.460
44.617
0.498
3.275
12.727
0.631
2.456
14.066
4,979.812
3,047.806
1,005.988
0.978
66.819
11.099
998.163
1.740
1,006.966
1,077.821
37
38
34.355
Office equipment
2,550.533
2,499.126
26.902
Vehicles
TOTAL
Previous Year
18.335
Computers
209.319
390.024
Plant & machinery
Furniture and fixture
733.605
1,137.993
Building
Land
Description
As on
01.04.11
11. TANGIBLE ASSETS (Refer note 31)
64.759
123.574
10.473
1.063
11.444
1.192
15.640
24.947
-
Additions
during
the year
98.022
72.168
1.064
0.091
0.325
0.082
-
49.604
46.856
Deletions
during
the year
COST / VALUATION
2,517.270
2,550.532
36.311
19.307
220.438
35.465
405.664
708.948
1,091.137
As on
31.3.12
-
384.076
290.835
21.495
12.677
85.086
11.778
123.960
129.080
01.04.11
-
11.082
8.095
0.868
0.057
0.227
0.009
-
9.921
Deductions
during
the year
-
102.328
101.335
3.835
2.472
24.260
3.410
37.907
30.444
For the
year
DEPRECIATION
-
475.322
384.076
24.462
15.092
109.119
15.179
161.867
149.603
As on
31.03.12
2,041.948
2,166.456
11.849
4.215
111.319
20.286
243.797
559.345
1,091.137
Net Value
of
Assets
As on
31.03.12
2,166.456
2,208.290
5.407
5.659
124.232
22.576
266.065
604.524
1,137.993
Net Value
of Assets
As on
31.03.11
` in million
` in million
AS AT MARCH 31, 2012
12. Non-current investments (Refer note 32 and 40)
Particulars
Number
Of
Shares
Cost
Number
Of
Shares
1
10
1,165.238
334.569
30,295,911
29,043,797
`
`
1
10
1,165.238
334.569
10
10
10
10
692.950 23,881,821
146.038
4,392,691
424.928
6,345,554
9,315.321 199,598,555
`
`
`
`
10
10
10
10
701.894
146.038
424.928
9,315.321
Face
Value
Face
Value
Cost
TRADE INVESTMENTS IN FULLY PAID EQUITY SHARES:
QUOTED
United Breweries Limited
Mangalore Chemicals & Fertilisers
Limited
UB Engineering Limited
30,295,911 `
29,043,797 `
23,577,490
4,392,691
6,345,554
199,598,555
`
`
`
`
UN-QUOTED
In Equity Shares
In Subsidiary Companies
Kingfisher Training & Aviation Services Ltd
UB Infrastructure Projects Limited
UB Electronic Instruments Limited
UB International Trading Limited
Kingfisher Aviation Training Limited
City Properties Maintenance Company
Bangalore Limited
UB Overseas Limited
UBHL (BVI) Limited
Rigby International Corp.
Rubic Technologies Inc.
12,079.044
33,216
50,000
280,976
50,002
50,000
3,000,000
50,000
`
`
`
`
`
`
`
50 USD
238,370 USD
15,115,488 USD
5,500,000 USD
12,087.988
10
10
100
10
10
10
10
0.332
0.500
27.209
0.500
0.500
30.000
0.500
33,216
50,000
280,976
50,002
50,000
3,000,000
50,000
`
`
`
`
`
`
`
10
10
100
10
10
10
10
0.332
0.500
27.209
0.500
0.500
30.000
0.500
1
1
1
0.01
0.002
10.040
660.238
26.558
50
238,370
15,115,488
5,500,000
USD
USD
USD
USD
1
1
1
0.01
0.002
10.040
660.238
26.558
756.379
In other Companies
United Racing & Bloodstock Breeders
Limited
WIE Engineering Limited
UB Pharma (Kenya) Limited
40,045 `
10
0.400
306,860 `
120,000 KS
10
100
1.419
7.616
9.435
756.379
40,045
`
10
0.400
306,860 `
120,000 KS
10
100
1.419
7.616
9.435
39
` in million
PARTICULARS
NUMBER
OF
SHARES
FACE
VALUE
COST
NUMBER
OF
SHARES
1,155.633
2,500.000
72,115,605 USD
10,000,000 `
FACE
VALUE
COST
In Preference Shares
In Subsidiary Companies
UB Overseas Limited - 0.001%
Less : Provision for diminution in value of
certain investments
Aggregate amount of quoted investments
Aggregate amount of un quoted investments
Market value of quoted investments
40
25,115,605 USD
10,000,000 `
1
1
1
1
3,318.216
2,500.000
3,655.633
5,818.216
16,500.491
18,672.018
35.994
35.994
16,464.497
18,636.024
12,079.044
12,087.988
4,385,453
6,548.036
35,600.262
49,586.910
` in million
13. Long term loans and advances
(Refer note 34, 35 and 40)
Loans and advances to others
Considered good
Considered doubtful
Less: Provision
Loans and advances to subsidiaries
Considered good
Considered doubtful
Less: Provision
As at
As at
March 31, 2012
March 31, 2011
21.063
21.063
-
19,589.914
20.000
19,609.914
20.000
Loans and advances to associates
Considered good
Other receivables
Considered good
Considered doubtful
Less: Provision
14. Other non-current assets
Other deposits - considered good
15. Current investments
Mutual funds
21.063
8.393
231.629
240.022
231.629
8.393
19,589.914
19,216.010
20.000
19,236.010
20.000
19,216.010
2,971.865
0.425
0.425
-
0.425
277.864
0.266
33.635
33.901
33.635
0.266
22,583.267
19,502.533
68.852
65.690
68.852
65.690
26.512
431.701
26.512
431.701
41
` in million
As at
As at
March 31, 2012
March 31, 2011
16. Inventories
Raw materials
Packing materials, stores and spares
Finished goods including goods in transit
32.753
223.064
2.518
4.489
67.644
255.817
74.651
17. Trade receivables
Unsecured
Exceeding six months:
Considered good
Considered doubtful
Less: Provision
Others: considered good
18. Cash and cash equivalents
Cash on hand
Balances with scheduled banks:
in Current accounts
in Unpaid dividend accounts
in Deposit accounts
19. Short term loans and advances
Advances to suppliers
Advance income tax
Prepaid expenses
Other receivables
20. Other current assets
Receivable on account of redemption of
preference shares
Duty drawback receivable
42
34.063
4.758
38.821
4.758
34.063
27.360
7.941
35.301
7.941
27.360
269.486
366.425
303.549
393.785
0.238
0.154
325.395
3.313
748.707
2.494
79.418
17.909
408.364
769.264
189.774
1,156.002
4.585
57.433
108.858
954.670
19.018
128.529
1,407.794
1,211.075
2,404.357
-
101.780
72.299
2,506.137
72.299
` in million
Year ended
March 31, 2012 March 31, 2011
21. Revenue from operations
Sales
Dividends
Guarantee commission
Lease rent
Income from property maintenance
Licence fees
Management service fees
Profit on sale of investments
Duty drawback
22. Other income
Interest income
Profit on sale of old assets
Provisions/liabilities no longer required/payable written back
Exchange gain
Miscellaneous income
23. Cost of packing material Consumed
Packing materials consumed
24. Changes in Inventories of Finished Goods and Work-in-Progress
Opening Stock:
Finished goods
Closing Stock:
Finished goods
(Increase)/ decrease in stocks
2,715.431
1,967.727
500.959
112.735
543.568
461.976
92.713
197.320
26.000
200.316
169.457
361.929
99.655
608.177
408.591
87.392
203.770
25.700
9.892
109.116
5,020.475
3,881.949
1,309.155
0.378
36.323
256.005
8.532
1,169.899
0.113
30.959
44.090
1,610.393
1,245.061
220.507
88.083
220.507
88.083
67.644
36.545
67.644
36.545
223.064
67.644
223.064
67.644
(155.420)
(31.099)
43
` in million
Year ended
March 31, 2012 March 31, 2011
25. Employee benefits expenses
Salaries, wages and bonus
Contribution to provident and other funds
Workmen and staff welfare
26. Finance costs
Interest expense
Processing charges and bank charges
27. Other expenses
Rent including lease rent
Rates and taxes
Insurance premium
Communication expenses
Travel and conveyance
Electricity charges
Printing and stationery
Repairs & maintenance
i) Buildings
ii) Machinery
iii) Others
Vehicle repairs and maintenance
Property maintenance expenses
Advertisement and sales promotion
Brokerage
Rebate and discount
Commission paid to selling agents
Freight charges
Miscellaneous expenses
Claims paid
Professional charges
Legal charges
Directors’ sitting fees
Auditors’ remuneration
Advances written off
Less: provision withdrawn
Provision for diminution in value of investments
Provision for bad and doubtful debts
Loss on asset discarded
Other expenses
44
265.264
265.264
171.496
145.790
33.968
18.133
28.393
25.362
233.857
189.285
3,324.422
192.250
2,016.053
210.277
3,516.672
2,226.330
27.903
24.194
4.027
9.910
29.764
3.285
3.441
12.511
29.806
2.116
6.944
26.505
1.739
5.156
14.038
2.871
0.913
6.463
72.775
132.519
23.265
8.467
21.839
210.712
14.211
3.552
61.781
12.233
1.274
2.815
11.486
1.532
1.072
5.620
63.942
51.932
3.853
5.519
8.314
148.133
12.688
0.082
16.043
33.420
1.520
3.429
0.022
15.401
26.558
5.403
0.118
10.642
707.675
496.083
28. UB City Luxury residential Project
The Company has executed a Joint Development Agreement with a Developer on 26th April, 2010 for development of a
luxury residential building named as “Kingfisher Towers – Residences at UB City” in the available land in UB City. The super
built up area of the building would be 767,870 sq ft. The super built up area falling to the share of the Company would
be 418,388 sq. ft. The construction is in progress.
The Company has issued allotment letters in respect of five residential units measuring 41,605 sq ft. in Kingfisher Towers
by collecting booking amounts of ` 826.925 million.
st
29. Estimated amount of contracts remaining to be executed on capital account as at 31 March 2012 and not provided for
is ` 5.357 million (net of advances) (Pr year ` 23.550 million).
30. Contingent liabilities:
As at
As at
March 31, 2012 March 31, 2011
a) Guarantees given by the Company on behalf of subsidiaries to banks, financial
1500.000
1500.000
institutions and others
b) Guarantees given by the Company on behalf of associates to banks, financial
77,228.600
74,099.400
institutions and others
c) Demands raised by Income Tax authorities against which the Company has
234.210
127.700
preferred appeals
Certain beneficiaries have invoked the corporate guarantees given by the company on behalf of Kingfisher Airlines
Limited, an associate company. The total amount invoked and outstanding as on June 30, 2012 is ` 8,357.700 million and
Kingfisher Airlines Limited is under negotiation with the beneficiaries. There has been no financial loss on this count to
the company.
31. Fixed Assets
a) The Company’s land in Bangalore was revalued in August 2001, based on an independent valuer’s report. Accordingly,
the value of the land was restated at ` 1,707 million, with a corresponding adjustment to the Fixed Assets Revaluation
Reserve.
b) The Company owns certain valuable trademarks which are carried at NIL value. Some of these trademarks / logo have
been licenced to Group companies.
c) The Company’s UB City property is under charge in favour of HDFC Ltd for facilities granted to the Company.
d) The Company’s property in Goa is under charge in favour of a bank for facilities granted to an associate.
32. Investments:
a) The Company has pledged 10,310,382 shares held in United Spirits Limited, 11,207,729 shares held in Mangalore
Chemicals & Fertilisers Limited, 769,728 shares in UB Engineering Limited, 197,433,555 shares in Kingfisher Airlines
Limited and 3,903,209 shares held in McDowell Holdings Limited to secure the borrowings of subsidiary companies
and associate companies.
b) 900,000 shares of Kingfisher Airlines Limited held by the Company and pledged with a bank for credit facilities
extended to an associate company, have been sold by the bank, subsequent to the Balance Sheet date, resulting in a
loss of ` 30.333 million to the company.
c)
An existing pledge of 1,310,472 shares of United Spirits Limited to a bank have been further extended, subsequent to
Balance Sheet date, to secure the borrowings of associate companies.
d) Investments include 1,765,000 shares of Kingfisher Airlines Limited and 197 shares of United Spirits Limited held in
custody account of lenders.
e)
The Company’s investment of ` 26.512 million in IDFC Mutual Fund is given as a lien to secure the borrowings of an
associate company.
45
f)
The investment in subsidiaries (including step down subsidiaries) have been considered as long term strategic
investments and diminution in their market value / net worth, though significant is considered temporary and hence
no provision is considered necessary.
g) The Preference Shares issued by a wholly owned overseas subsidiary, UB Overseas Limited, are to be redeemed anytime
at the option of the shareholder or at end of 10 years from the date of allotment of the shares. The Preference
shareholder also has the option for partial / full conversion into equity shares of the Company, at the rate of one
equity share for one preference share held, at face value of USD 1 each, to be determined and issued by the Issuer.
During the year, 47 million preference shares of USD 1 each have been redeemed.
33. Confirmation of balances from certain Sundry Debtors and Sundry Creditors are awaited. Adjustment for differences, if
any, arising out of confirmation and reconciliation thereof would be made in the current year. The Management is of the
opinion that the effect of adjustments, if any, is not likely to be significant.
34. The Company, over the years has advanced significant amounts to subsidiaries including overseas subsidiaries aggregating
to ` 1,627.300 million which have not yet been repaid. Even though there is erosion in the net worth of these subsidiaries,
the Management of the view that all the amounts are ultimately recoverable, taking into consideration their business plans
and growth strategies.
35. The Company has accrued interest of ` 1,285.272 million for the year on loans to associate/ subsidiaries, including overseas
subsidiaries as per loan agreements signed with them. Considering the income stream of those companies, realisability of
this interest could possibly take protracted period of time beyond those stipulated in the loan agreements.
36. During the year UB Ajanta Breweries Private Limited and UB Nizam Breweries Private Limited (collectively referred to as
“APB India”) have been merged with United Breweries Limited pursuant to the scheme of amalgamation approved by the
Hon’ble High Court of Karnataka. As a result, 427,740 shares in United Breweries Limited has been allotted to the wholly
owned overseas subsidiary, UB Overseas Limited.
37. Cash in hand includes foreign currency notes.
38. As required under Section 205C of the Companies Act, 1956, the Company has transferred ` 0.132. million (Pr year ` 0.367
million) to the Investor Education and Protection Fund (IEPF) during the year. As on March 31, 2012, no amount was due
to be transferred to the IEPF.
39. Guarantee Commission represents the commission charged by the Company for the corporate guarantees provided on
behalf of subsidiaries and certain associate companies. Security Commission represents the commission charged by the
Company for the securities pledged on behalf of a subsidiary and an associate company.
Guarantee commission of ` 521.143 million has been accrued during the year based on contractual obligation although
the recovery could take a longer period of time than anticipated since the associate company for whom these guarantees
were given is presently precluded by its bankers consortium to honour the obligation aggregating to ` 646.770 million
upto 31st March, 2012.
40. The company along with its subsidiaries has significant financial exposure on various counts to Kingfisher Airlines Limited.
Kingfisher Airlines Limited has ceased to be a subsidiary of the company with effect from 18th February, 2012 and has
become an associate company thereafter. As at March 31, 2012, such exposure include equity investment of ` 21,142.800
million, loans and advances ` 10,486.984 million and other receivables ` 2,090.837 million, and corporate guarantees
to banks/aircraft lessors ` 89,258.600 million. Certain corporate guarantees have been invoked and Kingfisher Airlines
Limited is under negotiation in this regard with the beneficiaries. The Management is reasonably confident that none of
the guarantees would eventually devolve upon the Company. The ultimate impairment of investments and non-recovery
of loans and advances are not presently quantifiable and hence no provision has been considered in the accounts.
46
41. During the year, the company converted an existing Rupee Loan of ` 5,369.816 million from HDFC Limited (secured
against future sale proceeds from the luxury residential building – Kingfisher Towers) into a “Dollar Denominated Loan”
at concessional rate of interest. The repayment of Principal and interest payments, under the terms of this loan are with
reference to the dollar rate prevailing on the due dates. The company has recognized part of the exchange difference as
interest in terms of AS 16 – Borrowing Costs and the balance difference is kept in the Foreign Currency Monetary Item
Translation Difference Account which is amortised over the life of the loan but not beyond March 2020, as provided in
Government of India Notification no G.S.R.913(E) (F.No.17/133/208-CL.Vj, Dated 29-12-2011). Accordingly an amount of
` 13.032 million is charged to the Statement of Profit and Loss and the Balance of ` 219.631 million is carried in Foreign
Currency Monetary Item Translation Difference Account.
42. Remuneration to Chairman, Managing Director and Managerial Personnel
i)
The Chairman of the Company has received remuneration from two subsidiaries, amounting to USD 120,000 (Pr year
USD 120,000) and GBP 89,600 (Pr year GBP 89,600) during the year 2011-12.
ii)
The Company has not paid any remuneration to the Managing Director. However, he has received remuneration of `
13.086 million as an executive of an associate company.
iii) Subsidiaries have paid sitting fees of ` 0.090 million (Pr year ` 0.100 million) to Directors including the Managing
Director.
43. Remuneration to Auditors:
Statutory Audit
Tax Audit
Limited Reviews
Certification fees
2011-12
2.000
0.200
0.300
0.315
2010-11
2.000
0.200
0.300
0.929
2.815
3.429
31.03.2012
31.03.2011
56.175
52.042
Service cost
7.064
5.072
Interest cost
4.369
4.031
(9.549)
(3.317)
4.565
(1.652)
62.624
56.175
63.625
61.678
5.028
4.802
(3.793)
0.463
-
-
Benefits settled
(9.549)
(3.317)
Plans assets at period end, at fair value
55.264
63.625
44. Employee benefits
Gratuity computations as on 31-03-2012
Disclosure as per AS 15
Defined benefit plans
Reconciliation of opening and closing balances of the present value of the defined
benefit obligation:
Obligations at period beginning
Benefits settled
Actuarial (gain)/loss
Obligations at period end
Defined benefit obligation liability as at the balance sheet
Is wholly funded by the Company
Change in plan assets
Plan assets at period beginning, at fair value
Expected return on plan assets
Actuarial gain/(loss)
Contributions
47
31.03.2012
31.03.2011
Fair value of plan assets at the end of the year
55.264
63.625
Present value of the defined benefit obligations at the end of the period
62.624
56.175
7.360
(7.450)
Reconciliation of present value of the obligation and the fair value of the plan assets:
Liability recognized in the Balance Sheet
31.03.2012
31.03.2011
Service cost
7.064
5.072
Interest cost
4.369
4.031
(5.028)
(4.802)
Details of Gratuity cost
Actuarial (gain) / loss
Net gratuity cost
Actual return on plan assets
8.357
(2.115)
14.762
2.186
1.235
5.264
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.
Assumptions
Interest rate
Discount factor
Estimated rate of return on plan assets
Salary Increase
Attrition rate
Retirement age
8.50%
8.50%
8.00%
5.00%
1.00%
58
8.00%
8.00%
8.00%
5.00%
1.00%
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.
45. Details of dues to Micro, Small and Medium Enterprises and Small Scale Industries.
Based on the response received by the Company, there are no outstanding as at March 31, 2012 to suppliers, as defined
under the Micro, Small & Medium Enterprises Development Act, 2006.
Amount due to Micro and Small Enterprises is nil to the extent of information disclosed by creditors.
46. The Company has recognized the rent from cancellable operating leases in accordance with the terms of the lease deed.
In respect of the non- cancellable operating leases, the Company recognises the rent on a straight line basis over the noncancellable lease term.
Future minimum lease payments receivable under non-cancellable operating lease ` Nil (Pr year nil)
48
47. The gross carrying amount, accumulated depreciation and net carrying value of leased building are as follows:
Description
Gross Block
Less: Deletion
Accumulated depreciation
Less: Deletion
Net Block
31.03.2012
507.320
49.604
116.778
9.921
31.03.2011
457.716
507.320
106.857
350.859
77.794
429.526
48. Deferred tax
Particulars
31.03.2012
Deferred Tax Liability in respect of
i) Depreciation on fixed assets
31.03.2011
-
Total
i)
9.210
9.210
-
Deferred Tax Asset in respect of
Depreciation of fixed assets
2.988
ii) Allowance for carried forward losses
iii) Others
53.190
13.365
Total
*69.543
9.210
**9.210
Note :
*Deferred tax asset is not recognized as a matter of prudence
** Deferred tax asset is recognized only to the extent of deferred tax liability.
49. Quantitative Particulars
Particulars of purchases and sales of goods traded by the Company
Products
Units
Opening Stock
Value
Quantity
1. Alcoholic
beverages
2. Leather
products
Cases
102,728
(104,655)
4,383
(610)
34.123
(26.529)
4.104
(0.480)
Quantity
3,019,578
(2,433,006)
286,947
(284,124)
3. Processed Food
Tons
(-)
(-)
2,543
(1,656)
129.648
(88.786)
1,961
(1,656)
4. Readymade
garments
5. Pharmaceuticals
Pcs
37,063
(14,974)
-
8.584
(2.540)
-
1,365,816
(1,029,804)
7,780
(29,360)
323.220
(263.750)
2.754
(9.377)
1,251,434
(1,007,715)
7,780
(29,360)
Pairs
Boxes
EA
Purchases
Sales
Value
Quantity
Value
957.251 2,818,363 1,695.500
(805.990) (2,434,933) (1,285.820)
354.388
291,330
379.640
(254.241)
(280,351)
(263.188)
Closing Stock
Quantity
303,943
(102,728
(4,383)
Value
121.754
(34.123)
(4.104)
167.460
(130.990)
582
-
36.638
-
426.470
(271.362)
3.148
(10.495)
151,445
(37,063)
-
64.672
(8.584)
-
Figures in brackets relates to previous year
49
50. Segment reporting:
Segment-wise business performance for the year ended March 31, 2012
Primary Segment Information
Segment Revenue
a) Alcoholic beverages
b) Leather products
c) Readymade garments
d) Investments
e) Guarantee services
f) Property development
g) Others
Total
Other income
Finance costs
Segment Result
2011-12
1805.844
439.396
455.441
313.051
543.568
962.935
500.240
2010-11
1,350.703
288.184
291.648
109.659
608.177
770.521
463.057
2011-12
349.815
(16.934)
7.284
208.542
439.059
836.188
165.312
2010-11
285.288
16.422
(3.306)
(7.260)
517.816
651.441
139.717
5,020.475
3,881.949
1,989.266
1,610.393
(3,516.672)
1,600.118
1,245.061
(2,226.330)
82.987
618.849
Profit before tax
Other
Information:
a) Alcoholic
beverages
b) Leather
products
c) Readymade
garments
d) Investments
e) Property
development
f) Others
Total
2011-12
Segment
Assets
Segment
Liabilities
2010-11
Segment
Segment
Assets
Liabilities
2011-12
Capital
DepreciExpendi-ture
ation
2010-11
Capital
Depreciat-ion
Expenditure
439.444
464.615
688.012
384.665
-
0.032
-
0.070
314.938
45.550
304.958
145.237
36.233
11.561
49.717
4.559
290.921
6.835
401.899
5.500
4.528
9.663
31.0655
4.661
29,711.702 40,166.664 26,551.152
- 1,637.716
-
-
13.081
0.920
30.912
70.696
23.999
67.991
41.872
61.133
45,943.804 30,263.398 43,294.622 27,157.250
64.760
102.328
123.574
101.335
43,271.225
1,517.079
110.197
34.696
95.373
Notes :
1 Income under the segment “investments” represents dividends received, profit on sale of investments/ assets.
2 Income under the segment “property development” represents lease rent and property development income.
3 Segment results represents profit/(loss) before interest expenses, other income and tax.
4 Capital expenditure represents the gross additions made to fixed assets during the year.
5
6
Segment assets include Fixed Assets, Investments, Current Assets, Loans & Advances except income tax assets.
Segment Liabilities include Secured and Unsecured Loans, Current Liabilities and Provisions except provision for tax
and dividend.
Secondary segments, based on geographical locations
Particulars
Segment
Segment Revenue
Within India
Outside India
2011-12
2,348.250
2,672.225
Total
5,020.475
Segment Assets
2010-11
2010-11
1,970.089
1,911.860
2011-12
40,876.702
5,067.102
38,477.863
4,816.759
3,881.949
45,943.804
43,294.622
Note: Segment Assets include Fixed Assets, Investments, Current Assets, Loans and Advances except income tax assets.
50
51. Related Party Transactions:
Key Management Personnel: Mr. A. Harish Bhat - Managing Director
i) Name of the Related Parties and description of relationship
Subsidiaries
UB Electronic Instruments Limited, UB Infrastructure Projects Limited, UB International Trading Limited, Kingfisher
Finvest India Limited, Kingfisher Training and Aviation Services Limited, Kingfisher Aviation Training Limited,
Kingfisher Goodtimes Private Limited, City Properties Maintenance Company Bangalore Limited, Bangalore Beverages
Limited, UB Sports Limited, Rigby International Corp., United Breweries of America Inc, Delaware, Inversiones Mirabel,
S.A, Mendocino Brewing Co. Inc, USA, United Breweries International [UK] Limited, Kingfisher Beer Europe Limited
(formerly known as UBSN Limited), Rubic Technologies, Inc, Releta Brewing Company LLC, UB Overseas Limited, UBHL
(BVI) Limited, Best Ride Consultancy Pvt Limited.
Associates
United Spirits Limited, Mangalore Chemicals & Fertilizer Limited, UB Engineering Limited, WIE Engineering Limited
(Under Liquidation), McDowell Holdings Limited, Pixray India Limited, UB Pharma (Kenya) Limited, Kingfisher Airlines
Limited.
Subsidiary of an Associate
Shaw Wallace Breweries Limited, Royal Challenger Sports Private Limited.
51
ii) Transactions with Related Parties during the year:
2011-12
2010-11
Kingfisher Training and
Aviation Services Ltd
UB Realty Limited
2011-12
2010-11
2011-12
2010-11
UB Infrastructure Projects Ltd
2011-12
Kingfisher Aviation
Training Ltd
2010-11
2011-12
2010-11
City Prperties Maintenance Company B’Lore
Ltd
2011-12
2010-11
Purchase of goods
( finished or unfinished)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sale of goods
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2011-12
2010-11
Purchase of fixed assets
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Receiving of services
-
-
-
0.031
-
-
-
-
-
-
-
-
13.814
10.753
0.619
Leasing arrangement
-
-
-
-
-
-
-
-
-
-
-
-
0.749
Investments Redeemed
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Licence Agreement
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Finance (including loans
in cash or in kind ) paid
366.388
5,635.064
0.136
0.007
0.659
-
13.700
15.800
707.262
827.556
0.191
-
25.772
24.339
in cash or in kind )
received
727.497
2,378.553
20.000
-
-
-
1.065
0.051
809.579
3,246.029
-
-
18.666
26.200
Investments made
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend received
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Guarantee Commission
received
-
-
-
-
-
-
0.037
0.515
-
-
-
-
-
-
Deposit Received
-
-
-
-
-
-
-
-
-
-
-
-
-
0.412
Interest Received
-
-
-
-
-
-
10.608
7.916
71.810
157.291
-
-
-
-
Interest Paid
-
-
1.200
-
-
-
-
-
-
-
-
-
-
-
Guarantees and
collaterals
1,500.000
1,500.000
-
-
-
-
-
-
-
-
-
-
-
-
Amount due from
as on Mar 31, 2012
8,573.848
8,934.957
-
-
0.659
-
111.794
88.513
972.096
1,002.603
383.489
383.298
1.793
7.670
Amount due to
as on Mar 31, 2012
-
-
21.088
0.024
-
-
-
-
-
-
-
-
0.204
0.125
Associate Companies
Mangalore Chemicals and Fertilisers
Limited
UB Engineering
Limited
Shawallace Breweries
Limited **
Royal Challenger
Sports Pvt Ltd **
Kingfisher Airlines Ltd
Total
Purchase of goods
656.993
469.445
-
-
-
-
-
-
-
-
-
-
656.993
469.445
Sale of goods
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Purchase of fixed assets
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Receiving of services
-
-
-
-
-
-
-
-
-
0.316
-
-
-
0.316
Rendering of Services
Sale of Assets
Licence Agreement Pegasus
-
-
-
-
-
-
-
-
-
-
-
-
-
-
541.471
392.444
-
-
-
-
-
-
-
-
-
-
541.471
392.444
-
-
60.000
60.000
25.796
27.770
-
-
51.519
56.000
-
-
137.315
143.770
in cash or in kind) paid
1,933.582
3,674.606
0.042
0.127
2.366
5.358
4,303.422
5.640
938.279
5,751.159
1.539
-
7,179.229
9,436.890
in cash or in kind )
received
1,503.705
2,799.683
39.663
69.815
77.938
6.729
2,080.389
3,950.970
-
2,671.652
250.000
-
3,951.695
9,498.849
6,330.000
Investments made
-
-
-
-
-
-
-
-
-
6,330.000
-
-
-
Dividend received
59.705
59.705
34.853
29.044
-
-
-
-
-
-
-
-
94.557
88.748
7.513
8.532
-
-
14.874
17.661
-
-
521.143
580.095
-
-
543.531
606.289
Deposit Received
-
223.915
420.000
100.000
-
250.000
-
-
-
-
-
-
420.000
573.915
Interest Received
-
-
-
-
12.600
12.600
-
-
44.733
632.480
-
-
57.333
645.080
1.887
282.286
-
-
-
-
340.768
56.400
-
-
15.393
-
358.048
338.686
Guarantee
Commission received
Interest Paid
Guarantees and
collaterals
550.000
550.000
-
-
650.000
800.000
-
-
89,258.600
91,351.700
-
-
90,458.600
92,701.700
Management contracts
including deputation of
employees
-
-
26.000
25.700
-
-
-
-
-
-
-
-
26.000
25.700
Amount due from as on
Mar 31, 2012
-
118.156
62.421
16.042
121.364
143.667
-
-
2,786.408
1,230.735
-
-
2,970.194
1,508.599
1,661.569
2,086.565
520.000
100.000
250.000
250.000
2,119.465
4,001.730
-
-
263.854
-
4,814.888
6,438.294
Amount due to as on
Mar 31, 2012
** Subsidiary of an associate
52
UB Electronic
Instruments
Limited
Kingfisher Finvest
India Ltd
Subsidiary Companies
UB International
Trading Ltd
2011-12
UB Overseas Ltd
2010-11
2011-12
Bangalore Beverages
Limited
UBHL-BVI Ltd.
2010-11
2011-12
2010-11
2011-12
Kingfisher Beer
Europe Ltd
UB Sports Limited
2010-11
2011-12
2010-11
2011-12
Bestride Consultancy
Pvt Ltd
2010-11
2011-12
2010-11
Total
2011-12
2010-11
354.388
254.241
-
-
-
-
-
-
-
-
-
-
-
-
354.388
254.241
30.509
1.037
-
-
-
-
-
-
-
-
-
-
-
-
30.509
1.037
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6.686
1.603
-
-
20.500
12.386
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.749
0.619
-
-
2,404.356
-
-
-
-
-
-
-
-
-
-
-
2,404.356
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
386.400
281.038
-
-
-
-
6,696.125
7,000.000
-
6.500
6.686
-
0.028
-
8,203.347
13,790.304
0.004
4.836
-
-
-
-
5,988.924
327.255
0.150
-
-
-
-
-
7,565.883
5,982.924
-
-
-
1,974.225
-
-
-
-
-
-
-
-
-
-
-
1,974.225
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1.373
-
-
-
-
-
-
-
-
-
-
0.037
1.888
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.412
-
-
30.709
28.030
-
-
1,127.412
321.994
-
-
-
-
-
-
1,240.539
515.232
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1.200
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,500.000
1,500.000
139.434
76.917
2,742.727
284.620
252.693
225.483
8,829.352
6,994.740
6.350
6.500
-
-
0.028
-
22,014.264
18,005.301
-
-
-
-
-
-
-
-
-
-
-
1.603
-
-
21.292
1.752
53
52. Disclosures required by Accounting Standard (AS) 29-“Provisions, Contingent Liabilities and Contingent Assets”
Provisions:
1
2
3
4
Particulars of disclosure
Balance as on 1.04.11
Provision for contingent claims
Provision for leave encashment
Provision made during year
Provision used during the year.
37.428
-
23.820
12.394
2.381
Balance as on 31.03.12
37.428
33.833
Year and quantum of outflow of cash in respect of the above contingent claims is not presently ascertainable. Time of
outflow of cash on account of leave encashment is contingent upon the time of employee’s separation from the Company.
53. Earnings per Share
Net profit after tax
Number of equity shares
Earnings per share (Basic)/ (Diluted) - in `
54. Value of imports calculated on CIF basis
Raw materials
Packing materials
Capital Goods
Total
55. Expenditure in Foreign Currency:
Foreign Travel expenses
Commission to Agents
Professional and Legal fees
Imports of material and capital goods
Others
Investments
Total
56. Earnings in Foreign Exchange
Export of goods calculated on FOB basis
Receivable on account of redemption of Preference shares
Others
Total
2011-12
76.488
66,818.521
2010-11
416.886
66,818.521
1.14
6.24
2011-12
78.123
1.761
9.597
2010-11
21.300
22.170
27.160
89.481
70.630
2011-12
4.517
0.729
0.098
89.481
36.388
-
2010-11
4.304
1.890
11.162
70.630
13.070
1,974.225
131.213
2,075.281
2011-12
2,572.197
2,404.357
-
2010-11
1,836.565
17.567
4,976.554
1,854.132
57. The Company has not entered into any speculative derivative transactions. Hedging is restricted to the business needs of
the Company. As at the Balance Sheet date, foreign currency receivable / payable that is not hedged by any derivative
instrument or otherwise are as under:
Particulars
54
Currency
USD
GBP
Euro
USD
GBP
Net Receivable / (Payable)
Foreign Currency Amount
2011-12
56.326
0.009
(0.049)
(0.015)
2010-11
11.424
(0.017)
(0.042)
(0.022)
Net Receivable / (Payable)
Amount in local currency
2011-12
2,881.441
0.736
(3.349)
(0.767)
2010-11
510.102
(1.090)
(1.920)
(1.638)
58. All amounts are in Rupees million, unless otherwise stated.
59. Previous year’s figures have been regrouped to conform to Schedule VI (as amended) of the Companies Act, 1956.
Dr. Vijay Mallya
N. Srinivasan
A. Harish Bhat
Chairman
Director
Managing Director
S. Vishnumurthy
Proprietor
Mumbai
Kaushik Majumder August 24, 2012
Company Secretary
55
COMPANY’S GENERAL BUSINESS PROFILE
I
II
III
Registration Details
Registration / CIN
:
740 /85110KA1915PLC000740
State Code
:
08
Balance Sheet Date
:
31.03.2012
Public Issue
:
Nil
Rights Issue
:
Nil
Private Placement
:
Nil
Capital Raised during the year
Bonus Issue
:
Nil
Private Placement
:
Nil
Position of Mobilisation and Deployment of Funds
Total Liablities
(` in thousands)
47,099,805
Sources of funds
Application of Funds
Paid up Capital
668,185 Net Fixed Assets
15,161,256 Investments
16,491,009
Secured Loans
18,157,197 Other assets
27,533,780
2,696,445 P&L a/c bal
Other Liabilities
-
10,416,722
Performance of the Company
Turnover
V
3,075,016
Reserves & surplus
Unsecured Loans
IV
47,099,805
6,630,868 Total Expenditure
Profit Before Tax
82,987 Profit after Tax
Earning per Share
1.14 Dividend Rate
6,547,881
76,488
Nil
Generic Name of three Principal Products / Services of the Company
1. Trading in following goods
ITC Code
Beer
220300
Liquor
:
220830
Leather Shoes
:
640320
2. Real Estate Development and Investment holding
56
:
Disclosure under Clause 32 of the Listing Agreement in the Books of the Holding
Company United Breweries (Holdings) Limited
` in million
Sl No
Name of the Company
Value of Investment
Parent
Company
Subsidiaries
Total
Amount of
Outstanding
as at March
31,2012
Maximum
amount
outstanding
during the year
Subsidiaries
1
Bangalore Beverages Limited
-
0.500
0.500
8,829.352
9,089.455
2
Bestride Consultancy Private Limited
-
0.100
0.100
-
-
3
City Properties Maintenance
Company Bangalore Limited
0.500
-
0.500
7.670
23.123
4
2,500.500
-
2,500.500
8,573.848
8,957.557
5
30.000
-
30.000
383.489
383.489
6
Kingfisher goodtimes Private Limited
-
0.100
0.100
-
-
7
Kingfisher Training and Aviation
Services Limited
0.332
0.027
0.359
88.513
88.513
8
27.209
0.327
27.536
-
-
9
0.500
-
0.500
972.093
1,102.750
10
0.500
-
0.500
76.917
76.917
11
UB Sports Limited
-
0.500
0.500
6.500
6.500
12
13
UB Overseas Limited
14
15
660.238
-
660.238
-
-
3,318.218
0.038
3,318.256
284.619
284.619
26.558
-
26.558
-
-
UBHL (BVI) Limited
10.040
-
10.040
225.482
235.330
6,574.595
1.592
6,576.187
19,448.483
20,248.253
Associates
1
692.950
421.319
1,114.269
1,661.569
1,661.569
2
146.038
178.196
324.234
-
-
3
Mangalore Checmicals & Fertilizer
limited
334.569
-
334.569
457.579
457.579
4
United racing & Bloodstock Breeders
Limited
0.400
-
0.400
24.974
24.974
5
Pixray India Limited
-
0.153
0.153
-
-
6
1.419
-
1.419
-
-
7
UB Pahrma (Kenya) Limited
8
9
7.616
-
7.616
-
-
424.928
-
424.928
128.636
128.636
9,315.321
12,016.883
21,332.204
2,786.408
2,786.408
10,923.241
12,616.551
23,539.792
5,059.166
5,059.166
57
Auditor’s Report on Consolidated Financial Statements
The Board of Directors,
United Breweries (Holdings) Limited,
Bangalore.
1. We have audited the attached Consolidated Balance Sheet of United Breweries (Holdings) Limited Group, as at 31st March
2012, and also the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement for the year ended
on that date annexed thereto. These financial statements are the responsibility of the United Breweries (Holdings) Limited’s
management and have been prepared by the management on the basis of separate financial statements and other financial
information regarding components. Our responsibility is to express an opinion on these 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 certain subsidiaries, whose financial statements reflect total assets of
` 31,664.115 million as at 31st March 2012, total revenues of ` 2,252.706 million and net cash out flows amounting to
` 6.467 million 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 is based solely on the report of such other auditors.
4. Attention is invited to the following;
Note no 30 regarding inclusion in the income for the year, an amount of ` 529.294 million of guarantee/security
commission charged to Kingfisher Airlines Limited (KFA). KFA has not accrued the charge in view of the restrictions
imposed by its lenders for the period commencing from 1.1.2011. The total of such charge, accrued for the period
from 1.1.2011 to 31.3.2012 is ` 656.765 million.
(i) (ii) Note no 31 regarding inclusion in the income for the year, interest of ` 634.916 million charged to an associate,
the ultimate realization of which may take protracted period of time
(iii) Note no 32 regarding significant financial exposure to KFA in the form of investments in equity, loans and
advances and guarantees. KFA has considerably scaled down its operations and it is under severe financial stress.
No provision has been made in the accounts for the probable loss that may arise due to non recovery of loans
and advances and other receivables, decline in the value of investments and invocation of guarantees.
5. The auditors of an associate company have reported that in view of Explanation 1 to Paragraph 17 of Accounting Standard
22, they cannot express any independent opinion in the matter of recognition of deferred tax asset of ` 11,180.846 million
(net) for the year by that associate.
6. The financial statements of certain associate companies mentioned in Sl No. 2 of Note 1 have not been considered in the
Consolidated Financial Statements for the reasons stated against their names.
7. The financial statements of Kingfisher Airlines Limited, which was a subsidiary upto 18.02.2012 and became an associate
thereafter has been considered for inclusion in the consolidated financial statements based on financial statements as
prepared by the management for the period upto the date it was a subsidiary. These financial statements reflect a revenue
of ` 54,828.710 million and a loss of ` 14,757.869 million.
8. The financial statements of certain associate companies, which reflect the group’s share of profit for the year of
` 575.192 million have been audited by other auditors and we have relied upon such audited financial statements for the
purpose of our examination of the Consolidated Financial Statements.
58
Auditor’s Report on Consolidated Financial Statements (contd.)
9. We report that in our opinion the consolidated financial statements have been prepared by the United Breweries (Holdings)
Limited’s management in accordance with the requirements of Accounting Standard (AS) 21 Consolidated Financial
Statements and Accounting Standard (AS) 23 Accounting for Investments in Associates in Consolidated Financial Statements
specified in the Companies (Accounting Standards) Rule, 2006.
10. 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, and to the best of our information and according to the explanations given to us,
and except for the effects of paragraph 4 above, which according to the management, is presently not quantifiable and the
effects of paragraphs 5 and 6 above, we are of the opinion that 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 United Breweries (Holdings) Limited
Group as at 31st March 2012;
(b) in the case of the Consolidated Statement of Profit and Loss, of the loss for the year ended on that date; and
(c) in the case of the Consolidated Cash Flow Statement, of the cash flows for the year ended on that date.
Mumbai
August 24, 2012
(S. Vishnumurthy)
Proprietor
Membership no. 22715
59
Consolidated Balance Sheet as at March 31, 2012
` in million
Note No.
2
3
668.185
22,966.411
91.097
668.185
(6,857.557)
76.791
4
78,188.310
Equity and Liabilities
Shareholders’ funds
Share capital
Minority interest
Non-current liabilities
Deferred tax liabilities (net)
Other Long term liabilities
5
6
22,253.875
3.063
3,694.028
76.961
Current liabilities
Short-term borrowings
Trade payables
Short-term provisions
7
8
9
10
8,909.781
774.759
5,439.338
1,087.553
8,412.237
29,576.039
21,857.913
1,506.627
65,965.051
136,764.357
13
14
2,637.496
1.903
1,033.068
434.537
38,531.255
19,716.715
104.758
18,305.650
203.954
7,338.712
21,766.660
16,408.361
29,274.486
17,069.205
10,516.046
15
16
17
18
19
20
26.512
448.200
624.776
475.182
1,828.869
101.780
431.701
2,103.920
5,077.770
3,337.337
2,745.239
2,185.316
65,965.051
136,764.357
3,153.421
182.391
Assets
Non-current assets
Fixed assets
Tangible assets
Intangible assets
Capital work in progress
Goodwilll on consolidation
Non current investments
Deferred tax assets (net)
Long term loans and advances
Other non current assets
Current assets
Current investments
Inventories
Trade receivables
Cash and cash equivalents
Short term loans and advances
Other current assets
11
12
Significant Accounting Policies and other notes 1, 27 to 45
This is the Consolidated Balance Sheet referred to in our report of even date.
Dr. Vijay Mallya
Chairman
60
N. Srinivasan
Director
Mumbai
August 24, 2012
A. Harish Bhat
Managing Director
S. Vishnumurthy
Proprietor
Statement of Consolidated Profit and Loss for the year ended March 31, 2012
` in million
Note No.
For the year ended
March 31, 2012
March 31, 2011
Revenue
Revenue from operations
21
60,039.488
68,706.699
Other income
22
6,108.565
1,802.165
66,148.053
70,508.864
1,568.143
1,184.342
1,858.884
1,421.126
(168.881)
(31.086)
48,048.689
45,075.109
Expenses
Purchase of traded goods
Cost of materials consumed
23
Change in inventories
Aircraft fuel, lease rentals, maintenance & other expenses
Employee benefit expenses
24
6,507.250
7,014.777
Finance costs
25
15,359.261
14,691.504
Depreciation
11
2,802.967
2,198.106
Other expenses
26
11,499.907
13,347.248
87,476.220
84,901.126
(21,328.167)
(14,392.262)
of
-
912.465
Loss before tax and before share in profits/(losses) of associates
(21,328.167)
(15,304.727)
Current tax
13.881
164.593
Earlier year
0.456
43.300
(5,650.632)
(4,934.430)
(15,691.872)
(10,578.190)
581.589
1,750.968
(15,110.283)
(8,827.222)
(4.293)
9.278
(15,114.576)
(8,817.944)
(226.20)
(131.97)
Loss before exceptional items, taxation and before share in
profits/(losses) of associates
Less: Exceptional items
Cost incurred on account
lease/purchase contracts
of
premature
termination
Tax expense:
Deferred tax
Loss after tax and before share in profits/(losses) of associates
Share in profits/(losses) of associates
Loss before minority interest
Share of minority interest
Net loss for the year
Basic / diluted earnings per share (Face value of ` 10 each)
Significant Accounting Policies and other notes
1, 27 to 45
This is the Consolidated Statement of Profit and Loss referred to in our report of even date.
Dr. Vijay Mallya
Chairman
N. Srinivasan
Director
Mumbai
August 24, 2012
A. Harish Bhat
Managing Director
S. Vishnumurthy
Proprietor
61
Consolidated Cash Flow Statement for the year ended March 31, 2012
` in million
For the year ended
March 31.2012
A.
Cash flow from operating activities
Net loss before taxation
Adjustments for :
Depreciation
Loss pertainig to erstwhile subsidiary
Dividend income
Interest income
(21,328.167)
Increase/ (decrease) in provision for stock obsolescence
Income on sale and lease back transaction
Loss on sale of assets
Loss on sale of investments (other than short term
investments)
Interest and Finance Charges
Liabilities no longer required
Amortisation of initial cost on lease of aircrafts
Amortisation of slot charges
Provision for employee compensation
Provision for frequent flyer scheme
Provision for contingency
Unrealised exchange fluctuation (gain)/loss
Bad debts / advances written off
Provision for bad and doubtful advances / debts
Operating profit/(loss) before working
changes
Adjustment for changes in working capital:
Increase in inventories
Increase in trade and other receivables
62
generated
from/(used
in)
2,198.106
(500.959)
5.664
259.837
(10.000)
(4.142)
(361.929)
11.102
-
4,418.766
44.112
(288.330)
2.982
-
14,691.504
(733.337)
198.026
182.105
(45.310)
43.540
70.000
231.284
188.009
66.124
operating
(144.146)
(477.478)
22,510.059
16,103.458
1,181.892
798.731
(220.735)
45.990
1,758.948
Cash generated from/(used in) operations
Less : taxes paid (including fringe benefit tax)
(15,304.727)
186.358
20,408.218
(157.226)
(1,869.362)
capital
Increase in current liabilities/other liabilities
Net cash
activities
For the year ended
March 31.2011
(271.019)
11,934.867)
1,584.203
7,349.983
(4,855.903)
2,766.095
(6.277)
(4,057.173)
(508.374)
2,759.818
(4,565.547)
Consolidated Cash Flow Statement for the year ended March 31, 2012 (contd.)
For the year ended
March 31.2012
B.
C.
Cash flow from investing activities
Purchase of Fixed Assets (Including changes in capital
work in progress)
Lease rentals for aircraft on finance lease (principal
portion)
Sale of fixed assets/advance for residential units
Purchase of investments
Sale of investments
Loan to other companies
Dividend income
Interest received
(Increase)/ decrease in fixed deposits with bank
Net cash generated from /(used) in investing activities
Cash flow from financing activities
Proceeds from issue of shares
Interest and finance Charges
Dividend paid and corporate dividend tax paid
Proceeds from loans from banks and others
For the year ended
March 31.2011
(253.991)
(402.060)
-
(1,149.691)
1,390.133
449.026
(9,866.679)
157.226
303.988
(54.552)
400.002
(896.478)
(267.622)
144.146
449.090
565.835
(7,874.850)
2.916
(3,831.218)
(77.918)
8,221.536
(1,156.777)
13,032.000
(14,032.592)
(77.918)
6,356.007
Net cash generated from financing activities
4,315.316
5,277.496
Net increase (decrease) in cash and cash equivalents
(799.716)
(444.828)
Cash and cash equivalents at the beginning of the
year
Elimination on cessation of subsidiaries
Exchange gain/ (loss) on opening cash/ cash
equivalents
Cash and cash equivalents at the end of the year
2,092.848
2,537.828
(882.169)
1.788
(0.152)
412.751
2,092.848
8.542
377.697
26.512
412.751
23.660
1,637.487
431.701
2,092.848
475.182
88.943
26.512
3.337.337
1,676.190
431.701
412.751
2,092.848
Cash and cash equivalents comprise of :
Cash in hand
Balance with banks in current accounts
Short term investments
Reconciliation of cash and cash equivalents as per
Balance Sheet and Cash flow statement
Cash and cash equivalents as per balance sheet
Less : Deposits maturing beyond 3 months
Add : Current investments
Notes to the Consolidated Cash Flow Statement
1
2
Short term investments represents amounts invested in mutual funds which are readily convertible into cash
Balances with banks include ` 3.313 being balances in unpaid dividend account which cannot be used by the Company
except for payment of unpaid dividend / transfer to Invester Education and Protection Fund.
Dr. Vijay Mallya
Chairman
N. Srinivasan
Director
Mumbai
August 24, 2012
A. Harish Bhat
Managing Director
S. Vishnumurthy
Proprietor
63
Notes to the Consolidated Financial Statements
1. SIGNIFICANT ACCOUNTING POLICIES ADOPTED IN THE PREPARATION OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
i.
Basis of Preparation of Consolidated Financial Statements:
The consolidated financial statements relate to UNITED BREWERIES (HOLDINGS) LIMITED (the Company), its subsidiaries
and associates (the Group). The consolidated financial statements are prepared in accordance with Accounting Standard 21“Consolidated Financial Statements” and Accounting Standard 23-“Accounting for Investments in Associates in Consolidated
Financial Statements”. The consolidated financial statements are prepared by adopting uniform accounting policies for like
transactions and other events in similar circumstances and are presented to the extent possible, in the same manner as the
Company’s separate financial statement, except as otherwise stated.
ii. The subsidiary companies considered in the consolidated financial statements are:
Name of the Subsidiary
64
Ownership
Percentage
Country of Incorporation
1
Kingfisher Training and Aviation Services
Limited
71.92
India
2
100.00
India
3
98.44
India
4
100.00
India
5
100.00
India
6
100.00
India
7
City Properties Maintenance Company
(Bangalore) Limited
55.00
India
8
100.00
India
9
Vitae India Spirits Limited (*)
India
10
Kingfisher Airlines Limited (*)
India
11
UB Sports Limited
100.00
India
12
Kingfisher Goodtimes Private Limited
71.92
India
13
100.00
British Virgin Islands
14
100.00
15
United Breweries of America Inc.,
Delaware
92.49
United States of America
16
Inversiones Mirabel, S.A.
100.00
Republic of Panama
17
Mendocino Brewing Company, Inc.
66.26
18
United Breweries International [UK] Limited
66.26
United Kingdom
19
Kingfisher Beer Europe Limited (formerly
known as UBSN Limited)
66.26
United Kingdom
20
Releta Brewing Company, LLC
66.26
21
UB Overseas Limited
100.00
22
UBHL [BVI] Limited
100.00
23
100.00
India
(*) ceased to be subsidiary from 18.02.2012
The associate companies required to be considered in the consolidated financial statements are:
1
2
3
4
5
6
7
8
Name of the Associate Company
Kingfisher Airlines Limited(*)
Mangalore Chemicals & Fertilizers Limited
WIE Engineering Limited (under liquidation)
Ownership
Percentage
47.89
37.18
24.51
27.72
42.15
30.36
25.88
50.00
Country of
Incorporation
India
India
India
India
India
India
India
Kenya
(*)With effect from 18.02.2012
The following companies are excluded from the consolidation for the year under review for reasons mentioned there
against.
Reason for exclusion
1
Under liquidation proceedings
2
Closed operations
iii. Basis of Presentation of Financial Statements:
The financial statements of the parent Company and that of its subsidiaries, UB Electronic Instruments Limited, Kingfisher
Finvest India Limited, UB International Trading Limited, UB Infrastructure Projects Limited, Kingfisher Aviation Training
Limited, Kingfisher Training and Aviation Services Limited, Kingfisher Goodtimes Pvt. Limited, City Properties Maintenance
Company Bangalore Limited, Kingfisher Airlines Limited, Bestride Consultancy Private Limited, Bangalore Beverages Limited,
UB Sports Limited and Vitae India Spirits Limited have been prepared in accordance with the Generally Accepted Accounting
Principles (GAAP) applicable in India and the financial statements of Rigby International Corp, Rubic Technologies Inc,
Inversiones Mirabel, S.A., Mendocino Brewing Company, Inc., United Breweries of America, Inc., Delaware, United Breweries
International (UK) Limited, Kingfisher Beer Europe Limited (formerly known as UBSN Limited) , Releta Brewing Company
LLC, UB Overseas Limited and UBHL [BVI] Limited have been prepared in accordance with the accounting / financial
reporting standards applicable in their respective countries of incorporation and as realigned to GAAP applicable in India.
The consolidated financial statements have been prepared based on such financial statements.
iv. Principles of Consolidation:
i) The financial statements 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 expenses after eliminating intragroup balances and intra-group transactions. The result of operations of Kingfisher Airlines Limited is included in the
consolidated statement of profit and loss until the date of cessation of the relationship i.e 18th February, 2012.
ii) Unless otherwise stated, the financial statements of the parent Company and its subsidiaries have been consolidated
using uniform accounting polices for like transactions and other events in similar circumstances.
iii) Goodwill represents the difference between the group’s share in the networth of a subsidiary and the cost of acquisition
at each point of time of making the investment in the subsidiary. Goodwill arising on consolidation is not amortised.
For this purpose the group’s share of networth is determined on the basis of the latest financial statement prior to
the acquisition after making necessary adjustments for material events between the date of such audited financial
statement and the date of respective acquisition. Negative goodwill is recognised as capital reserve on consolidation.
However for the purposes of consolidation, capital reserve arising on consolidation of subsidiaries is set off against the
goodwill arising on consolidation.
v. Accounting for Investment in Associates:
Accounting for investments in Associate companies have been carried out under the Equity method of accounting prescribed
under Accounting Standard 23- “Accounting for Investments in Associates”, wherein goodwill/ capital reserve arising on
acquisition of an associate included in the carrying amount of the investment is disclosed separately.
65
Basis of inclusion
1
Audited results for the year ended 31/3/12
2
3
Mangalore Chemicals & Fertilizers Limited
4
5
6
Un-audited results for the year ended 31/3/12
vi. Valuation of Inventories:
Inventories are valued at lower of costs and net realizable value. Cost of inventories comprise of cost of purchase, cost of
conversion and other costs incurred in bringing the inventories to their present location and condition.
In respect of the parent Company and its Indian subsidiary, UB International Trading Limited, and its overseas subsidiaries,
cost is determined under the weighted average cost method.
vii. Revenue recognition:
All revenues are generally recognized on accrual basis except where there is an uncertainty of ultimate realization.
i) Sales are recognized when the property in goods are transferred for a price and it is reasonable to expect the ultimate
collection.
ii) Interest is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.
iii) Dividends and royalty income are accounted for, when the right to receive the payment is established.
viii.Fixed Assets:
i)
Fixed Assets are stated at cost less depreciation, wherever applicable. The land in Bangalore is stated at the revalued
amount as adjusted in accordance with the revaluation done in August 2001 at the market value determined by
approved valuers. All costs relating to the acquisition and installation of fixed assets are capitalized and include
borrowing cost relating to borrowed funds attributable to the acquisition of qualifying assets for the period upto the
date of acquisition.
ii) Capital work-in-progress comprise advances paid towards acquisition of fixed assets and cost of fixed assets that are not
ready for intended use at the year-end.
iii) Assets acquired under leases where the acquiring company has substantially all the risks and rewards of ownership are
classified as assets acquired under finance leases. Such assets are capitalised at the inception of the lease at lower of
the fair value or the present value of minimum lease payments.
ix. Borrowing costs:
Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as
part of cost of such assets till such time as the asset is ready for its intended use or sale. A qualifying asset is an asset that
necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are
recognized as an expense in the period in which they are incurred.
x. Depreciation:
i)
Depreciation has been provided at the rates prescribed under Schedule XIV of the Companies Act, 1956, under written
down value method with regard to the parent Company and its Indian subsidiaries other than Kingfisher Training and
Aviation Services Limited.
ii) In respect of Kingfisher Training and Aviation Services Limited,
a) Depreciation on fixed assets (other than computer software and interiors) is provided on straight-line method at
the rates and in the manner prescribed under Schedule XIV to the Companies Act, 1956.
b) Computer Software is amortized over a period of four years.
c) Interiors in leased premises are amortized over a period of five years.
iii) In respect of foreign subsidiaries, depreciation is provided on straight line basis.
66
xi. Effect of changes in foreign exchange rates:
i)
Transactions in foreign currencies are translated applying the following exchange rates:
a) In respect of export transactions of the parent Company, at the average exchange rate prevailing in the month
preceding the month in which the transaction took place.
b) In respect of all other transactions at the rate of exchange prevailing on the date of transaction.
ii) Monetary assets and liabilities denominated in foreign currency are translated at the rates of exchange at the Balance
Sheet date and the resultant gain or loss is recognized in the Statement of Profit and Loss except exchange difference
arising on reporting of long term foreign currency monetary items which are accumulated in a Foreign Currency
Monetary Translation Difference Account and amortised over the balance period of such long term asset / liability but
not beyond March 31, 2020.
iii) Financial statements of non-integral foreign operations are translated using the average rate of exchange for the
year, in so far as their statement of profit and loss is concerned and the closing rate in so far as their Balance Sheet is
concerned.
iv) Exchange difference arising on translation of financial statements of non-integral foreign operations is accumulated in
foreign currency translation reserve.
xii. Accounting for Government Grants:
Government grants available to the Company are considered for inclusion in the accounts, where there is reasonable
assurance that the Company will comply with the conditions attached to them and where such benefits have been earned
by the Company and it is reasonably certain that the ultimate collection will be made. Revenue grants are recognized in the
Statement of Profit and Loss.
xiii.Investments:
i)
Current investments refer to the investments that are readily realizable and intended to be held for not more than a
year.
ii) Trade investments refer to the investments made with the aim of enhancing the group’s business interest.
iii) Long term investments are stated at cost. All expenses relating to acquisition of shares are capitalized. Diminution in
the value of investment, if considered permanent, is provided for.
iv) Current investments are stated at the lower of cost and fair value.
xiv.Retirement Benefits:
a) Defined-contribution plans
These are plans in which the group pays pre-defined amounts to separate funds and does not have any legal or informal
obligation to pay additional sums. These comprise of contributions to the Employees’ Provident Fund, Superannuation
Fund and certain state plans like Employees’ State Insurance and Employees’ Pension Scheme. The group’s payments
to the defined contribution plans are recognized as expenses during the period in which the employees perform the
services that the payment covers.
b) Defined-benefit plans
Gratuity: The group provides for gratuity, a defined benefit plan (Gratuity Plan), to certain categories of employees.
Liability with regard to gratuity plan is accrued based on actuarial valuation, based on Projected Unit Credit Method,
carried out by an independent actuary, at the Balance Sheet date. Actuarial gains and losses comprise experience
adjustments and the effect of changes in the actuarial assumptions are recognized immediately in the Statement of
Profit and Loss as income or expense.
c) Other long term employee benefits
Compensated absences which are not expected to occur within twelve months after the end of the period in which the
employee renders the related services are recognized as a liability at the present value of the defined benefit obligation
at the Balance Sheet date based on actuarial valuation carried out at each Balance Sheet date.
d) Short term employee benefits
Undiscounted amount of short term employees benefits expected to be paid in exchange for the services rendered by
employees is recognized during the period when the employee renders the services. These benefits include compensated
absences such as paid annual leave and performance incentives.
67
xv. Segment reporting:
The operations of the Group are divided into alcoholic beverages, leather products, readymade garments, investment,
property development, maintenance, training, airlines and other activities. Accordingly, the primary segment reporting
comprises the performance under these segments and the secondary segment reporting is based on geographical locations
of customers.
xvi.Related Party disclosures:
Transactions between related parties is disclosed as per Accounting Standard 18, “Related Party Disclosure” , and disclosure
regarding the name of the transacting related party, description of the relationship between the parties, nature of
transactions and amount outstanding as at the end of the accounting year, are made.
xvii. Taxes on Income:
i)
Tax expenses comprises of current and deferred tax.
ii) Current income tax is measured at the amount expected to be paid to the tax authorities by the components (holding
and subsidiary companies) and in accordance with the Income tax laws of the respective countries in which they are
incorporated.
iii) Deferred tax is recognized, on timing differences, being the difference between taxable incomes and accounting income
that originate in one period and are capable of reversal in one or more subsequent periods.
xviii. Accounting for Leases:
In respect of the parent Company,
Lease income from non cancellable operating leases are recognized in the statement of Profit and Loss Account,
on straight line basis, over the non-cancellable lease term. In respect of other operating leases, lease income is
recognized in accordance with the terms of the lease deeds as modified based on negotiations from time to
time.
xix. Impairment of assets:
The group evaluates all the assets for assessing any impairment and accordingly recognizes the impairment
wherever applicable as provided in Accounting Standards 28- “Impairment of Assets”.
xx. Employee Stock Options Scheme:
Stock Options granted to employees under the Employee Stock Option Plan are accounted as per the
accounting treatment prescribed in the Guidance Note on Accounting for Employee Share-based Payments
issued by the Institute of Chartered Accountants of India.
The Company measures compensation cost relating to employee stock options using the Net Intrinsic Value
Method. Compensation expense is amortized over the vesting period of the option. The accounting value of the
options net of deferred compensation expense is disclosed as Employees Stock Option Outstanding.
xxi. Provisions and Contingencies:
A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that
an out flow of resources will be required to settle the obligation in respect of which a reliable estimate can be made.
Provisions are not discounted to its present value and are determined based on Management estimates required to settle
the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the
current management estimates.
xxii. Maintenance costs:
Payments for maintenance of aircraft to lessors and third party service providers as per the related maintenance
agreements, comprising fixed period-based amounts and variable activity-based amounts, are expensed on
accrual basis.
In respect of aircraft acquired on finance lease, payments made to lessors for major maintenance expenditure
in terms of the lease agreements are initially considered as Maintenance Deposits and expensed to Profit and
Loss Account as and when maintenance expenditure is incurred.
68
xxiii. Earnings per share:
Earnings per equity share (basic/diluted) is arrived at by dividing the net profit or loss for the period attributable to the equity share holders by the weighted average number of equity shares outstanding during the year.
` in million
As at
March
31, 2011
As at
March
31, 2012
2. Share Capital
Authorised
100,000,000 (2011: 100,000,000 ) Equity Shares of ` 10/- each
1,000.000
1,000.000
1,000.000
1,000.000
668.185
668.185
668.185
668.185
Issued, Subscribed and Paid-up
66,818,521 (2011: 66,818,521) Equity Shares of ` 10/- each fully
paid up.
a. Reconciliation of equity shares outstanding at the beginning and at the end of the reporting year
No. of
Shares
As at the beginning of the year
Amount
Amount
66,818,521
668.185
66,818,521
668.185
-
-
-
-
66,818,521
668.185
66,818,521
668.185
Issued during the year
Outstanding at the end of the year
No. of
Shares
b. Terms and rights attached to equity shares
The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.
The rights of shareholder is governed by the Articles of Association of the Company and the Companies Act, 1956.
c. Details of shareholders holding more than 5% shares in the company
31 March 2012
31 March 2011
Number of
shares
% holding
Number of
shares
Dr Vijay Mallya
5,284,978
7.91
5,284,978
7.91
5,260,002
7.87
5,260,002
7.87
14,159,986
21.19
14,159,986
21.19
7,213,505
10.80
8,283,635
12.40
3,627,344
5.43
Watson Limited
Platinum Investment Management Limited
Birla Sunlife Trustee Company Pvt Ltd
-
-
% holding
d. Aggregate number of shares issued for consideration other than cash during the period of five years immediately preceeding the reporting date
The company has issued 29,720,949 bonus shares during the year 2006-07
69
` in million
As at
March 31, 2012
As at
March 31, 2011
3. Reserves and Surplus
Capital reserve
511.365
511.365
Securities premium account
8,331.975
8,331.975
Capital reserve arising on consolidation of associates
7,200.625
6,282.580
Fixed assets revaluation reserve
Less: Adjustment on sale of land and building
1,090.511
46.027
1,123.179
1,044.484
32.668
1,090.511
Foreign currency monetary item translation difference
account
(215.055)
-
Foreign currency translation reserve
(675.988)
(358.044)
Share options outstanding account
74.817
Less: Transferred to Statement of Profit & Loss
(45.308)
29.509
Surplus as per Statement of Profit and Loss
(22,745.453)
(28,186.391)
Less : Elimination of the brought forward loss of a subsidiary
upon it ceasing to be a subsidiary
29,863.910
Share of brought forward loss transferred to minority on additional investment by minority
7.253
12,346.369
Adjustment on account of additional investment by parent company
-
1,915.315
(15,114.574)
(8,817.944)
(7,988.864)
(22,742.651)
-
75.000
Add: Loss for the year
Less: General reserve
Less: On account of an associate being held for disposal
-
0.116
14,757.869
-
6,769.005
(22,667.535)
Proposed dividend
-
66.819
-
Less : Elimination of loss for the year of a subsidiary upon it ceasing to be a subsidiary
Less: Appropriations
70
11.099
6,769.005
(22,745.453)
22,966.411
(6,857.557)
` in million
As at
March 31, 2012
As at
March 31, 2011
4 Long term borrowings
Secured
From banks
From others
Unsecured
Fixed deposits
From banks
8% Optionally convertible debentures
From group companies
From others
2,207.486
18,179.145
44,422.896
22,769.620
850.793
500.000
2,080.000
2,060.867
25,878.291
1,343.843
5,490.596
7,093.199
5,559.744
86,679.898
62.616
2,470.674
145.198
2,739.884
564.550
500.000
26.576
3,624.416
936.014
4,670.492
8,491.588
22,253.875
78,188.310
Less: Current Maturities
Secured
From banks
From others
Unsecured
Fixed deposits
From banks
From others
(Secured by pledge of shares held by the parent company and its subsidiary, deposit of title deed of the parent companys’
land and structures in Bangalore, charge on fixed assets , charge on current assets, securitisation of rent receivables from the
property let out, assignment of receivables for use of trade marks and securitisation of sale proceeds from the luxury residential
building.)
5. Other long term liabilities
Trademark licence security deposits
Lease security deposits
Refundable deposit
Gain on sale and lease back
Installments from allottees for residential units
6. Long term provisions
For legal cases
Employee benefits
2,425.000
350.204
24.399
67.500
826.925
2,035.000
885.470
96.337
67.500
49.114
20.000
3,694.028
3,153.421
37.428
39.533
37.428
144.963
76.961
182.391
71
` in million
As at March
31, 2012
As at March
31, 2011
7. Short term borrowings
Secured
Working capital loan / cash credit from banks
1,371.753
3,083.334
From others
3,175.148
800.170
1,977.305
3,950.970
-
577.763
2,385.575
-
8,909.781
8,412.237
774.759
29,576.039
774.759
29,576.039
Unsecured
From a group company
From banks
Intercorporate deposits
8. Trade payables
Trade creditors
9. Other current liabilities
Current maturities of long term borrowings
3,624.416
8,491.588
419.856
268.559
Interest accrued and due
272.858
294.015
Statutory dues
214.565
117.417
Employee dues
5.672
0.734
-
6,135.440
Forward sales
Security deposit
0.100
0.100
Advertisement and sales promotion
114.540
15.283
Advances received from customers
155.287
54.994
Claims payable
14.973
14.117
Other liabilities
600.571
6,444.095
-
4.142
0.498
-
Gain on sale and lease back
Investor Education and Protection Fund:
Unclaimed public deposits/interest
Unclaimed Dividends
3.275
3.363
12.727
14.066
5,439.338
21,857.913
Proposed dividend
-
66.819
Corporate tax on proposed dividend
-
11.099
Frequent flyers scheme
-
216.575
Creditor for capital supplies
10. Short term provisions
Provision for contingencies
Income tax
Employee benefits
72
-
70.000
1,083.661
1,121.311
3.892
20.823
1,087.553
1,506.627
-
477.962
2,315.578
370.529
Aircrafts
Vehicles
2.409
64.287
1,367.195
11,939.531
25,680.019
23,608.852
Ground support & other equipment
Aircrafts acquired under financial lease
Total tangible assets
Previous year
2,310.065
1,693.206
-
17.726
4,169.802
Improvement to lease-hold aircrafts
Improvement to lease-hold plants
1,484.924
379.386
6.818
31.618
-
12.558
33.112
9.992
69.102
-
24.947
-
68.183
14.214
Improvement to lease-hold buildings
Tangible assets ( others)
718.928
586.852
Furniture & fixtures
213.802
Office eqipments
Computers
90.389
932.220
Plant & machinery
1,357.345
Buildings
Buildings on rented land
1,174.175
Land
Tangible assets
546.145
Total intangible assets
Previous year
-
1.903
300.000
Non-compeitition fee
Others
-
24.646
Designs (aircraft interiors)
14.214
Additions
during the
year
219.596
01.04.11
As at
238.898
23,708.670
11,939.531
1,352.062
2.015
5,654.726
373.760
333.899
2,315.578
566.389
497.589
185.185
-
90.389
350.691
46.856
-
558.295
300.000
-
24.646
233.649
Deletion
during the
year
Cost / Valuation
Computer software
Intangible Assets
Description of Assets
11 FIXED ASSETS
25,680.020
3,664.556
-
32.859
64.681
-
12.444
68.248
-
33.022
254.450
38.608
1,001.322
-
1,031.602
1,127.320
546.145
2.064
-
1.903
-
0.161
31.03.12
As at
5,443.248
7,373.870
3,109.521
259.037
39.870
1,894.392
218.325
153.924
335.631
352.591
292.402
53.118
405.791
8.622
250.646
-
235.904
342.190
190.164
-
12.082
139.944
01.04.11
As at
2,091.819
2,713.486
591.888
56.402
4.508
1,558.187
71.366
33.889
114.792
76.497
55.965
11.800
93.362
1.304
43.526
-
106.286
89.482
53.115
-
3.117
33.250
Depreciation
for the
year
-
11.407
39.209
-
11.240
49.250
-
25.781
114.308
16.503
499.153
-
259.709
-
342.190
0.161
-
-
-
0.161
31.03.12
As at
161.197 7,373.870
9,060.793 1,026.560
3,701.408
304.032
5.169
3,452.579
278.451
138.562
450.423
403.307
234.058
48.416
-
9.926
34.462
-
-
431.511
243.279
-
15.199
173.033
Deductions
during the
year
Depreciation
0.500
0.500
-
-
-
-
-
-
-
-
-
-
0.500
-
-
-
-
-
-
-
-
-
1.03.11
` in millions
-
-
8,830.010
1,108.158
24.417
2,275.410
161.061
216.605
1,979.947
234.261
426.526
160.683
525.929
81.768
1,106.700
1,174.175
242.058
203.954
109.836
1.903
12.563
79.652
31.03.11
18,165.104
2,637.496 18,305.650
-
21.452
25.472
-
1.204
18.998
-
7.241
140.142
22.105
501.669
-
771.893
1,127.320
203.954
1.903
-
1.903
31.03.12
As at
Net value of Assets
0.500 18,305.650
0.500
-
-
-
-
-
-
-
-
-
-
0.500
-
-
-
-
-
-
-
-
-
31.03.12
As at
Impairment
73
` in million
As at
March 31, 2012
As at
March 31, 2011
12. Non current investments
Long term investments
In fully paid equity shares
In associate companies
36,314.759
In other companies
Less: Provision for diminution in value of
investments
13,427.730
2,225.931
2,990.067
38,540.691
16,417.797
9.436
9.436
38,531.255
16,408.361
13. Long term loans and advances
Loans and advances to others
Considered good
Considered doubtful
7,346.107
16,772.336
20.000
337.986
7,366.107
Less: Provision
20.000
17,110.322
7,346.107
337.986
16,772.336
Loans and advances to associates
Considered good
12,370.183
296.603
0.425
0.266
19,716.715
17,069.205
Other receivables
Considered good
14. Other non current assets
Initial cost on leased aircraft
Other deposits - considered good
-
1,032.789
104.758
9,483.257
104.758
10,516.046
26.512
431.701
26.512
431.701
15. Current investments
Mutual funds
74
` in million
As at
March 31, 2012
As at
March 31, 2011
16. Inventories
Raw materials
83.286
64.821
Packing materials, stores and spares
35.682
6.810
-
1,657.368
-
(54.371)
Rotables,
tools
consumables
and
engineering
Less: Provision for obsolescene
Work in progress
Finished goods including goods in transit
Inflight stores consumable
31.588
32.831
297.644
123.003
-
273.458
448.200
2,103.920
17. Trade receivables
Unsecured
Exceeding six months:
Considered good
Considered doubtful
Less: Provision
Others: considered good
47.261
254.532
4.758
15.941
52.019
270.473
4.758
47.261
15.941
254.532
577.515
4,823.238
624.776
5,077.770
8.542
23.660
374.384
1,634.755
18. Cash and cash equivalents
Cash on hand
Balances with banks:
in current accounts
in unpaid dividend account
in deposit account
3.313
2.732
88.943
1,676.190
475.182
3,337.337
19. Short term loans and advances
Advances to suppliers
Advance income tax
211.707
108.858
1,486.531
1,441.110
Prepaid expenses
20.053
42.170
Other receivables
110.578
1,153.101
1,828.869
2,745.239
20. Other Current Assets
Initial cost on leased aircraft
-
225.608
Deposits
-
440.973
101.780
1,518.735
101.780
2,185.316
Duty drawback receivable
75
` in million
Year ended
March 31, 2012
Year ended
March 31, 2011
21. Revenue from operations
Sales
4,625.323
3,618.409
53,048.165
62,333.790
Dividends
157.226
144.146
Guarantee commission
551.681
26.194
Lease rent
461.481
409.965
Income from property maintenance
223.375
199.645
Licence fees
205.681
147.770
Income from air passanger, cargo & other related services
Management service fees
26.000
25.700
Duty drawback
169.457
1,371.733
500.959
371.821
70.140
57.526
60,039.488
68,706.699
1,869.362
477.478
Training
22. Other Income
Interest income
Profit on sale of fixed assets
Provisions/liabilities no longer required/payable written back
Income on sale and lease back transaction
Exchange gain
Miscellaneous income
0.229
0.113
1,258.586
733.337
3.107
4.142
2,490.192
-
487.089
587.095
6,108.565
1,802.165
1,638.377
1,333.043
220.507
88.083
1,858.884
1,421.126
23. Cost of material consumed
Raw material consumed
Packing materials consumed
76
` in million
Year ended
March 31, 2012
Year ended
March 31, 2011
24. Employee benefits expenses
Salaries, wages and bonus
6,175.024
6,706.129
Contribution to provident and other funds
201.429
192.853
Employee compensation expenses
(25.550)
(45.310)
Workmen and staff welfare
156.347
161.105
6,507.250
7,014.777
15,166.905
13,150.186
192.356
1,541.318
15,359.261
14,691.504
Rent including lease rent
552.515
517.915
Rates and taxes
235.266
481.909
Insurance
668.696
767.620
Communication expenses
236.422
270.187
Travel and conveyance
555.826
687.642
General administrative expenses
127.779
276.613
Repairs & maintenance
249.757
305.551
6.569
5.620
25. Finance cost
Interest expenses
Processing charges and bank charges
26. Other expenses
Vehicle repairs and maintenance
Property maintenance expenses
73.355
71.344
Selling and promotion expenses
4,824.864
4,958.802
23.265
3.853
Brokerage
Commission paid to selling agents
1,643.040
1,958.054
Freight charges/job charges
244.501
252.430
Miscellaneous expenses
278.807
360.049
3.552
0.082
562.379
947.447
2.377
2.940
Claims paid
Legal & professional charges
Directors’ sitting fees
Auditor’s remuneration
Bad debts
Provision for contingencies
Provision for bad and doubtful debts/advances
Loss on sale of investments
3.792
16.271
90.956
188.009
-
70.000
81.500
66.124
223.184
-
42.185
11.215
Amortisation of initial cost on lease of aircraft
148.519
198.026
Amortisation of slot charges
143.565
182.105
Loss on sale of assets
Recruitment expenses
15.195
14.975
Hire charges
319.604
433.809
Training expenses
142.437
181.520
-
117.136
11,499.907
13,347.248
Exchange loss
77
27.UB City Luxury residential Project
The parent Company has executed a Joint Development Agreement with a Developer on 26th April, 2010 for development
of a luxury residential building named as “Kingfisher Towers – Residences at UB City” in the available land in UB City. The
super built up area of the building would be 767,870 sq ft. The super built up area falling to the share of the Company
would be 418,388 sq. ft. The construction is in progress.
The Company has issued allotment letters in respect of five residential units measuring 41,605 sq ft. in Kingfisher Towers
by collecting booking amounts of ` 826.925 million.
28 Estimated amount of contracts remaining to be executed, on capital account as on 31.03.12 and not provided for,
in the case of :
a) The parent company is ` 5.357 million (net of advances) (Pr year ` 23.550 million)
b) A subsidiary of the parent Company, UB International Trading Limited, ` Nil (Pr year ` 1.476 million)
29. Fixed Assets :
i)
The parent Company’s land in Bangalore was revalued in August 2001, based on an independent valuer’s report.
Accordingly, the value of the land stood restated at ` 1,707 million, with a corresponding adjustment to the Fixed
Assets Revaluation Reserve.
ii) Depreciation has been charged under the written-down value method as per the rates prescribed under the
Companies Act 1956, in respect of the parent Company and its Indian subsidiaries except Kingfisher Airlines
Limited and Kingfisher Training and Aviation Services Limited. In respect of Kingfisher Airlines Limited and
Kingfisher Training and Aviation Services Limited and the overseas subsidiaries, depreciation is charged under
the straight-line method at the rates prescribed under the statute governing those subsidiaries. The net
book value of fixed assets on which straight-line method of depreciation is used, is ` 555.957 million (Pr year
` 16,310.761 million).
30. Guarantee commission of ` 529.294 million has been accrued during the year based on contractual obligation although
the recovery could take a longer period of time than anticipated since the associate company for whom these guarantees
were given is presently precluded by its bankers consortium to honour the obligation aggregating to ` 656.765 million
upto 31st March, 2012.
31. The Company has accrued interest of ` 634.916 million for the year on loans to associate as per loan agreements signed
with them. Considering, the income stream of the company, realisability of this interest could possibly take protracted
period of time beyond those stipulated in the loan agreements.
32. The company along with its subsidiaries has significant financial exposure on various counts to Kingfisher Airlines Limited.
Kingfisher Airlines Limited has ceased to be a subsidiary of the company with effect from 18th February, 2012 and has
become an associate company thereafter. As at March 31, 2012, such exposure include equity investment of ` 21,142.800
million, loans and advances ` 10,486.984 million and other receivables ` 2,090.837 million, and corporate guarantees
to banks/aircraft lessors ` 89,258.600 million. Certain corporate guarantees have been invoked and Kingfisher Airlines
Limited is under negotiation in this regard with the beneficiaries. The Management is reasonably confident that none of
the guarantees would eventually devolve upon the Company. The ultimate impairment of investments and non-recovery
of loans and advances are not presently quantifiable and hence no provision has been considered in the accounts.
33. Effect of Kingfisher Airlines Limited ceasing to be a subsidiary
The Effect of Kingfisher Airlines Limited ceasing to be a subsidiary are as follows :
Sl.
No.
1
2
3
78
Description
Liabilities
Assets
Increase
29,834.401
-
Decrease
112,239.332
82,404.931
34. Upon Kingfisher Airlines Limited becoming an associate, the difference between investment in Kingfisher Airlines Limited and the share of equity of Company in Kingfisher Airlines Limited is treated as Goodwill and such Goodwill is not
tested for impairment.
35. Disclosures pursuant to Accounting Standard 23-“Accounting for Investments in Associates in Consolidated
Financial Statements”:
The details of carrying value of investments in associates as on March 31, 2012 is as under.
1
2
3
4
5
Cost of investments in associates (excluding goodwill and capital reserve)
Share of profits of associates up to 31.03.2012
Goodwill
Movement in share of equity in Associates (Capital Reserve)
Carrying value of investments in associates
2,168.360
5,613.569
21,332.205
7,200.625
36,314.759
36. a) Future Minimum Lease Payments (in respect of Finance Lease):
Particulars Not later than one year
Later than one year and not later than five years
Later than five years
Total
3.832
6.532
-
11.955
9.434
-
10.364
37. Employee benefit
Disclosure as per AS 15
Defined benefit plans
Reconciliation of opening and closing balances of the present value of the
defined benefit obligation:
Obligations at period beginning
Less : pertaining to erstwhile subsidiary
Service Cost
Interest cost
Past service cost – vested benefit
Benefits settled
Actuarial (gain)/loss
Obligations at period end
Defined benefit obligation liability as at the Balance Sheet
is wholly funded by the respective company
Change in plan assets
Plans assets at period beginning, at fair value
Actuarial gain/(loss)
Contributions
Benefits settled
Plan assets at period end, at fair value
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 recognized in the Balance Sheet
Details of Gratuity cost
Service cost
Interest cost
Post service cost – vested benefit
Actuarial (gain) / loss
Net gratuity cost
21.389
203.790
(144.946)
7.628
4.595
(9.549)
4.478
65.996
157.677
38.781
14.901
0.850
(10.256)
1.838
203.790
63.625
5.028
(3.793)
(9.549)
55.264
61.678
4.802
0.463
(3.317)
63.625
55.264
65.996
(10.732)
63.625
203.790
(140.165)
7.628
4.595
(5.028)
8.248
15.443
38.781
14.901
0.850
(4.802)
1.375
51.105
79
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
Assumptions
Interest rate
Discount factor
Estimated rate of return on plan assets
Salary Increase
Retirement age ( years)
8.50%
8.50%
8.00%
5.00%
58
8.00%
8.00%
8.00%
5.00%
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..
38. Deferred Tax:
a) The following deferred tax assets / liabilities are recognized for the year.
Name of the Company
City Properties Maintenance Company Bangalore Limited
Kingfisher Training and Aviation Services Limited
Deferred tax Liability
Total
Total deferred tax asset(recognized in the Statement of
Profit and Loss)
0.136
1.321
1.457
Deferred Tax Asset
5,650.349
0.330
0.089
1.321
5,652.089
5,650.632
b) Kingfisher Airlines Limited, an erstwhile subsidiary of the parent Company( presently associate) has recognized in its
financial statements, deferred tax assets on unabsorbed depreciation and business losses on the basis of the business
plan prepared by the Management, which takes into account certain future receivables arising out of contractual
obligations. The Management of the erstwhile subsidiary is of the opinion that there is virtual certainty supported by
convincing evidences that sufficient future taxable income will be available against which the deferred tax assets can be
realized.
39. Segment Reporting:
Segment-wise business performance for the year ended March 31, 2012
Primary Segment Information
Segment Revenue:
a) Alcoholic Beverages
b) Leather products
c) Readymade Garments
d) Investments
e) Airlines
f) Property development
g) Maintenance
h) Training
i) Others
Total Revenue
Other income
Finance costs
Exceptional item
Net loss before tax
80
Segment Revenue
2011-12
2010-11
3,734.648
2,995.861
441.578
288.417
455.441
291.648
157.226
144.146
53,048.165
63,596.406
962.440
769.960
223.375
199.645
70.140
59.461
946.475
361.155
68,706.699
60,039.488
Segment Results
2010-11
2011-12
371.370
279.800
(17.835)
20.257
7.284
(3.306)
(204.376)
(27.438)
(13,483.494)
(3,470.640)
836.188
656.283
15.583
24.463
(10.405)
(13.604)
408.214
1,031.262
(1,502.889)
(12,077.471)
6,108.565
1,802.165
(15,359.261)
(14,691.504)
(912.465)
(21,328.167)
(15,304.727)
2010-11
2011-12
Other Information
a) Alcoholic Beverages
b) Leather Products
Readymade
c)
Garments
d) Investments
e) Airlines
Property
f)
Development
g) Maintenance
h) Training
i) Others
Total
Segment
Assets
Segment
Assets
Segment
Liabilities
2010-11
2011-12
Segment
Liabilities
Capital
Expenditure
Depreciation
Capital
Expenditure
Depreciation
1,830.725
1,682.388
1,469.245
1,072.655
49.907
66.822
26.827
50.686
379.349
84.349
412.471
179.122
40.099
15.250
60.771
8.728
290.921
6.835
27,146.352
29,454.300
4.528
9.663
31.065
4.661
59,327.436
-
39,058.352
-
2,616.609
-
110,644.129
1,581.589
-
51,641.628
2,209.446
2,028.602
1,517.079
-
1,637.716
-
-
13.081
0.920
30.912
90.346
154.537
453.591
17.144
153.921
149.643
54.480
110.562
551.247
41.432
110.269
175.805
5.279
2.021
23.998
2.069
9.612
69.861
2.067
0.086
46.066
1.812
10.411
62.292
64,043.984 41,152.632 83,023.701 141,677.711
1,707.421
2,802.967
2,378.248
2,198.104
Notes :
1
Income under the segment “investments” represents dividends received, profit on sale of investments/ assets.
2
Income under the segment “property development” represents lease rent and property development
3
Segment results represents profit/(loss) before finance expenses, other income and tax.
4
Capital expenditure represents the gross additions made to fixed assets during the year.
5
Segment assets include Fixed Assets, Investments, Current Assets, Loans & Advances except goodwill and income tax
assets.
6
Segment Liabilities include Secured and Unsecured Loans, Current Liabilities and Provisions except provision for tax and
dividend.
Secondary segments, based on geographical locations
Particulars
Segment
Within India
Outside India
Total
Segment Revenue
2010-11
2011-12
45,639.427
50,548.962
14,400.061
18,157.737
68,706.699
60,039.488
Segment Assets
2010-11
2011-12
62,338.808
80,894.941
1,705.176
2,128.760
83,023.701
64,043.984
Note: Segment Assets include Fixed Assets, Investments, Current Assets, Loans and Advances except goodwill and income
tax assets.
40. Related Party Transactions:
i.
Key Management Personnel : Dr. Vijay Mallya, Chairman of the parent Company and Chairman & Managing Director of Kingfisher Airlines Limited,
Mr. A. Harish Bhat - Managing Director
Name of the Related Parties where control exists:
Associates
Kingfisher Airlines Limited*, United Spirits Limited *, Mangalore Chemicals & Fertilizer Limited *, UB Engineering
Limited*, WIE Engineering Limited (Under Liquidation), McDowell Holdings Limited, Pixray India Limited, UB Pharma
(Kenya) Limited.
Subsidiary of Associates :
Shaw Wallace Breweries Limited & Royal Challengers Sports Private Limited*
* With which there have been transactions during the year.
81
ii. Transactions with Related Parties during the year :
Sl.
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
Nature of Transactions
Purchase of goods/services
Rendering of services
Leasing arrangement
Licence Fees received
Dividend received
Guarantee commission received
Interest received
Interest paid
Investment made
Guarantees given
Finance (including loans in cash
or in kind paid)
Finance (including loans in cash
or in kind received)
Payment of remuneration for
employment
Management contracts
Deposit received
Sale of assets
Amount Due from
as on March 31, 2012
Amount Due to
as on March 31, 2012
Associates
Subsidiaries of
Associates
Previous
Current
Year
Year
Current
Year
656.993
37.591
137.315
126.248
543.531
660.938
5.230
90,458.600
13,006.431
Previous
Year
469.445
30.478
87.770
120.439
26.194
12.888
282.286
175.129
1,350.000
3,680.091
356.161
56.400
4,304.961
5.640
4,006.786
2,876.227
2,330.389 3,950.970
-
-
26.000
420.000
541.471
25.700
573.915
392.444
12,777.555
299.926
4,087.595
Key Management
Personnel
Previous
Current
Year
Year
13.444
12.405
2,436.565 2,383.319 4,001.730
41. Contingent liabilities:
2010-11
Particulars
2011-12
i) Guarantees given
77,228.600
14,643.584
ii) Claims against the parent Company and its subsidiaries, not
0.961
5,855.893
acknowledged as debts
1,799.399
iii) Liability for deduction of tax at source on lease payments in respect of
aircrafts and engines, where agreements were entered into with lessors
prior to March 31, 2007
iv) Demands raised by Income Tax Authorities against which the subsidiaries
0.508
140.479
have preferred appeals
v) Arrears of fixed cumulative preference dividends (including tax thereon)
430.589
vi) Demand raised by Income Tax authorities against which the parent
234.210
127.700
Company has preferred appeals
vii) Demands raised by Service Tax Authorities against which the subsidiaries
10.752
10.752
have preferred appeals
viii) Certain aircraft lessors and bankers have invoked, the corporate guarantees given by the parent company on behalf
of KFA. The total amount invoked and outstanding as on June 30, 2012 is ` 8,357.700 million and KFA is under
negotiation with the beneficiaries.
82
42. Earnings per Share:
Loss for the year
Weighted average number of equity shares
Earnings per share (Basic / Diluted) - in `
2011-12
(15,114.576)
66,818,521
(226.20)
2010-11
(8,817.944)
66,818,521
(131.97)
43. There are no speculative derivative transactions. Hedging is restricted to the business needs of the companies. As at the
Balance Sheet date, foreign currency exposures that have not been hedged by any derivative instrument or otherwise are as
follows:
2011-12
Capital advances
Prepaid Maintenance Reserve
Other assets
Finance lease for aircraft and other term loan from financial institution
Other liabilities
-
2010-11
5,030.117
-
7,325.338
2,882.177
4,496.561
-
6,788.889
4.116
5,406.477
44. All amounts are in Rupees millions, unless otherwise stated.
45. Previous year’s figures have been regrouped to conform to Schedule VI (as amended) of the Companies Act, 1956.
Previous year figures are not comparable since Kingfisher Airlines Limited has ceased to be a subsidiary and has become an
associate with effect from 18.02.2012.
Dr. Vijay Mallya
N. Srinivasan
A. Harish Bhat
S.Vishnumurthy
Proprietor
83
Indian Subsidiaries
City
Properties
Maintenance
Company
Bangalore Limited
4 Kingfisher Finvest India Limited
5 Kingfisher Aviation Training Limited
6 Kingfisher Goodtimes Private Limited
7 Kingfisher Training and Aviation Services
Limited
8 UB Electronic Instruments Limited
9 UB Infrastructure Projects Limited
10 UB International Trading Limited
11 UB Sports Limited
(209.461)
(230.094)
271.999
(278.067)
804.282
225.783
0.001
784.123
17.358
7.476
(8.347)
(6.135)
29.193
0.500
0.500
0.500
(0.849)
(598.695)
(28.388)
(247.650)
13.181
(149.396)
(958.068)
0.547
(0.078)
129.007
10.500
30.000
0.100
0.500
773.255
1,284.878
28.136
12.194
8.180
8.180
1.974
0.042
33.899
0.500
0.100
0.909
Reserves
703.892
295.052
284.174
1,039.625
773.255
3,468.115
0.004
22.889
46.159
203.649
56.603
985.655
156.362
0.852
10,538.759
415.358
0.051
104.676
15,821.365
1,035.316
88.364
Total
Assets
109.070
299.363
12.174
533.569
0.849
2,781.933
0.256
258.345
24.798
344.865
10.052
977.680
164.209
6.488
Total
Revenue
13.171
77.151
357.709
-
4.752
3.487
(0.957)
(0.080)
517.854
284.174
318.451
4.694
325.294
537.780
1.338
4.594
(0.143)
4.476
773.255
(0.096)
3,435.030
0.001 (30.738)
0.046
8.366 (182.865)
24.468
91.359
1.213
- 1,182.813
(8.756)
300.000
-
(1.891)
0.124
8.020
Profit before Tax
60.668 (787.552)
(0.278)
(0.005)
78.930 (23.704)
0.100 1,508.344
75.691
- 147.738
Details of
Investments
1,486.326 10,433.314
384.811
0.030
(24.831)
0.100
5,818.891
1,035.174
53.557
Total
Liabilities
3.377
3.487
(1.093)
(0.080)
0.130
0.038
1.208
4.594
(0.143)
4.438
(0.096)
- (30.738)
- (182.865)
1.213
(8.756)
1.374
1.684
0.136
-
-
-
-
-
-
` in million
Proposed Dividend
(1.891)
0.124
8.020
Profit
after
Tax
- (787.552)
(0.278)
(0.005)
0.003 (23.704)
0.060
4.130
Tax
Provision
Note:
1 The exchange rate prevelant on the last day of the financial year has been taken for conversion for the balance sheet items while the conversion rate for
the revenues has been the average rate for the period.
2 None of the above Companies has proposed any dividend.
3 The Anuual 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.
4 The Annual Report is also available for inspection of investors at the Registered Office of the Company and its Subsidiaries.
5 In respect of overseas subsidiaries, USD is valued at ` 51.16 and GBP at ` 81.79 as on 31.03.2012 (for Balance sheet items) and average rate at ` 47.80 for
USD , ` 76.69 for GBP (for P&L account items).
1
2
3
4
5
6
Overseas Subsidiaries
UB Overseas Limited
UBHL (BVI) Limited
United Breweries International ( UK) Limited
Kingfisher Beer Europe Limited (Formerly
known as UBSN Ltd)
7 United Breweries of America Inc., Delaware
8 Relata Brewing Company LLC
9 Inversiones Mirabel, S.A.
10 Mendicino Brewering Company Inc. USA
1
2
3
Capital
SUMMARISED FINANCIALS OF SUBSIDIARY COMPANIES 2011-12
84
Board of Directors
N. Srinivasan
S. G. Ruparel
V. K. Rekhi
B. S. Patil
Sidhartha V. Mallya
M.S. Kapur
Dr. Vijay Mallya
Chairman
The Team
Dr. Vijay Mallya
Chairman
A. Harish Bhat
Managing Director
Kaushik Majumder
Corporate Vice President Legal & Company Secretary
CONTENTS
x
x
Auditor’s Report
xx
Balance Sheet
xx
Profit and Loss Account
xx
Cash Flow Statement
xx
Schedules
xx
Significant Accounting Policies
xx
Balance Sheet Abstract
xx
Consolidated Financial Statement
XX
Left to Right: Subhash R. Gupte, Ravi Nedungadi, V. Shashikanth and Anil Pisharody.

Notes to the Consolidated Financial Statements (contd.)

Transcription

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