Annual Report 2012-2013 - UB Group

Notes to the Financial Statements (contd.)
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 to be named as “Kingfisher Towers – Residences at UB City” in the available land in
UB City. The development of above project (in which the Company is entitled to 55% share of super built up area)
is under progress and is expected to be completed in 2015.
The Company has issued allotment letters in respect of seven residential units in Kingfisher Towers by collecting
booking amounts of ` 1,135.222 million (Pr year ` 826.925 million)
29. Estimated amount of contracts remaining to be executed on capital account as at 31st March 2013 and not provided
for is ` 2.190 million (net of advances) (Pr year ` 5.357 million).
30. Contingent liabilities:
a) Guarantees given by the Company on behalf of subsidiaries to banks and
financial institutions and others
b) Guarantees given by the Company on behalf of associates to banks and
financial institutions and others
(The enforceability of the Guarantees issued for Kingfisher Airlines Limited
beneficiaries are being contested in appropriate Courts of law)
c) Demand raised by Income Tax authorities against which the Company has
preferred appeals
As at
March 31, 2013
As at
March 31, 2012
1500.000 1500.000
90,852.200 77,228.600
948.793 234.210
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 March 31, 2013 is ` 9,874.600 million (Pr year
` 8,357.700 million) and Kingfisher Airlines Limited is under negotiation with the beneficiaries. The Company
continues to recognise these obligations as only ‘contingent liabilities’ in view of the legal advice obtained by 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. The amounts shown in the Balance Sheet are after making adjustments for
disposals.
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 and the land, in which residential properties are being developed, are under
charge in favour of HDFC Limited, for facilities granted to the Company. ICICI Bank has second charge in UB City
properties for the loans granted by them.
d) The Company’s property in Goa is tenanted to an associate company and is also under charges in favour of
a bank for facilities granted to another associate company. The lessee has obtained an injunction from court
restraining the lender from taking any coercive action in enforcing the charge.
32. Investments:
a) The Company has pledged 22,451,587 shares of United Spirits Limited, 14,961,610 shares of Mangalore Chemicals
& Fertilizers Limited, 6,269,728 shares of UB Engineering Limited, 194,633,555 shares of Kingfisher Airlines
Limited and 3,420,239 shares of McDowell Holdings Limited to secure the borrowings of the company along
with the borrowings of subsidiary companies and an associate company.
b) Investment as on March 31, 2013, includes 21,870,156 shares of Kingfisher Airlines Limited, 7,196 shares of
McDowell Holdings Limited,10,000,000 shares of Mangalore Chemicals & Fertilizers Limited and 2,446,352
shares of United Spirits Limited held in custody of lenders after they have invoked the pledge of these shares.
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