president & cfo - UB Group

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

DIRECTORSVIJAY MALLYA,ChairmanS.R.GUPTE,Vice ChairmanV.K.REKHI,Managing DirectorM.R. DORAISWAMY IYENGARB.M. LABROOSREEDHARA MENONSUDHINDAR KRISHAN KHANNAPRESIDENT & CFO – THE UB GROUPRAVI NEDUNGADIDEPUTY PRESIDENT & CHIEF FINANCIAL OFFICERP.A.MURALICOMPANY SECRETARYV.S.VENKATARAMANAUDITORSPRICE WATERHOUSE, CHARTERED ACCOUNTANTS, BANGALOREREGISTERED & CORPORATE OFFICE‘UB TOWER’, # 24, VITTAL MALLYA ROAD,BANGALORE – 560 001

Report of the DirectorsYour Directors have pleasure in presenting the AnnualReport of your Company and the audited accounts for theyear ended March 31, 2009.At the outset, your Directors are glad to report that the Schemeof Amalgamation of Shaw Wallace & Company Limited andPrimo Distributors Private Limited with the Company (“theScheme”) has been sanctioned by the Hon’ble High Courtsof Karnataka, Bombay and Calcutta and the Scheme hasbecome effective on July 6, 2009. The Amalgamation takeseffect from April 1, 2007, being the Appointed Date.Your Directors are also glad to report that the Scheme ofAmalgamation of Zelinka Limited with the Company withthe Appointed Date of April 1, 2007 has became operativefrom March 26, 2009 pursuant to a Scheme of Amalgamationsanctioned by the Hon’ble High Court of Karnataka atBangalore and compliance of the procedure required to befollowed by Zelinka Limited under the local laws of Cyprus.Accordingly, the financial results for the year ended March31, 2009 also include those relating to the amalgamatingCompanies.FINANCIAL RESULTSRupees in Millions2008-09 2007-08The working of your Company forthe year under review resulted in• Profit from operations 4,953.169 5,175.774Less:• Depreciation361.565 326.112• Taxation(including deferred tax) 1,624.980 1,736.903• Profit after tax2,966.624 3,112.759Profit B/F from previous year7,018.342 4,411.221Profit transferred on Amalgamation 103.983-Profit available for appropriation 10,088.949 7,523.980Your Directors have made thefollowing appropriations:To General ReserveTo Capital Redemption ReserveProposed Dividend:Preference SharesEquity SharesCorporate Tax on ProposedDividend350.000--215.825250.00077.5001.930150.33136.679 25.877Balance carried to the Balance Sheet 9,486.445 7,018.342EPS – Basic – Rupees27.49 31.84EPS – Diluted – Rupees27.49 31.40Your Directors propose a Dividend on the equity shares ofthe Company at the rate of Rs.2/- per share, including on7,749,121 equity shares of Rs.10/- each fully paid-up allottedto the shareholders of Shaw Wallace & Company Limitedpursuant to the Scheme of Amalgamation sanctioned by theHon’ble High Courts of Karnataka, Bombay and Calcutta.CAPITALIn terms of the Scheme of Amalgamation (“the Scheme”)sanctioned by the Hon’ble High Courts of Karnataka, Bombayand Calcutta, the Authorised Capital of Shaw Wallace &Company Limited and Primo Distributors Private Limited,the Transferor Companies stood combined with that ofyour Company. Consequently, the Authorised Capital of theCompany stands increased from Rs.1,200,000,000/- dividedinto 110,000,000 equity shares of Rs.10/- each and 10,000,000Preference Shares of Rs.10/- each to Rs.3,292,000,000/- dividedinto 245,000,000 Equity Shares of Rs.10/- each and 84,200,000Preference Shares of Rs.10/- each.In terms of the Scheme, 7,749,121 Equity shares of Rs.10/-each, fully paid-up were issued and allotted on July 24, 2009to the shareholders of Shaw Wallace & Company Limited inthe ratio specified in the Scheme. Consequently, the Issued,Subscribed and Paid-up Equity Share Capital of the Companystood increased from Rs.1,001,632,560/- divided into100,163,256 equity shares of Rs.10/- each to Rs.1,079,123,770/-divided into 107,912,377 equity shares of Rs.10/- each.PERFORMANCE OF THE COMPANYThe Company has been able to record a 20% growth involumes during the year with some key brands such asSignature Whisky recording a growth of 27% to enter theMillionaires Club. The umbrella McDowell’s brand continuesits buoyant growth and has earned the distinction of beingIndia’s largest consumer brand calculated by retail value ofsales.With over 50% of India’s 1.2 billion population not havingyet achieved legal drinking age, the industry is currentlywitnessing a demographic window of opportunity with largenumber of first time consumers entering the market.The year however, witnessed a steep rise in input costs.Reduced sugarcane output and a political stand off betweenstate governments and sugarcane farmers in key producingstates during the crushing season, resulted in unprecedentedspike in input costs. Despite an impact of over Rs.3.5 billion31

Report of the Directors (Contd.)on account of higher input prices during the year, theCompany managed to show only a marginal reduction inprofits for the year which stood at Rs.2.97 billion as againstRs.3.11 billion in the previous year.AMALGAMATIONAmalgamation of Shaw Wallace & Company Limited andPrimo Distributors Private Limited with the Company:In terms of the Scheme of Amalgamation of Shaw Wallace& Company Limited (SWCL) and Primo Distributors PrivateLimited (Primo) with the Company (“the Scheme”) sanctionedby the Hon’ble High Courts of Karnataka, Bombay andCalcutta, which became effective on July 6, 2009, withAppointed Date as April 1, 2007:• SWCL and Primo, both subsidiaries of the Company wereamalgamated with the Company and the entire businessand whole of the undertaking of the said transferorcompanies stood transferred to and vested in theCompany;• The shareholders of erstwhile SWCL were issued andallotted in aggregate 7,749,121 Equity Shares of Rs.10/-each fully paid-up in the Company in the ratio of 4 equityshares of Rs.10/- each fully paid-up in the Company forevery 17 equity shares of Rs.10/- each fully paid-up inSWCL;• 15,072,311 equity shares of Rs.10/- each representing,31.40% of the paid-up capital of SWCL held by theCompany stood cancelled upon the Scheme becomingeffective;• The Equity Shares held by the Company in Primowere cancelled without any exchange of shares in theCompany, as its entire paid-up share capital was held bythe Company.• Consequent to the Scheme becoming effective, Primostood dissolved without winding up. SWCL will bedissolved without winding up under a separate Order ofthe Hon’ble High Court at Calcutta.In terms of the Scheme, a Trust in the name of Primo BenefitTrust and a Trust in the name of SWC Benefit Trust werecreated for transfer of 1,306,431 Equity shares held by Primoand 10,282,553 equity shares held by SWCL in the Company tothe aforesaid Trusts respectively. Upon the Scheme becomingeffective, the beneficial interest in SWC Benefit Trust andPrimo Benefit Trust stands transferred and vested in the USLBenefit Trust, whose beneficiary is the Company. Subsequentto the year end, SWCL has sold 10,282,553 Equity Shares heldby it in the Company in the open market, through the stockexchanges and 1,306,431 equity shares held by Primo in theCompany has been transferred to Primo Benefit Trust. Uponthe Scheme becoming effective, the shares held by PrimoBenefit Trust stood transferred to and vest with USL BenefitTrust.Amalgamation of Zelinka Limited with the Company:In terms of the Scheme of Amalgamation of Zelinka Limitedwith United Spirits Limited as sanctioned by the Hon’ble HighCourt of Karnataka at Bangalore and subsequent complianceof the procedure required to be followed by Zelinka Limitedunder the local laws of Cyprus, which became operative onMarch 26, 2009, with Appointed Date as April 1, 2007:• the entire undertaking of Zelinka Limited including allassets and liabilities, stood transferred to and vested inthe Company;• The Equity Shares held by the Company in Zelinka Limitedwere cancelled without any exchange of shares in theCompany, as its entire paid-up share capital was held bythe Company.Amalgamation of Balaji Distilleries Limited with theCompany:Balaji Distilleries Limited (BDL), which has been a contractmanufacturing unit of the UB Group ever since its inceptionin the year 1983, is proposed to be amalgamated with theCompany with effect from April 1, 2009, being the AppointedDate. BDL has a large state of the art distillery and breweryin Tamil Nadu. The distillery has a capacity to produce Tenmillion cases per year while the brewery has a capacity ofNine million dozens per annum expandable to about twelvemillion dozens. BDL incurred huge losses resulting in theerosion of its entire Net Worth and in consequence, BDL onreference, has been declared as a sick industrial undertakingunder the Sick Industrial Companies (Special Provisions) Act,1985 (SICA).The draft Rehabilitation Scheme along with the Scheme ofArrangement between Balaji Distilleries Limited, Chennai42

Report of the Directors (Contd.)The demand for Scotch continues to grow, especially fromnew markets in Asia and this has led to the continuedhardening of scotch prices, thus affirming the strategicadvantage of the Whyte and Mackay acquisition.The consolidated accounts for the year include non cashadjustments, reflecting changes in the relative exchange ratesof reporting currency, the US Dollar and the Great BritainPound. While Accounting Standards require the Companyto recognize these differences in a calibrated manner overthree years, the same is not viewed as a business constraint.DEPOSITORY SYSTEMThe trading of the equity shares in your Company is undercompulsory dematerialisation mode. As of date, equityshares representing 94.66% of the equity share capitalare in dematerialised form. As the depository systemoffers numerous advantages, members are requested totake advantage of the same and avail of the facility ofdematerialisation of the Company’s shares.DIRECTORSMr. Sreedhara Menon and Dr.Vijay Mallya retire by rotationand being eligible, offer themselves for re-appointment.AUDITORSM/s. Price Waterhouse, your Company's Auditors, are eligiblefor re-appointment at the Annual General Meeting and it isnecessary to fix their remuneration.TAX AUDITORSYour Directors have appointed M/s. Lodha & Co., CharteredAccountants as the Tax Auditors of the Company to carry outthe tax audit of the Company for the year ended March 31,2009.LISTING OF SHARES OF THE COMPANYYour Company’s Equity Shares have been delisted from theStock Exchanges at Ahmedabad, Chennai, Delhi and Kolkatain accordance with the shareholders’ approval at the AnnualGeneral Meeting of the Company held on November 28,2007.The Equity Shares of your Company continue to remainlisted on Bangalore Stock Exchange Limited, Bombay StockExchange Limited and National Stock Exchange of IndiaLimited. The listing fees for the year 2009-10 have been paidto these Stock Exchanges.7,749,121 equity shares issued and allotted to theshareholders of erstwhile Shaw Wallace & Company Limitedin terms of the Scheme of Amalgamation will be listed onthe stock exchanges where the existing equity shares of theCompany are presently listed and necessary steps have beentaken by your company in this regard.GLOBAL DEPOSITARY SHARESYour Company had issued 17,502,762 Global DepositaryShares (GDSs) representing 8,751,381 Equity Shares rankingpari-passu in all respects with the existing paid-up equityshares, 2 GDSs representing 1 equity share of par value ofRs.10/- each at US$7.4274 per GDSs aggregating to US$130 mn. These GDSs are listed on the Luxembourg StockExchange.As on July 24, 2009, there is an outstanding of 689,900 GDSsrepresenting 344,950 equity shares.CREDIT RATINGICRA Limited (ICRA) has assigned “LA-“ (pronouncedLA minus) rating on the long term scale to the Long TermDebt Programme of the Company (Basel II) and also assigned"A1” (pronounced A One) rating on the short term scale tothe Short Term Debt Programme of the Company.CORPORATE GOVERNANCEA report on the Corporate Governance is annexedseparately as part of this report along with a certificate ofcompliance from a Company Secretary in practice. Necessaryrequirements of obtaining certifications/declarations interms of Clause 49 have been complied with.MANAGEMENT DISCUSSION AND ANALYSISPursuant to Clause 49 of the Listing Agreement with the StockExchanges, Management Discussion and analysis Report isannexed and forms an integral part of the Annual Report.FIXED DEPOSITSFixed Deposits from the public and shareholders, stood atRs.654.01 million as at March 31, 2009. Matured deposits64

Report of the Directors (Contd.)for which disposal instructions had not been received fromconcerned depositors stood at Rs.28.07 million as at March31, 2009. Of this, a sum of Rs. 7.51 million has been since paidas per instructions received after the year-end.TRANSFER TO INVESTOR EDUCATION ANDPROTECTION FUNDPursuant to the provisions of Section 205A(5) and 205C of theCompanies Act, 1956, the Unclaimed Dividend, Debenturesand Deposits, remaining unclaimed and unpaid for morethan 7 years, have been transferred to the Investor Educationand Protection Fund.HUMAN RESOURCESEmployee relations remained cordial at all the Company’slocations.Particulars of employees drawing an aggregate remunerationof Rs.2,400,000/- or above per annum or Rs.200,000/- orabove per month, as required under Section 217(2A) of theCompanies Act, 1956, are annexed.EMPLOYEE STOCK OPTION SCHEMEThe Company has not offered any stock option to theEmployees during the year 2008-2009 either underthe McD ESOP Scheme or McD-Employee Stock OptionScheme – 2002.CONSERVATION OF ENERGY & TECHNOLOGYABSORPTION, ETC.In accordance with the provision of Section 217(1)(e) of theCompanies Act, 1956, read with the Companies (Disclosureof Particulars in the Report of the Board of Directors), Rules,1988, the required information relating to Conservationof Energy, Technology Absorption and Foreign Exchangeearnings and outgo is annexed.DIRECTORS’ RESPONSIBILITY STATEMENTPursuant to Section 217 (2AA) of the Companies Act, 1956,in relation to financial statements for the year 2008-09, theBoard of Directors reports that:• in the preparation of the annual accounts, the applicableaccounting standards have been followed along withproper explanation relating to material departures;• accounting policies have been selected and appliedconsistently and that the judgements and estimates madeare reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at the endof the financial year and of the profit of the Company forthe year ended March 31, 2009;• proper and sufficient care have been taken for themaintenance of adequate accounting records inaccordance with the provisions of the Companies Act,1956, for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;• the annual accounts have been prepared on a goingconcern basis.THANK YOUYour Directors place on record their sincere appreciation forthe continued support from the shareholders, customers,suppliers, banks and financial institutions and other businessassociates. A particular note of thanks to all employees ofyour Company, without whose contribution, your Companycould not have achieved the year’s performance.BangaloreJuly 29, 2009By Authority of the BoardDr. VIJAY MALLYAChairman75

Report of the Directors (Contd.)ANNEXURE TO DIRECTORS’ REPORT[Additional information given pursuant to requirement of Section 217(1)(e) of the Companies Act, 1956]CONSERVATION OF ENERGYWith reference to energy conservation and cost reduction, steps taken by the company at its various manufacturing unitswere as follows:-• Energy Audits were undertaken and devices such as ‘Power Bos’, ‘Variable Frequency Drive’ and ‘Automatic Power FactorControl unit’ were installed for conservation of electrical and thermal energies.• Process plant revamp was done to reduce steam consumption.• Plate Heat Exchangers were installed for Heat Recovery.• Steam driven condensate recovery pumps were installed for reducing Electrical / Fuel consumption.RESEARCH & DEVELOPMENT (R&D)As an ongoing process the Company carries out research in its State-of-the-art in-house Research and Development Centre fordevelopment of new-age products, new innovative packaging materials and analytical method for quality management.Expenditure on R & D:(Rs. in Million)(a) Capital - 0.214(b) Recurring - 30.033(c) Total - 30.247(d) Total R & D expenditure as a percentage of total turnover – 0.08%Technology imported during the last 5 years : NilTECHNOLOGY ABSORPTION• The Company is evaluating latest Technology for effluent Treatment of Distillery waste by a new process calledevaporation / incineration.• Imported labeling machines were installed for labeling of premium products to further enhance the quality of finishedproduct.• The Company perfected the art of sleeving technology by importing sleeving machine for full body sleeving of certainWhite Spirit Brands.• The Company is also evaluating the use of Gas Turbines for utilizing Methane gas produced in Anaerobic Digester andgenerating captive power for running the Distilleries.FOREIGN EXCHANGE EARNINGS/OUTGO(Rupees in Million)2008-09 2007-081 Exports & Foreign Exchange earnings 42.142 19.5972 Imports / Expenditure in Foreign Currency 1,944.014 792.318By Authority of the BoardBangaloreJuly 29, 2009Dr. VIJAY MALLYAChairman86

Report of the Directors (Contd.)SL.NoSTATEMENT OF PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956 AND COMPANIES(PARTICULARS OF EMPLOYEES) RULES, 1975.NAME AGE DESIGNATION/ NATURE OF DUTIES1 A R BANERJEE 51 ASSISTANT VICE PRESIDENT - FINANCE &ACCOUNTSREMUNERA-TION(Rs.)QUALIFICATIONEXPERI-ENCEINYEARSDATE OFCOMMENCE-MENT OFEMPLOY-MENTPARTICULARS OF PREVIOUSEMPLOYMENT4,375,118 B.COM (HONS)., AICWA 30 1-Oct-85 Cost Accountant, Bengal Waterproof Limited2 A HARISHA BHAT 55 DEPUTY PRESIDENT & GROUP TREASURER 8,658,348 CA 31 22-Nov-90 Manager Treasury, Digital Equipment (I) Limited3 ABHAY KEWADKAR 48 SENIOR VICE PRESIDENT - WINES 4,632,010 B.TECH (CHEM) 27 23-Aug-06 Vice President & Wine Maker, Grover Vineyards Limited4 AJAY B BALIGA* 50 EXECUTIVE VICE PRESIDENT - PPMQC 2,296,350 B.TECH (CHEM ENGG) 27 3-Nov-08 Senior Vice President - Business Development &Mfg, Allied Blenders & Distillers Pvt Limited5 ALOK GUPTA* 43 EXECUTIVE VICE PRESIDENT - MARKETING& BRAND INDIA3,606,686 B.COM, PGDM 21 21-Feb-95 Deputy General Manager, Shaw Wallace & CompanyLimited6 ALOK KUMAR SEN 54 SENIOR GENERAL MANAGER - MATERIALS 2,934,709 M.COM 30 19-Apr-82 Accounts Executive, Calcutta Industrial SupplyCorporation7 AMRIT THOMAS 42 EXECUTIVE VICE PRESIDENT - MARKETING 12,137,840 B.TECH, PGDM 17 12-Jun-07 Category Head - Beverages, Hindustan Lever Limited8 ANANT IYER 49 DIVISIONAL VICE PRESIDENT -INSTITUTIONAL & TRADE MARKETING9 ANIL KUMAR KUSH 53 CHIEF EXECUTIVE - VITTAL MALLYASCIENTIFIC RESEARCH FOUNDATION10 ARUN BOPAIAH 57 DIVISIONAL VICE PRESIDENT -MANUFACTURING6,185,605 M.SC., M.M.S. 25 15-Jun-92 Controller - Marketing, Consolidated DistilleriesLimited9,488,777 PHD, MBA 25 13-May-05 Scientific Director, Genesis Management Consultants4,570,305 B.SC, LLB 28 27-Oct-93 Manager - Personnel & Admin, Karnataka JewelsLimited11 ARUN MOKAL 52 GENERAL MANAGER - ADMINISTRATION 2,537,532 B.COM 30 15-Apr-85 Mackinnon Mackensieco Limited12 ARVIND JAIN 46 DIVISIONAL VICE PRESIDENT - SALES 4,746,485 PGDM 25 12-Apr-91 Area Manager, Titan Watches Limited.13 ASHOK CAPOOR 56 DEPUTY PRESIDENT 18,974,061 B.A. (ECO), MBA 34 12-May-92 Chief Operating Officer, erstwhile HerbertsonsLimited14 ASHWIN MALIK* 51 CHIEF OPERATING OFFICER OF ASUBSIDIARY COMPANY8,529,076 B.A. (ECO), MBA 29 1-Nov-88 Vice President Sales & Marketing, Carew PhipsonLimited15 B NARAYANA RAJU 55 ASSISTANT VICE PRESIDENT - DISTILLERY 2,677,490 M.SC 29 24-Jun-02 General Manager - Production & Admin,Balaji Group16 BHARATH RAGHAVAN 45 DIVISIONAL VICE PRESIDENT - LEGAL &SECRETARIAL3,860,638 B.COM, ACS 23 13-Feb-98 Senior Manager - Fixed Income, Peregrine CapitalIndia Private Limited17 DALIP KUMAR GARG 55 DIVISIONAL VICE PRESIDENT - SALES 4,877,446 B.A 30 4-Oct-01 Vice President - Sales, Millenium Breweries Limited18 DEBABRATHA BANERJEE* 49 SENIOR VICE PRESIDENT - SALES 3,452,403 PGDBM 28 1-Nov-96 Chief Operating Officer, erstwhile HerbertsonsLimited19 DEBASHISH SHYAM 41 DIVISIONAL VICE PRESIDENT -MARKETING20 DEBASISH DAS 51 DIVISIONAL VICE PRESIDENT -MANUFACTURING (SOUTH)21 DHARMARAJAN S 51 DIVISIONAL VICE PRESIDENT - FINANCE &ACCOUNTS22 DR. BINOD K MAITIN 60 SENIOR VICE PRESIDENT - QUALITYASSURANCE & TECHNICAL23 G DEVANATHAN 53 SENIOR GENERAL MANAGER -INFORMATION SYSTEMS24 I.P. SURESH MENON 52 SENIOR VICE PRESIDENT - PLANNING &CONTROL25 JOHN MATHEWANTHRAPER36 SENIOR GENERAL MANAGER -MARKETING4,670,002 BSC, PGDBM 18 20-Sep-04 Head - Marketing & Alliances (Internet Services),Bharti Infotel Limited, New Delhi4,895,189 BSC, B.TECH, PGDBM 26 20-Aug-84 Chemist, Eastern Distilleries Private Limited4,917,754 B.COM, ACA, LLB 25 7-Nov-86 Consultant, N M Raiji & Company6,041,753 M.SC., PH.D., 38 14-Dec-88 Senior Research Officer & Head, Analytical ResearchGroup, Shriram Institute For Industrial Research3,356,473 B.SC. 31 3-May-95 General Systems Manager, Amco Batteries Limited7,713,678 B.A. (HONS.) MMS 31 1-Apr-85 Secretary & Finance Manager ,UB ElectronicInstruments Limited2,719,735 MSC, MBA 12 19-Jan-05 Britania Industries Limited26 JOSEPH P C 56 GENERAL MANAGER - SALES (CSD) 2,613,243 B.A. 35 11-Oct-76 Packsell Combine, Office Assistant27 K. Krishnamoorthy 58 ASSISTANT VICE PRESIDENT & COMPANYSECRETARY - SHAW WALLACE &COMPANY LIMITED3,666,185 B.Com (Hons), LLB, ACS.,Inter ICWA38 3-Sep-93 General Manager (Corp. Finance) & CompanySecretary, Ceeta Industries Limited,.28 K R SANKARANARAYANA 53 SENIOR GENERAL MANAGER - TECHNICAL 7,908,779 M.SC., DIFAT 30 2-Jul-79 Executive, Tunga Bhadra Sugar Works29 K VIJAY KUMAR 44 SENIOR GENERAL MANAGER - DISTILLERY 2,437,580 B.SC, PDDBM, DIFAT 22 17-Feb-04 UDV India Limited30 KAUSHIK CHATTERJEE 48 CHIEF OPERATING OFFICER - REGIONALPROFIT CENTRE (EAST)ANNEXURE TO DIRECTORS’ REPORT12,097,381 B.COM 25 27-Apr-06 Chief Operating Officer - Indian Operations,Mason And Summers Alcobev Private Limited.Contd...97

Report of the Directors (Contd.)SL.NoSTATEMENT OF PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956 AND COMPANIES(PARTICULARS OF EMPLOYEES) RULES, 1975NAME AGE DESIGNATION/ NATURE OF DUTIES31 KUSHAL BANERJEE 51 SENIOR GENERAL MANAGER - PERSONEEL& ADMINISTRATIONREMUNERA-TION(Rs.)QUALIFICATION3,042,341 B.COM, PGDPM(IISWBM )EXPERI-ENCEINYEARSDATE OFCOMMENCE-MENT OFEMPLOY-MENTPARTICULARS OF PREVIOUSEMPLOYMENT30 8-Jul-02 Chief - Industrial Relations, Exide Industries Limited32 LAL RANGWANI 43 ASSISTANT VICE PRESIDENT - TRADE 3,161,037 M.COM. 22 7-Aug-87 Executive, erstwhile Herbertsons LimitedMARKETING & INSTITUTIONAL SALES(WEST)33 LALIT GUPTA 49 SENIOR VICE PRESIDENT - LEGAL 5,105,868 BSC., LLB., DLL 26 1-Jun-98 Joint Manager - Legal, Shriram Foods & Fertilizers34 LAXMI NARASIMHAN 39 CHIEF OPERATING OFFICER - REGIONAL 5,781,485 B.E, PGDM 15 8-Dec-03 Regional Manager, Coca Cola IndiaPROFIT CENTRE (AP)35 M A HAMEED 52 ASSISTANT VICE PRESIDENT - SALES 3,366,006 B.COM 25 1-Apr-03 Branch Sales Manager, Seagram ManufacturingPrivate Limited36 MAHESH NEDUNGADI 49 SENIOR GENERAL MANAGER - LEGAL 2,802,274 B.COM (HONS), ACS 26 6-May-96 Company Secretary, Nova Granites (India) Limited37 MATHEW XAVIER 45 DIVISIONAL VICE PRESIDENT- MARKETING& INNOVATIONS5,954,224 PGDM / B.COM 20 10-Nov-03 Vice President – Marketing, Erstwhile Shaw WallaceDistilleries Limited38 MOHAN P MEDEIRA 51 SENIOR GENERAL MANAGER - LOGISTCS, 3,246,935 B.SC (HONS), PGDSM, 31 17-Apr-84 Sales Assistant, Fibreglass Pilkington LimitedMATERIALS & MARKETING SERVICESDBMM39 MOHANTY B K 55 SENIOR GENERAL MANAGER - SALES 2,534,637 BA 32 20-Jul-77 NA40 MONGIA S K 68 DIVISIONAL VICE PRESIDENT - BUSINESS 3,611,808 M.SC, DEF SC. 51 2-Aug-93 Commodore-Indian NavyPROMOTION41 N R RAJSEKHER 53 CHIEF OPERATING OFFICER - REGIONALPROFIT CENTRE (WEST)12,493,979 B.SC 30 8-Apr-82 Vice President - Sales, erstwhile Shaw WallaceDistilleries Limited42 NAGAPPA G S 54 DIVISIONAL VICE PRESIDENT - SALES 4,835,691 B.SC 34 1-Aug-75 Executive, erstwhile Herbertsons Limited43 NANDINI VERMA 54 EXECUTIVE VICE PRESIDENT - CORPORATEAFFAIRS7,470,077 BA (HONS), IFDAF 37 13-Apr-07 Vice President - Corporate Affairs & Public Relation,Jet Airways44 NAVRATAN DUGAR 65 DEPUTY PRESIDENT - PROCUREMENT, 15,198,254 B.COM, M.COM, MBA, 40 1-May-01 Adviser, Balaji Group of CompaniesPLANNING, MANUFACTURING & QUALITYCONTROLMCIM45 P A MURALI 51 DEPUTY PRESIDENT & CHIEF FINANCIALOFFICER18,680,713 B.COM, ACA 28 5-Jul-93 Executive Vice President & Chief Financial Officer,United Breweries Limited46 P SRIRAM 49 ASSISTANT VICE PRESIDENT -MANUFACTURING4,606,605 B.TECH, PGDPM 26 4-Jan-95 Assistant Vice President - Manufacturing, erstwhileShaw Wallace Distilleries Limited47 P.N. PODDAR 56 SENIOR VICE PRESIDENT -6,523,806 M.TECH, DMS 33 1-Jan-88 Production Manager, Union Carbide (I) LimitedMANUFACTURING48 P.V. ACHAR 57 GENERAL MANAGER - MATERIALS 2,686,430 B.COM, MBA, DIP IN MM 38 11-Jan-88 Ideal Jawa (I) Pvt Limited, Senior Stores Officer49 PADMANABHAN N R 52 ASSISTANT VICE PRESIDENT - FINANCE & 3,816,458 B.COM, CA 26 31-Aug-94 Accounts Superintendent, Schrader Duncan LimitedACCOUNTS50 PARAMJIT SINGH GILL 47 CHIEF OPERATING OFFICER - REGIONALPROFIT CENTRE (NORTH)7,272,217 B.SC, D LL-CHARTEREDMARKETER, M.PHIL26 1-Dec-07 Executive Vice President, United National Breweries(SA) (Pty) Limited, Centurion51 PHILIP SARGUNAR A B 60 CHIEF OPERATING OFFICER - REGIONALPROFIT CENTRE (SOUTH) 15,730,324BA, MA 39 20-Nov-02 Executive Director & Chief Reputation Officer, TheEmpee Distilleries Limited52 PRAKASH MIRPURI 46 ASSISTANT VICE PRESIDENT - CORP 2,811,797 PGD 26 9-Apr-07 Director - Client Services, IpanMEDIA53 PRATIP SEN 57 ASSISTANT VICE PRESIDENT -MANUFACTURING3,988,859 B.TECH (CHEM), PGDBM 35 24-Nov-03 Chief Executive Officer, Vivada Chemicals PrivateLimited54 R SATSANGI 52 DIVISIONAL VICE PRESIDENT - REGIONAL 4,914,504 B.TECH (MECH) 30 19-Feb-96 Plant Manager, Pepsico India Holding LimitedMANUFACTURING HEAD (NORTH)55 R.N. PILLAI 53 DIVISIONAL VICE PRESIDENT - FINANCE 3,859,614 CA 33 1-Mar-86 Accountant, Royal Oman Police56 RAGHUNATHAN A 57 EXECUTIVE VICE PRESIDENT - FINANCE &ACCOUNTS8,180,984 B.COM, ACA 34 24-Sep-79 Executive Vice President - Finance & Accounts,erstwhile Herbertsons Limited57 RAJA R PETER 50 SENIOR GENERAL MANAGER - BUSINESSDEVELOPMENT2,446,835 BE 20 16-Jul-07 General Manager and Head Marketing Alliances,Tata Teleservices Limited58 RAJIV SURI 52 DIVISIONAL VICE PRESIDENT - FINANCE 5,047,917 B.COM (HONS), MBA,ACA,31 16-May-94 Senior Manager - Marketing Finance,Reliance Industries Limited59 RANAJOY SARKAR* 58 SENIOR GENERAL MANAGER - ACCOUNTS 3,237,286 B.COM (HONS), AICWA 33 1-Dec-86 Western India Industries60 RAVI NEDUNGADI.A.K. 51 PRESIDENT & CHIEF FINANCIAL OFFICER- UB GROUP26,126,482 B.COM (HONS),AICWA, ACA30 1-Jan-90 Group Finance Director, UB International Limited.,U.K.61 ROBIN BASU* 50 SENIOR VICE PRESIDENT - HR 4,074,211 B.COM, MBA 24 20-Mar-07 Senior Vice President - HR, Berger Paints62 S ANANDA PRASAD 56 GENERAL MANAGER - TAXATION 2,784,284 B.COM.,LL.B., 35 1-Jul-84 Assistant Manager - Accounts,Mysore Wine Products LimitedContd...108

Report of the Directors (Contd.)SL.NoSTATEMENT OF PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956 AND COMPANIES(PARTICULARS OF EMPLOYEES) RULES, 1975NAME AGE DESIGNATION/ NATURE OF DUTIESREMUNERA-TION(Rs.)QUALIFICATIONEXPERI-ENCEINYEARSDATE OFCOMMENCE-MENT OFEMPLOY-MENTPARTICULARS OF PREVIOUSEMPLOYMENT63 S R AINAPUR 51 ASSISTANT VICE PRESIDENT - ACCOUNTS 4,544,664 CA 27 1-Dec-87 Accounts Assistant, Kesarval Beverages Limited64 S.A. BAGI 55 SENIOR GENERAL MANAGER - DISTILLERY 3,186,601 B.SC., DIFAT, DBM 34 13-Aug-75 NA65 S.C.SINGHAL 56 DIVISIONAL VICE PRESIDENT - MANUFAC-TURING (EAST)4,944,857 B.SC, DIFAT 32 1-Sep-89 Assistant Manager (Works), Shri Shadilal EnterprisesLimited66 S.D.LALLA 65 JOINT PRESIDENT - OVERALL OPERATIONS 36,046,105 LC & SE, AMIE (CIVIL) 47 5-Apr-94 Managing Director, erstwhile Herbertsons Limited67 S.K. RASTOGI 55 DIVISIONAL VICE PRESIDENT - Quality 5,357,745 M.SC., 37 14-Nov-82 Quality Control Officer, Jagatjit Industries LimitedControl68 S.N. PRASAD 51 DIVISIONAL VICE PRESIDENT - FINANCE 4,956,553 B.COM, ACA, ACS, 25 7-Mar-91 Deputy Manager - Finance, UB Hoppecke EnergyProducts Limited69 S.SATISH 49 ASSISTANT VICE PRESIDENT - PLANNING 4,234,769 B.COM. 29 21-Jul-89 Accounts Officer, BPL Sanyo Limited& CONTROL70 S.SURYANARAYANAN 49 ASSISTANT VICE PRESIDENT - ENGINEER- 3,817,452 B.SC,B.TECH (MECH) 27 10-Feb-89 Purchase Officer, Sundaram - Clayton LimitedING71 SANJAY RAINA* 44 EXECUTIVE VICE PRESIDENT - HUMANRESOURCES2,282,195 MSW - PERSONNELMGMT22 19-Nov-08 Head HR - Network, Supply Chain - India & Er - SEAsia, Motorola India Private Limited72 SANJAY ROY 35 HEAD - MARKETING & SALES - WINES 2,833,566 B.COM, PGDM 12 18-Sep-00 Marketing Officer - Flash Lights,Eveready Industries India Limited73 SATENDRA CHAUDHARY* 50 SENIOR GENERAL MANAGER - HR 1,318,669 BA, LLB, PGDPM & IR 29 18-Sep-08 Vice President, Aditya Birla Group,74 SATISH NAIR 57 ASSISTANT VICE PRESIDENT - MATERIALS 3,854,268 B.SC, D-STRS MGMT,MATS34 6-Jul-84 Stores And Purchase Officer, Kartnataka OxygenLimited75 SHARMA V K 66 EXECUTIVE DIRECTOR - CHAIRMANSOFFICE7,028,860 B.COM, MA, LLB 35 5-Oct-84 Executive Director - Chairman's Office,erstwhile Herbertsons Limited76 SHIV KUMAR GUPTA 56 ASSISTANT VICE PRESIDENT - DISTILLERY 3,379,526 B.SC, DIFAT 36 13-Jan-06 General Manager - Distillery, A B Sugars Limited77 SUDARSHAN V ACHARYA 50 DIVISIONAL VICE PRESIDENT - RAW MA-TERIALS & OVERSEAS SUPPLY CHAIN4,266,689 B.COM., DO-MAT, DIP-LABOUR LAW28 20-Jan-89 Assistant Manager - Purchase, Astra Idl Limited,Bangalore78 SUKHVINDER SINGH 58 SENIOR GENERAL MANAGER - DISTILLERY 2,695,602 BA 32 1-Jul-82 NA79 T K SUBRAMANIAN 58 DIVISIONAL VICE PRESIDENT - SYSTEMS 6,496,668 B.SC., DMS 38 16-Mar-83 Controller - Systems, UBICS Limited80 T SAMBANDASAMY 50 DIVISIONAL VICE PRESIDENT - SALES 3,443,486 B.B.A, M.B.A 27 12-Apr-83 General Manager - Sales, erstwhile Shaw WallaceDistilleries Limited81 T.V. SUBRAMANIAN 54 ASSISTANT VICE PRESIDENT - BUSINESS 4,659,799 M.COM. ICWA 31 16-Jun-86 Manager-Branch Services, Deccon Marketing LimitedDEVELOPMENTS82 V K REKHI 63 MANAGING DIRECTOR 42,361,828 MA (HONS)., PGDBA., 38 3-Jan-72 Regional Director, UB International Limited., U.K.83 V S VENKATARAMAN 55 COMPANY SECRETARY & SENIOR VICEPRESIDENT7,193,171 B.COM (HONS), ACS 37 20-Aug-82 Deputy Company Secretary, United BreweriesLimited84 V.MURALI 47 SENIOR GENERAL MANAGER - DISTILLERY 2,813,692 ME (CHEM),DBA 23 4-Oct-90 Manager - Technical Service, Associated DrugCompany Private Limited85 VIVEK PRAKASH 48 SENIOR VICE PRESIDENT - CSD SALES 7,521,889 B.COM, LLB, 27 15-Jun-98 Deputy General Manager,Shaw Wallace & Company Limited86 WILLIAM DEVADASS 41 SENIOR GENERAL MANAGER - INST SALES 2,792,350 B.COM 18 25-Oct-06 Seagram Manufacturing Private Limited& TRADE MKTG87 ZEYN MIRZA 46 SENIOR GENERAL MANAGER - BUSINESS 2,728,074 B.COM, DIP IN COMP, 24 19-Aug-03 Managing Director, Adroit Tech Solutions LimitedDEVELOPMENTF&A, HRSE BREED* Employed for part of the yearNotes:1. No Employee is on Contract Employment. Other Terms and Conditions are as per Service Rules of the Company from time to time.2. None of the above mentioned employees is related to any Director of the Company.3. Remuneration as shown above includes Salary, House Rent Allowance, Company's contribution to Provident Fund and Super Annuation Fund,Value of Residential Accomodation, Bonus, Medical and other facilities.By Authority of the BoardBangaloreJuly 29, 2009dr. vijay mallyaChairman119

Corporate Governance Report1. COMPANY’S PHILOSOPHY ON CODE OF CORPORATEGOVERNANCEChairman, a Managing Director and five other NonExecutive Directors.Your Company is committed to good CorporateGovernance on a continuous basis by laying emphasis onethical corporate citizenship and establishment of goodcorporate culture.Your Company adheres to the highest level of integrity,fairness and transparency in all its operations and believesthat its operations and action must result in sustainedgrowth and long term benefits to all its stakeholders.2. BOARD OF DIRECTORSThe Board of Directors comprises a Non - ExecutiveName of DirectorCategory ofDirectorshipNo. of BoardMeetingsattendedDuring the financial year under review, SevenBoard Meetings were held, i.e., on April 21, 2008,July 21, 2008, September 22, 2008, October 21, 2008,November 29, 2008, December 26, 2008 and January 21,2009.Attendance of each Director at the Board Meetingsand the last Annual General Meeting and details ofnumber of outside Directorship and Committee positionheld by each of the Directors as on date are givenbelow:Attendance atlast AGM heldon December26, 2008No. of otherCompanies inwhich DirectorNo. of committees(other than thecompany) in whichChairman/ MemberDr. Vijay Mallya Non Executive Chairman 5 Yes 24 1(Chairman of 1)Mr. S.R. GupteNon ExecutiveVice ChairmanMr. V.K. Rekhi Executive /Managing DirectorMr. M.R. DoraiswamyIyengarMr. B.M. LabrooMr. Sreedhara MenonMr. Sudhindar KrishanKhannaNOTE:IndependentNon Executive DirectorIndependentNon Executive DirectorIndependentNon Executive DirectorIndependentNon Executive DirectorThe above details are in respect of their Directorship only in Indian Companies.7 Yes 11 8(Chairman of 4)6 Yes 3 Nil7 Yes 5 2(Chairman of 2)7 Yes 8 1(Chairman of 1)3 Yes 2 Nil4 Yes 1 Nila) Out of 24 other Companies in which Dr. Vijay Mallya is a Director, 9 are Private Limited Companies and 2, Section 25Companies.b) Out of 11 other Companies in which Mr. S.R. Gupte is a Director, 2 are Private Limited Companies and 1, Section 25Company.c) Out of 5 other Companies in which Mr. M.R. Doraiswamy Iyengar is a Director, 4 are Private Limited Companies.d) Out of 8 other Companies in which Mr. B.M. Labroo is a Director, 4 are Private Limited Companies.e) Out of 4 other Companies in which Mr. V.K. Rekhi is a Director, 1 is Private Limited Company and 1, Section 25Company.f) The other Company in which Mr. Sudhindar Krishan Khanna is a Director is a Private Limited Company.g) None of the Directors is related to any other Director.12 10

Corporate Governance Report (Contd.)DISCLOSURES REGARDING APPOINTMENT ANDRE-APPOINTMENT OF DIRECTORSDirectors retiring by rotation and being reappointed :Mr. Sreedhara MenonMr. Sreedhara Menon (Mr. Menon), aged 72 years, is theChairman of the Board and Strategic Advisor of VITEOSCapital Market Services Limited, a business ProcessOutsourcing Company in India with a Sister Company locatedat Piscataway, New Jersey, U.S.A. Mr. Menon has previouslyheld senior positions as Deputy President and Member ofthe Board of Directors of American Express Bank Limited,Chairman of the Board of Directors of American Express BankInternational, Managing Director, Emerging Markets Groupat Lehman Brothers Inc., New York and General Partner andVice Chairman of RRE Ventures, LLC. Mr. Menon has servedas a Member of the Board of Directors of U.S.-India BusinessCouncil, Asean-U.S. Business Council, President of the India-America Chamber of Commerce in New York, etc. Mr. Menonholds Masters Degree in Economics from Maharaja’s Collegeof the University of Kerala, India. He resides in Short Hills,New Jersey, U.S.A.Details of Mr. Menon’s directorships in other Indian Companiesand Committee Memberships are as under:-Other DirectorshipsPosition held1. Viteos Capital Markets Services Limited Director2. Viteos Fund Services Limited DirectorMr. Menon is a Member of the Audit Committee of theCompany.Mr. Menon does not hold any share in the Company and isnot related to any other Director.Dr. Vijay MallyaDr. Vijay Mallya (Dr. Mallya), aged 53 years, who holds aPh.D.in Business Administration, is a well-known Industrialistand is the Chairman of the Board of Directors of the Company.He took over the reins of the United Breweries Group in1983 at the young age of 28, which today is a multi-nationalconglomerate. Dr. Mallya is the Chairman of several publicCompanies both in India as well as overseas.Dr. Mallya has won wide recognition from distinguishedinstitutions throughout the span of his career, whichincludes:• The Fellowship Award 2003 – the Institute of Directors,New Delhi• Global Leader for Tomorrow – World Economic Forum,Davos, Switzerland• Sir M. Visvesvaraya Memorial Award instituted by theFederation of Karnataka Chambers of Commerce.• The prestigious Légion d’Honneur award by theGovernment of France in 2008.Dr.Mallya was a Member of the Rajya Sabha from 2002 to2008.Details of Dr. Mallya’s directorships in other Indian Companiesand committee memberships are as under:-Other DirectorshipsPosition held1. Aventis Pharma Limited Chairman2. Bayer CropScience Limited Chairman3. Kingfisher Airlines Limited Chairman & CEO4. Mangalore Chemicals and FertilizersChairmanLimited5. McDowell Holdings Limited Chairman6. Shaw Wallace & Company Limited Chairman7. United Breweries Limited Chairman8. United Breweries (Holdings) Limited Chairman9. Deccan Charters Limited Vice-Chairman10. Four Seasons Wines Limited Chairman11. Shaw Wallace Breweries Limited Chairman12. United Racing and Bloodstock Breeders ChairmanLimited13. Royal Challengers Sports Private Limited Chairman14. Kamsco Industries Private Limited Chairman15. Mallya Private Limited Chairman16. Millennium Alcobev Private Limited Chairman17. Pharma Trading Company PrivateChairmanLimited18. The Gem Investment & Trading CoChairmanPrivate Limited19. United East Bengal Football TeamChairmanPrivate Limited20. United Mohun Bagan Football TeamChairmanPrivate Limited21. VJM Investments Private Limited Chairman22. DCL Holdings Private Limited Vice Chairman23. Motorsports Association of India ManagementCommitteeMember24. SWEW Benefit Company ManagementCommitteeMemberHe is the Chairman of the Remuneration Committee ofMillennium Alcobev Private Limited.Dr. Mallya holds 10 equity shares in the Company and is notrelated to any other Director.13 11

Corporate Governance Report (Contd.)3. AUDIT COMMITTEEMr. Sreedhara Menon, a Non Executive IndependentDirector was inducted to the Audit Committee ofDirectors on March 20, 2009. Mr. Sreedhara Menon,who presently resides in U.S.A. has held various seniorpositions in Indian and Overseas Banking Institutions aswell as Capital Market Intermediaries.The Audit Committee constituted on April 19, 2001 tomeet the requirements under both the Listing Agreementand Section 292A of the Companies Act, 1956, comprisesat present the following Directors:Mr. M.R. DoraiswamyIyengar (Chairman)Mr. S.R. GupteMr. B.M. LabrooMr. Sreedhara MenonNon ExecutiveIndependent DirectorNon Executive DirectorNon ExecutiveIndependent DirectorNon ExecutiveIndependent DirectorThe terms of reference of the Audit Committee coversall matters specified under the Listing Agreement as wellas the provisions of Section 292A of the Companies Act,1956 and inter alia, includes the following:a) Oversight of the Company’s financial reportingprocess and the disclosure of its financial informationto ensure that the financial statement is correct,sufficient and credible.b) Recommending the appointment and removalof external auditor, fixation of audit fee and alsoapproval of payment for any other services.c) Reviewing with management the annual financialstatements before submission to the Board, focusingprimarily on:• Any changes in accounting policies and practices• Major accounting entries based on exercise ofjudgment by management• Qualifications in draft audit report• Significant adjustments arising out of audit• Compliance with Stock Exchange and legalrequirements concerning financial statements• Disclosure of any related party transactions.d) Reviewing with the management, external andinternal auditors, the adequacy of internal controlsystems.e) Reviewing the adequacy of internal audit functionincluding the structure of the internal auditdepartment, staffing and seniority of the officialheading the department, reporting structurecoverage and frequency of internal audit.f) Discussion with internal auditors any significantfindings and follow up thereon.g) Reviewing the findings of any internal investigationsby the internal auditors into matters where there issuspected fraud or irregularity or a failure of internalcontrol systems of a material nature and reportingthe matter to the Board.h) Discussion with statutory auditors before the auditcommences nature and scope of audit as well ashave post-audit discussions to ascertain any area ofconcern.i) Reviewing the Company’s financial and riskmanagement policies.j) To look into the reasons for substantial defaults inthe payment to the depositors, debenture holders,shareholders (in case of non payment of declareddividends) and creditors.The Committee, inter alia, has reviewed the financialstatements including Auditors' Report for the year endedMarch 31, 2009 and has recommended its adoption. Inaddition, the Committee has also reviewed quarterlyresults for June 30, 2008, quarterly and half yearly resultsfor September 30, 2008, quarterly results for December31, 2008 and quarterly results for March 31, 2009, whichwere subjected to a Limited Review by the StatutoryAuditors of the Company.During the financial year, five meetings were heldi.e., on April 21, 2008, July 21, 2008, October 21, 2008,November 29, 2008, and January 21, 2009. The details ofattendance by members of the Committee are as below:Name of the DirectorNo. ofMeetingsMeetingsattendedMr. M.R. DoraiswamyIyengar (Chairman) 5 5Mr. S.R. Gupte 5 5Mr. B.M. Labroo 5 5Mr. Sreedhara Menon* - -* Appointed as Member of the Committee w.e.f. March20, 2009.14 12

Corporate Governance Report (Contd.)4. COMPENSATION COMMITTEEThe Compensation Committee constituted by theCompany comprises at present the following Directors:-Mr. B.M. Labroo, ChairmanMr. S.R. GupteMr. M. R. Doraiswamy IyengarThe Committee is authorised, inter alia, to deal withthe matters related to compensation by way of salary,perquisites, benefits etc. to the Managing/WholeTime Directors of the Company and set guidelines forsalary, performance pay and perquisites to other senioremployees from the level of Executive Vice President andabove.The Committee is also empowered to formulate andimplement the Scheme for grant of Stock Option toemployees.During the financial year, three meetings were heldi.e., on April 18, 2008, August 29, 2008 and November29, 2008, which were attended by all the members ofthe Committee.Remuneration of Directors:The details of Remuneration paid/payable to the Directorsduring the Financial Year April 1, 2008 to March 31, 2009are given below:a) Executive DirectorsManaging Director : Mr. V.K.RekhiSalary &AllowancesPerformanceLinkedincentivePerquisitesRetirementBenefitsRs. Rs. Rs. Rs.18,062,406 17,084,564 3,275,101 3,939,757Notes:1. Mr. V.K.Rekhi (Mr.Rekhi) was appointed as theManaging Director of the Company for a periodof five years with effect from April 19, 2001.The re-appointment for a further period of fiveyears with effect from April 19, 2006 and theremuneration payable have been approved bythe Members at the Annual General Meetingheld on December 28, 2006 with a revisionthereon approved by the Members at the AnnualGeneral meeting held on December 26, 2008.The terms and conditions of appointment andremuneration of Mr. Rekhi are as set out in theresolution and as per the rules of the Company,as applicable.2. The employment of Mr. Rekhi is terminable oneither side by giving six months notice as per therules of the Company.3. There is no severance fee.4. No stock option was granted during the year.b) Non – Executive DirectorsSitting Fees are paid to Non-Executive Directors forattending Board/ Committee Meetings. They are alsoentitled to reimbursement of actual travel expenses,boarding and lodging, conveyance and incidentalexpenses incurred for attending such meetings.Name of the DirectorSitting feesDr Vijay MallyaNilMr. S.R. Gupte 290,000Mr. V.K.RekhiNilMr. M.R.Doraiswamy Iyengar 490,000Mr. B.M. Labroo 320,000Mr. Sreedhara MenonNilMr. Sudhindar Krishan Khanna 80,000Non Executive Directors are also eligible forCommission every year not exceeding one per centof the net profits of the Company as approved by theshareholders at the Annual General Meeting held onSeptember 23, 2005 to remain in force for a periodof five years from April 1, 2006. Such Commissionmay be apportioned amongst the Directors in anymanner they deem fit.The Commission of Rs.48,726,790/- on profits forthe year ended March 31, 2009 will be paid afteradoption of Accounts by Shareholders at the AnnualGeneral Meeting to be held on September 30, 2009and apportioned amongst the Directors in anymanner they deem fit.15 13

Corporate Governance Report (Contd.)c) Particulars of Equity Shares in the Company currentlyheld by the Directors, are furnished below:Name of the DirectorNo. of Shares heldDr Vijay Mallya 10Mr. S.R. GupteNilMr. V.K.Rekhi* 8,452Mr. M.R.Doraiswamy Iyengar 21Mr. B.M. Labroo 136,200Mr. Sreedhara MenonNilMr.S.K.Khanna 4,489* held jointly5. SHAREHOLDERS / INVESTORS GRIEVANCE COMMITTEEA Shareholders / Investors Grievance Committee wasconstituted on April 19, 2001, to operate in terms of theprovisions related thereto in the Listing Agreements withthe Stock Exchanges and /or the provisions as prescribedor as may be prescribed in this regard by the CompaniesAct, 1956.The Committee comprises at present the followingDirectors:Mr. M.R. Doraiswamy Iyengar, ChairmanMr. B.M. LabrooMr. V.S. Venkataraman, Company Secretary is theCompliance Officer.During the financial year four meetings were held i.e.,on April 21, 2008, August 2, 2008, October 21, 2008and January 21, 2009 and attended by both Mr. M.R.Doraiswamy Iyengar and Mr. B. M. Labroo, Members ofthe Committee.The Company / Company’s Registrars received 151complaints during the financial year, all of whichwere resolved to the satisfaction of the shareholders/investors.There are no complaints or Transfer of Shares pending ason March 31, 2009.The Company also has a Committee of Directors withauthority delegated by the Board of Directors, inter alia,to approve transfer and transmission of shares, issue ofnew share certificates on account of certificates lost,defaced, etc., and for other routine operations such asissue of powers of attorney, operation of bank accounts,etc.The Committee comprises at present the followingDirectors:Mr. S.R. GupteMr. M.R. Doraiswamy IyengarMr. V.K. Rekhi andMr. B.M. Labroo6. GENERAL BODY MEETINGSThe details of the last three Annual General Meetingsheld are furnished as under:FinancialYear endedMarch 31,2006March31,2007March 31,2008Date Time VenueDecember, 28,2006November, 28,2007December 26,200811.00a.m.3.30p.m.10.15a.m.Dr. B.R. AmbedkarBhavana, Miller’sRoad, Vasanthanagar,Bangalore - 560 052.Good ShepherdAuditorium, OppositeSt. Joseph’s Pre-University College,Residency Road,Bangalore – 560 025Dr. B.R. AmbedkarBhavana, Miller’sRoad, Vasanthanagar,Bangalore - 560 052.All the resolutions set out in the Notices, including SpecialResolutions were passed by the Shareholders.POSTAL BALLOTThe Company has not passed any resolution at the aboveAnnual General Meetings held which was required tobe passed through postal ballot as per the provisionsof the Companies Act, 1956 and the rules framedthereunder.No resolution was passed through Postal Ballot during2008-09.At this meeting also there is no Ordinary or SpecialResolution requiring passing by way of Postal Ballot.16 14

Corporate Governance Report (Contd.)7. DISCLOSURESDuring the financial year ended March 31, 2009, therewere no materially significant related party transactionswith its promoters, the Directors or the management,their subsidiaries or relatives, etc. that may havepotential conflict with the interests of the Company atlarge. Details of related party transactions forms part ofNotes on Accounts.The Company has complied with all the statutoryrequirements comprised in the Listing Agreements/Regulations/Guidelines/Rules of the Stock Exchanges/SEBI/other statutory authorities.There were no instances of non-compliance by theCompany nor have any penalties, strictures been imposedby Stock Exchanges or SEBI or any other statutoryauthority since incorporation of the Company on anymatter related to capital markets.Code of ConductIn compliance with Clause 49 of the Listing Agreementwith the Stock Exchanges, the Company has adopteda Code of Business Conduct and Ethics for its BoardMembers and Senior Management Personnel, acopy of which is available at the Company’s website,www.unitedspirits.in. All the members of the Boardand the senior management personnel had affirmedcompliance with the Code for the year ended March 31,2009 and a declaration to this effect signed by the CEO isforming part of this report.Pursuant to the requirements of SEBI (Prohibition ofInsider Trading) Regulations, 1992, the Company hasadopted a “Code of Conduct for prevention of InsiderTrading”. This Code is applicable to all the Directors anddesignated employees of the Company.8. MEANS OF COMMUNICATIONThe unaudited quarterly and half-yearly results aresent to all the Stock Exchanges where the shares of theCompany are listed. The results are normally publishedin “Business Standard” (English Daily) and “KannadaPrabha” (Kannada Daily). The results are displayed onthe Company’s Website www.unitedspirits.in.The required disclosures to the extent applicableincluding results were also posted in the portalwww.corpfiling.co.in, which is jointly owned, managedand maintained by Bombay Stock Exchange Limited andNational Stock Exchange of India LimitedThe Company has designated an exclusive Email id viz.uslinvestor@ubmail.com to enable the investor to posttheir grievances and monitor its redressal.9. MANAGEMENT DISCUSSION AND ANALYSIS REPORTManagement Discussion & Analysis Report is appendedand forms an integral part of this Annual Report.10. GENERAL SHAREHOLDER INFORMATIONa) AGM Date, Time andVenueWednesday, September 30, 2009at 2.00 p.m. at Good ShepherdAuditorium, Opposite St. Joseph’sPre-University College,Residency Road,Bangalore – 560 025.b) Financial Year April 1 to March 31First Quarterly Results By July 31Second Quarterly Results By October 31Third Quarterly Results By January 31Fourth quarterly Results By April 30c) Date of Book Closure Thursday, September 24, 2009 toWednesday, September 30, 2009(both days inclusive)d) Dividend payment date After September 30, 2009e) Listing on StockExchanges:The shares of the Company arelisted on the following StockExchanges:1.2.3.Bangalore Stock ExchangeLimited (BgSE)Bombay Stock ExchangeLimited, (BSE)National Stock Exchange ofIndia Limited (NSE)The listing fees for the years 2008-09 and 2009-10 havebeen paid to all the Stock Exchanges.Company’s Equity Shares were delisted from Delhi StockExchange Limited during the year 2008-09. The EquityShares of your Company continue to remain listedon Bangalore Stock Exchange Limited, Bombay StockExchange Limited and National Stock Exchange of IndiaLimited.f) Stock CodeBSE Demat 532432 Physical 32432NSESYMBOL - McDOWELL-NBgSEMcDowellg) ISIN No. INE854D01016h) Market price data As per Annexure A17 15

Corporate Governance Report (Contd.)i) Stock performancein comparison to BSEsensexj) Registrar and TransferAgentsAs per Annexure BAlpha Systems Private LimitedRegistered Office:30, Ramana Residency, 4th Cross,Sampige Road, Malleswaram,Bangalore 560 003Tel. Nos. (080) 2346 0815-818Fax No. (080) 2346 0819Email: alfint@vsnl.comk) Share Transfer System The power to consider and approveshare transfers / transmission /transposition / consolidation /subdivision etc. has been delegatedto a Committee of Directors asindicated under the headingShareholders / Investors GrievanceCommittee. The Committee meetsgenerally once in a fortnight. Therequirements under the ListingAgreement / Statutory regulationsin this regard are being followed.l) Distribution ofShareholdingm) Dematerialisation ofsharesn) Outstanding GDRs/ADRs/ Warrants orany other ConvertibleinstrumentsAs per Annexure – C94.57% of paid-up share capital isheld in dematerialised form.5514 Global Depository Shares(GDSs) representing 2757 EquityShares of Rs.10/- each as on March31, 2009 (2 GDSs representing oneequity share of Rs.10/- each)o) Plant Locations 1. Cherthala (Kerala)2. Hyderabad I (Andhra Pradesh)3. Hyderabad II (Andhra Pradesh)4. Ponda (Goa)5. Hathidah (Bihar)6. Kumbalgodu (Karnataka)7. Rosa (Uttar Pradesh)8. Udaipur (Rajasthan)9. Serampore (West Bengal)10. Bhopal - I(Madhya Pradesh)11. Bhopal - II (Madhya Pradesh)12. Asansol (West Bengal)13. Nasik-I (Maharashtra)14. Nasik-II (Maharashtra)15. Pondicherry (Pondicherry)16. Alwar (Rajasthan)17. Aurangabad (Maharashtra)18. Meerut (Uttar Pradesh)19. Hospet (Karnataka)20. Pathankot (Punjab)21. Palwal (Hariyana)22. Gopalpur - on - sea (Orissa)23. Palakkad (Kerala)24. Baddi (Himachal Pradesh)25. Badrakali (West Bengal)26. Baramati (Maharashtra)27. Zuari Nagar (Goa)p) Address forcorrespondenceNON MANDATORY REQUIREMENTSShareholder correspondence shouldbe addressed to the Company’sRegistrars and Transfer Agents:Alpha Systems Private LimitedRegistered Office:30, Ramana Residency, 4th Cross,Sampige Road,Malleswaram, Bangalore 560 003.Tel. Nos. (080) 2346 0815-818Fax No.080 2346 0819Email: alfint@vsnl.comInvestors may also write or contactthe Company Secretary, Mr. V.S.Venkataraman or Mr. MaloyKumar Gupta, Sr. Manager–Secretarial at the Registered Officeof the Company at ‘UB Tower’,No.24, Vittal Mallya Road, Bangalore– 560 001. Tel. Nos. (080) 3985 6500,22210705. Fax No. (080) 3985 6862,3985 6959.In compliance with the provisions ofClause 47(f) of the Listing Agreementwith the Stock Exchanges, anexclusive email Id, viz. uslinvestor@ubmail.com has been designatedfor registering complaint and itsredressal by the Investor, which hasbeen displayed on the website ofthe Company, www.unitedspirits.in.a) Chairman of the Board Dr. Vijay MallyaWhether Chairman ofthe Board is entitled tomaintain a Chairman’sOffice at the Company’sexpenses and alsoallowed reimbursementof expenses incurredin performance of hisduties.b) RemunerationCommitteec) Shareholders Rights:The Company maintains theChairman’s Office at Company’sexpenses and also reimbursesthe expenses incurred inperformance of his duties.The Company has formed aCompensation Committee.The half - yearly The Company’s half-yearlydeclaration of financial results are published in Englishperformance including and Kannada Newspapers.summary of the Hence, the same are not sentsignificant events in the to the shareholders.last 6 months should besent to each householdof shareholders.The Company has not adopted Whistle Blower Policy beingnon-mandatory.18 16

Corporate Governance Report (Contd.)ANNEXURE A: MARKET PRICE DATAUnited Spirits Limited - Monthly BSEUnited Spirits Limited - Monthly NSEMonth High Low Volume Month High Low VolumeApr-08 1,873.00 1,482.00 802,029 Apr-08 1,873.70 1,480.00 3,746,793May-08 1,709.90 1,501.25 766,135 May-08 1,727.00 1,500.00 5,515,773Jun-08 1,699.00 1,210.00 585,163 Jun-08 1,692.90 1,215.00 3,745,889Jul-08 1,323.40 1,006.55 1,075,394 Jul-08 1,328.00 1,006.00 5,003,178Aug-08 1,415.50 1,215.00 358,514 Aug-08 1,417.00 1,248.00 2,466,541Sep-08 1,408.50 1,162.00 3,042,941 Sep-08 1,471.00 1,140.00 4,984,128Oct-08 1,297.00 606.00 3,573,868 Oct-08 1,299.50 606.00 8,943,412Nov-08 974.80 676.00 2,053,035 Nov-08 984.70 677.50 6,252,973Dec-08 981.90 775.00 865,758 Dec-08 1,000.05 765.15 3,614,850Jan-09 1,016.90 425.65 26,512,374 Jan-09 1,015.00 426.05 50,709,696Feb-09 744.90 529.80 43,727,942 Feb-09 744.80 530.00 88,137,465Mar-09 718.00 546.20 19,757,155 Mar-09 716.95 532.00 50,955,864ANNEXURE B: UNITED SPIRITS LIMITED - STOCK PERFORMANCE COMPARED TO BSE SENSEXANNEXURE C: DISTRIBUTION OF SHARE HOLDINGS AS ON MARCH 31, 2009Shareholdingof nominal valueRs.VALUEWISEShareholdersNumber% toTotalShare AmountRs.% toTotalUpto - 5,000 79,573 97.50 63,466,510 6.345,001 - 10,000 1,009 1.24 7,646,190 0.7610,001 - 20,000 403 0.49 5,757,050 0.5720,001 - 30,000 151 0.19 3,810,740 0.3830,001 - 40,000 78 0.10 2,725,840 0.2740,001 - 50,000 59 0.07 2,763,850 0.2850,001 - 100,000 91 0.11 6,422,970 0.64100,001 and above 252 0.31 9,090,39,410 90.76Total 81,616 100.00 1,001,632,560 100.00CategoryCATEGORYWISENo. ofShares% ofEquityCapitalPromoter Group 36,628,260 36.57Resident BodyCorporate15,938,471 15.91Banks/FI/FII/MF/Trust 38,120,824 38.06NRI/OCB/FCB 1,418,478 1.42G D S 2,757 0.00Resident Individuals 8,054,466 8.04Total 100,163,256 100.0019 17

Corporate Governance Report (Contd.)CERTIFICATE ON CORPORATE GOVERNANCEThe Members ofUnited Spirits LimitedWe have examined the compliance of conditions of Corporate Governance by United Spirits Limited, for the year ended onMarch 31, 2009 as stipulated in Clause 49 of the Listing Agreement, as amended, of the said Company with Stock Exchangesin India.The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limitedto procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions ofCorporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.In our opinion and to the best of our information and according to the explanations given to us, we certify that the Companyhas complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.We state that in respect of investor grievances received during the year ended on March 31, 2009, no grievances are pendingagainst the Company as per the records maintained by the Company and presented to the Shareholders’/Investors’ GrievanceCommittee.We further state that such compliance is neither an assurance as to future viability of the Company nor the efficiency ofeffectiveness with which the management has conducted the affairs of the Company.BangaloreJuly 29, 2009M.R. GopinathCompany Secretary (in practice)FCS 3812 CP 1030CEO/CFO CertificateIn terms of the requirement of the amended Clause 49 of the listing agreement with the Stock Exchanges, the certificatesfrom CEO/CFO have been obtained.BangaloreJuly 29, 2009V.K. REKHIManaging DirectorDeclaration regarding affirmation of Code of ConductIn terms of the requirement of the amended Clause 49 of the Listing Agreement, Code of Conduct as approved by the Boardof Directors of the Company on December 30, 2005 had been displayed at the Company’s website www.unitedspirits.in.All the members of the Board and the senior management personnel had affirmed compliance with the Code for the yearMarch 31, 2009.BangaloreJuly 29, 2009V.K. REKHIManaging Director20 18

Annexure to Report of the Directors (Contd.)Management Discussion & Analysis ReportA. INDUSTRY OVERVIEW:The Indian Alcoholic Beverages industry is a combinationof branded liquors and the low-priced commoditysegment that is referred to as Country Liquor. Thebranded beverage space is further classified into Spirits,Beer and Wine. The Spirits space consists of Indian MadeForeign Liquor (IMFL), Bottled In Origin (BIO) beveragesand the Bottled In India (BII) spirits.The IMFL industry has been growing at a fast pace of13% and for the year ended March 31, 2009 stood at214 mio cases. Aspiration and higher disposable incomepropels growth at the top end, while new consumersand uptrading from country liquor spurt growth atlower end. Karnataka, where Country liquor was bannedin July 2007 has particularly seen a spurt in volumes ofthe low-end brands.The outlook for the industry continues to be buoyantfuelled by the large and growing number of youth cominginto the legal drinking age category. While countrieslike the USA and China are well past the ‘demographic’window, India is comparatively a ‘young’ country withover half the 1.2 billion population under 25 years of theage. This offers considerable potential for the future.The progressive prohibition of country liquor will onlyboost the growth in other sectors, notably IMFL.B. REGULATORY ENVIRONMENT:Regulation and Taxation of the alcoholic beveragesindustry is a part of List II of the Seventh Scheduleof the Constitution of India which places it in thejurisdiction of the State Governments and not of theFederal Government. While the Federal Governmentis authorized to license greenfield manufacturing unitsand levy customs duties on imports, every other activityincluding those relating to production and sale as alsotaxation are controlled by the State Governments. Withover 28 different markets that a national organizationlike your Company operates in, it is a highly challengingand complex network of regulations and proceduresthat it has to contend with; compounding the problem isthe fact that these undergo frequent changes.In July 2009, the Union Govt. again specifically targetedthe alcoholic beverage sector by amending the law totax manufacturing at contract units. The constitutionalvalidity of this law is being questioned by the industry.C. BUSINESS ANALYSIS:During the fiscal year under review, input costs saw anunprecedented rise over the previous year, in excess ofRs. 3500 million, particularly in the price of key ingredientslike alcoholic spirit Extra Neutral Alcohol (ENA) and glass.The increase in prices of ENA stemmed from a number offactors including reduced sugarcane output, increasedfuel price, unremunerative sugar support prices leadingto delay in crushing and a political stand off with thefarmers. In earlier reports the Company had indicatedthat the price of spirit had increased significantly. In thecurrent year this moved up even further and the sharprise in fuel prices pushed it to an unprecedented level ofRs.160/case and that too in prime crushing season whenprices are traditionally the lowest. Glass prices whichwere also impacted by the rise in fuel costs also saw anincrease. The subsequent reduction in the prices of fuelhas seen a nominal roll- back of the increase grantedearlier.The Company’s main-line brands grew by 19%, whileoverall growth was 20%, despite the selective defocus oflow-end brands in an era of high input costs.D. MARKETING:The Company’s top brands have contributed significantlyto the 20% sales volume growth recorded in fiscal 2009.Signature Whisky, the premium whisky offering enteredthe coveted ‘Millionaires Club’, having recorded a 27%growth to sell over a million cases this fiscal. BlueRiband – for long the touchstone for Gin in India – alsoentered the Millionaires Club this year.At the end of the fiscal year, 19 brands in your Company’sportfolio are members of the spirits Millionaires Club – ahallowed group of brands that sell over a million cases of9 liters each annually.McDowell’s No.1, the largest umbrella spirits brand in theworld, sold over 31.5 million cases in the fiscal year justended which represents a 15% growth over the previousyear. McDowell’s No.1 Celebration Rum at over 10million cases is now the world’s 3rd largest Rum growingin excess of 24% at a time when other Rum brands in thetop 100 have either degrown or at best registered onlymarginal single-digit growth. The third flavor under theMcDowell’s No.1 umbrella – the Brandy - continues at itsperch of the world’s largest selling brandy. Sales of the21 19

Annexure to Report of the Directors (Contd.)brandy flavor were hampered by the lack of adequatecapacity in Tamil Nadu, one of the largest markets forthe flavor.Your Company has had a long history of investment in itsbrands through a continuous process of refurbishing andupgrading its offerings to the consumers – apart frommodifications in blends to adapt to changing palates, italso regularly upgrades the packaging to make the ‘look& feel’ of the products more contemporary. As part ofthis concerted strategy, two key brands – Royal Challengeand No.1 McDowell’s – were revamped during fiscal 2009and rolled out across the country in phases.As part of its well planned premiumisation strategy, theCompany introduced a Vodka offering in the prestigesegment called Romanov Red - this got off to a rousinglaunch capturing 8% market share in the very year oflaunch.Sales of the Company’s other premium brands – BlackDog Scotch Whisky, Antiquity Blue Whisky, WhiteMischief Vodka, DSP Black Whisky etc. continued tomaintain double digit growths.During fiscal 2008 the Company had introduced theproducts from its overseas subsidiaries, Whyte & Mackay,Bouvet Ladubay and Liquidity Inc. to the Indian market.This process continued in 2009 with a national roll-out ofthese products which have all been well received in theIndian market.In the last quarter of the fiscal year, your Companyintroduced Whyte & Mackay Special, a blended whisky,through the BII route. Positioned in the regular scotchcategory, the product has received acclaim fromconsumers.During fiscal 2008 your Company had capitalized ona unique opportunity through investment in the theRoyal Challengers Bangalore Team in the Indian PremierLeague of Twenty/20 Cricket Tournament. In the secondyear of the tournament, the response to the concept andto the team has been stronger than earlier – the teamended up as the Runners-Up in the Tournament. Whilethe franchise has been acquired in perpetuity throughyour Company’s wholly owned subsidiary M/s.RoyalChallengers Sports Private Limited, your Company willuse the association as an effective platform to fuel thegrowth of its premium offerings through well thoughtoutstrategies.E. RISKS & CONCERNS, OPPORTUNITIES & THREATS:Favourable demographies, increasing prosperity anddisposable income coupled with attitudinal changestowards consumption indicate strong and sustaineddemand for many years ahead. The ‘feel good’ factoramong the young Indians translates into steady uptrading.The Company has witnessed double digitsgrowth in the 1st line range of products. This trend isexpected to continue. There is a clearly visible, thoughslow process of deregulation taking place and over timeit is expected that these will result in increased retailpenetration as also elimination of several infructuousregulations that add to the costs of doing business.The Alcoholic Beverages industry is the favourite target ofthe Governments, both Central & State, when they needto balance their budgets. As a result, the industry suffersfrom the twin impact of over-regulation and excessivetaxation. Nearly 60% of the price of a bottle of alcoholgoes to the State and local Governments towards taxesand duties. The unreasonable levels of taxation show nosign of abatement and continue to impede profitabilitydespite continuing growth in market demand.The Government of India, in keeping with itscommitment to the WTO, has been consistently reducingthe import tariff on Bottled in Origin (BIO) spirits.During the fiscal year 2008 additional Customs Duty onBIO products was removed by the Central Government.The State Governments however, offer some measure ofprotection to the domestic industry through the levy ofcountervailing duties on BIO products.During fiscal 2009, shareholder communication hasconsistently referred to the sharp rise in the prices ofthe Company’s key inputs viz., Molasses/Spirit as a resultof reduced acreage, unreasonable support prices fixedby local Governments and increase in fuel costs. Therunaway inflation in the rupee-dollar parity as also inthe price of oil impacted both spirit and glass prices.An oligopolistic situation in the glass industry ensuredthat when international prices of oil came down, theprice increase that was granted to the suppliers of glasscontainers was not fully rolled back. However, exciseduty concessions by the Federal Govt. in two tranches inDecember 2008 and February 2009 helped mitigate thesituation somewhat.The spurt prices of spirit in Q3 impacted margins sharply.While the situation has since corrected itself somewhat,prices continue to be high. The spectre of a failingmonsoon in the current fiscal is not expected to help the22 20

Annexure to Report of the Directors (Contd.)situation both in terms of supply and price. However,the situation is partially offset by reduced demand foralchol from industrial users.In order to capitalize on an emerging segment in thealcoholic beverages space viz. wines, your Companyhad, in 2006, acquired M/s. Bouvet Ladubay SA, Franceand in fiscal 2007 invested in a subsidiary M/s. FourSeasons Wines Limited. The latter company has set up astate-of-the-art winery near Baramati in Maharashtrawith a capacity to produce 1 mio cases per annum. Twobrands, Zinzi (Red & White) and Four Seasons (whichwill be progressively available in 6 varietals) are beingproduced at this winery.Increased awareness through exposure gained fromthe media as also from global travel coupled withincreased consumer spending has pushed up the salesat the premium end of the market. Through a wellbalancedportfolio, both domestic and international,your Company is poised to drive significant advantagesfrom sales of products from the Whyte & Mackay stableusing the Bottled In Origin (BIO) and Bottled In India (BII)routes.The hardening of prices owing to reduced worldwideavailability of matured malt of the required vintage hasboosted business prospects at Whyte & Mackay. TheCompany is also focusing its branded spirits activityon select geographies including travel retail as againstan earlier strategy that attempted a presence in everymarket.F. OUTLOOK:Nearly 70% of the Company’s sales are made toGovernment buying agencies who are reluctant togrant price increases whatever the provocation. AndhraPradesh, the largest Indian market for IMFL, continues todeny the industry even inflation-linked price increases.Notwithstanding this, the Company’s efforts to convincestates and these buying agencies to adapt a morepragmatic approach continue. While the lack of suchincreases affects the profitability of your Company,particularly at a time of rising input costs, your Companyconsistently endeavours to work around the problemthrough a mix of strategy, higher volume throughputand cost control measures.G. INTERNAL CONTROL SYSTEM:The company has a robust system of internal controlwhich has been incorporated in the enterprise-wise SAPsystem.Additional checks of the Company’s systems are carriedout by the independent auditors as also by the Company’sown Operations Review team and by the UB Group’sInternal Audit Department.H. INTERNATIONAL OPERATIONS:Subsequent to the acquisition of Whyte & Mackay,Glasgow in fiscal 2008 your Company has reinforced themanagement and reorganized the selling operations.Products from Whyte & Mackay, as mentioned earlier,are available in India on both BIO & BII basis.The expansion of the winery at Bouvet Ladubay to acapacity of over 8 million bottles, has been completedduring the fiscal year at a cost of 12 million Euros.The Company’s sales which were around 4.5 millionbottles during the fiscal year continue to grow in thetraditional markets as also in India where they havebeen introduced on a BIO basis. The technical expertiseof the French wine-maker has also been used in settingup the FSWL winery near Baramati. However, sales ofthe BIO wines in India have been marginally hamperedthrough the unreasonable inter-state policies of certainState Governments.I. HUMAN RESOURCES:The Company’s human capital is now in excess of 7,000employees, including factory workmen. There has beenno loss of production at any of the manufacturingfacilities due to industrial unrest. The HR Departmentis geared to lend its support to the effort to make theCompany a ‘employer of choice’ in the Indian marketplace.J. FORWARD LOOKING STATEMENTS:This Report contains forward-looking statementsthat involve risks and uncertainties. Your Companyundertakes no obligation to publicly update or revise anyforward-looking statements, whether as a result of newinformation, future events, or otherwise. Actual results,performances or achievements could differ materiallyfrom these expressed or implied in such forward-lookingstatements. Readers are cautioned not to place unduereliance on these forward-looking statements thatspeak only as of their dates. This Report should be readin conjunction with the financial statements includedherein and the notes theretoBangaloreJuly 29, 2009By Authority of the BoardDr. VIJAY MALLYAChairman23 21

Auditors' Report to the Members of United Spirits Limited1. We have audited the attached Balance Sheet ofUnited Spirits Limited, as at March 31, 2009, andthe related Profit and Loss Account and Cash FlowStatement for the year ended on that date annexedthereto, which we have signed under reference to thisreport. These financial statements are the responsibilityof the Company’s management. Our responsibility isto express an opinion on these financial statementsbased on our audit.2. We conducted our audit in accordance with theauditing standards generally accepted in India. ThoseStandards require that we plan and perform the auditto obtain reasonable assurance about whether thefinancial statements are free of material misstatement.An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financialstatements. An audit also includes assessing theaccounting principles used and significant estimatesmade by management, as well as evaluating the overallfinancial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.3. As required by the Companies (Auditor’s Report) Order,2003, as amended by the Companies (Auditor’s Report)(Amendment) Order, 2004 (together ‘the Order’), issuedby the Central Government of India in terms of subsection(4A) of Section 227 of ‘The Companies Act, 1956’of India (the ‘Act’) and on the basis of such checks of thebooks and records of the Company as we consideredappropriate and according to the information andexplanations given to us, we give in the Annexure astatement on the matters specified in paragraphs 4 and5 of the said Order.4. Further to our comments in the Annexure referred to inparagraph 3 above, we report that:4.1. We have obtained all the information andexplanations which, to the best of our knowledgeand belief, were necessary for the purpose of ouraudit;4.2. In our opinion, proper books of account asrequired by law have been kept by the Companyso far as appears from our examination of thosebooks;4.3. The Balance Sheet, Profit and Loss Account andCash Flow Statement dealt with by this report arein agreement with the books of account;4.4. In our opinion, the Balance Sheet, Profit and LossAccount and Cash Flow Statement dealt with bythis report comply with the accounting standardsreferred to in sub-section (3C) of section 211 of theAct;4.5. On the basis of written representations receivedfrom the directors, as on March 31, 2009, andtaken on record by the Board of Directors of theCompany, none of the directors is disqualifiedas on March 31, 2009 from being appointed as adirector in terms of clause (g) of sub-section (1) ofsection 274 of the Act;4.6. In our opinion and to the best of our informationand according to the explanations given to us,the said financial statements, together with thenotes thereon and attached thereto, give, in theprescribed manner, the information required by theAct and also give a true and fair view in conformitywith the accounting principles generally acceptedin India:i) in the case of the Balance Sheet, of the state ofaffairs of the Company as at March 31, 2009;ii) in the case of the Profit and Loss Account, ofthe profit for the year ended on that date;andiii) in the case of the Cash Flow Statement, of thecash flows for the year ended on that date.J. MajumdarPartnerMembership Number – F 51912For and on behalf ofPrice WaterhouseChartered AccountantsPlace: BangaloreDate : July 29, 200922

Annexure to the Auditors' Report[Referred to in paragraph 3 of the Auditors’ Report of even date to the members of United Spirits Limited on the financialstatements for the year ended March 31, 2009]1. (a) The Company is maintaining proper recordsshowing full particulars including quantitativedetails and situation of fixed assets.(b) The fixed assets are physically verified by themanagement according to a phased programmedesigned to cover all the items over a period ofthree years, which in our opinion is reasonablehaving regard to the size of the Company and thenature of its assets. Pursuant to the programme,a portion of the fixed assets has been physicallyverified by the management during the year and nomaterial discrepancies between the book recordsand the physical inventory have been noticed.(c) In our opinion and according to the informationand explanations given to us, a substantial partof fixed assets has not been disposed off by theCompany during the year.2. (a) The inventory (except those in transit at the yearendamounting to Rs.123.794 Million) has beenphysically verified by the management during theyear. In our opinion, the frequency of verification isreasonable.(b) In our opinion, the procedures of physical verificationof inventory followed by the management arereasonable and adequate in relation to the size ofthe Company and the nature of its business.(c) On the basis of our examination of inventory records,in our opinion, the Company is maintaining properrecords of inventory. The discrepancies noticed onphysical verification of inventory as compared tobook records were not material.3. (a) The Company has not granted any loans, securedor unsecured, to companies, firms or other partiescovered in the register maintained under Section301 of the Act and, accordingly, sub clauses (b), (c)and (d) of clause (iii) of Paragraph 4 of the Orderare not applicable.(b) The Company has not taken any loans, secured orunsecured, from companies, firms or other partiescovered in the register maintained under Section301 of the Act and accordingly, sub clauses (f) and(g) of clause (iii) of Paragraph 4 of the Order arenot applicable.4. In our opinion and according to the informationand explanations given to us, having regard to theexplanation that certain items purchased are of specialnature for which suitable alternative sources do notexist for obtaining comparative quotations, there isan adequate internal control system commensuratewith the size of the Company and the nature of itsbusiness for the purchase of inventory and fixed assets,and for the sale of goods and services. Further, on thebasis of our examination of the books and records ofthe Company, and according to the information andexplanations given to us, we have neither come acrossnor have been informed of any continuing failure tocorrect major weaknesses in the aforesaid internalcontrol system.5. (a) In our opinion and according to the informationand explanations given to us, the particulars ofcontracts or arrangements referred to in Section301 of the Act have been entered in the registerrequired to be maintained under that section.(b) In our opinion and according to the informationand explanations given to us, the transactions madein pursuance of such contracts or arrangementsand exceeding the value of Rupees Five Lakhs inrespect of any party during the year have beenmade at prices which are reasonable having regardto the prevailing market prices at the relevant timeexcept for sale of goods aggregating to Rs.649.482million and purchase of services aggregating toRs.94.938 million as there are no market pricescomparable to those sold/ purchased, which,however, are considered to be of special nature asexplained by the management of the Company.6. In our opinion and according to the information andexplanations given to us, the Company has compliedwith the provisions of Sections 58A and 58AA or anyother relevant provisions of the Act and the Companies(Acceptance of Deposits) Rules, 1975 with regard to thedeposits accepted from the public. According to theinformation and explanations given to us, no Order hasbeen passed by the Company Law Board or NationalCompany Law Tribunal or Reserve Bank of India or anyCourt or any other Tribunal on the Company in respectof the aforesaid deposits.7. In our opinion, the Company has an internal auditsystem commensurate with its size and nature of itsbusiness.23

Annexure to the Auditors' Report (Contd.)8. The Central Government of India has not prescribedthe maintenance of cost records under clause (d) ofsub-section (1) of Section 209 of the Act for any of theproducts of the Company.9. (a) According to the information and explanationsgiven to us and the records of the Companyexamined by us, in our opinion, the Company isgenerally regular in depositing the undisputedstatutory dues including provident fund, investoreducation and protection fund, employees’ stateinsurance, income-tax, wealth tax, service tax,customs duty, excise duty and cess, and othermaterial statutory dues, as may be applicable,with the appropriate authorities except dues withrespect to sales-tax. The extent of the arrears ofstatutory dues outstanding as at March 31, 2009for a period of more than 6 months from the datethey became payable in respect of sales – tax is asfollows :Name ofthestatuteMaharashtraValue AddedTax, 2002NatureofduesSalesTaxAmount(Rs. inMillion)Period towhich theamountrelates12.938 2005-06DuedateApril 1,2006Date ofPaymentNotyetpaid(b) According to the information and explanationsgiven to us and the records of the Companyexamined by us, the particulars of dues of incometax,sales-tax, wealth tax, service tax, customs duty,excise duty and cess as at March 31, 2009, whichhave not been deposited on account of a dispute,are given in Appendix-1.10. The Company has neither accumulated losses as atMarch 31, 2009 nor has it incurred any cash loss eitherduring the financial year ended on that date or in theimmediately preceding financial year.11. According to the records of the Company examinedby us and the information and explanations given tous, the Company has not defaulted in repayment ofdues to any financial institution or bank or debentureholders as at the balance sheet date.12. In our opinion, the Company has maintained adequatedocuments and records in the cases where theCompany has granted loans and advances on the basisof security by way of pledge of shares, debentures andother securities.13. The provisions of any special statute applicable to chitfund/ nidhi/ mutual benefit fund/ societies are notapplicable to the Company.14. In our opinion, the Company is not a dealer ortrader in shares, securities, debentures and otherinvestments.15. In our opinion and according to the information andexplanations given to us, the terms and conditions ofthe guarantees given by the Company, for loans takenby others from banks or financial institutions duringthe year, are not prejudicial to the interest of theCompany.16. In our opinion, and according to the information andexplanations given to us, on an overall basis, the termloans have been applied for the purposes for whichthey were obtained.17. On the basis of an overall examination of the balancesheet of the company, in our opinion and accordingto the information and explanations given to us, thereare no funds raised on a short-term basis which havebeen used for long-term investment.18. The Company has not made any preferential allotmentof shares to parties and companies covered in theregister maintained under Section 301 of the Actduring the year.19. The Company has not issued any debenture during theyear..20. The Company has not raised any money by public issuesduring the year.21. 21. During the course of our examination of the booksand records of the Company, carried out in accordancewith the generally accepted auditing practices in India,and according to the information and explanationsgiven to us, we have neither come across any instanceof fraud on or by the Company, noticed or reportedduring the year, nor have we been informed of suchcase by the management.Place : BangaloreDate : July 29, 2009J. MajumdarPartnerMembership Number – F 51912For and on behalf ofPrice WaterhouseChartered Accountants24

Annexure to the Auditors' Report[Referred to in paragraph 9(b) of the Annexure to the Auditors’ report of even date to the members of United SpiritsLimited on the financial statements for the year ended March 31, 2009].Name of the StatuteAmount*(Rs. Million)Forum where disputeis pendingThe Income-Tax Act, 1961 126.203 Commissioner of Income-Tax AppealsThe Wealth-Tax Act, 1957 -Central and Respective StateSales Tax ActsRespective State Excise Acts3.620 Assessing Officer 2003-04Year To Which The Amount Relates1993-94, 1994-95, 1999-00, 2000-01,2001-02, 2002-03 to 2005-06140.476 Income Tax Appelate Tribunal 2003-04, 2004-05, 2005-06Commissioner of Income Tax -Appeals199.471 Supreme Court 1996-0656.825 High Court88.749 Appellate Tribunal15.756 Joint Commissioner1992-93, 1994-95,1996-971982-83,1984-86,1992-93,1995-96,1996-97,1997-98,1997-00,1999-00, 2002-03, 2003-04,2006-071986-90,1985-86,1986-87,1987-88, 1988-89,1989-96,1990-91,1991-92, 1991-93, 1994-95,1995-96,1996-97, 1997-98, 1997-01,1998-99,1999-00, 2000-011984-85,1985-86,1987-88,1991-92, 1992-93,2000-01, 2006-07, 2007-088.848 Deputy Commissioner 1984-85,1992-93, 2002-030.291 Commissioner of Sales Tax 1999-00, 2000-011.995 Assistant Commissioner 1974-76, 1995-96,1996-97, 2002-03, 2008-097.183 Assessing Officer 1993-94,1995-96, 1997-98, 2003-04, 2004-050.892 Appellate and Revisional board 1993-94, 2004-05, 2005-06115.431 Additional Commissioner 2002-03, 2004-05, 2005-064.785 Supreme Court265.885 High Court17.464 Appellate Tribunal 1995-96193.185 Excise CommissionerThe Central Excise Act, 1944 6.000 Supreme Court* Net of amounts paid under protest or otherwise1971-72,1972-73,1973-74,1977-78, 1978-79,1979-80, 1980-81, 1981- 82, 1981-091963-64,1972-74,1983-84,1984-85, 1985-86,1986-87, 1988-91, 1990-91, 1991-92,1992-93,1993-94,1995-00, 1996-97,1997-98, 1998-99,1998-01, 1999-00, 2000-01,2001-09,2002-03,2003-04.1974-81,1980-81,1981-82,1982-83, 1983-84,1983-85,1984-85,1984-85, 1985-86, 1986-87,1985-87,1987-88, 1987-89, 1988-89,1989-90,1991-92, 1991-96, 1995-96,1993-94,1995-98,1993-96,1998-99,1999-00, 2001-02, 2002- 03,2004-05, 2005-06.1.593 Excise Superintendent 1986-87,1992-93,1992-99,1997-98, 2001-021.701 District Magistrate and Collector 1994-9512.170 Chinsurah Court, Hooghly 1981-848.311 Additional District Magistrate 1993-940.081 Collector 1994-9525.635 High Court 1989-97,1996-97, 2004-052.363 Commissioner of Central excise 1995-96, 2003-04- Assistant Commissioner 1995-9625

Balance Sheet as at March 31, 2009SOurces Of FunDsRs. MillionSchedule 2009 2008Shareholders' FundsShare Capital 1 1,001.633 1,001.633Share Capital Suspense 1A 77.491 -Reserves and Surplus 2 29,708.037 19,091.596Loan FundsSecured Loans 3 13,064.790 11,067.394Unsecured Loans 4 6,163.730 553.385Foreign Currency Monetary Items Translation Difference 311.347 -[Schedule 18 Note 12(d)]50,327.028 31,714.008ApplicatiOn Of FunDsFixed Assets 5Gross Block 7,876.187 6,530.725Less: Depreciation 1,949.852 1,602.381Net Block 5,926.335 4,928.344Capital Work in Progress 282.632 361.2236,208.967 5,289.567Investments 6 20,514.765 6,571.557Deferred Tax Asset (Net) [Schedule 18 Note 17(b)] 216.403 5.162Current Assets, Loans and AdvancesInventories 7 6,539.691 3,843.829Sundry Debtors 8 6,650.397 4,134.998Cash and Bank Balances 9 848.628 280.013Other Current Assets 10 2,103.003 1,187.662Loans and Advances 11 16,709.818 18,158.07132,851.537 27,604.573Less: Current Liabilities and Provisions 12Liabilities 8,781.513 7,298.083Provisions 683.131 458.7689,464.644 7,756.851Net Current Assets 23,386.893 19,847.722Statement on Significant Accounting Policies 17Notes on Accounts 1850,327.028 31,714.008The Schedules referred to above and the notes thereon form an integral part of the Accounts.This is the Balance Sheet referredto in our report of even dateJ. MAJUMDAR M.R.DORAISWAMY IYENGAR V.K.REKHIPartner Director Managing DirectorFor and on behalf ofPrice Waterhouse V.S.VENKATARAMAN P.A.MURALIChartered Accountants Company Secretary Chief Financial OfficerBangaloreBangaloreJuly 29, 2009 July 29, 200926

Profit and Loss Account for the year ended March 31, 2009Rs. MillionIncOmeSchedule 2009 2008Sales (Gross) 71,130.831 51,784.918Less: Excise Duty 33,654.208 23,343.10337,476.623 28,441.815Income arising from Sale by Manufacturers under 'Tie-up'agreements (Tie-up units) 2,958.308 2,916.525Income from Brand Franchise 460.493 372.903Other Income 13 543.446 369.138Exchange Gain 90.901 117.87941,529.771 32,218.260EXpenDitureMaterials 14 23,118.263 15,843.843Manufacturing and Other Expenses 15 11,500.545 9,913.530Interest and Finance charges (Net) 16 1,957.794 1,285.11336,576.602 27,042.486Profit before Depreciation and Taxation 4,953.169 5,175.774Depreciation 361.565 326.112Profit before Taxation 4,591.604 4,849.662Provision for Taxation:Current Tax 1,760.925 1,710.000Deferred Tax (Credit) (186.008) (13.097)Fringe Benefit Tax 50.063 40.000Profit after Taxation 2,966.624 3,112.759Profit brought forward from previous year 7,018.342 4,411.221Profit transferred on Amalgamation [Schedule 18 Note 2(D)] 103.983 -10,088.949 7,523.980Appropriations:Proposed DividendPreference Shares - 1.930Equity Shares 215.825 150.331Corporate Tax on Proposed Dividend 36.679 25.877Transfer to Capital Redemption Reserve - 77.500Transfer to General Reserve 350.000 250.000Profit carried to Balance Sheet 9,486.445 7,018.342Basic Earnings Per Share (Face Value of Rs.10 each) 27.49 31.84Diluted Earnings Per Share (Face Value of Rs.10 each) 27.49 31.40Statement on Significant Accounting Policies 17Notes on Accounts 18The Schedules referred to above and the notes thereon form an integral part of the Accounts.This is the Profit and Loss Account referredto in our report of even dateJ. MAJUMDAR M.R. DORAISWAMY IYENGAR V.K. REKHIPartner Director Managing DirectorFor and on behalf ofPrice Waterhouse V.S.VENKATARAMAN P.A. MURALIChartered Accountants Company Secretary Chief Financial OfficerBangaloreBangaloreJuly 29, 2009 July 29, 200927

Cash Flow Statement for the year ended March 31, 2009Rs. Million2009 2008A. CASH FLOW FROM OPERATING ACTIVITIESProfit before Taxation 4,591.604 4,849.662Adjustments for:Depreciation 361.565 326.112Unrealised Foreign Exchange Loss / (Gain) (168.432) (126.572)Bad Debts/ Advances written off 6.005 94.538Loss/(Gain) on Fixed Assets Sold/Written Off (Net) (44.955) 20.354Loss/(Gain) on Sale of Investments (Net) (3.355) -Liabilities no longer required written back (136.599) (97.745)Provision for Doubtful Debts/ Advances/ Deposits 210.345 171.171Provision for diminution in value of Investments (Net) 0.030 0.051Provision - Others 96.372 74.961Interest Expense and Finance Charges 2,008.538 1,339.205Income from investments (42.017) (61.705)Interest Income (50.744) 2,236.753 (54.092) 1,686.278Operating profit before working capital changes 6,828.357 6,535.940(Increase)/decrease in Trade and other receivables (5,417.056) (1,168.960)(Increase)/decrease in Inventories (2,578.433) (907.333)Increase/(decrease) in Trade payables 1,915.761 (6,079.728) 2,010.196 (66.097)Cash generated from operations 748.629 6,469.843Direct taxes paid (2,047.839) (2,099.154)Fringe Benefit taxes paid (43.569) (39.950)Cash generated / (used in) from operations (1,342.779) 4,330.739B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of fixed assets (106.662) (982.991)Sale of fixed assets 62.875 15.883Finance Lease Payments (17.259) (15.159)Purchase of long term investments - (5.884)Purchase of current Investments (50.000) (1,256.094)Disposal of investment in Associate 10.700 -Sale of long term investments 38.162 1.539Sale of current investments 45.000 1,256.094Investments in Subsidiaries (26.635) (18.506)Reduction in investment cost - 87.000Loan given to Subsidiaries (2,694.980) (7,271.191)Realisation of Loan from Subsidiaries 133.895 417.254Interest received 34.713 93.482Dividend received 55.386 50.566Net cash used in investing activities (2,514.805) (7,628.007)28

Cash Flow Statement for the year ended March 31, 2009 (Contd.)Rs. Million2009 2008C. CASH FLOW FROM FINANCING ACTIVITIESRedemption of Preference Shares - (77.500)Proceeds/(Repayment) of long term loans:Proceeds 3,686.681 291.402Repayment (2,619.985) (489.661)Proceeds/(Repayment) of fixed deposits 95.169 (117.669)Proceeds/(Repayment) of short term loans 2,150.000 (100.000)Working Capital Loan / Cash Credit from Banks (net) 2,347.704 1,868.588Interest and Finance Charges paid[including on Finance lease Rs 2.981 Million(2008: Rs 3.003 Million)] (1,641.688) (1,324.793)Dividends paid (208.446) (190.831)Corporate Tax on distributed profit (25.862) (18.005)Notes:Net cash used in financing activities 3,783.573 (158.469)Net (Decrease)/ Increase in cash and cash equivalents (74.011) (3,455.737)Cash and cash equivalents as at March 31, 2008 280.013 3,735.750Cash and Cash equivalents of Transferor Companies as at642.626 -April 1, 2008Cash and cash equivalents as at March 31, 2009 848.628 280.013(74.011) (3,455.737)1. The above Cash Flow Statement has been compiled from and is based on the Balance Sheet as at March 31, 2009 andthe related Profit and Loss Account for the year ended on that date.2. The above cash flow statement has been prepared under the indirect method as set out in the Accounting Standard- 3 on Cash Flow Statements as notified under Section 211(3C) of the Companies Act, 1956 and reallocation requiredfor this purpose are as made by the Company.3. In view of the amalgamation described in Note 2 on Schedule 18, the figures of the current year are not comparablewith those of previous year.4. Previous year's figures have been regrouped wherever necessary in order to conform to this year's presentation.This is the Cash Flow Statementreferred to in our report of even dateJ. MAJUMDAR M.R. DORAISWAMY IYENGAR V.K. REKHIPartner Director Managing DirectorFor and on behalf ofPrice Waterhouse V.S.VENKATARAMAN P.A. MURALIChartered Accountants Company Secretary Chief Financial OfficerBangaloreBangaloreJuly 29, 2009 July 29, 200929

Schedules forming part of Balance Sheet as at March 31, 20091. Share CapitalAuthorisedRs. Million2009 2008245,000,000 (2008: 110,000,000) Equity Shares of Rs.10/- each 2,450.000 1,100.00084,200,000 (2008: 10,000,000) Preference Shares of Rs.10/- each[Schedule 18 Note 2(A) (IV)]Notes :Issued, Subscribed and Paid-up842.000 100.0003,292.000 1,200.000100,163,256 (2008: 100,163,256) Equity Shares of Rs.10/- each fully paid up 1,001.633 1,001.633Of the above,1. 51,719,968 (2008: 51,719,968) Equity Shares were allotted as fully paid upon July 9, 2001 to the shareholders of the erstwhile McDowell & CompanyLimited, pursuant to a scheme of Amalgamation for consideration otherthan cash1,001.633 1,001.6332. 34,010,521 (2008: 34,010,521) Equity Shares were alloted as fully paid onNovember 6, 2006 to Equity Shareholders of erstwhile Herbertsons Limited,Triumph Distillers & Vintners Private Limited, Baramati Grape IndustriesLimited, United Distillers India Limited and Shaw Wallace DistilleriesLimited pursuant to a Scheme of Amalgamation for consideration otherthan cash.3. 8,751,381 (2008: 8,751,381) Equity shares of Rs.10/- each fully paid uprepresent 17,502,762 (2008: 17,502,762) Global Depository Shares issuedby the Company on March 29, 2006.4. 5,681,326 (2008: 5,681,326) Equity shares of Rs.10/- each fully paid up werealloted consequent to conversion of 100,000, 2% Convertible Bonds inForeign Currency during 2008.1A Share Capital SuspenseEquity Share Suspense7,749,121 (2008: Nil) Equity Shares of Rs.10/- each to be issued as fully paidup to the equity shareholders of Transferor Companies pursuant to theScheme of Amalgamation for consideration other than cash [Schedule 18Note 2(A)(I)] 77.491 -77.491 -30

Schedules forming part of Balance Sheet as at March 31, 2009 (Contd.)Rs. Million2009 20082. Reserves anD SurplusCentral SubsidyAs per last Balance Sheet 1.500 1.500Capital Redemption ReserveAs per last Balance Sheet 541.946 464.446Add: Transferred from Profit and Loss Account - 77.500Add: Adjustment on Amalgamation[Schedule 18 Note 2(D)] 37.000 -578.946 541.946Securities Premium AccountAs per last Balance Sheet 9,893.917 5,457.811Addition during the year:(a) Conversion of 100,000, 2% Convertible Bonds in- 4,386.163Foreign Currency(b) Premium payable on redemption of 2% Convertible- 49.943Bonds in Foreign Currency reversed during the year9,893.917 9,893.917Foreign Currency Translation Reserve[Schedule 18 Note 5(d)]As per last Balance Sheet (821.948) (144.912)Addition during the year (357.000) (677.036)Transfer to General Reserve on Amalgamation[Schedule 18 Note 2(B)(II)(d)] 144.912 -Reversed during the year due to Amalgamation[Schedule 18 Note 2(B)(II)(d)] 570.131 -(463.905) (821.948)Contingency ReserveAs per last Balance Sheet 110.000 110.000General ReserveAs per last Balance sheet 2,347.839 2,097.839Add:Addition during the year:(a) Reserve arising on amalgamation[Schedule 18 Note 2(A)(V)(d) and 2(B)(II)(c)] 7,849.035 -(b) Transfer from Foreign Currency Translation Reserveon amalgamation [Schedule 18 Note 2(B)(II)(d)] (144.912) -(c) Adjustment on Amalgamation[Schedule 18 Note 2(D)] 20.000 -(d) Transfer from Profit and Loss Account 350.000 250.00010,421.962 2,347.839Less:(a) Expenses relating to Amalgamation[Schedule 18 Note 2(C)] (146.879) -(b) Diminution in value of certain fixed assets of theCompany [Schedule 18 Note 2(A)(V)(e)] (80.704) -(c) Adjustment on adoption of notification underCompanies (Accounting Standards) Rules, 2009 relatingto AS11 - "The Effects of Changes in Foreign ExchangeRates" [Schedule 18 Note 12(d)] (93.245) -10,101.134 2,347.839Surplus in Profit and Loss account 9,486.445 7,018.34229,708.037 19,091.59631

Schedules forming part of Balance Sheet as at March 31, 2009 (Contd.)3. SecureD LOansTerm LoansRs. Million2009 2008From Banks [Note (i)] 5,327.059 5,929.343[Repayable within one year: Rs.1,296.805 Million (2008:Rs.1,349.236 Million)]Working Capital Loan / Cash Credit from Banks [Notes (ii) and (iii)] 7,711.007 5,096.500Finance Lease [Note (iv)] 26.724 41.551Notes:(i)(ii)Out of the above loans:(a)(b)(c)(d)(e)Secured by charge on certain fixed assets of theCompany including Land and Building.Secured by charge on fixed assets of the Companyincluding Land and Buildings, pledge of certain sharesheld by the Company and also by pledge of certaininvestments of other companies.Secured by a second charge on certain fixed assetsof the Company including Land and Building.Foreign Currency External Commercial Borrowingssecured by charge on certain fixed assets of theCompany including Land and Building, a Trademarkand a fixed deposit with bank (charge createdsubsequent to the year end).Secured by hypothecation of specific fixed assetsacquired under respective agreements.Secured by hypothecation of inventories (except thoseheld outside India), book debts and other current assets.13,064.790 11,067.3941,426.205 488.2222,062.499 3,907.29462.500 125.0001,775.550 1,404.2000.305 4.627(iii) Includes Foreign Currency Non-Resident [FCNR(B)] Loans. - 893.069(iv) Secured against assets acquired under lease agreements.4. UnsecureD LOansFixed Deposits 631.505 553.385[Repayable within one year Rs. 148.294 Million(2008 : Rs.367.072 Million)]Long term loan from a bank (Note below) 750.000 -[Repayable within one year Rs Nil (2008: Rs.Nil )]Short term loan from banks 2,150.000 -[Repayable within one year Rs 2,150 Million (2008: Rs.Nil )]From Subsidiary Company 2,556.633 -[Repayable within one year Rs. Nil (2008: Rs.Nil )]From Others 35.000 -Interest accrued and due [Schedule 18 Note 9] 40.592 -Note: Out of the above loans, Rs 750 Million is guaranteed by a director of the Company.6,163.730 553.38532

Schedules forming parat of Balance Sheet as at March 31, 2009 (Contd.)5. FiXeD AssetsRs. MillionGROSS BLOCK DEPRECIATION NET BLOCK2008on Amalgamation(Notes 4and 5)Additions2009 2008Deletion/AdjustmentsAmalgamation(Note 4)For theyearDeletion/Adjustments2009 2009 2008Tangible:Land (Note 1 below):Freehold 1,592.059 845.460 5.870 (93.506) 2,536.895 - - - - - 2,536.895 1,592.059Leasehold 213.027 - - 100.766 112.261 - - - - - 112.261 213.027Buildings(Notes 2 and 3 below)1,342.301 138.718 14.472 1.176 1,494.315 260.121 11.099 47.824 0.318 318.726 1,175.589 1,082.180Plant & Machinery 2,856.364 (3.942) 139.037 16.757 2,974.702 1,067.016 11.495 218.383 10.211 1,286.683 1,688.019 1,789.348Furniture & Fixture andOffice Equipments:Finance Lease 46.892 - - - 46.892 17.615 - 14.515 - 32.130 14.762 29.277Others 293.761 2.260 30.883 10.866 316.038 114.117 0.310 28.531 9.895 133.063 182.975 179.644Vehicles :Finance Lease 18.798 - 2.432 - 21.230 2.274 - 3.316 - 5.590 15.640 16.524Others 167.523 15.814 3.066 34.055 152.348 141.238 6.325 19.066 31.770 134.859 17.489 26.285Aircraft - 180.562 - - 180.562 - 5.461 25.836 - 31.297 149.265 -Intangible:Trademark, Formulaeand License- 40.944 - - 40.944 - 3.410 4.094 - 7.504 33.440 -6,530.725 1,219.816 195.760 70.114 7,876.187 1,602.381 38.100 361.565 52.194 1,949.852 5,926.335 4,928.3442008 5,862.048 - 755.867 87.190 6,530.725 1,323.350 - 326.112 47.081 1,602.381Capital Work-in-Progress (including Advances) 282.632 361.2236,208.967 5,289.567Notes:1. The Company is in the process of registering certain freehold and leasehold land in its own name. Deletions/ adjustments include Rs.100.766 Million reclassified from lease hold landto freehold land.2. Cost of buildings includes the following payments made for the purpose of acquiring the right of occupation of Mumbai godown space:i) 660 equity shares (unquoted) of Rs.100 each fully paid in Shree Madhu Industrial Estate Limited Rs.0.066 Million (2008: Rs.0.066 Million) Application has been made for duplicateshare certificates and the same is in the process.ii) 199, 6 % Debentures (unquoted) of Rs.1,000 each fully paid in Shree Madhu Industrial Estate Limited Rs. 0.199 Million (2008: Rs.0.199 Million). Application has been made forduplicate debentures certificates and the same is in the process.iii) Deposit with Shree Madhu Industrial Estate Limited Rs. 0.132 Million (2008: Rs. 0.132 Million)3. Include value of fully paid shares Rs. 0.006 Million (2008: Rs 0.003 Million) held in Co-operative Housing Societies.4. Addition on amalgamation and includes additions/deletions of the Transferor companies during the year ended March 31, 2008.5. Net of diminution in value of certain assets of the Company amounting to Rs 80.704 Million as per a Scheme of Amalgamation [Schedule 18 Note 2(A)(V)(e)].33

Schedules forming part of Balance Sheet as at March 31, 2009 (Contd.)Rs. Million6. InvestmentsParticularsFace Value(Rs)Nos. 2009 Nos. 2008CURRENTUnquoted InvestmentsUnits (Fully Paid)SBI SHF Liquid Plus 10 1,405,232 14.059 782,761 7.832HSBC Mutual Fund 10 148,341 1.491 139,249 1.394ICICI Prudential Liquid Fund 10 583,580 5.836 545,695 5.457Total Current Investments 21.386 14.683LONG TERMQuoted InvestmentsA. TradeFully Paid Equity SharesMangalore Chemicals & Fertilizers Limited (Note 2) 10 6,150 0.032 6,150 0.032McDowell Holdings Limited 10 50,000 0.500 50,000 0.500In Subsidiary CompanyShaw Wallace & Company Limited 10 - - 15,072,311 4,801.8770.532 4,802.409B. Non-TradeFully Paid Equity SharesHousing Development Finance Corporation Limited 10 240 0.002 - -ICICI Bank Limited 10 8,916 0.382 - -HDFC Bank Limited 10 200 0.002 - -Vijaya Bank (Note 2) 10 42,100 0.466 42,100 0.466Premier Fertilizers Limited 100 - - 300 0.001Radico Khaitan Limited 2 537,850 2.043 537,850 2.043Khaitan Chemicals & Fertilizers Limited 10 13,880 0.725 13,880 0.725Rampur Fertilizers Limited (Note 3) 10 27,760 0.527 27,760 0.527IndusInd Bank Limited 10 - - 10,400 0.468Indo Lowenbraw Breweries Limited 10 - - 18 -Hero Honda Motors Limited 2 - - 175 0.035Rampur Engineering Company Limited 10 - - 1,001 0.010Shree Synthetics Limited (Rs.350) 10 - - 35 0.000Gammon India Limited (Note 2) 10 - - 1,000 -Ashok Leyland Limited (Rs. 117) 1 - - 10 0.000Crompton Greaves Limited 2 - - 280 0.005Daewoo Motors Limited 10 - - 50 0.001Exide Industries Limited (Rs.132) 1 - - 20 0.000Areva TND (India) Limited (Rs.387) 10 - - 6 0.000Harrisons Malayalam Limited 10 - - 20 0.002Hindustan Motors Limited (Rs.51) 10 - - 2 -Indian Rayon and Industries Limited 10 - - 10 0.003MRF Limited 10 - - 5 0.004Nirlon Limited (Rs.254) 10 - - 12 -Rallis India Limited 10 - - 28 0.003Siemens (India) Limited 2 - - 150 0.008Units (Fully Paid)Unit Trust of India (Note 1)- 6.75% Tax Free US 64 Bonds 100 - - 312,246 31.224- UTI Balance Fund -Income - Retail(formerly known as US 2002)10 328,547 3.838 328,547 3.8387.985 39.363Total Quoted Investments (A+B) 8.517 4,841.77234

Schedules forming part of Balance Sheet as at March 31, 2009 (Contd.)6. Investments (Contd.)ParticularsUnquoted InvestmentsC. TradeFully paid Equity SharesFace Value(Rs)Rs. MillionNos. 2009 Nos. 2008Yankay Associates Private Limited 100 1 0.004 - -Goa Fruit Distilleries Private Limited 100 350 0.035 350 0.035North West Distilleries Private Limited 10 - - 1,000 0.010Phipson and Company (Pakistan) Limited (Re.1) 100 - - 3,942 0.000Utkal Distilleries Limited 100 - - 10,700 7.448Baramati Teluka Fruits Growers Fed Limited 100 5,000 0.500 5,000 0.500Shaw Scott Distilleries Private Limited 100 - - 1 0.001In Subsidiary CompaniesShaw Wallace Breweries Limited 10 78,512,509 3,240.191 - -Asian Opportunities & Investments Limited US$1 4,998,706 301.000 4,998,706 301.000United Spirits Nepal Limited NRS 100 67,716 65.626 67,716 65.626Primo Distributors Private Limited 10 - - 3,920,010 1,030.000Zelinka Limited CYP 1 - - 1,000 0.101Palmer Investment Group Limited US$ 1 15,000,000 6,917.801 - -Montrose International S.A US$ 1000 500 133.932 - -Liquidity Inc. US$0.0001 4,000,000 119.313 - -Four Seasons Wines Limited 10 50,000 0.500 50,000 0.500McDowell Scotland Limited £ 1 1,575,000 125.505 1,575,000 125.505Daffodils Flavours & Fragrances Private Limited 10 10,000 0.100 10,000 0.100United Vintners Limited 10 50,000 0.500 50,000 0.500USL Holdings Limited US$ 1 500,000 22.183 500,000 22.183McDowell Beverages Limited 10 50,000 0.500 50,000 0.500United Alcobev Limited 10 50,000 0.500 50,000 0.500Herbertsons Limited 10 60,000 0.600 60,000 0.600United Spirits (Shanghai) Trading Company Limited RMB 10 500,000 26.635 - -McDowell & Company Limited 10 50,000 0.500 50,000 0.500Jasmine Flavours & Fragrances Private Limited 10 10,000 0.100 10,000 0.100Royal Challengers Sports Private Limited 10 10,000 0.100 10,000 0.100Fully paid Preference Shares11% Redeemable Preference Shares ofGanges Soap Works Private Limited9.3% Cumulative Redeemable Preference Shares of100 - - 2,000 -Rampur Engineering Company Limited 10 - - 25,000 0.250In Subsidiary Company7% Non Cumulative redeemable preference shares ofShaw Wallace Breweries limited 100 1,197,000 119.700 - -11,075.825 1,556.05935

Schedules forming part of Balance Sheet as at March 31, 2009 (Contd.)6. Investments (Contd.)Rs. MillionParticularsFace Value(Rs)Nos. 2009 Nos. 2008D. Non-TradeIn Government SecuritiesIndira Vikas Patra 0.003 0.003National Savings/Plan/Def. Certificates 0.193 6.486(Deposited with Govt.Authorities)In Fully Paid DebenturesNon-Redeemable6.5% Bengal Chamber of Commerce & Industry 0.002 0.0025% Woodland Hospital & Medical Centre Limited 0.007 0.0070.5% Woodlands Medical Centre Limited 100 117 0.012 - -5.0% Woodlands Medical Centre Limited 100 270 0.027 - -Fully paid Equity SharesMadhav Co-operative Housing Society Limited (Rs.250) 50 5 0.000 5 0.000Sangam Bhavan Cooperative Housing Society Limited 50 10 0.001 10 0.001U.B. Electronics Instruments Limited 100 1,996 0.129 1,996 0.129Stridewell Leather India Private Limited (Rs. 20) 10 - - 2 0.000Ashoka Securities Private Limited 10 - - 25 0.003McDowell & HRB Emp. Co-op Society Limited 200 - - 10 0.002Koel Manufacturing and Investment (P) Limited 10 - - 1 0.002Maltings Limited 10 - - 695 -Central Investment (P) Limited 10 - - 305 -Consolidated Breweries Limited. 10 - - 750 -Goa Urban Co-Operative Bank Limited 50 - - 199 0.010Mapusa Urban Co-Operative Bank Limited (Rs.130) 25 - - 5 0.000Baramati Sahakari Bank Limited 100 - - 9 0.000Thane Janta Sahakari Bank Limited 50 - - 10 0.001Rupee Co- op Bank Limited 25 - - 40 0.0010.374 6.647E. OthersInterest as Sole Beneficiary in USL Benefit Trust[Refer Schedule 18 Note 6(b)] 9,409,542 153.536Total Unquoted Investments (C+D+E) 20,485.741 1,716.242Total Long Term Investments (A+B+C+D+E) 20,494.258 6,558.014Total Current and Long Term Investments 20,515.644 6,572.697Less: Provision for diminution in the value of investments (Note 5) 0.879 1.140Total 20,514.765 6,571.557Aggregate value of Quoted Investments:- Book value 7.638 4,840.632- Market value 47.361 4,824.355Aggregate Book value of Unquoted Investments 20,507.127 1,730.925Notes:1. Investments in units of Unit Trust of India amounting to Rs 3.175 Million (2008 : Rs 34.400 Million) represent those made under Rule 3Aof the Companies (Acceptance of Deposit) Rules, 1975.2. An application has been made for duplicate certificate.3. Market Quotations are not available.4. Also Refer Schedule 18 Note 6.5. Investments written off during the year Rs 0.291 Million (2008: Rs Nil) and adjusted to provision for diminution in the value of investments.36

Schedules forming part of Balance Sheet as at March 31, 2009 (Contd.)Rs. Million2009 20087. InventOriesRaw Materials including materials in transit 964.531 607.711Packing Materials, Stores and Spares 897.769 611.236Finished goods including goods in transit 2,052.475 1,526.985Work-in-Progress [including held outside India 2,624.916 1,097.897Rs 955.030 Million (2008: Rs Nil)]6,539.691 3,843.8298. SunDry DebtOrs(Unsecured)Exceeding six monthsConsidered Good 14.434 28.448Considered Doubtful 66.947 63.91181.381 92.359Others: Considered Good 6,635.963 4,106.5506,717.344 4,198.909Less: Provision for Doubtful Debts 66.947 63.9116,650.397 4,134.9989. Cash anD Bank BalancesCash on Hand 4.475 5.176Remittances-in-Transit/ Cheques on Hand 73.624 23.907Balances with Scheduled Banks:On Current Accounts [Note (i)] 304.061 198.069On Unpaid Dividend Account 17.878 19.730On Deposit Account [Notes (ii) and (iii)] 448.590 33.131848.628 280.013Notes:(i) includes Rs.32.097 Million (2008: Rs.25.385 Million) in Exchange EarnersForeign Currency (EEFC) Account and Rs.8.703 Million (2008: Rs.1.155Million) in Foreign Currency.(ii) a) includes Rs.0.587 Million (2008: Rs.8.403 Million) pledged withGovernment Departments..b) includes Rs.1.300 Million (2008: Rs. 2.673 Million) as margin.(iii) includes Rs 133.926 Million (2008: Rs Nil) pledged as security against loanfrom a bank.10. Other Current Assets(Unsecured, considered good except where otherwise stated)Income accrued on Investments and Deposits 18.111 2.080Other Deposits - Considered Good 2,080.019 1,180.964- Considered Doubtful 9.940 6.809Fixed assets held for sale 4.873 4.6182,112.943 1,194.471Less: Provision for Doubtful Deposits 9.940 6.8092,103.003 1,187.66237

Schedules forming part of Balance Sheet as at March 31, 2009 (Contd.)Rs. Million2009 200811. LOans anD ADvances(Unsecured, considered good except where otherwise stated)Loans and Advances to Subsidiaries 11,093.202 15,068.198Advances recoverable in cash or in kind or for value to be received:Advances to Tie-up units - Considered Good 2,449.150 855.340- Considered Doubtful 20.314 21.519Advance Income Tax (Net of Provisions) 424.718 440.513Taxes and Duties Paid in Advance 917.938 1,002.739Other Advances - Considered Good 1,824.810 791.281- Considered Doubtful 500.947 295.56417,231.079 18,475.154Less: Provision for Doubtful Advances 521.261 317.08316,709.818 18,158.07112. Current Liabilities anD PrOvisiOnsA. LiabilitiesAcceptances * 1,126.924 698.359Sundry CreditorsMicro and Small Enterprises [Schedule 18 Note 7] 34.443 10.242Others 5,785.664 4,366.329Dues to Subsidiaries 309.838 1,234.395Dues to Directors 49.169 51.486Investor Education and Protection Fund [Schedule 18 Note 8]Unclaimed Debentures 0.001 0.001Unclaimed Dividends 19.588 19.694Unclaimed Fixed Deposits 28.074 11.025Security Deposit ** 128.109 125.551Advances Received from Customers 220.326 184.078Interest accrued but not due 514.062 86.656Other Liabilities 565.315 510.2678,781.513 7,298.083* Includes bills drawn against inland letters of credit of Rs.876.924Million (2008: Rs.215.149 Million)and secured by a charge on debtors,inventories and other current assets.** Includes due to a subsidiary Rs Nil (2008: Rs.11 Million)B. ProvisionsProposed DividendPreference Shares - 1.930Equity Shares 215.825 150.245Corporate Tax on Proposed Dividend 36.694 25.877Fringe Benefit Tax (Net of Payments) 8.527 0.591Employee Benefits 422.085 280.125683.131 458.76838

Schedules forming part of Profit & Loss Account as at March 31, 2009Rs. Million2009 200813. Other IncOmeIncome from Investments:Dividend income from Subsidiary (Gross) 40.107 41.654[Tax deducted at source Rs.2.645 Million (2008 : Rs.1.905 Million)]Dividend income from other investments (Gross) 1.910 20.051Profit on Sale of Fixed Assets (Net) 44.965 -Profit on Sale of Investments 3.355 -Liabilities no longer required written back 136.599 97.745Provision for diminution in value of investment written back 0.291 -Bad debts / Advances recovered 0.072 3.172Scrap Sales 157.577 114.996Insurance Claims 2.814 2.657Miscellaneous 155.756 88.863543.446 369.13814. MaterialsRaw Materials Consumed 10,207.958 5,424.371Purchase of Finished Goods 5,186.702 4,072.316Packing Materials Consumed 9,477.688 6,562.563Movement in StocksOpening Stock:Work-in-Progress 1,097.897 1,055.278Finished Goods 1,526.985 996.6382,624.882 2,051.916Add : Stocks of the Transferor Companies as on April 1, 2008[Schedule 18 Note 2(D)]Work-in-Progress 3.696 -Finished Goods 56.647 -60.343 -Closing Stock:Work-in-Progress 2,624.916 1,097.897Finished Goods 2,052.475 1,526.9854,677.391 2,624.882(Increase)/ Decrease in Stocks (1,992.166) (572.966)Excise Duty on Opening/Closing Stock of Finished Goods (net) 238.081 357.55923,118.263 15,843.84339

Schedules forming part of Profit & Loss Account as at March 31, 2009 (Contd.)Rs. Million2009 200815. Manufacturing anD Other EXpensesEmployee Cost:Salaries, Wages and Bonus 2,183.409 1,921.848Contribution to Provident and Other Funds 272.379 236.884Workmen and Staff Welfare 136.527 116.830Voluntary Retirement Scheme Compensation - 4.053Power and Fuel 196.797 160.397Stores and Spares Consumed 47.940 41.572Repairs and Maintenance:Buildings 49.390 56.459Plant and Machinery 70.646 54.031Others 53.392 54.685Rent 322.595 138.440Rates and Taxes 311.443 236.126Insurance 38.316 32.784Travelling and Conveyance 460.965 401.404Legal and Professional 459.907 284.423Freight Outwards 836.505 605.481Advertisement and Sales Promotion 3,467.676 3,030.129Commission on Sales 311.980 267.257Royalty/ Brand Fee/ Trade Mark Licence Fees 60.032 358.652Cash Discount 362.937 195.655Sales Tax 192.964 142.686Fixed Assets Written Off 0.010 16.949Loss on Sale of Fixed Assets (Net) - 3.405Directors' Remuneration:Sitting Fee 1.180 1.070Commission [Schedule 18 Note 19] 48.727 51.044Bad Debts and Advances Written Off 6.005 94.538Investments Written Off 0.291 -Provision for Doubtful Debts/ Advances/ Deposits 210.345 171.171Provision for Diminution in Value of Investments 0.030 0.051Research and Development 30.033 27.681Others:Personnel and Administration 265.733 233.730Selling and Distribution 828.115 785.498Miscellaneous 274.276 188.59711,500.545 9,913.53016. Interest anD Finance ChargesInterest on:Fixed Loans 822.464 769.797Other Loans 925.627 488.420Finance Charges (Including Bill Discounting) 260.447 80.9882,008.538 1,339.205Less: Interest Income:On Investments 1.054 2.142On Deposits and Other Accounts (Gross) 45.305 50.270[Tax Deducted at Source Rs. 3.825 Million (2008: Rs.7.982 Million)]On Income Tax Refunds 4.385 1.6801,957.794 1,285.11340

Schedules forming part of account for the year ended March 31, 200917. STATEMENT ON SIGNIFICANT ACCOUNTING POLICIES1. Basis of preparation of Financial StatementsThe Financial Statements of the Company are prepared under historical cost convention, except as otherwisestated, in accordance with the Generally Accepted Accounting Principles (GAAP) in India, the Accounting Standardsas specified in the Companies (Accounting Standard) Rules 2006, and the relevant provisions of the CompaniesAct, 1956.2. Fixed Assets(a) Fixed assets are stated at their original cost of acquisition and subsequent improvements thereto includingtaxes, duties, freight and other incidental expenses related to acquisition and installation of the assetsconcerned, except amounts adjusted on revaluation and amalgamation. Interest on borrowings attributableto qualifying assets are capitalised and included in the cost of fixed assets as appropriate.(b) The costs of Fixed Assets acquired in amalgamations are determined at their fair values, on the date ofacquisition or nearer thereto, or as approved under the schemes of amalgamation.(c) Assets held for disposal are stated at their net book value or estimated net realisable value, whichever islower.(d) Intangible assets are stated at the consideration paid for acquisition less accumulated amortisation.3. LeasesAssets acquired under Leases, where the Company has substantially all the risks and rewards of ownership, areclassified as finance leases. Such leases are capitalised at the inception of the lease at lower of the fair value orthe present value of the minimum lease payments and a liability is created for an equivalent amount. Each leaserental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate ofinterest on the outstanding liability for each period.Assets acquired as leases, where a significant portion of the risk and rewards of ownership are retained by thelessor, are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrualbasis.4. Depreciation and Amortisationa) Depreciation is provided on the Straight Line Method, including on assets revalued, at rates prescribedin Schedule XIV to the Companies Act, 1956 except for the following, which are based on management’sestimate of useful life of the assets concerned:i) Computers, Vehicles and Aircrafts over a period of three, five and eleven years respectively;ii) In respect of certain items of Plant and Machinery eligible for triple shift allowance, depreciation isprovided for the full year on triple shift basis.b) Fixed assets acquired on amalgamation over the remaining useful life computed based on rates prescribedin Schedule XIV to the Companies Act, 1956, as below:Buildings – Factory1 to 30 years– Non factory 1 to 54 yearsPlant & Machinery1 to 20 yearsVehicles1 to 4 yearsComputers1 to 2 years41

Schedules forming part of account for the year ended March 31, 2009 (Contd.)c) Assets taken on finance lease are depreciated over their estimated useful lives or the lease term, whicheveris lower.d) Leasehold Land are not amortised.e) Goodwill arising on amalgamation is charged to the Profit and Loss Account in the year of amalgamation.f) Intangible assets are amortised, on a straight line basis, commencing from the date the assets are availablefor use, over their respective individual estimated useful lives as estimated by the management:Trademark, Formulae and Licence10 years5. ImpairmentDepreciation charged as above is not less than the minimum specified as per Schedule XIV of the CompaniesAct, 1956.Impairment loss, if any, is provided to the extent the carrying amounts of assets exceed their recoverableamount.Recoverable amount is higher of the net selling price of an asset and its value in use. Value in use is the presentvalue of estimated future cash flows expected to arise from the continuing use of an asset and from its disposalat the end of its useful life.6. InvestmentsLong-term Investments are stated at cost to the Company. Provision for diminution in the value is made torecognise a decline, other than temporary, in the value of long-term investments.Current investments are valued at cost or market value, whichever is less.7. InventoriesInventories are valued at lower of cost and net realisable value. The costs are, in general, ascertained underWeighted Average Method. Finished goods and Work-in-Progress include appropriate manufacturing overheadsand borrowing costs, as applicable. Excise/ Customs duty payable on stocks in bond is added to the cost. Dueallowance is made for obsolete and slow moving items.8. Revenue RecognitionSales are recognised when goods are despatched from distilleries/ warehouses of the Company in accordancewith the terms of sale except where such terms provide otherwise, where sales are recognised based on suchterms. Gross Sales are inclusive of excise duty but are net of trade discounts and sales tax, where applicable.Income arising from sales by manufacturers under “Tie-up” agreements (Tie-up units) and income from brandfranchise are recognised in terms of the respective contracts on sale of the products by the Tie-up unit/ Franchisees.Income from brand franchise is net of service tax, where applicable.Dividend income on investments are recognised and accounted for when the right to receive the payment isestablished.9. Foreign Currency TransactionsTransactions in foreign currency are recognised at the rates of exchange prevailing on the dates of thetransactions.Liabilities/ assets in foreign currencies are reckoned in the accounts as per the following principles:Exchange differences arising on a monetary item that, in substance, forms part of an enterprise’s net investmentin a non-integral foreign operation is accumulated in a foreign currency translation reserve in the enterprise’sfinancial statements until the disposal of the net investment.42

Schedules forming part of account for the year ended March 31, 2009 (Contd.)Exchange differences arising on reporting of long term foreign currency monetary items, with the exception ofexchange differences arising on a monetary item that, in substance, forms part of an enterprise’s net investmentin a non-integral foreign operation, at rates different from those at which they were initially recorded during theperiod or reported in previous financial statements, are accounted as below:(a) In so far as they relate to the acquisition of depreciable capital assets, are added to or deducted from the costof the asset and are depreciated over the balance life of the asset; and(b) In other cases, the said exchange differences are accumulated in a ‘Foreign Currency Monetary ItemsTranslation Difference Account’ and amortised over the balance period of such long term asset/liability butnot beyond March 31, 2011.All other monetary assets and liabilities denominated in foreign currency are restated at the rates ruling at theyear end and all exchange gains/ losses arising therefrom are adjusted to the Profit and Loss Account, except thosecovered by forward contracted rates where the premium or discount arising at the inception of such forwardexchange contract is amortised as expense or income over the life of the contract.Exchange differences on forward contracts are recognised in the Profit and Loss Account in the reporting period inwhich the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward contractsis recognised as income or expense for the year.For forward exchange contracts and other derivatives that are not covered by Accounting Standard (AS) -11‘The Effects of Changes in Foreign Exchange Rates’, the Company follows the guidance in the announcementof the Institute of Chartered Accountants of India (ICAI) dated March 29, 2008, whereby for each category ofderivatives, the Company records any net mark-to-market losses. Net mark-to-market gains are not recorded forsuch derivatives.Also refer Schedule 18 Note 12 below.10. Employee Benefitsa) Defined-contribution plansThese are plans in which the Company pays pre-defined amounts to separate funds and does not have anylegal or informal obligation to pay additional sums. These comprise of contributions to the employees’provident fund with the government, superannuation fund and certain state plans like Employees’ StateInsurance and Employees’ Pension Scheme. The Company’s payments to the defined contribution plans arerecognised as expenses during the period in which the employees perform the services that the paymentcovers.b) Defined-benefit plansGratuity:The Company provides for gratuity, a defined benefit plan (the Gratuity Plan), to certain categories ofemployees. Liability with regard to gratuity plan is accrued based on actuarial valuation, based on ProjectedUnit Credit Method at the balance sheet date, carried out by an independent actuary. Actuarial Gains andLosses comprise experience adjustments and the effect of changes in the actuarial assumptions and arerecognised immediately in the Profit and Loss Account as income or expense.Provident Fund:Company’s Provident Funds administered by trusts set up by the Company where the Company’s obligation isto provide the agreed benefit to the employees and the actuarial risk and investment risk fall, in substance,on the Company are treated as a defined benefit plan. Liability with regard to such provident fund plans are43

Schedules forming part of account for the year ended March 31, 2009 (Contd.)accrued based on actuarial valuation, based on Projected Unit Credit Method, carried out by an independentactuary at the balance sheet date. Actuarial Gains and Losses comprise experience adjustments and theeffect of changes in the actuarial assumptions and are recognised immediately in the Profit and Loss Accountas income or expense.Death Benefit:Death Benefit payable at the time of death is actuarially ascertained at the year-end and provided for in theaccounts.c) Other long term employee benefits:Compensated absences which are not expected to occur within twelve months after the end of the periodin which the employee renders the related services are recognised as a liability at the present value of thedefined benefit obligation at the balance sheet date based on actuarial valuation carried out at each balancesheet date.d) Short term employee benefits:Undiscounted amount of short term employee benefits expected to be paid in exchange for the servicesrendered by employees is recognised during the period when the employee renders the services. Thesebenefits include compensated absences such as paid annual leave and performance incentives.11. Expenditure on account of Voluntary Retirement SchemeExpenditure on account of Voluntary Retirement Scheme of employees is expensed in the period in which it isincurred.12. Research and DevelopmentRevenue expenditure on research and development is charged to Profit and Loss Account in the period in whichit is incurred. Capital Expenditure is included as part of fixed assets and depreciated on the same basis as otherfixed assets.13. Taxes on IncomeProvision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amount oftax payable in respect of taxable income for the period.Deferred tax is recognised on timing differences between the accounting income and the taxable income for theyear and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.Deferred tax assets are recognised and carried forward to the extent that there is a reasonable/ virtual certaintythat sufficient future taxable income will be available against which such deferred tax asset can be realised.Fringe Benefit Tax is determined at current applicable rates on expenses falling within the ambit of “FringeBenefit” as defined under the Income Tax Act, 1961.14. Earnings per Share (EPS)Basic EPS is arrived at based on Net Profit after Taxation available to equity shareholders to the weighted averagenumber of equity shares outstanding during the year. The Diluted EPS is calculated on the same basis as Basic EPS,after adjusting for the effects of potential dilutive equity shares unless impact is anti-dilutive.44

Schedules forming part of account for the year ended March 31, 2009 (Contd.)15. ProvisionsA provision is recognised when an enterprise has a present obligation as a result of a past event and it is probablethat an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate canbe made. Provisions, other than employee benefits, are not discounted to their present value and are determinedbased on management estimate required to settle the obligation at the balance sheet date. These are reviewedat each balance sheet date and adjusted to reflect the current management estimates.16. ContingenciesLiabilities which are material and whose future outcome cannot be ascertained with reasonable certainty aretreated as contingent and, to the extent not provided for, are disclosed by way of notes on the accounts.17. Share / Foreign Currency Convertible Bonds [FCCB] issue expenses and Premium on Redemption of FCCBShare/ Foreign Currency Convertible Bonds issue expenses incurred are expensed in the same year and premiumpayable on FCCBs is expensed over the currency of FCCBs. Both are adjusted to the Securities Premium Account aspermitted by Section 78(2) of the Companies Act, 1956.18. ExpenditureExpenses are net of taxes recoverable, where applicable.45

Schedules forming part of account for the year ended March 31, 2009 (Contd.)18. NOTES ON ACCOUNTSRs. Million1. Contingent Liabilities2009 2008a) (i) Guarantee given on behalf of other bodies corporate(including performance guarantees) 31,397.558 24,887.119(ii)Guarantees given by the Company’s bankers for which Counter Guaranteeshave been given by the Company 172.217 125.151b) Disputed claims against the Company not acknowledged as debts, currently underappeal/ sub judice:(i) Excise demands for excess wastages and distillation losses 238.384 176.179(ii) Other miscellaneous claims 244.274 215.178(iii) Income Tax demand (including interest) under appeal 305.186 198.175(iv) Sales Tax demands under appeal in various states 604.036 634.134c) Co-accepted bills of Tie-up Units – since fully settled 15.016 216.740d) Claims from suppliers not acknowledged as debts 45.449 50.967The Management is hopeful of succeeding in the above appeals/ disputes based on legal opinions/ legalprecedents.2. A. The Scheme of Amalgamation under Section 391 to 394 of the Companies Act, 1956 for the amalgamationof Shaw Wallace & Company Limited (‘SWCL’), a subsidiary company, and Primo Distributors Private Limited(‘Primo’), a wholly owned subsidiary company, (together ‘Transferor Companies’) with the Company (‘theScheme’) and their respective shareholders, with April 1, 2007 being the Appointed Date, has been sanctionedby the Hon’ble High Court of Karnataka, the Hon’ble High Court of Judicature at Bombay and the Hon’bleHigh Court at Calcutta.Upon necessary filings with the respective Registrar of Companies, the Scheme has become effective on July6, 2009 and the effect thereof have been given in these accounts. Consequently,a. In terms of the Scheme the entire business and undertaking of Transferor Companies including all assetsand liabilities, as a going concern, stand transferred to and vested in the Company (hereinafter referredto as ‘Amalgamation’) with effect from April 1, 2007 being the Merger Appointed Date.b. Primo ceased to be subsidiary of the Company and Shaw Wallace Breweries Limited (SWBL) became adirect subsidiary of the Company. Primo stands dissolved without being wound up. SWCL will be dissolvedwithout winding up by separate order by the Hon’ble High Court at Calcutta.SWCL was engaged in manufacture and sale of potable alcohol and Primo was engaged in the businessof distribution of alcoholic beverages.(I) In consideration of the amalgamation, the Company will issue :a) 7,749,121 equity shares of Rs.10/- each aggregating to Rs.77.491 Million in the ratio of 4 (four) fully paidup Equity Shares of the face value of Rs.10/- each of the Company for every 17 (Seventeen) fully paid upequity shares of Rs.10/- each held in SWCL [also refer Note 2 (A)(II) below].46

Schedules forming part of account for the year ended March 31, 2009 (Contd.)Pending issue of these Equity Shares, a sum of Rs. 77.491 Million has been shown under Equity ShareCapital Suspense. Subsequently, on July 24, 2009, the allotment of the Company’s shares to the eligibleshareholders of SWCL has been completed. Steps have been taken to list the shares with the stockexchanges where the existing shares of the Company are currently listed.b) As Primo was a wholly owned subsidiary of the Company, no consideration was payable pursuant toamalgamation of Primo with the Company.(II) Pursuant to the Scheme, Equity Shares to be issued as above include 4,925,231 Equity Shares of Rs.10/- eachfully paid up to Palmer Investment Group Limited(Palmer), R.G.Shaw & Company Limited (R G Shaw), JIHLNominees Limited (JIHL Nominees), Shaw Scott & Company Limited (Shaw Scott), Shaw Darby & CompanyLimited (Shaw Darby) and Thames Rice Milling Company Limited (Thames Rice), subsidiaries of the Company,in exchange for the 20,932,244 Equity Shares of Rs.10/- each fully paid up held by them in the share capitalof SWCL, in the proportion of Equity Shares held by them respectively.(III) Pursuant to the Scheme, 10,282,553 Equity Shares of Rs.10/- each fully paid up held by SWCL and 1,306,431Equity Shares of Rs.10/- each fully paid up held by Primo in the share capital of the Company, were to betransferred to the SWCL Benefit Trust and the Primo Benefit Trust established by virtue of trust deeds datedJuly 25, 2008 for the benefit of SWCL and Primo respectively. Upon the Scheme becoming effective, thebeneficial interest in SWC Benefit Trust and Primo Benefit Trust stands transferred and vested in the USLBenefit Trust established by virtue of trust deed dated September 26, 2006 for the benefit of the Company.Subsequent to the year end, on June 30, 2009 SWCL has sold 10,282,553 Equity Shares held by it in theCompany in the open market, through the stock exchanges and 1,306,431 Equity shares held by Primo in theCompany has been transferred to Primo Benefit Trust on July 6, 2009 which stands vested with USL BenefitTrust in terms of the Scheme.(IV) Pursuant to the scheme, the Authorised Share Capital of the Company stands increased and reclassified,without any further act or deed on the part of the Company, including payment of stamp duty and Registrarof Companies fees, by the authorised share capital of the transferor companies amounting to Rs 2,092Million and the Memorandum of Association and Articles of Association of the Company stand amendedaccordingly without any further act or deed as the part of the Company.(V) Accounting for AmalgamationThe amalgamation of the Transferor Companies with the Company is accounted for on the basis of thePurchase Method as envisaged in the Accounting Standard (AS) -14 on Accounting for Amalgamationsspecified in the Companies (Accounting Standard) Rules 2006 and in terms of the Scheme, as below:a. All tangible assets [excluding investment in shares held by the Transferor Companies in the Companyand the interest in the USL Benefit Trust in accordance with the terms of the Scheme as explained in Note2(A)(III) above] and liabilities of the Transferor Companies at their respective fair values.b. Interest in USL Benefit Trust, arising from the terms of the Scheme as explained in Note 2(A)(III) above,has been accounted as Investment, valued and recorded, in the manner prescribed in the Scheme, at theaverage of the weekly high and low of the closing price of the Company, on the stock exchange wherethe shares of the Company are more frequently traded in terms of turnover, for the period ended sixmonths preceding the Appointed Date, i.e. April 1, 2007, aggregating to Rs. 9,256.006 Million.c. The equity shares directly held by the Company in the Transferor Companies stand cancelled and debitedto General Reserve of the Company [refer (d) below].47

Schedules forming part of account for the year ended March 31, 2009 (Contd.)d. Rs.7,860.187 Million, being the difference between the value of net assets of the Transferor Companiestransferred to the Company (determined as stated above) and the face value of equity shares to beissued and after adjusting for the equity shares directly held by the Company in the Transferor Companieswhich are cancelled, is credited to General Reserve of the Company. This accounting treatment of thereserve has been prescribed in the Scheme. Had the Scheme not prescribed this treatment, this amountwould have been credited to Capital Reserve.e. The Company, based on the reports by an Independent valuer, has revalued, at their respective fairvalues, all fixed assets being Land, Buildings, Plant and Machinery, Furniture and Fixtures and OfficeEquipment and Vehicles, at one location, as at April 1, 2007 and an amount of Rs. 80.704 Million, beingdiminution in value of certain Plant and Machinery determined based on their respective disposal valueas estimated by the independent valuer, has been debited to General Reserve. This accounting treatmenthas been prescribed in the Scheme. Had the scheme not prescribed this treatment, Rs.80.704 Millionbeing diminution in value of certain fixed assets would have been debited to the Profit and Loss Accountfor the year instead of General Reserve, having corresponding impact on the net profit for the year.B. The Scheme of Amalgamation under Section 391 to 394 of the Companies Act, 1956 for the amalgamation ofZelinka Limited (‘Zelinka’ or the ‘Transferor Company’), Cyprus, with the Company (‘the ZL Scheme’) and theirrespective shareholders, with April 1, 2007 being the Appointed Date, has been sanctioned by Hon’ble High Courtof Karnataka and the certified copy of the Order of the Hon’ble High Court of Karnataka has been filed withthe Registrar of Companies. Zelinka has complied with the procedure required to be followed under the localcorporate laws of Cyprus to give effect to the ZL Scheme. Accordingly, the ZL scheme became operative fromMarch 26, 2009. The Company has given effect to the ZL Scheme in these accounts with effect from April 1, 2007being the Appointed Date. Consequently, in terms of the ZL Scheme:a. The entire business and undertaking of Zelinka including all assets and liabilities, as a going concern, standtransferred to and vested in the Company with effect from April 1, 2007 being the Merger AppointedDate.b. Zelinka ceased to be a subsidiary of the Company. Palmer Investment Group Ltd, British Virgin Islands andMontrose International SA, Panama have become direct wholly owned subsidiaries of the Company. LiquidityInc has become direct subsidiary of the Company.(I)Zelinka was engaged in Investment related activities.As Zelinka was a wholly-owned subsidiary of the Company, no consideration was payable pursuant to theamalgamation of Zelinka with the Company.(II) Accounting treatmentThe amalgamation of Zelinka with the Company is accounted for on the basis of the Purchase Method asenvisaged in the Accounting Standard (AS) -14 on Accounting for Amalgamations specified in the Companies(Accounting Standard) Rules 2006 and in terms of the Scheme, as below:a) All assets and liabilities of the Transferor Company at their respective book values.b) The investment held by the Company in the equity share capital of the Transferor Company standscancelled and debited to General Reserve of the Company [refer (c) below].c) Rs.11.152 Million being the difference between the value of net assets of the Transferor Companytransferred to the Company (determined as stated above) after adjusting for investments cancelledis debited to General Reserve of the Company. This accounting treatment of the reserve has beenprescribed in the ZL Scheme. Had the ZL Scheme not prescribed this treatment, this amount would havebeen debited to Goodwill, which would have been charged to the Profit and Loss Account for the year asper the accounting policy of the Company, with a corresponding impact on the net profit for the year.48

Schedules forming part of account for the year ended March 31, 2009 (Contd.)d) Interest free loans in foreign currency aggregating to Rs. 7,345.279 Million as on April 1, 2007, grantedby the Company to Zelinka for acquisition of long term strategic investments, stand cancelled. Exchangedifference on such loans aggregating to Rs.144.912 Million as on April 1, 2007, accumulated by theCompany in Foreign Currency Translation Reserve, has been transferred to General Reserve. Thisaccounting treatment of the reserve has been prescribed in the ZL Scheme. Had the ZL Scheme notprescribed this treatment, this amount would have been debited to the Profit and Loss Account for theyear instead of General Reserve, having corresponding impact on the net profit for the year.Exchange differences of Rs. 570.131 Million on loan to Zelinka arising during the year ended March 31,2008 stands reversed on cancellation of such loans on amalgamation.C. All costs and expenses (including those of the Transferor Companies) incidental with the finalisation of theschemes and to put these into operation, including expenses in connection with excise and label re-registrations,all advisory fees, stamp duty charges, meeting expenses, professional fees, consultant fees including expenses andother expenses or charges attributable to the implementation of the Scheme (expenses relating to amalgamation),aggregating to Rs.146.879 Million are debited to General Reserve in the books.This accounting treatment of the costs and expenses has been prescribed in the Scheme. Had the Scheme notprescribed this treatment, this amount would have been debited to the Profit and Loss Account for the yearinstead of General Reserve, having corresponding impact on the net profit for the year.D. From April 1, 2007, the Transferor Companies had carried out the business in trust on behalf of the Company.Accordingly, Profit for the year ended March 31, 2008 of the Transferor Companies after making the followingadjustments have been added to the Profit and Loss Account:Rs. MillionProfit after Taxation for the year ended March 31, 2008 as per audited accounts 673.956Transfer to General Reserve (20.000)Transfer to Capital Redemption Reserve (37.000)Proposed Dividend (Net of dividend received by the Company) (32.940)Corporate Tax on Proposed Dividend (8.159)Adjustments on Amalgamation (471.874)Amount Transferred to Profit and Loss Account on Amalgamation 103.983E. The Board of Directors of the erstwhile Central Distilleries & Breweries Limited (CDBL) (amalgamated with erstwhileSWDL amalgamated with the Company in an earlier year) on April 29, 1986 decided to issue 134,700 Equity Sharesof Rs.10 each, the allotment whereof was stayed by the Hon’ble High Court of Delhi on September 13,1988. TheHon’ble High Court of Delhi had vacated its order and has ordered to keep in abeyance the allotment on 72,556shares and the matter is sub-judice. The holders, in exchange of these shares will be entitled to 17,776 equityshares of Rs.10 each of the Company pursuant to a Scheme of Arrangement. Necessary adjustments in this respectwill be carried out on disposal of the matter pending before the aforesaid Court.F. Pursuant to the Scheme of amalgamation, the bank accounts, agreements, licences and certain immovableproperties are in the process of being transferred in the name of the Company.3. The Board of Directors of the Company at their meeting held on November 29, 2008 have approved the proposalof merger of Balaji Distilleries Limited with the Company with effect from April 1, 2009 as per the Schemeof Arrangement between BDL, Chennai Breweries Private Limited and the Company, subject to the necessaryapprovals.49

Schedules forming part of account for the year ended March 31, 2009 (Contd.)The Draft Rehabilitation Scheme along with the Scheme of Arrangement is pending with the Board for Industrialand Financial Reconstruction formed under the provisions of Sick Industrial Companies (Special Provisions) Act,1985, for approval.4. Fixed AssetsEstimated amount of contracts remaining to be executed on capital account and not provided for (net ofadvances) – Rs.106.562 Million (2008: Rs.219.396 Million).5. Current Assets, Loans and Advancesa) Loans and Advances include:i) Rs. 11,093.202 Million (2008: Rs.14,987.889 Million) given as loan to the subsidiaries. The entire loan isnon interest bearing.ii) An amount of Rs. 736.429 Million (2008: Rs. 489.847 Million) due from a Tie-up unit secured by the assetsof the Tie-up unit.iii) An amount of Rs. 250 Million (2008: Rs. Nil) due from a proposed tie-up unit secured by the shares ofthe proposed tie-up unit.iv) Rs.3 Million (2008: Rs.3 Million) being amount paid to BDA Limited (BDA) towards reassignment ofcertain Liquor Brands/ Trade Marks pursuant to a Memorandum of Understanding dated March 20,1992. Pending execution of the deed for such assignments and judicial resolutions of various disputeswith BDA pertaining to control of BDA and ownership of the ‘Officers Choice’ and other brands currentlysub-judice at the various courts, the advance given to the party has been provided for as a matter ofprudence. All consequential adjustments arising out of the above matters will be made as and whenascertained.v) Due from an Officer of the Company Rs. 1.193 Million (2008: Rs.1.085 Million). Maximum amountoutstanding at any time during the year Rs. 1.193 Million (2008: Rs.1.085 Million).vi) Due from the Managing Director of the Company Rs. 3.140 Million (2008: Rs. 2.854 Million). Maximumamount outstanding at any time during the year Rs. 3.140 Million (2008: Rs. 2.854 Million).b) Certain confirmation of balances from Sundry Debtors, Loans and Advances, Deposits and Sundry Creditorsare awaited and the account reconciliations of some parties where confirmations have been received are inprogress. Adjustment for differences, if any, arising out of such confirmations/reconciliations would be madein the accounts on receipt of such confirmations and reconciliation thereof. The Management is of the opinionthat the impact of adjustments, if any, is not likely to be significant. In the opinion of the management, allcurrent assets, loans and advances including advances on capital accounts would be realised at the values atwhich these are stated in the accounts, in the ordinary course of business.c) Bank Balance with scheduled bank includes Rs. 154.000 Million (2008: Rs. 205.960 Million) out of the proceedsof the beer business of erstwhile SWCL, sold in an earlier year. The said sum is kept under escrow pendingresolution of various taxation matters.d) The Company has, granted interest free loans in foreign currency amounting to Rs.7,435.245 Million [2008:Rs. 6190.725 Million, excluding Rs. 6836.073 Million, relating to Zelinka cancelled on amalgamation asreferred to in Note 2(B)(II)(d) above] to USL Holdings Limited, BVI (USL Holdings), a subsidiary of the Company,for acquisition of long term strategic investments. Management is of the view that out of these loans,Rs.3,630.300 Million (2008: Rs. 3,987.000 Million), from the inception of the grant of loans, in substance, formpart of the Company’s net investment in the subsidiary, as the settlement of these loans is neither plannednor likely to occur in the foreseeable future and management intends to convert these loans into investmentin share capital of the subsidiary in near future. Accordingly, in accordance with AS 11 - The Effects ofChanges in Foreign Exchange Rates (AS 11), exchange difference aggregating to Rs.463.905 Million [2008:Rs. 106.905 Million excluding Rs.715.043 Million relating to loans to Zelinka referred in Note 2(B)(II)(d) above]arising on such loans has been accumulated in a foreign currency translation reserve, which at the time ofthe disposal of the net investment in these subsidiaries would be recognised as income or as expenses.50

Schedules forming part of account for the year ended March 31, 2009 (Contd.)6. Investmenta)CURRENTFaceValuePurchased duringthe YearNosRs.MillionAcquired onAmalgamation*NosRs.MillionSold/Written off duringthe YearNosRs.MillionTransferred/Cancelledpursuant to scheme ofAmalgamationNosRs.MillionUnquoted InvestmentsUnits (Fully Paid)(Including dividend reinvestment)SBI SHF Liquid Plus 10 5,120,222 51.227 - - 4,497,751 45.000 - -HSBC MF Investments 10 9,092 0.097 - - - - - -ICICI Prudential Liquid Fund 10 37,885 0.379 - - - - - -LONG TERMA. Quoted Investments1. Fully Paid Equity Sharesi) TradeIn Subsidiary CompanyShaw Wallace & Company Limited 10 - - - - - - 15,072,311 4,801.877ii) Non-TradePremier Fertilizers Limited. ** 100 - - - - 300 0.001 - -IndusInd Bank Limited 10 - - - - 10,400 0.468 - -Indo Lowenbraw Breweries Ltd ** 10 - - - - 18 - - -Hero Honda Motors Limited. 2 - - - - 175 0.035 - -Rampur Engineering Co., Limited ** 10 - - - - 1,001 0.010 - -Gammon India Ltd ** 10 - - - - 1000 - - -Ashok Leyland Limited (Rs. 117 ) 1 - - - - 10 0.000 - -Shree Synthetics Limited (Rs.350)** 10 - - - - 35 0.000 - -Crompton Greaves Limited 2 - - - - 280 0.005 - -Daewoo Motors Limited. ** 10 - - - - 50 0.001 - -Exide Industries Limited (Rs. 132 ) 1 - - - - 20 0.000 - -Areva TND (India) Limited(Rs. 387 ) 10 - - - - 6 0.000 - -Harrisons Malayalam Limited. 10 - - - - 20 0.002 - -51

Schedules forming part of account for the year ended March 31, 2009 (Contd.)6. Investmenta)ii) Non-Trade (Cont’d)FaceValuePurchased duringthe YearNosRs.MillionAcquired onAmalgamation*NosRs.MillionSold/Written off duringthe YearNosRs.MillionTransferred/Cancelledpursuant to scheme ofAmalgamationHindustan Motors Limited (Rs. 51 ) 10 - - - - 2 0.000 - -Indian Rayon and Industries Limited 10 - - - - 10 0.003 - -MRF Limited 10 - - - - 5 0.004 - -Nirlon Limited (Rs. 254) 10 - - - - 12 0.000 - -Rallis India Limited 10 - - - - 28 0.003 - -Siemens (India) Limited 2 - - - - 150 0.008 - -Housing Development FinanceCorporation Ltd. 10 - - 240 0.002 - - - -ICICI Bank Limited 10 - - 8,916 0.382 - - - -HDFC Bank Limited 10 - - 200 0.002 - - - -2. Units (Fully Paid)Unit Trust of India6.75% Tax Free US 64 Bonds 100 - - - - 312,246 31.225 - -B. Unquoted Investments1. Fully paid Equity Sharesi) TradeYankay Associates Private Limited 10 - - 1 0.004 - - - -North West Distilleries PrivateLimited** 10 - - - - 1,000 0.010 - -Utkal Distilleries Limited 100 - - - - 10,700 7.448 - -Shaw Scott Dist Private Limited** 100 - - - - 1 0.001 - -Shaw Wallace Breweries Limited 10 - - 78,512,509 3,240.191 - - - -Primo Distributors Private Limited 10 - - - - - - 3,920,010 1,030.000Palmer Investment Group Ltd US$ 1 - - 15,000,000 6,917.801 - - - -Montrose International S.A US$ 1000 - - 500 133.932 - - - -Liquidity Inc. US$0.0001 - - 4,000,000 119.313 - - - -USL Shanghai trading co. Ltd RMB 10 500,000 26.635 - - - - - -Zelinka Limited CYP 1 - - - - - - 1,000 0.102NosRs.Million52

Schedules forming part of account for the year ended March 31, 2009 (Contd.)6. Investment (Contd.)a)FaceValuePurchased duringthe YearNosRs.MillionAcquired onAmalgamation*NosRs.MillionSold/Written off duringthe YearNosRs.MillionTransferred/Cancelledpursuant to scheme ofAmalgamationii) Non Trade - -Ashoka Securities Private Limited** 10 - - - - 25 0.003 - -McDowell & HRB Emp. Co-op SocietyLtd** 200 - - - - 10 0.002 - -Koel Manufacturing and Investment (P)Limited** 10 - - - - 1 0.002 - -Goa Urban Co-Operative Bank Limited** 50 - - - - 199 0.010 - -Maltings Limited ** 10 - - - - 695 - - -Stridewell Leather India Pvt. Ltd.(Rs.20)** 10 - - - - 2 0.000 - -Central Investment (P) Ltd.** 10 - - - - 305 - - -Consolidated Breweries Ltd.** 10 - - - - 750 - - -Baramati Sahakari Bank Limited** 100 - - - - 9 - - -Mapusa Urban Co-Operative BankLimited (Rs.130)** 25 - - - - 5 0.000 - -Thane Janta Sahakari Bank Limited** 50 - - - - 10 0.001 - -Rupee Co-op Bank Limited 25 - - - - 40 0.001 - -2. Fully paid Preference Shares11% Redeemable Preference shares of WorksPrivate Ltd Ganges Soap** 100 - - - - 2,000 - - -9.3% Cumulative Redeemable PreferenceShares of Rampur Engineering CompanyLimited ** 10 - - - - 25,000 0.250 - -7% Non Cumulative redeemable preferenceshares of Shaw Wallace Breweries Limited 100 - - 1,197,000 119.700 - - - -3. In Government SecuritiesNational Savings/Plan/Def. Certificates/FD's(Deposited with Govt. Authorities) - 0.110 - 0.015 - 6.418 - -4. Fully paid Debentures0.5% Woodlands Medical Centre Limited 100 - - 117 0.012 - - - -5.0% Woodlands Medical Centre Limited 100 - - 270 0.027 - - - -5. OthersInterest as Sole Beneficiary in USL Benefit Trust - - - 9,256.006 - - - -* Including additions of the Transferor companies during the year ended March 31, 2008 [Note 2 (D) above]** Written off during the year.NosRs.Million53

Schedules forming part of account for the year ended March 31, 2009 (Contd.)6. Investment (Contd.)b) Investment in USL Benefit Trust represents beneficial interest in USL Benefit Trust which holds 13,741,643(2008: 2,152,659) equity shares of Rs 10 each of the Company, with all additions or accretions thereto in trustfor the benefit of the Company. The above includes 10,282,533 shares held by erstwhile SWCL, a transferorcompany, in the Company referred to in Note 2 (A) (III) above.c) The carrying cost of investment in Palmer Investment Group Limited amounting to Rs. 6,917.801 Million,substantially exceeds the net worth and the market value of shares held directly and indirectly throughsubsidiary, by it. The management of the Company believes that this reflects intrinsic value far in excess ofthe carrying cost of investments and that such shortfall in net worth / decline in market value of such sharesis purely temporary in nature and, hence, no provision is considered necessary for the same.7. Disclosures of dues/payments to Micro and Small enterprises to the extent such enterprises are identified by theCompany.Rs. Million2009 2008a) (i) The principal amount remaining unpaid as at March 31, 2009 32.359 10.242(ii) Interest due thereon remaining unpaid on March 31, 2009 0.047 -b) The amount of interest paid by the Company in terms of section 16 of the Micro,Small and Medium Enterprises Development Act, 2006, along with the amountof the payment made to the supplier beyond the appointed day during eachaccounting year:(i) Delayed payments of principal beyond the appointed date during theentire accounting year 132.355 -(ii) Interest actually paid under Section 16 of the Micro, Small and Medium'Enterprises Development Act, 2006 - -c) The amount of interest due and payable for the period of delay in makingpayment (which have been paid but beyond the appointed day during theyear) but without adding the interest specified under the Micro, Small andMedium 'Enterprises Development Act, 2006 - -d) The amount of interest accrued and remaining unpaid on March 31, 2009 inrespect of principal amount settled during the year 2.037 -e) The amount of further interest remaining due and payable even in thesucceeding years, until such date when the interest dues as above are actuallypaid to the small enterprise, for the purpose of disallowance as a deductibleexpenditure under Section 23 of the Micro, Small and Medium 'EnterprisesDevelopment Act, 2006. - -The above information has been determined to the extent such parties have been identified on the basis ofinformation provided by the Company, which has been relied upon by the auditors.8. As required under Section 205C of the Companies Act, 1956, the Company has transferred Rs. 4.678 Million(2008 : Rs. 10.517 Million) to the Investor Education and Protection Fund (IEPF) during the year. On March 31,2009, no amount was due for transfer to the IEPF.9. Interest on inter corporate deposit included under Unsecured Loan – Other in Schedule 4 acquired onamalgamation, where negotiation/ settlement has not been finalised, has been provided in terms of the decreeand / or otherwise considered adequate by the management. In the opinion of the management, interest so farprovided is adequate and no further provision is necessary in this respect. Adjustments, if any, are carried out asand when the amounts are determined on final disposal / settlement of the matter.54

Schedules forming part of account for the year ended March 31, 2009 (Contd.)10. Employee Benefitsa) Defined Contribution PlansThe Company offers its employees defined contribution plans in the form of Provident Fund (PF) andEmployees’ Pension Scheme (EPS) with the government, Superannuation Fund (SF) and certain state planssuch as Employees’ State Insurance (ESI). PF and EPS cover substantially all regular employees while the SFcovers certain executives and the ESI covers certain workers. Contribution to SF is made to trust managed bythe Company, while other contributions are made to the Government’s funds. While both the employees andthe Company pay predetermined contributions into the provident fund and the ESI Scheme, contributionsinto the pension fund and the superannuation fund are made only by the Company. The contributions arenormally based on a certain proportion of the employee’s salary.During the year, the Company has recognised the following amounts in the Profit and Loss Account, whichare included in Contribution to Provident and other funds in Schedule 15:Rs. Million2009 2008Provident Fund and Employee’s Pension Scheme * 45.614 54.495Superannuation Fund 33.380 29.018Employees’ State Insurance 8.738 8.553* Excluding contribution to PF made to trusts managed by the Company.b) Defined Benefit PlansGratuity:87.732 92.066The Company provides for gratuity, a defined benefit plan, (the Gratuity Plan), to certain categories ofemployees. The Gratuity Plan provides a lump sum payment to vested employees at retirement or terminationof employment, an amount based on the respective employee’s last drawn salary and years of employmentwith the Company. The Company has employees’ gratuity funds managed by the Company as well as byInsurance Companies.Provident Fund:For certain executives and workers of the Company, contributions are made as per applicable Indian lawstowards Provident Fund to certain Trusts set up and managed by the Company, where the Company’sobligation is to provide the agreed benefit to the employees and the actuarial risk and investment risk fall,in substance, on the Company. Having regard to the assets of the Fund and the return on the investments,shortfall in the assured rate of interest notified by the Government, which the Company is obliged to makegood is determined actuarially.Death Benefit:The Company provides for Death Benefit, a defined benefit plan (the Death Benefit Plan) to certain categoriesof employees. The Death Benefit Plan provides a lump sum payment to vested employees on death, anamount based on the respective employee’s last drawn salary and remaining years of employment with theCompany after adjustments for any compensation received from the insurance company and restricted tolimits set forth in the said plan. The Death Benefit Plan is Non-Funded.55

Schedules forming part of account for the year ended March 31, 2009 (Contd.)10. b) Defined Benefit Plan (Contd.)A) Reconciliation of opening and closing balancesof the present value of the defined benefitobligation:2009 2008Funded Non-Funded Funded Non-FundedGratuity PF Gratuity Pension Death-BenefitGratuity PF PensionRs MillionObligation at the beginning of the year 506.729 998.230 - - 3.854 451.227 799.633 - 3.525Death-BenefitOn amalgamation 8.212 54.746 0.505 17.450 - - - - -Contributions by plan participants - 114.921 - - - - 194.223 - -Current Service cost 56.310 106.378 0.060 9.925 10.957 75.237 69.316 - 0.329Interest cost 39.188 78.211 0.037 - - 36.098 65.432 - -Actuarial (gain)/ loss on obligations 48.277 - (0.023) - - (0.860) - - -Benefits paid (50.199) (183.650) (0.079) - - (54.973) (130.374) - -Obligation at the end of the year 608.517 1,168.836 0.500 27.375 14.811 506.729 998.230 - 3.854B) Reconciliation of opening and closing balancesof the fair value of plan assets:Plan Assets at the beginning of the year 423.665 938.021 - - - 414.821 747.196 - -On amalgamation 6.250 35.440 - - - - - - -Prior period adjustment - - - - - - - - -Contributions by plan participants - 114.921 - - - - 194.223 - -Contributions by the Company 86.044 55.722 0.079 - - 41.181 48.878 - -Expected return on plan assets 35.895 77.196 - - - 33.186 85.811 - -Actuarial gains / (losses) (6.499) 58.083 - - - (10.550) 12.287 - -Benefits paid (50.199) (183.650) (0.079) - - (54.973) (130.374) - -Plan assets at the end of the year 495.156 1,095.733 - - - 423.665 958.021 - -C) Reconciliation of present value of definedbenefit obligation and the fair value of planassets to the assets and liabilities recognised inthe balance sheet:Present value of obligation at the end of the year 608.517 1,168.836 0.500 27.375 14.811 506.729 998.230 - 3.854Fair value of plan assets at the end of the year 495.156 1,095.733 - - - 423.665 938.021 - -Liability/(Net Asset) Recognised in Balance Sheet 113.361 73.103 0.500 27.375 14.811 83.064 60.209 - 3.854[Included under Provisions in Schedule 12(B)]56

Schedules forming part of account for the year ended March 31, 2009 (Contd.)10. b) Defined Benefit Plan (Contd.)2009 2008Funded Non-Funded Funded Non-FundedGratuity PF Gratuity Pension Death-BenefitGratuity PF PensionRs MillionD) Expenses recognised in the Profit and LossAccount :Current service cost 56.310 106.379 0.060 9.925 10.957 75.237 69.316 - 0.329Interest cost 39.188 78.211 0.037 - - 36.098 65.432 - -Expected return on plan assets (35.895) (77.196) - - - (33.186) (65.811) - -Prior period adjustment - - - - - - - - -Actuarial (gains)/losses 54.777 (58.083) (0.023) - - 9.690 (12.287) - -Total Expenses recognised in theProfit and Loss Account 114.380 49.311 0.074 9.925 10.957 87.839 56.650 - 0.329Death-Benefit2009 2008Gratuity PF Gratuity PFE) Investment details of plan assetsGovernment securities 0% 38% 18% 34%Securities guaranteed by Government 1% 0% 34% -Private Sector Bonds 0% 0% 2% -Public Sector / Financial Institutional Bonds 0% 33% 1% 29%Special Deposit Scheme 0% 17% 7% 19%Fund balance with Insurance Companies 86% 0% 29% -Others (including bank balances) 13% 12% 9% 18%100% 100% 100% 100%Based on the above allocation and the prevailing yields on these assets, the long term estimate of the expected rate of return on fund assets hasbeen arrived at. Assumed rate of return on assets is expected to vary from year to year reflecting the returns on matching government bonds.57

Schedules forming part of account for the year ended March 31, 2009 (Contd.)10. b) Defined Benefit Plan (Contd.)2009 2008Funded Non-Funded Funded Non-FundedGratuity PF Gratuity Pension Death-BenefitGratuity PF PensionRs MillionDeath-BenefitF) Actual return on plan assets 7.6% 7.75% - - - 8.55% 8.25% - -G) AssumptionsDiscount Rate (per annum) 7.75% 8.00% - - - 8% 8% - -Expected Rate of Return on Plan Assets 8.00% 8.19% - - - 8% 8.19% - -Rate of increase in Compensation levels 5.00% NA - - - 5% NA - -Average past service of employees (years) 14 NA - - - 14.76 NA - -Mortality ratesLIC1994-96ultimatetableLIC1994-96ultimatetable- - -LIC1994-96ultimatetableLIC1994-96ultimatetable- -The estimates of future increase in compensation levels, considered in the actuarial valuation, have been taken on account of inflation,seniority, promotion and other relevant factors such as supply and demand in the employment market.As per the best estimate of the management, contribution of Rs 120 Million is expected to be paid to the plans during the year endingMarch 31, 2010.58

Schedules forming part of account for the year ended March 31, 2009 (Contd.)11. Borrowing Costs Rs. Million2009 2008Interest included in the Closing Stock of Malt and Grape Spirit under maturation 82.643 38.11712. Foreign Currency Transactionsa) The Company has marked to market all the outstanding derivative contracts on the Balance Sheet date and hasrecognised the resultant loss amounting to Rs. Nil (2008: Rs 55.238 Million) during the year.b) As on March 31, 2009, the Company has the following derivative instruments outstanding:i) Interest and currency swap arrangement (USD-INR) amounting to USD 35 Million (2008: USD 35 Million).c) The year end foreign currency exposures that have not been hedged by a derivate instrument or otherwise are asunder:i) Loans and Advances to Subsidiaries USD 76.086 Million, GBP 55.200 Million, Euro 24.750 Million (2008: USDii)216.400 Million, GBP 57.850 Million, Euro 19.250 Million).FCNR Nil (2008: USD 22.260 Million).d) The central Government vide notification dated March 31, 2009 has amended Accounting Standard (AS-11)- TheEffects of changes in Foreign Exchange Rates, notified under the Company’s (Accounting Standard) Rules, 2006.The Company has exercised the option stated in Paragraph 46 of AS 11 retrospectively from April 1, 2007.As a result, the Company has changed its accounting policy for recognition of exchange differences arising onreporting of long term foreign currency monetary items, with the exception of exchange differences arisingon a monetary item that, in substance, forms part of an enterprise’s net investment in a non-integral foreignoperation, at rates different from those at which they were initially recorded during the period or reported inprevious financial statements, which hitherto were charged to the Profit and Loss Account, as below:(i) In so far as they relate to the acquisition of depreciable capital assets, are added to or deducted from thecost of asset and are depreciated over the balance life of the asset. This, however, did not have any impacton the results for the year ended March 31, 2009; and(ii) In other cases, the said exchange differences are accumulated in a ‘Foreign Currency Monetary Item TranslationDifference Account’ and amortised over the balance period of such long term asset/liability but not beyondMarch 31, 2011. Exchange difference recognised in the Profit and Loss Account upto last financial year endingMarch 31, 2008 relating to said long term monetary items in foreign currency aggregating to Rs.93.245Million (net of deferred tax Rs. 48.014 Million) has been debited to the opening revenue as provided in therules. As a result of this change in accounting for exchange difference, net profit for the year is lower byRs.170.089 Million. The amount remaining to be amortised in the financial statement as on March 31, 2009is Rs.311.347 Million.59

Schedules forming part of account for the year ended March 31, 2009 (Contd.)13. Segment ReportingThe Company is engaged in the business of manufacture, purchase and sale of Beverage Alcohol (Spirits and Wines)including through Tie-up units/ brand franchise, which constitutes a single business segment. The Company’s operationsoutside India did not exceed the quantitative threshold for disclosure envisaged in AS 17 on ‘Segment Reporting’specified in the Companies (Accounting Standard) Rules 2006. In view of the above, primary and secondary reportingdisclosures for business/geographical segment as envisaged in AS-17 are not applicable to the Company.14. Related Party Disclosuresa) Names of related parties and description of relationshipEnterprise where there is controli) Subsidiary Companies:1) United Spirits Nepal Private Limited (USNPL), 2) Asian Opportunities & Investment Limited (AOIL), 3) Bouvet-Ladubay S.A.S (BL)^, 4) Chapin Landais S.A.S (CL)^, 5) Palmer Investment Group Limited(PIG)^, 6) MontroseInternational SA (MI)^, 7) JIHL Nominees Limited (JIHL)^, 8) RG Shaw & Company Limited (RGSC)^, 9) ShawDarby & Company Limited (SDC)^, 10) Shaw Scott & Company Ltd (SSC)^, 11) Thames Rice Milling CompanyLimited (TRMCL)^, 12) Shaw Wallace Overseas Limited (SWOL)^, 13) McDowell (Scotland) Limited (MSL), 14) USLHoldings Limited (USLHL), 15) Royal Challengers Sports Private Limited (RCSPL), 16) Spring Valley InvestmentHoldings Inc (SVIHI)^, 17) USL Holdings (UK) Limited^, 18) United Spirits (UK) Limited^, 19) United Spirits(Great Britain) Limited^, 20) Shaw Wallace Breweries Limited (SWBL), 21) Ramanretti Investment & TradingLimited (RITL)^, 22) Daffodils Fragrance and Flavours Private Limited (DFFPL), 23) Four Seasons Wines PrivateLimited (FSWPL), 24)Herbertsons Limited (HL), 25) United Vintners Limited (UVL), 26) United Alcobev Limited(UAL) , 27) McDowell Beverages Limited (MBL), 28) McDowell & Company Limited, 29) Jasmine Flavours andFragrances Limited, 30) Liquidity Inc, 31) Whyte and Mackay Group Limited^, 32) Whyte and Mackay HoldingsLtd^, 33) Whyte and Mackay Limited (W&M), 34) Whyte and Mackay Warehousing Limited^, 35) Bruce &Company (Leith) Limited^, 36) Charles Mackinlay & Company Limited^, 37) Dalmore Distillers Limited^, 38)Dalmore Whyte & Mackay Limited^, 39) Edinburgh Scotch Whisky Company Limited^, 40) Ewen & CompanyLimited^, 41) Fettercairn Distillery Limited^, 42) Findlater Scotch Whisky Limited^, 43) Glayva Liqueur Limited^,44) Glentalla Limited^, 45) GPS Realisations Limited^, 46) Grey Rogers & Company Limited^, 47) Hay &MacLeod Limited^, 48) Invergordon Distillers (Holdings) Limited^, 49) Invergordon Distillers Group Limited^,50) Invergordon Distillers Limited^, 51) Invergordon Gin Limited^, 52) Isle of Jura Distillery Company Limited^,53) Jarvis Halliday & Company Limited^, 54) John E McPherson & Sons Limited^, 55) Kensington DistillersLimited^, 56) Kyndal Spirits Limited^, 57) Leith Distillers Limited^, 58) Loch Glass Distilling Company Limited^,59) Longman Distillers Limited^, 60) Lycidas (437) Limited^, 61) Pentland Bonding Company Limited^,62) Ronald Morrison & Company Limited^, 63) St The Sheep Dip Whisky Company Limited^, 64) Vincent Street(437) Limited^, 65) Tamnavulin-Glenlivet Distillery Company Limited^, 66) TDL Realisations Limited^, 67) W & SStrong Limited^, 68) Watson & Middleton Limited^, 69) Wauchope Moodie & Company Limited^, 70) Whyte &Mackay Distillers Limited^, 71) William Muir Limited^, 72) WMB Realisations Limited^, 73) Whyte and MackayProperty Limited^, 74) Whyte and Mackay de Venezuela CA^, 75) KI Trustees Limited^, 76) USL ShanghaiTrading Company Limited *.* Became a subsidiary during the year^ No transactions during the year.60

Schedules forming part of account for the year ended March 31, 2009 (Contd.)ii) USL Benefit TrustAssociates with whom transactions have taken place during the yearUtkal Distilleries Ltd (Utkal) (upto July 25, 2008) and Wine Soc. of India Private Limited.Key Management personnelMr. V.K.Rekhi, Managing DirectorEmployees’ Benefit Plans where there is significant influence:Mc Dowell & Company Limited Staff Gratuity Fund (McD SGF), McDowell & Company Limited Officers' GratuityFund (McD OGF), SWDL Group Officers Gratuity Fund (SWDL OGF), SWDL Employees Gratuity Fund (SWDLEGF), Herbertsons Limited Employees Gratuity Fund (HL EGF), Phipson & Company Limited Management StaffGratuity Fund. (PCL SGF), Phipson & Company Limited Gratuity Fund. (PCL GF), Carew & Company Ltd. GratuityFund (CCL GF), McDowell & Company Limited Provident Fund (McD PF), Herbertsons Limited ExecutivesProvident Fund (HL EPF) and The Bengal Distilleries Company Limited Staff Provident Fund (BD PF), ShawWallace & Associated Companies Employees Gratuity Fund (SWCEGF), Shaw Wallace & Associated CompaniesExecutive Staff Fund (SWCSGF), Shaw Wallace & Co. Associated Companies Provident Fund (SWCPF).61

Schedules forming part of account for the year ended March 31, 2009 (Contd.)b) Summary of the transactions with related parties:Sl.No.Nature of transactions **Entitieswhere thereis controlAssociates2009 2008KeyManagementpersonnelEmployees’Benefit Planswhere thereis significantinfluenceTotalEntitieswherethere iscontrolAssociatesKeyManagementpersonnelEmployees’BenefitPlans wherethere issignificantinfluenceRs. Milliona) Purchase of goods- SWCL - - - - - 26.117 - - - 26.117- W&M 1,321.002 - - - 1,321.002 314.774 - - - 314.774- Utkal - - - - - - 0.309 - - 0.309- Others 9.724 - - - 9.724 3.259 - - - 3.259b) Sale of goods- SWCL - - - - - 54.181 - - - 54.181- Utkal - 0.981 - - 0.981 - 6.328 - - 6.328- USNPL 87.395 - - - 87.395 38.630 - - - 38.630- Others 7.671 - - - 7.671 - - - - -c) Income from sale by Tie-up Units.- Utkal - 30.858 - - 30.858 - 125.223 - - 125.223d) Income from Brand Franchise- USNPL 23.360 - - - 23.360 15.818 - - - 15.818e) Sale/ (Purchase) of fixed assets- SWCL - - - - - (1.719) - - - (1.719)- Utkal - - - - - - 0.336 - - 0.336f) Other Income- USNPL 40.206 - - - 40.206 19.045 - - - 19.045- SWCL - - - - - 22.608 - - - 22.608g) Advertisement & Sales Promotion- RCSPL 107.507 - - - 107.507 - - - - -h) Rent- W&M 104.805 - - - 104.805 - - - - -i) Royalty and Brand Fee- SWCL - - - - - 272.027 - - - 272.027- AOIL - - - - - 9.074 - - - 9.074j) Interest Expense- SWBL 182.413 - - - 182.413 - - - - -k) Rental Deposit - - 3.140 - 3.140 - - 2.854 - 2.854l) Interest as Sole Beneficiary in USLBenefit Trust 9,409.542 - - - 9,409.542 153.536 - - - 153.536m) Receipt from USL Benefit Trust - - - - - 8.655 - - - 8.655n) Finance (including loans and equitycontributions in cash or in kind)- USL Holding Ltd. 1,244.520 - - - 1,244.520 6190.725 - - - 6190.725- RCSPL 806.749 - - - 806.749 207.047 - - - 207.047- AOIL 449.508 - - - 449.508 15.934 - - - 15.934- FSWPL 261.744 - - - 261.744 120.842 - - - 120.842- SWBL (1,652.733) - - - (1,652.733) (519.200) - - - (519.200)- Utkal - (126.478) - - (126.478) - (135.830) - - (135.830)- SWCL - - - - - (1,155.201) (1,155.201)- Zelinka - - - - - (509.206) (509.206)- Others 148.574 - - - 148.574 181.666 181.666-Total62

Schedules forming part of account for the year ended March 31, 2009 (Contd.)b) Summary of the transactions with related parties: (Contd.)Sl.No.Nature of transactions ** Entitieswhere thereis controlo) Guarantees and Collaterals givenAssociates KeyManagementpersonnelEmployees’Benefit Planswhere thereis significantinfluenceTotal Entitieswherethere iscontrolAssociates KeyManagementpersonnelEmployees’BenefitPlans wherethere issignificantinfluence- USL Holding Ltd 31,397.558 - - - 31,397.558 24,830.870 - - - 24,830.870- USNPL - - - - - 56.250 - - - 56.250p) Managing Directors’ Remuneration - - 42.362 - 42.362 - - 31.439 - 31.439q) Rent - - 3.069 - 3.069 - - 2.790 - 2.790r) Dividend Paid- PDPL - - - - - 1.306 - - - 1.306- SWCL - - - - - 25.706 - - - 25.706- USL Benefit Trust 3.229 - - - 3.229 5.382 - - - 5.382s) Contribution to Gratuity Fund- McD OGF - - - 43.692 43.692 - - - 5.984 5.984- McD SGF - - - 33.493 33.493 - - - 33.621 33.621- SWCPF - - - 0.654 0.654 - - - - -t) Contribution to Provident Fund- Mcd PF - - - 55.068 55.068 - - - 48.015 48.015- BD PF - - - - - - - - 0.863 0.863u) Amount due fromTotal- USL Holding Ltd 7,451.161 - - - 7,451.161 6,206.641 - - - 6,206.641- AOIL 1,674.998 - - - 1,674.998 1,225.489 - - - 1,225.489- Zelinka - - - - - 6,836.073 - - - 6,836.073- Utkal - - - - - - 489.847 - - 489.847- RCSPL 910.74 - - - 910.74 207.809 - - - 207.809- FSWPL 498.627 - - - 498.627 196.305 - - - 196.305- Others 641.161 - - - 641.161 355.406 - - - 355.406v) Amount due to- SWCL - - - - - (1,234.395) - - - (1,234.395)- PDPL - - - - - (11.000) - - - (11.000)- W & M (303.828) - - - (303.828) (80.309) - - - (80.309)w) Loan from SWBL (2,556.633) - - - (2,556.633) - - - - -x) Interest accrued and dues (446.649) - - - (446.649) - - - - -** Excludes Reimbursement of Expenses and Cost sharing arrangements.The above information has been determined to the extent such parties have been identified on the basis of information provided by theCompany, which has been relied upon by the auditors.63

Schedules forming part of account for the year ended March 31, 2009 (Contd.)15. (a) The Company’s significant leasing arrangements in respect of operating leases for premises (residential, office,stores, godown, manufacturing facilities etc), which are not non-cancellable, range between 11 months and 3years generally (or longer in certain cases) and are usually renewable by mutual consent on mutually agreeableterms. The aggregate lease rentals payable are charged as Rent under Schedule 15 to the accounts.Leasing arrangements entered into prior to April 1, 2001 have not been considered for treatment under AS 19‘Accounting for Leases’.(b) The Company has acquired computer equipment and cars on finance leases. The lease agreement is for a primaryperiod of 48 months for computer equipment and 36 months to 60 months for cars. The Company has anoption to renew these leases for a secondary period. There are no exceptional/restrictive covenants in the leaseagreements.The minimum lease payments and their present value, for each of the following periods are as follows:Rs. MillionParticularsPresentValue ofpayments2009 2008MinimumleasepaymentsPresentValue ofpaymentsMinimumleasepaymentsLater than one year and not later than five years 15.618 17.137 24.074 26.683Later than five years - - - -15.618 17.137 24.074 26.683Not later than one year 11.106 12.930 17.477 20.30426.724 30.067 41.551 46.987Less: Finance Charges 3.343 5.436Present value of net minimum lease payments 26.724 41.55116. Earnings Per Share: 2009 2008Nominal Value of equity shares (Rs) 10 10a) Net Profit after tax (Rs. Million) 2,966.624 3,112.759Less: Proposed Dividend on Preference Shares (including Corporatetax thereon) - 2.258Net Profit available for equity shares 2,966.624 3,110.501b) Basic number of Equity Shares of Rs.10 each outstanding during theyear** 107,912,377 100,163,256c) Weighted Average number of Equity Shares of Rs.10 each outstandingduring the year** 107,912,377 97,702,675d) Basic Earnings Per Share (Rs.) (a /c) 27.49 31.84e) Dilutive Effect on Profit (Rs Million) * - 23.130f) Profit attributable to equity shareholders for computing Diluted EPS(Rs. Million) (a+e) 2,966.624 3,133.631g) Dilutive Effect on Weighted average number of equity sharesoutstanding during the year * - 2,080,338h) Weighted average number of Equity Shares and equity equivalentshares for computing Diluted EPS (c+g) 107,912,377 99,783,013i) Diluted Earnings Per Share (Rs.) (f / h) 27.49 31.40* Dilutive effect on weighted average number of equity shares and profit attributable is on account of ForeignCurrency Convertible Bonds.** Including Equity Shares to be issued referred to in Note 2(A)(I)(a).64

Schedules forming part of account for the year ended March 31, 2009 (Contd.)17. Taxes on Income:a) Current TaxationProvision for current taxation includes:Rs. Million2009 2008i) Income Tax 1,747.925 1,697.500ii) Wealth Tax 13.000 12.5001,760.925 1,710.000b) Deferred TaxationThe net Deferred Tax (Asset) / Liability as on March 31, 2009 has been arrived at as follows:ParticularsDeferredTax (Assets) /Liabilities as on1.4.2008Taken overonAmalgamation*Current Yearcharge /(credit)Deferred Tax(Assets) /Liabilities ason 31.03.2009Difference between book and tax depreciation 251.044 40.279 14.934 306.257Provision for Doubtful Debts (131.814) - (71.496) (203.310)Employee Benefits (68.486) (2.650) (47.184) (118.320)Others (55.906) (14.849) (130.275) (201.030)(5.162) 22.780 (234.021) (216.403)Less: Adjustment on adoption of notification foramendment to AS11 (48.013)186.008* Including deferred tax assets/(liabilities) of the Transferor Companies arising/ reversing during the year endedMarch 31, 2008. (Note 2 (D) above).18. Remuneration paid/payable to Managing Director2009 2008Salary and Allowances 18.062 14.966Incentives paid 17.085 10.213Contribution to Provident and other Funds * 3.940 3.383Value of Perquisites 3.275 2.87742.362 31.439* Provision for contribution to employee retirement/post retirement and other employee benefits which are basedon actuarial valuation done on an overall company basis are excluded above.65

Schedules forming part of account for the year ended March 31, 2009 (Contd.)Rs. Million19. Directors’ Commission2009 2008Computation of Net Profits under Section 198 of the Companies Act, 1956Net Profit before Taxation 4,591.604 4,849.662Add: Depreciation as per Books 361.565 326.112Remuneration to Managing Director 42.362 31.439Directors’ Fees 1.180 1.070Directors’ Commission 48.727 51.044Book deficit/(surplus) on fixed assets sold,written-off, etc (net) as per books (45.105) 20.354Provision for Doubtful Debts 210.345 171.171Diminution in value of Investments 0.030 0.0515,210.708 5,450.903Less: Depreciation under Section 350 of the Companies Act, 1956 361.565 326.112Profit on Sale of Investments 3.355 -Deficit/(Surplus) on disposal of fixed assets underSection 349 of the Companies Act, 1956 (26.891) 20.354Net profit 4,872.679 5,104.437Commission 1% thereof 48.727 51.044The total remuneration as stated above is within the maximum permissible limit under the Companies Act, 1956.20. Quantitative Information in respect of goods manufactured and sold by the Companya. Particulars of Capacity and Production:DescriptionBeverage Alcohol[Note (i)]UnitLicensedCapacity2009 2008InstalledCapacityActualProduction(Note iv)LicensedCapacityInstalledCapacityActualProductionLtrs 201,627,259 229,217,267 186,609,997 164,560,592 192,150,600 150,225,898Notes:i. Includes alcohol produced and bottled out of purchased rectified spirit. This activity is not considered asmanufacture under the Industries (Development and Regulation) Act, 1951.ii. The Company's applications for the Carry On Business licenses for certain Units are still pending with theauthority.iii. The Licensed and Installed Capacity has been certified by the Company’s management and relied upon bythe Auditors, this being a technical matter.iv. Includes production at manufacturing facilities taken on lease.66

Schedules forming part of account for the year ended March 31, 2009 (Contd.)Rs. Million2009 2008b. Particulars of opening stock of Finished Goods:Description Unit Quantity Value Quantity ValueBeverage Alcohol Cases 1,342,421 1,526.985 967,072 996.6381,526.985 996.638c. Particulars of stock of finished goods of the Transferor Companies as on April 1, 2008 (Note 3 (D) above) acquiredon amalgamationDescription Unit Quantity Value Quantity ValueBeverage Alcohol Cases 66,899 56.647 - -d. Particulars of closing stock of Finished Goods:56.647 - -Description Unit Quantity Value Quantity ValueBeverage Alcohol Cases 1,530,313 2,052.475 1,342,421 1,526.985e. Particulars of Turnover:2,052.475 1,526.985Description Unit Quantity Value Quantity ValueBeverage Alcohol Cases 52,932,510 71,130.831 38,743,593 51,784.918f. Particulars of purchase of traded goods:71,130.831 51,784.918Description Unit Quantity Value Quantity ValueBeverage Alcohol Cases 3,914,188 5,186.702 3,265,082 4,072.31621. Particulars of Raw Materials Consumed:5,186.702 4,072.316Description Unit Quantity Value Quantity ValueSpirits Litres 175,537,178 7,841.101 121,714,329 3,721.819Malt Kg. 15,426,159 415.177 8,732,860 206.760Molasses Kg. 123,317,858 605.718 124,989,972 314.633Others 1,345.962 1,181.15910,207.958 5,424.371Whereof: % Value % ValueImported 18 1,888.249 15 817.613Indigenous 82 8,319.709 85 4,606.758100 10,207.958 100 5,424.37167

Schedules forming part of account for the year ended March 31, 2009 (Contd.)22. Consumption of Packing Material, Stores and Spares:(including stores consumed in Repairs and Maintenance expenses)Rs Million2009 2008% Value % ValueImported 1 124.304 1 55.499Indigenous 99 9,410.332 99 6,581.998100 9,534.636 100 6,637.497Rs. Million23. Value of Imports on C.I.F. basis:2009 2008Raw Materials and Packing Materials 1,470.157 538.831Components and Spare Parts 2.691 0.794Plant and Machinery 25.131 28.1531,497.979 567.77824. Earnings in Foreign Currency:Interest on Fixed Deposits (net) 1.936 0.552Dividend income from subsidiary 40.206 19.04542.142 19.59725. Expenditure in Foreign Currency:Interest 115.803 121.616Rent 104.805 -Others (Royalty, Travelling, Subscription, Professional fees, Foreign Travel Expenses,Advertisement, Bank Charges, Finance Charges, etc.) 225.427 102.92426. Auditors’ Remuneration *446.035 224.540Statutory Audit ** 11.000 7.000Other Services 5.950 7.670Out-of-pocket Expenses (including service tax) 0.407 0.293* Included under Legal and Professional Charges in Schedule 15.** Including relating to earlier year Rs. 1 Million (2008 : Nil).17.357 14.96368

Schedules forming part of account for the year ended March 31, 2009 (Contd.)Rs. Million27. (a) Repairs to Plant and Machinery include:2009 2008Wages 7.588 6.479Stores Consumed 7.840 23.674(b) Repairs to Building include:15.428 30.153Wages 1.708 9.853Stores consumed 1.168 9.68828. Research and Development expenses comprise the following:2.876 19.541Salaries and Wages 15.959 14.795Contribution to Provident Fund and other Funds 1.674 1.598Staff Welfare Expenses 0.972 0.884Rent 3.861 3.710Miscellaneous Expenses 7.567 6.69429. a) Previous year's figures have been regrouped / rearranged wherever necessary.30.033 27.681b) In view of the amalgamation described in Note 2 above, the figures for the year ended March 31, 2009 are notcomparable with those of previous year.J. MAJUMDAR M.R.DORAISWAMY IYENGAR V.K. REKHIPartner Director Managing DirectorFor and on behalf ofPrice Waterhouse V.S.VENKATARAMAN P.A. MURALIChartered Accountants Company Secretary Chief Financial OfficerBangaloreBangaloreJuly 29, 2009 July 29, 200969

Statement Pursuant To Section 212(1)(e) Of The Companies Act, 1956As At March 31, 2009Sl.No.Name of the subsidiarya) No of shares held at the endof the financial year of thesubsidiaryUnited SpiritsLtd.Othersubsidiarycompaniesb) Extent of holding Net aggregate Profit/loss of the subsidiary so faras it concerns the members of the company% %UnitedSpirits Ltd.Othersubsidiarycompaniesa) Not dealt with in theaccounts of the company(ii )for the previousfinancial yearsof the subsidiarysince it becamea subsidiary(i )for thesubsidiary'sfinancialyear ended31.03.2009b) Dealt with in theaccounts of the company(ii )for the previousfinancial yearsof the subsidiarysince it becamea subsidiary(Rs. Million)(i )for thesubsidary'sfinancialyear ended31.03.20091 2 3 4 5 6 7 8 91 Asian Opportunities & 4,998,706- 100% - (60.572) (148.097) - -Investments Ltd.Shares2 United Spirits Nepal P. Ltd. 67,716- 82.46% - 38.828 67.697 - -(formerly known asMcDowell Nepal Ltd.)Shares3 Ramanreti Investments &- 50,000- 100% (0.064) (0.211) - -Trading Ltd.Shares4 Shaw Wallace Breweries 78,512,509 1,686,004 51.44% 1.10% 227.303 1,686.014 - -Ltd.*Shares5 Palmer Investment Group 15,000,000- 0% (0.321) (0.569) - -Ltd.Shares6 RG Shaw & Company Ltd. - 7,690,180- 100% 18.383 22.029 - -Shares7 Shaw Scott & Company- 105,609- 100% 4.556 6.204 - -Ltd.Shares8 Shaw Darby & Company- 130,845- 100% 3.115 6.305 - -LtdShares9 Thames Rice Milling- 90,160- 100% 2.462 4.736 - -Company LtdShares10 Shaw Wallace Overseas Ltd - 357,745- 100% 0.607 0.257 - -Shares11 JIHL Nominees Ltd - 10- 100% 2.085 5.951 - -Shares12 Montrose International- 500- 100% 12.686 17.792 - -S.AShares13 Bouvet Ladubay - 5,40,000- 100% 18.255 106.117 - -Shares14 Chapin Landais - 5,000- 100% 0.802 (0.351) - -Shares15 McDowell & Co. (ScotLand)- 1,575,000- 100% (35.206) (23.453) - -LtdShares16 Spring Valley Investments- 50,000- 100% (0.119) (0.219) - -Holdings IncShares17 United Spirits (Great- 100- 100% (1,251.126) (1,077.225) - -Britain) LtdShares18 USL Holdings Ltd - 100,000- 100% 477.551 (9.606) - -Shares19 USL Holdings (UK) Ltd - 100,000- 100% (6,402.734) (1,821.350) - -Shares20 United Spirits (UK) Ltd - 100,000- 100% (0.158) (0.325) - -21 Daffodils Flavours &Fragrances Pvt Ltd10,000SharesShares- 100% - 1.473 (2.641) - -70

Statement Pursuant To Section 212(1)(e) Of The Companies Act, 1956As At March 31, 2009 (Contd.)Sl.No.Name of the subsidiarya) No of shares held at the endof the financial year of thesubsidiaryUnited SpiritsLtd.Othersubsidiarycompaniesb) Extent of holding Net aggregate Profit/loss of the subsidiary so faras it concerns the members of the company% %UnitedSpirits Ltd.Othersubsidiarycompaniesa) Not dealt with in theaccounts of the company(ii )for the previousfinancial yearsof the subsidiarysince it becamea subsidiary(i )for thesubsidiary'sfinancialyear ended31.03.2009b) Dealt with in theaccounts of the company(ii )for the previousfinancial yearsof the subsidiarysince it becamea subsidiary(Rs. Million)(i )for thesubsidary'sfinancialyear ended31.03.20091 2 3 4 5 6 7 8 922 Four Seasons Wines Ltd 50,000- 100% - (78.976) (46.419) - -Shares23 Herbertsons Ltd 54,000Shares- 90% - (0.024) (0.041) - -24 McDowell Beverages Ltd 50,000Shares25 United Alcobev Ltd 50,000Shares26 United Vintners Ltd 50,000Shares27 McDowell and Co. Ltd 50,000Shares28 Royal Challengers Sportsd 10,000Pvt. LtdShares29 Jasmine Flavours and10,000Fragrances P LtdShares30 Whyte and MackayLimited31 Liquidity Inc., 4,000,000Shares32 United Spirits Trading(Shanghai) Co. P Ltd5,000,000Shares4,600,349,728Shares* Balance 72,416,505 equity shares vest with SWFSL Benefit Trust whose beneficiary is Shaw Wallace Breweries Ltd.Sl.no- 100% - (0.077) (0.026) - -- 100% - (0.072) (0.038) - -- 100% - (12.581) (12.241) - -- 100% - (0.053) (0.152) - -- 100% - (55.774) (7.987) - -- 100% - (0.029) (0.098) - -- 100% 257.704 2,141.720 - -51% (66.647) (34.984) - -100% (26.410) - - -Statement Pursuant to Section 212(1)(f) Of The Companies Act, 1956 as at March 31, 2009Material changes that have occurred between the closeof subsidiary's financial year and March 31, 2009Name of thesubsidiary1 United Spirits Nepal P. Ltd.(formerly known asMcDowell Nepal Ltd.)SubsidiaryFinancialyear endedonCompany'sInterestin theSubsidiarySubsidiary'sFixedAssetsSubsidiary'sInvestmentsMoneyslent by theSubsidiaryMoneys borrowed by thesubsidiary for the purposesother than that of meetingcurrent liabilities16.07.2008 82.46% 0.229 - - 0.000(Rs. Million)M.R.DORAISWAMY IYENGAR V.K.REKHI P. A. MURALI V.S.VENKATARAMANDirector Managing Director Chief Financial Officer Company SecretaryangaloreJuly 29, 200971

Details of Subsidiary CompaniesName of the SubsidiaryR.G. Shaw & CompanyLimitedPalmer InvestmentGroup LimitedMontroseInternational S.A.Shaw Scott &Company LimitedShaw Darby &Company Limited(Amount in Millions)Thames Rice MillingCompany LimitedGBP INR USD INR USD INR GBP INR GBP INR GBP INR1. Capital 0.077 5.583 15.000 760.950 0.500 25.365 0.106 7.667 0.131 9.499 0.090 6.5462. Reserves 1.036 75.199 1.214 61.578 0.194 9.861 0.088 6.393 0.057 4.152 0.093 6.7223. Total Assets 1.113 80.782 16.214 822.528 0.694 35.226 0.194 14.061 0.188 13.651 0.183 13.2684. Total Liabilities 1.113 80.782 16.214 822.528 0.694 35.226 0.194 14.061 0.188 13.651 0.183 13.2685. Investments 0.720 52.304 16.234 823.551 - - 0.098 7.084 0.109 7.884 0.123 8.9086. Turnover - - - - 1.916 89.051 - - - - - -7. Profit before Taxation 0.262 20.736 (0.007) (0.321) 0.273 12.686 0.064 5.032 0.039 3.115 0.031 2.4628. Provision for Taxation 0.030 2.353 - - - - 0.006 0.476 - - - -9. Profit after Taxation 0.232 18.383 (0.007) (0.321) 0.273 12.686 0.058 4.556 0.039 3.115 0.031 2.46210. Proposed Dividend - - - - - - - - - - - -Name of the SubsidiaryJIHLNomineesLimitedUSL Holdings (UK)LimitedSpring ValleyInvestmentsHolding Inc.USL HoldingsLimitedUnited Spirits(Great Britain) LimitedUnited Spirits(UK) LimitedRamanretiInvestmentsand TradingCompanyPrivate LtdUSD INR GBP INR USD INR USD INR GBP INR GBP INR INR1. Capital 0.000 0.001 0.001 0.073 0.050 2.537 0.500 25.365 0.000 0.000 0.000 0.000 0.5002. Reserves 0.179 9.087 (198.663) (14,422.953) (0.008) (0.402) 30.779 1,561.401 (30.603) (2,215.657) (0.006) (0.436) (6.650)3. Total Assets 0.179 9.088 234.237 17,005.640 0.042 2.135 31.279 1,586.766 501.282 36,292.817 (0.006) (0.435) (6.150)4. Total Liabilities 0.179 9.088 234.237 17,005.640 0.042 2.135 31.279 1,586.766 (531.885) (38,508.474) (0.006) (0.435) (6.150)5. Investments - - 0.000 0.000 0.002 0.100 0.050 2.537 506.794 36,691.886 0.000 0.000 16.8606. Turnover - - - - - - - - - - - - -7. Profit before Taxation 0.045 2.085 (80.911) (6,402.734) (0.003) (0.119) 10.277 477.551 (24.002) (1,737.745) (0.002) (0.158) (0.064)8. Provision for Taxation - - - - - - - - 6.721 486.600 - - -9. Profit after Taxation 0.045 2.085 (80.911) (6,402.734) (0.003) (0.119) 10.277 477.551 (17.281) (1,251.144) (0.002) (0.158) (0.064)10. Proposed Dividend - - - - - - - - - - - - -72

Details of Subsidiary Companies (Contd.)(Amount in Millions)Name of theSubsidiaryBouvetLadubay S.A.SUnited SpiritsNepal Pvt. Ltd.(Formerly knownas McDowellNepal Ltd)AsianOpportunitiesand InvestmentsLimitedShaw WallaceOverseasLimitedShawWallaceBreweriesLimitedFourSeasonsWinesLimitedUnitedVintnersLimitedUnitedAlcobevLimitedMcDowellBeveragesLimitedMcDowell(Scotland)LimitedEURO INR NRS INR USD INR GBP INR INR INR INR INR INR GBP INR1. Capital 10.800 729.324 8.212 5.132 4.999 253.584 0.358 25.972 1,645.850 50.500 0.500 0.500 0.500 1.575 114.3452. Reserves 2.399 162.035 100.713 62.945 (1.952) (99.035) (0.163) (11.816) 3,355.460 (125.425) (24.852) (0.140) (0.145) (0.945) (68.580)3. Total Assets 23.183 1565.553 186.047 116.280 3.946 200.173 0.195 14.156 5,000.248 (74.925) (24.352) 0.360 0.355 4.876 353.9654. Total Liabilities 23.183 1565.553 186.047 116.280 3.946 200.173 0.195 14.156 5,000.248 (74.925) (24.352) 0.360 0.355 4.876 353.9655. Investments 0.235 15.893 - - 27.189 1,379.294 - - 58.573 8.721 - - - - -6. Turnover 16.537 1086.989 691.787 432.367 - - - - - 23.335 5.767 - - - -7. Profit before Taxation 0.349 22.922 90.595 56.622 (1.304) (60.572) 0.010 0.764 325.321 (78.976) (12.581) (0.072) (0.077) (0.445) (35.206)8. Provision for Taxation 0.071 4.667 28.470 17.794 - - 0.002 0.157 98.018 - - - - - -9. Profit after Taxation 0.278 18.255 62.125 38.828 (1.304) (60.572) 0.008 0.607 227.303 (78.976) (12.581) (0.072) (0.077) (0.445) (35.206)10. Proposed Dividend - - 29.423 18.389 - - - - - - - - - - -Name of the SubsidiaryChapinLandias S.A.SHerbertsonsLimitedDaffodilsFlavours &FragrancesPrivateLimitedLiquidity Inc.,White & MackayGroup Ltd.White & Mackay Ltd.RoyalChallengersSportsP LtdJasmineFlavoursandFragrancesP LtdUnited Spirits(Trading)ShanghaiCo. P LtdMcDowellandCompanyLimitedEURO INR INR INR USD INR GBP INR GBP INR INR INR RMB INR INR1. Capital 0.100 6.753 0.600 0.100 0.001 0.051 62.315 4,511.634 178.973 12957.647 0.100 0.100 5.000 38.220 0.5002. Reserves 0.079 5.309 (0.065) (1.222) (0.946) (48.015) 2.477 179.304 107.059 7751.072 (63.760) (0.127) (4.398) (33.619) (0.205)3. Total Assets 0.179 12.064 0.535 (1.122) 0.469 23.768 299.443 21,679.692 888.687 64340.939 (92.168) (0.027) 0.602 4.600 0.2954. Total Liabilities 0.179 12.064 0.535 (1.122) 0.469 23.768 (234.651) (16,988.754) 888.687 64340.939 (92.168) (0.027) 0.602 4.600 0.2955. Investments - - - - - - 0.121 8.738 483.505 35005.762 - - - - -6. Turnover 3.042 199.970 - - 0.589 27.358 176.703 12,793.310 173.091 12531.788 501.608 - 3.311 22.450 -7. Profit before Taxation 0.019 1.238 (0.024) 2.227 (1.434) (66.647) 4.371 316.471 23.443 697.273 (84.281) (0.029) (3.895) (26.410) (0.053)8. Provision for Taxation 0.007 0.436 - 0.754 - - 0.812 58.767 1.268 91.803 (28.507) - - - -9. Profit after Taxation 0.012 0.802 (0.024) 1.473 (1.434) (66.647) 3.559 257.704 22.174 160.398 (55.774) (0.029) (3.895) (26.410) (0.053)10. Proposed Dividend - - - - - - - - - - - - - - -73

BALANCE SHEET ABSTRACTBALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILEIIIIIIIVVRegistration DetailsRegistration No. L 0 1 5 5 1 K A 1 9 9 9 P L C 0 2 4 9 9 1 State Code 0 8Balance Sheet Date 3 1 0 3 2 0 0 9Capital Raised during the period (Rs. Million)Public issue N I L Rights issue N I LBonus Shares N I L Private Placement N I LOthers* N I L Naked Warrants / Pref. offer N I LPosition of Mobilisation and Deployment of Funds (Rs. Million)Total Liabilities 5 0 3 2 7 . 0 2 8 Total Assets 5 0 3 2 7 . 0 2 8Sources of fundsPaid-up Capital 1 0 0 1 . 6 3 3 Reserves & Surplus 2 9 7 0 8 . 0 3 7Share Capital Secured Loans 1 3 0 6 4 . 7 9 0Suspense 7 7 . 4 9 1 Unsecured Loans 6 1 6 3 . 7 3 0Application of FundsNet Fixed Assets 6 2 0 8 . 9 6 7 Investments 2 0 5 1 4 . 7 6 5Net Current Assets 2 3 4 8 6 . 8 9 3 Misc. Expenditure N I LAccumulated Losses N I L Deferred Tax Asset (Net) 2 1 6 . 4 0 3Performance of Company (Rs. Million)Turnover 4 1 5 2 9 . 7 7 1 Total Expenditure 3 6 5 7 6 . 6 0 2(Gross Revenue)(+) Profit / (-) Loss (+) Profit / (-) LossBefore Tax + 4 5 9 1 . 6 0 4 After Tax + 2 9 6 6 . 6 2 4Earning (Basic) per share in Rs. 2 7 . 4 9(incl. Deferred Tax)Earnings (Diluted) per Share in Rs. 2 7 . 4 9 Dividend rate % 2 0Generic Name of Three Principal Products / Services of Company (as per monetary items)Item Code No. (ITC Code) 2 2 0 8 3 0 0 0Product DescriptionW H I S K YItem Code No. (ITC Code) 2 2 0 8 2 0 0 1Product DescriptionB R A N D YItem Code No. (ITC Code) 2 2 0 8 4 0 0 1Product descriptionR U MV.K.REKHI M.R.DORAISWAMY IYENGER P. A. MURALIManaging Director Director Chief Financial OfficerBangaloreJuly 29, 2009V.S. VENKATARAMANCompany Secretary74

Auditors' Report to the Board of Directors of United Spirits Limited1. We have audited the attached Consolidated BalanceSheet of United Spirits Limited and its subsidiaries(United Spirits Limited Group) as at March 31, 2009,the Consolidated Profit and Loss account for theyear ended on that date annexed thereto, and theConsolidated Cash Flow Statement for the yearended on that date, which we have signed underreference to this report. These Consolidated FinancialStatements are the responsibility of the United SpiritsLimited’s management and have been prepared bythe management on the basis of separate financialstatements and other financial information regardingcomponents. Our responsibility is to express an opinionon these Consolidated Financial Statements based onour audit.2. We conducted our audit in accordance with auditingstandards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatement. Anaudit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financialstatements. An audit also includes assessing theaccounting principles used and significant estimatesmade by the management, as well as evaluating theoverall financial statement presentation. We believethat our audit provides a reasonable basis for ouropinion.3. We did not audit the financial statements of certainsubsidiaries, whose financial statements reflect totalassets of Rs. 68,927.464 Million as at March 31, 2009,total revenues of Rs. 16,381.334 Million and net cashoutflow amounting to Rs. 731.870 Million for the yearended on that date as considered in the ConsolidatedFinancial Statements and associates whose financialstatements reflect the United Spirits Limited Group’sshare of loss of Rs. 1.308 Million for the year ended onthat date as considered in the Consolidated FinancialStatements. These financial statements and otherinformation of these subsidiaries and associates havebeen audited by other auditors, whose reports havebeen furnished to us, and our opinion, insofar as itrelates to the amounts included in respect of thesesubsidiaries, is based solely on the report of the otherauditors.4 We report that the Consolidated Financial Statementshave been prepared by United Spirits Limited’smanagement in accordance with the requirementsof Accounting Standard 21, Consolidated FinancialStatements and Accounting Standard 23, Accountingfor Investments in Associates in Consolidated FinancialStatements, as specified in the Companies (AccountingStandard) Rules, 2006.5. Based on our audit and on consideration of the reportsof other auditors on separate financial statements andon the other financial information of the components,in our opinion and to the best of our information andaccording to the explanations given to us, the attachedConsolidated Financial Statements, give a true andfair view in conformity with the accounting principlesgenerally accepted in India:i) in the case of the Consolidated Balance Sheet, ofii)iii)the state of affairs of the United Spirits LimitedGroup as at March 31, 2009;in the case of the Consolidated Profit and Lossaccount, of the loss for the year ended on thatdate; andin the case of the Consolidated Cash FlowStatement, of the cash flows for the year endedon that date.Place: BangaloreDate : July 29, 2009J. MajumdarPartnerMembership Number – F 51912For and on behalf ofPrice WaterhouseChartered Accountants75

Consolidated Financial StatementBalance Sheet as at March 31, 2009Rs. MillionSchedule 2009 2008SOurcEs Of FuNdsShareholders’ FundsShare Capital 1 1,001.633 885.744Share Capital Suspense 1A 28.239 -Reserves and Surplus 2 22,826.141 19,886.905Minority Interest 62.854 1,992.239Loan FundsSecured Loans 3 69,926.045 65,270.189Unsecured Loans 4 3,678.829 771.175Term Liability towards Franchisee rights [Schedule 19 Note 4] 4,431.413 -Deferred Tax Liability (Net) [Schedule 19 Note 15(b)] - 18.029101,955.154 88,824.281ApplicatiON Of FuNdsa) Fixed Assets 5Gross Block 22,919.456 16,985.241Less: Depreciation 6,649.966 6,357.133Net Block 16,269.490 10,628.108Capital Work in Progress 288.382 534.43216,557.872 11,162.540b) Goodwill on Consolidation 44,738.318 53,259.734Investments 6 9,501.457 2,119.087Deferred Tax Asset (Net) [Schedule 19 Note 15(b)] 917.977 -Foreign Currency Monetory Item Translation Difference [Schedule 19 Note17(d)(ii)] 5,597.523 -Current Assets, Loans and AdvancesInventories 7 17,458.044 14,850.027Sundry Debtors 8 8,879.604 8,369.997Cash and Bank Balances 9 4,490.023 5,437.838Other Current Assets 10 2,145.024 1,469.204Loans and Advances 11 7,399.294 4,350.57240,371.989 34,477.638Less: Current Liabilities and Provisions 12Liabilities 13,878.812 11,933.516Provisions 2,584.477 1,227.97216,463.289 13,161.488Net Current Assets 23,908.700 21,316.150Miscellaneous Expenditure ( to the extent not written off) 13 733.307 966.770Statement on Significant Accounting Policies 18Notes on Accounts 19The Schedules referred to above and the notes thereon form an integral part of the Accounts.101,955.154 88,824.281This is the Consolidated Balance Sheet referred to in our report of even dateJ. MAJUMDAR M. R. DORAISWAMY IYENGAR V. K. REKHIPartner Director Managing DirectorFor and on behalf ofPrice Waterhouse V. S. VENKATARAMAN P. A. MURALIChartered Accountants Company Secretary Chief Financial OfficerBangaloreBangaloreJuly 29, 2009 July 29, 200976

Consolidated Financial StatementProfit and Loss Account for the year ended March 31, 2009Rs. MillionSchedule 2009 2008INcOmESales (Gross) 88,991.063 71,710.354Less: Excise Duty 38,449.701 28,993.74950,541.362 42,716.605Income arising from Sale by Manufacturers under ‘Tie-up' agreements (Tie-up units) 2,286.740 2,393.603Income from Brand Franchise 1,417.905 1,165.041Income from IPL Franchise 434.608 -Other Income 14 1,038.408 1,063.17255,719.023 47,338.424EXpENditurEMaterials 15 26,909.455 20,905.933Manufacturing and Other Expenses 16 20,067.629 14,670.312Interest and Finance charges 17 7,175.643 5,447.563Exchange Loss (Net) 3,809.315 81.16857,962.042 41,104.976Profit before Exceptional and Other (2,243.019) 6,233.448Non-Recurring items, Depreciation and TaxationDepreciation 925.839 741.412Profit before Exceptional and OtherNon-Recurring Items and Taxation (3,168.858) 5,492.036Exceptional and Other Non-Recurring Items (Net) - Contingency Provision Written Back - 181.258(Loss)/ Profit before Taxation and before share in Profit/Losses) of Associates (3,168.858) 5,673.294Provision for Taxation:Current Tax 1,815.351 1,841.299Deferred Tax (949.703) 773.129Fringe Benefit Tax 50.063 46.815(Loss)/Profit after Taxation and before share in (4,084.569) 3,012.051Profits/(Losses) of AssociatesShare in Profits/ (losses) of Associates (Net) (1.308) (7.419)(Loss) / Profit before Minority Interest (4,085.877) 3,004.632Minority Interest in (Profit)/Loss (1.741) (284.048)Net (Loss)/ Profit for the year (4,084.136) 2,720.584Profit brought forward from previous year 8,036.929 5,822.345Profit transferred on Amalgamation [Schedule 19 Note 2(D)] (162.543) -3,790.250 8,542.929Appropriations:Proposed DividendEquity Shares - Interim 8.552 -Equity Shares - Final 206.280 132.623Corporate Tax on Proposed Dividend 36.679 25.877Transfer to Capital Redemption Reserve - 77.500Transfer to General Reserve 350.000 270.000Profit carried to Balance Sheet 3,188.739 8,036.929Basic Earnings Per Share (Rs.) (Face Value of Rs.10 each) (39.66) 31.59Diluted Earnings Per Share (Rs.) (Face Value of Rs.10 each) (39.66) 31.11Statement on Significant Accounting Policies 18Notes on Accounts 19The Schedules referred to above and the notes thereon form an integral part of the Accounts.This is the Consolidated Profit and Loss Account referred to in our report of even dateJ. MAJUMDAR M. R. DORAISWAMY IYENGAR V. K. REKHIPartner Director Managing DirectorFor and on behalf ofPrice Waterhouse V. S. VENKATARAMAN P. A. MURALIChartered Accountants Company Secretary Chief Financial OfficerBangaloreBangaloreJuly 29, 2009 July 29, 200977

Consolidated Financial StatementCash Flow Statement for the Year Ended March 31, 2009Rs. Million2009 2008A. CASH FLOW FROM OPERATING ACTIVITIESNet profit/(loss) before Exceptional and OtherNon- recurring items and Taxation (3,168.858) 5,492.036Adjustments for :Depreciation 925.839 741.412Unrealised Foreign Exchange Loss/(Gain) 3,174.218 (72.702)Bad Debts/Advances written off 19.289 187.060Loss/(Gain) on Fixed Assets Sold/Written Off (Net) (142.002) (97.325)Loss/(Gain) on Sale of Investments (Net) (24.500) 5.798Liabilities no longer required written back (136.619) (199.962)Provision for Doubtful Debts/Advances/Deposits 212.444 135.350Provision for diminution in value of Investments/(Written back) 0.031 0.051Provision for Onerous Lease/(written back) 403.578 (82.863)Provision - Others 1,057.645 77.550Interest and Finance Charges 7,377.259 5,880.823Income from investments (31.696) (94.097)Interest Income (201.616) 12,633.870 (433.260) 6,047.835Operating profit before working capital changes 9,465.012 11,539.871(Increase)/decrease in Trade and other receivables (3,991.660) (2,597.188)(Increase)/decrease in Inventories (2,608.017) (793.677)Increase/(decrease) in Trade payables 1,846.147 (4,753.530) (3,208.175) (6,599.040)Cash generated from operations 4,711.482 4,940.831Direct taxes paidFringe Benefit taxes paidCash flow before Exceptional and Other Non-Recurring Items(2,314.180) (2,222.266)(43.632) (45.320)2,353.670 2,673.245Prior Period, Exceptional and Other Non-Recurring items - -Cash flow after extraordinary itemsand net cash from operating activities 2,353.670 2,673.245B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of fixed assets (951.509) (2,641.536)Payment towards Franchise rights (501.575) -Sale of fixed assets 189.223 168.906Finance Lease Payments (17.257) (15.159)Purchase of long term investments (9.683) (14.582)Purchase of current investments (50.000) (1,303.931)Consideration paid on acquisitions of shares in Subsidiaries - (36,574.961)[net of cash and cash equivalent on the acquisition dateRs. NIL (2008: Rs.112.446 Million)]Disposal of Investment in Associate 10.700 -Sale of long term investments 1,068.924 1.539Sale of current investments 881.551 1,249.216Interest received 214.423 419.443Dividend received 29.993 82.958Net cash used in investing activities 864.790 (38,628.107)78

Consolidated Financial StatementsCash Flow Statement for the Year Ended March 31, 2009 (Contd.)Rs. Million2009 2008C. CASH FLOW FROM FINANCING ACTIVITIESShare Application Money in a Subsidiary Company 50.000 -Expenses incurred on arrangement of borrowings - (788.716)Proceeds/(Repayment) of long term loansProceeds 2,170.756 40,742.225Repayment (4,465.117) (505.269)Proceeds/(Repayment) of fixed deposits 95.169 (117.669)Proceeds/(Repayment) of short term loans 2,814.552 (1,700.328)Working Capital Loan / Cash Credit from Banks (net) 2,415.467 2,340.240Interest and Finance charges Paid[including on Finance lease Rs. 2.981 Million(7,104.189) (4,124.167)(2008: Rs. 3.003 Million)]Dividends paid (142.913) (175.510)Corporate Tax on distributed profit - (56.119)Net cash used in financing activities (4,166.275) 35,614.687Net increase in cash and cash equivalents (947.815) (340.175)Cash and cash equivalents as at March 31, 2008 5,437.838 5,778.013Cash and cash equivalents as at March 31, 2009 4,490.023 5,437.838(947.815) (340.175)Notes:1. The above Cash Flow Statement has been compiled from and is based on the Balance Sheet as at March 31, 2009 and therelated Profit and Loss Account for the year ended on that date.2. The above cash flow statement has been prepared under the indirect method as set out in the Accounting Standard - 3 onCash Flow Statements as notified under Section 211(3C) of the Companies Act, 1956 and reallocation required for this purposeare as made by the Company.3. Previous year’s figures have been regrouped wherever necessary in order to conform to this year’s presentation.This is the Consolidated Cash Flow Statementreferred to in our report of even date.J. MAJUMDAR M. R. DORAISWAMY IYENGAR V. K. REKHIPartner Director Managing DirectorFor and on behalf ofPrice Waterhouse V. S. VENKATARAMAN P. A. MURALIChartered Accountants Company Secretary Chief Financial OfficerBangaloreBangaloreJuly 29, 2009 July 29, 200979

Consolidated Financial StatementSchedules forming part of Balance Sheet as at March 31, 2009Rs. Million2009 20081. SharE CapitalAuthorised245,000,000 (2008: 110,000,000) Equity Shares of Rs.10/- each 2,450.000 1,100.00084,200,000 (2008: 10,000,000) Preference Shares of Rs.10/- each 842.000 100.000[Schedule 19 Note 2(A)(IV)] 3,292.000 1,200.000Issued, Subscribed and Paid-up100,163,256 (2008: 100,163,256) Equity Shares of Rs.10/- each fully paid up. 1,001.633 1,001.633Less: Nil (2008: 11,588,984)Equity Shares held by Subsidiaries - 115.889Notes :Of the above,1,001.633 885.7441. 51,719,968 (2008: 51,719,968) Equity Shares were allotted as fully paid up on July 9, 2001 to the Shareholders of the erstwhileMcDowell & Company Limited, pursuant to the Schemes of Amalgamation for consideration other than cash.2. 34,010,521 (2008: 34,010,521) Equity Shares were alloted as fully paid on November 6, 2006 to Equity Shareholders oferstwhile Herbertsons Limited, Triumph Distillers & Vintners Private Limited, Baramati Grape Industries Limited, UnitedDistillers India Limited and Shaw Wallace Distilleries Limited pursuant to a Scheme of Amalgamation for considerationother than cash.3. 8,751,381 (2008: 8,751,381) Equity shares of Rs.10/- each fully paid up represent 17,502,762 (2008: 17,502,762) GlobalDepository Shares issued by the Company on March 29, 2006.4. 5,681,326 (2008: 5,681,326) Equity shares of Rs.10/- each fully paid up were alloted consequent to conversion of 100,000,2% Convertible Bonds in Foreign Currency during 2008.1A. SharE Capital SuspENsEEquity Share Suspense7,749,121 (2008: Nil) Equity Shares of Rs.10/- each to be issued as fully paid upto the Equity Shareholders of Transferor Companies pursuant to the Scheme ofAmalgamation for consideration other than cash [Schedule 19 Note 2(A)(I)]77.491 -Less: 4,925,231 (2008: 11,588,984) Equity Shares to be held by Subsidiaries 49.252 -28.239 -80

Consolidated Financial StatementSchedules forming part of Balance Sheet as at March 31, 2009 (Contd.)Rs. Million2009 20082. REsErvEs aNd SurplusCentral SubsidyAs per Last Balance Sheet 1.500 1.500Capital Redemption ReserveAs per last Balance Sheet 578.946 464.446Transferred from the General Reserve - 37.000Transferred from the Profit and Loss Account - 77.500578.946 578.946Securities Premium AccountAs per last Balance Sheet 9,893.918 5,457.811Addition during the year:(a) Conversion of 100,000, 2% Convertible Bonds in Foreign- 4,386.164Currency(b) Premium payable on redemption of 2% Convertible Bonds in- 49.943Foreign Currency reversed during the year9,893.918 9,893.918Employee Housing FundAs per last Balance Sheet 0.625 0.625Foreign Currency Translation Reserve 350.527 (82.000)Contingency ReserveAs per last Balance Sheet 110.000 110.000General ReserveAs per last Balance sheet 1,346.987 1,113.987Add: Addition during the year(a) Reserve arising on amalgamation [Schedule 19 Note 2(A)(V) 7,849.035 -(d) and 2(B)(II)(c)](b) Adjustment on adoption of notification under Companies 99.360 -(Accounting Standards) Rules, 2009 relating to AS11 - “TheEffects of Changes in Foreign Exchange Rates” [Schedule 19Note 17(d)](c) Transferred from Profit and Loss Account 350.000 270.0009,645.382 1,383.987Less:(a) Expenses relating to Amalgamation [Schedule 19 Note 2(C)] (146.879) –(b) Diminution in value of certain fixed assets of the Company (80.704) -[Schedule 19 Note 2(A)(V)(e)](c) Transfer from Foreign Currency Translation Reserve on(715.913) -amalgamation [Schedule 19 Note 2(B)(II)(d)](d) Transferred to Capital Redemption Reserve - (37.000)8,701.886 1,346.987Surplus in Profit and Loss Account 3,188.739 8,036.92922,826.141 19,886.90581

Consolidated Financial StatementSchedules forming part of Balance Sheet as at March 31, 2009 (Contd.)Rs. Million2009 20083. SEcurEd LOaNsTerm LoansFrom Banks [Note (i)] 61,893.339 59,638.123[Repayable within one year: Rs.6,314.639 Million (2008: Rs.1,604.634 Million)]Working Capital Loan / Cash Credit from Banks [Note (ii) and (iii)] 8,005.982 5,590.515Finance Lease [Note (iv)] 26.724 41.55169,926.045 65,270.189Notes:(i) Out of the above loans:(a) Secured by charge on certain fixed assets of the Company including Land andBuilding. 1,426.205 488.222(b) Secured by charge on certain fixed assets of the Company including Land andBuildings, pledge of certain shares held by the Company and also by pledge ofcertain shares of other Companies. 2,062.412 3,906.754(c) Foreign Currency Borrowings and External Commercial Borrowings secured bycharge on certain fixed assets of the Company inlcuding land and buildings, atrade mark and fixed deposits with bank (charge created subsequent to yearend). 1,775.550 1,404.200(d) Secured by a second charge on certain fixed assets of the Company includingland and building. 62.500 125.000(e) Secured by hypothecation of specific fixed assets acquired under respectiveagreements. 0.305 4.627(f) Secured by a charge on fixed and floating securities over the Group's assetsincluding a pledge on Group's maturing stock and pledge over the Share Capitalof Subsidiary Companies in United Kingdom. 24,358.044 28,307.701(g) Secrued by hypothecation of certain trademarks of the Group Pledge of certainshares held by the Group and Trust including charge on Immovable property,current assets including inventories held by the Group. 31,428.520 24,856.350(h) Secured by charge on property 308.200 255.938(i) Secured by fixed assets and inventory 471.603 289.331(ii) Secured by charge on certain fixed assets of the Company including land andbuilding and hypothecation of inventories (except those held outside India), bookdebts and other current assets..(iii) Includes Foreign Currency Non-Resident [FCNR(B)] Loans. - 893.069(iv) Secured against assets acquired under lease agreements4. UNsEcurEd LOaNsFixed Deposits 631.505 553.385[Repayable within one year Rs.148.294 Million (2008: Rs. 367.072 Million)]Long term loan from a bank (Note below) 750.000 -[Repayable within one year Rs.Nil (2008: Rs. Nil)]Short term loan from banks 2,150.000 -[Repayable within one year Rs.2,150 Million (2008: Rs. Nil)]From Others 106.732 177.198Interest accrued and due 40.592 40.5923,678.829 771.175Note: Out of the above loans Rs.750 Million (Rs. Nil) is guaranteed by a promoter/director of the Company.82

Consolidated financial StatementSchedules forming part of Balance Sheet as at March 31, 2009 (Contd.)5. FiXEd AssEts Rs. MillionGROSS BLOCK DEPRECIATION NET BLOCK2008TranslationAdjustmentsAcquisition /Amalgamation(Note 4 and 5)AdditionsDeletion/Adjustments2009 2008TranslationAdjustmentsAcquisition /AmalgamationFor theyearDeletion/Adjustments2009 2009 2008TangibleLand ( Note 1 below):Freehold 1,987.266 (15.080) 811.183 112.121 (93.506) 2,988.996 - - - - - - 2,988.996 1,987.266Leasehold 215.246 - (2.220) (27.419) 100.766 84.841 - - - - - - 84.841 215.246Buildings (Notes 2 and 3 below) 4,273.751 (203.279) 84.001 295.807 18.040 4,432.240 995.682 (53.173) - 113.760 13.060 1,043.209 3,389.031 3,278.069Plant and Machinery 8,647.132 (491.413) (60.529) 766.700 220.066 8,641.824 4,348.038 (274.502) - 552.172 188.599 4,437.109 4,204.715 4,299.094Furniture and Fixtures andOffice Equipments :Finance Lease 46.892 - (6.146) - - 40.746 17.615 - - 14.515 - 32.130 8.616 29.277Others 1,083.256 (61.773) (13.206) 41.606 20.349 1,029.534 782.670 (55.812) - 60.800 19.120 768.538 260.996 300.586Vehicles :Finance Lease 18.798 - - 2.432 - 21.230 2.274 - - 3.316 - 5.590 15.640 16.524Others 235.681 (2.756) (4.042) 3.066 34.055 197.894 194.627 (2.818) - 19.527 31.770 179.566 18.328 41.054Aircraft 180.562 - - - - 180.562 5.461 - - 25.837 - 31.298 149.264 175.101IntangibleTrademark, Formulae and License 296.657 66.032 0.234 5.678 - 368.601 10.766 5.848 - 37.252 - 53.866 314.735 285.891Franchisee Rights - - - 4,932.988 - 4,932.988 - - - 98.660 - 98.660 4,834.328 -16,985.241 (708.269) 809.275 6,132.979 299.770 22,919.456 6,357.133 (380.457) - 925.839 252.549 6,649.966 16,269.490 10,628.1082008 6,821.724 20.324 8,234.907 2,268.330 360.044 16,985.241 1,764.466 24.213 4,111.633 741.412 284.591 6,357.133Capital Work-in-Progress (including Advances) 288.382 534.43216,557.872 11,162.540Notes:1. The Company is in the process of registering certain freehold and leasehold land in its own name. Deletions / adjustments include Rs.100.766 Millionreclassified from lease hold land to freehold land.2. Cost of buildings includes the following payments made for the purpose of acquiring the right of occupation of Mumbai Godown space:i) 660 Equity Shares (unquoted) of Rs.100 each fully paid in Shree Madhu Industrial Estate Limited Rs.0.066 Million (2008: Rs.0.066 Million). Application hasbeen made for Duplicate Share Certificates and the same is in process.ii) 199, 6% Debentures (unquoted) of Rs.1,000 each fully paid in Shree Madhu Industrial Estate Limited Rs. 0.199 Million (2008: Rs.0.199 Million).Application has been made for duplicate Debentures certificates and the same is in the process.3. Include value of fully paid shares of Rs.0.006 Million (2008: Rs.0.003 Million) held in Co-operative Housing Socities.4. Adjustments on amalgamation. Refer Schedule 19 Notes 2(V)(d).5. Net of diminution in value of assets of the Company amounting to Rs.80.704 Million as per a Scheme of Amalgamation [Schedule 19 Note 2(A)(V)(e)].83

Consolidated Financial StatementSchedules forming part of Balance Sheet as at March 31, 2009 (Contd.)6. INvEstmENtsCURRENTUnquoted InvestmentsUnits (Fully Paid)Rs. Million2009 2008Mutual funds Investments 21.386 851.233Total Current Investments 21.386 851.233LONG TERMQuoted InvestmentsA. TradeFully Paid Equity Shares 0.532 10.155B. Non-TradeFully Paid Equity Shares 4.147 6.1244.679 16.279Units (Fully Paid) (Note 1) 3.839 35.982Total Quoted Investments (A+B) 8.518 52.261Unquoted InvestmentsC. TradeFully paid Equity Shares 10.828 0.683Associates** 8.721 15.896Add: Accumulated Profits/ (Losses) of Associates(net of dividend received) (8.721) (11.197)- 4.699** Including Goodwill on acquisition of AssociatesRs.3.518 Million (2008: Rs. 10.828 Million)Fully paid Preference Shares - 0.25010.828 5.632D. Non-TradeIn Government Securities 0.200 1,006.501In Fully Paid Debentures 0.048 0.048Fully Paid Equity Shares 10.675 10.80010.923 1,017.349E. Others (Note 2) 9,450.681 194.6769,450.681 194.676Total Unquoted Investments (C+D+E) 9,472.432 1,217.657Total Long Term Investments (A+B+C+D+E) 9,480.950 1,269.918Total Current and Long Term Investments 9,502.336 2,121.151Less: Provision for diminution in the value of Investments(Note 3)0.879 2.064Total 9,501.457 2,119.08784

Consolidated Financial StatementSchedules forming part of Balance Sheet as at March 31, 2009 (Contd.)6. INvEstmENts (Contd.)Rs. Million2009 2008Aggregate Value of Quoted Investments- Book Value 8.518 901.430- Market Value 68.748 1,182.416Aggregate book value of Unquoted Investments 9,472.432 1,217.657Acquired on acquisition - 9.378Additions during the year 52.666 1,322.503Adjustments to Investments 9,256.005 -Sold during the year 1,927.486 1,256.823Notes:1. Investments in units of Unit Trust of India amounting to Rs.3.175 Million (2008: Rs. 34.400 Million) represent those madeunder Rule 3A of the Companies (Acceptance of Deposit) Rules, 1975.2. Include:a) Rs. 9,409.541 Million (2008: Rs.153.536 Million) pertaining to investment in USL Benefit Trust represents beneficialinterest USL Benefit Trust which holds 3,459,090 (2008: 2,152,659) equity shares of Rs.10 each of the Company, withall additions or accretions thereto in trust for the benefit of the Company and includes 10,282,553 Shares held byerstwhile Shaw Wallace and Company referred to in Schedule 19 Note 2(A)(III).b) Rs. 41.140 Million (2008: Rs. 41.140 Million) pertaining to 72,416,505 (2008: 72,416,505) Equity Shares of SWBL whosebeneficial ownership vested with SWFSL are kept with escrow agent in view of court order. Pursuant to a schemeof amalgamation, such beneficial interest are held in trust by the trustee of SWFSL benefit trust for the benefit ofSWBL3. Investments written off during the year aggregated to Rs.1.216 Million (2008: Rs. Nil) adjusted against the provision fordiminution in the value of Investment.85

Consolidated Financial StatementSchedules forming part of Balance Sheet as at March 31, 2009 (Contd.)7. INvENtOriEsRs. Million2009 2008Raw Materials including materials in transit 1,210.364 777.277Packing Materials, Stores and Spares 1,065.984 754.209Finished goods including goods in transit 3,320.363 2,548.239Work-in-Progress 11,861.333 10,770.3028. SuNdry DEbtOrs(Unsecured)Exceeding six months:17,458.044 14,850.027Considered Good 14.434 64.064Considered Doubtful 147.707 149.849162.141 213.913Others: Considered Good 8,865.170 8,305.9339,027.311 8,519.846Less: Provision for Doubtful debts 147.707 149.8499. Cash aNd BaNk BalaNcEsNotes:8,879.604 8,369.997Cash on Hand 5.527 6.558Remittance in Transit/ Cheques on Hand 232.624 30.675Balances with Scheduled Banks:On Current Accounts [Note (i)] 2,398.959 1,010.607On Unpaid Dividend Account 17.878 19.730On Deposit Account [Note (ii) and Note (iii)] 1,835.035 4,370.268(i) includes Rs.32.097 Million (2008: Rs.25,285 Million) in Exchange Earners Foreign Currency .(EEFC) Account and Rs.8.703 Million (2008: Rs.1.155 Million) in Foreign Currency(ii) (a) includes Rs. 0.587 Million (2008: Rs. 8.403 Million) pledged with GovernmentDepartments.(b) includes Rs. 1.300 Million (2008: Rs.2.673 Million) as margin.(iii) includes Rs.133.926 Million (2008: Nil) pledge as Security against loan from a bank4,490.023 5,437.83810. OthEr CurrENt AssEts(Unsecured, Considered Good except otherwise stated)Income accrued on Investments and Deposits 46.331 59.138Other Deposits – Considered Good 2,093.820 1,405.448– Considered Doubtful 9.940 8.031Fixed assets held for sale 4.873 4.6182,154.964 1,477.235Less: Provision for Doubtful Deposits 9.940 8.0312,145.024 1,469.20486

Consolidated Financial StatementSchedules forming part of Balance Sheet as at March 31, 2009 (Contd.)Rs. Million2009 200811. LOaNs aNd AdvaNcEs(Unsecured, considered good except where otherwise stated)Advances recoverable in cash or in kind or for value to be receivedAdvances to Tie-up units – Considered Good 2,522.168 917.736– Considered Doubtful 20.314 21.519Advances Income Tax (Net of Provisions) 491.243 -Other Advances – Considered Good 4,385.883 3,432.836– Considered Doubtful 500.947 295.5647,920.555 4,667.655Less: Provision for Doubtful Advances 521.261 317.0837,399.294 4,350.57212. CurrENt LiabilitiEs aNd PrOvisiONsA. LiabilitiesAcceptances * 1,126.924 753.918Sundry Creditors 9,790.924 8,502.305Dues to Directors 49.193 51.486Investors Education and Protection Fund [Schedule 19 Note 8]Unclaimed Debentures 0.001 0.001Unclaimed Dividends 19.518 22.840Unclaimed Fixed Deposits 28.074 11.025Security Deposit 130.847 115.810Advances Received from Customers 371.992 183.105Interest accrued but not due 1,847.209 1,734.259Other Liabilities 514.130 558.76713,878.812 11,933.516* Includes bills drawn against inland letters of credit of Rs. 876.924 Million(2008: Rs. 215.149 Million) and secured by a charge on debtors, inventories andother current assets.B. ProvisionsProposed DividendEquity Shares - Final 206.280 131.039Corporate Tax on Proposed Dividend 36.679 -Taxation (Net of Payments) - 7.586Fringe Benefit Tax (Net of Payments) 8.467 2.036Provision for Contingencies - 103.744Onerous Lease Provision [Schedule 19 Note 16] 909.890 600.601Employee Benefits 1,423.161 382.9662,584.477 1,227.97213. MiscEllaNEOus EXpENditurEExpenditure Incurred for Raising Borrowed FundsAs per the last Balance Sheet 966.770 -Add: Additions during the year - 1,078.845966.770 1,078.845Less: Amortisation during the year 160.140 112.075806.630 966.770Less: Translation Adjustments 73.323 -733.307 966.77087

Consolidated Financial StatementSchedules forming part of Profit & Loss Account for the year ended March 31, 2009Rs. Million2009 200814. OthEr INcOmEIncome from Investments:Dividend income from other investments 31.696 94.097[Tax deducted at source Rs. 1.905 Million (2008: Rs.1.905 Million)]Lease Rent 322.776 261.801Profit on Sale of Fixed Assets (Net) 142.012 114.274Profit on Sale of Investments 24.500 -Provision for Onerous Lease written back - 82.863Liabilities no longer required written back 136.619 199.962Bad debts/ Advances recovered 0.088 3.173Scrap Sales 158.491 160.114Insurance Claims 2.814 3.308Miscellaneous 219.412 143.5801,038.408 1,063.17215. MatErialsRaw Materials Consumed 12,140.730 8,160.766Purchase of Finished Goods 5,292.096 4,409.791Packing Materials Consumed 11,097.935 8,522.697Movement in Stocks:Opening Stock:Work-in-Progress 10,770.302 1,422.364Finished Goods 2,548.239 1,063.70813,318.541 2,486.072Add : Taken over on Amalgamation/AcquisitionWork-in-Progress - 9,188.949Finished Goods - 1,083.380- 10,272.329Closing Stock:Work-in-Progress 11,861.333 10,770.302Finished Goods 3,320.363 2,548.23915,181.696 13,318.541(Increase)/ Decrease in Stocks (1,863.155) (560.140)Excise Duty on Opening/Closing Stock of Finished Goods (Net) 241.849 372.81926,909.455 20,905.93388

Consolidated Financial StatementSchedules forming part of Profit & Loss Account for the year ended March 31, 2009 (Contd.)Rs. Million2009 200816. MaNufacturiNg aNd OthEr EXpENsEsEmployee Cost:Salaries, Wages and Bonus 4,174.779 3,748.690Contribution to Provident and Other Funds 441.248 408.542Workmen and Staff Welfare 132.447 117.749Voluntary Retirement Scheme Compensation - 4.053Actuarial Loss/ (Gain) on Pension 1,746.228 (975.539)6,494.702 3,303.495Direct Expenses on IPL Franchise 411.571 -Power and Fuel 706.332 444.233Stores and Spares Consumed 130.584 110.942Repairs and Maintenance:Buildings 87.824 71.483Plant and Machinery 182.926 155.477Others 217.315 136.034Rent 107.924 281.236Rates and Taxes 457.318 417.433Insurance 133.719 117.390Travelling and Conveyance 640.265 561.727Legal and Professional 656.441 633.271Freight Outwards 1,008.744 815.710Advertisement and Sales Promotion 5,378.471 4,781.123Commission on Sales 390.848 405.644Royalty/ Brand Fee/ Trade Mark Licence Fees 60.032 96.925Cash Discount 363.748 206.742Sales Tax 194.732 142.850Fixed Assets Written Off 0.010 16.949Loss on Sale of Investments - 5.798Directors’ Remuneration:Sitting Fee 1.180 2.311Commission 48.727 51.044Bad Debts and Advances Written Off 19.289 187.060Provision for Doubtful Debts/ Advances / Deposits 212.444 135.350Provision for Onerous Lease 403.578 -Provision for Diminution in Value of Investments (Net) 0.031 0.051Research and Development 30.536 28.779Others:Personnel and Administration 415.636 360.199Selling and Distribution 977.023 947.971Miscellaneous 335.679 253.08520,067.629 14,670.31289

Consolidated Financial StatementSchedules forming part of Profit & Loss Account for the year ended March 31, 2009 (Contd.)Rs. Million2009 200817. INtErEst aNd FiNaNcE ChargEsInterest on:Fixed Loans 4,795.748 3,842.234Others Loans 1,998.334 1,617.936Amortisation of Expenditure Incurred for Raising Borrowed Funds 160.140 112.075Finance Charges (including Bill discounting charges) 423.037 308.5787,377.259 5,880.823Less : Interest Income:On Investments 1.222 2.144On Deposits and Other Accounts (Gross) 196.009 341.877On Income Tax Refunds 4.385 89.2397,175.643 5,447.56390

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 200918. STATEmENT ON SIGNIfIcANT AccOUNTING POLIcIEs1. Basis of Preparation of Consolidated Financial StatementsThe Consolidated Financial Statements relate to United Spirits Limited (the Company) and its subsidiaries andassociates (the Group). The Consolidated Financial Statements are prepared in accordance with AccountingStandard (AS) 21 on Consolidated Financial Statements and AS 23 on Accounting for Investments in Associates inConsolidated Financial Statement as specified in the Companies (Accounting Standard) Rules, 2006, and the relevantprovisions of the Companies Act, 1956 of India. The Consolidated Financial Statements are prepared by adoptinguniform accounting policies for like transactions and other events in similar circumstances and are presented tothe extent possible, in the same manner as the Company’s separate financial statement. Accounting policies havebeen consistently applied except where a newly-issued accounting standard is initially adopted or a revision to anexisting accounting standard requires a change in the accounting policy hitherto in use.On occasion, a subsidiary company whose financial statements are consolidated may issue its shares to third partiesas either a public offering or private placement at per share amounts in excess of or less than the Company'saverage per share carrying value. With respect to such transactions, the resulting gains or losses arising fromthe dilution of interest are recorded as Capital Reserve/Goodwill. Gains or losses arising on the direct sale by theCompany of its investment in its subsidiaries or associated companies to third parties are transferred to the profitand loss account. Such gains or losses are the difference between the sale proceeds and the net carrying value ofthe investments.2. Subsidiary and Associate Companies considered in the Consolidated Financial Statements:(A) Subsidiary Companies:Sl.No.Name of the CompanyCountry ofIncorporationProportion ofowner-ship interest(%)Proportion of votingpower held directly orindirectly, if differentfrom proportion ofownership interest (%)2009 2008 2009 20081 Asian Opportunities & Investments Limited(AOIL)Mauritius 100 100 - -2 United Spirits Nepal Private Limited Nepal 82.47 82.47 - -3 Zelinka Limited (ZL) (ii) Cyprus - 100 - -4 Shaw Wallace & Company Limited(SWCL) (ii)India - 75 - -5 Ramanretti Investments & Trading Ltd. (RITL) (iii) India 100 75 - -6 Shaw Wallace Breweries Limited(SWBL) (iii)India 100 75 - 1007 Primo Distributors Pvt. Ltd. (PDPL) (ii) India - 100 - -8 Palmer Investment Group Ltd.(PIG) British VirginIslands100 100 - -9 RG Shaw & Company Ltd. (RGSC) U.K. 100 100 - -10 Shaw Scott & Company Ltd. (SSC) U.K. 100 100 - -11 Shaw Darby & Company Ltd. (SDC) U.K. 100 100 - -12 Thames Rice Milling Company Limited (TRMC) U.K. 100 100 - -91

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)(A) Subsidiary Companies ( Contd.)Sl.No.Name of the CompanyCountry ofIncorporationProportion of ownershipinterest (%)Proportion of votingpower held directly orindirectly, if differentfrom proportion ofownership interest (%)2009 2008 2009 200813 Shaw Wallace Overseas Limited (SWOL) (iii) U.K. 100 75 - 10014 JIHL Nominees Limited(JIHL) Jersey Islands 100 100 - -15 Montrose International S.A (MI) Panama 100 100 - -16 USL Holdings Limited (UHL)17Spring Valley Investments Holding Inc.(SVIH)British VirginIslandsBritish VirginIslands100 100 - -100 100 - -18 USL Holdings (UK) Limited (UHUKL) U.K 100 100 - -19 United Spirits (UK) Limited (USUKL) U.K 100 100 - -20United Spirits (Great Britain) Limited(USGBL)U.K 100 100 - -21 Four Seasons Wines Limited (FSWL) India 100 100 - -22 United Vintners Limited (UVL) India 100 100 - -23 United Alcobev Limited (UAL) India 100 100 - -24 McDowell Beverages Limited (MBL) India 100 100 - -25 McDowell (Scotland) Limited (MSL) Scotland 100 100 - -26 Bouvet Ladubay S.A.S (BL) France 100 100 - -27 Chapin Landias S.A.S (CL) France 100 100 - -28 Herbertsons Limited (HL) India 100 100 - -29 Daffodils Flavours & Fragrances Private Limited(DFFPL)30 Jasmine Flavours and Fragrances PrivateLimitedIndia 100 100 - -India 100 100 - -31 Royal Challengers Sports Private Limited India 100 100 - -32 McDowell and Company Limited India 100 100 - -33 Liquidity Inc. USA 51 51 - -34 USL Shanghai Trading Company Limited(USLS) (i)Whyte and Mackay GroupChina 100 - - -35 Whyte and Mackay Group Limited U.K 100 10036 Bruce & Company (Leith) Limited U.K 100 100 - -37 Charles Mackinlay & Company Limited U.K 100 100 - -38 Dalmore Distillers Limited U.K 100 100 - -39 Dalmore Whyte & Mackay Limited U.K 100 100 - -40 Edinburgh Scotch Whisky CompanyLimitedU.K 100 100 - -41 Ewen & Company Limited U.K 100 100 - -42 Fettercairn Distillery Limited U.K 100 100 - -43 Findlater Scotch Whisky Limited U.K 100 100 - -92

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)(A) Subsidiary Companies (Contd.)Sl.No.Name of the CompanyCountry ofIncorporationProportion of ownershipinterest (%)Proportion of votingpower held directly orindirectly, if differentfrom proportion ofownership interest (%)2009 2008 2009 200844 Glayva Liqueur Limited U.K 100 100 - -45 Glentalla Limited U.K 100 100 - -46 GPS Realisations Limited U.K 100 100 - -47 Grey Rogers & Company Limited U.K 100 100 - -48 Hay & MacLeod Limited U.K 100 100 - -49 Invergordon Distillers (Holdings) Limited U.K 100 100 - -50 Invergordon Distillers Group Limited U.K 100 100 - -51 Invergordon Distillers Limited U.K 100 100 - -52 Invergordon Gin Limited U.K 100 100 - -53 Isle of Jura Distillery Company Limited U.K 100 100 - -54 Jarvis Halliday & Company Limited U.K 100 100 - -55 John E McPherson & Sons Limited U.K 100 100 - -56 Kensington Distillers Limited U.K 100 100 - -57 Kyndal Spirits Limited U.K 100 100 - -58 Leith Distillers Limited U.K 100 100 - -59 Loch Glass Distilling Company Limited U.K 100 100 - -60 Longman Distillers Limited U.K 100 100 - -61 Lycidas (437) Limited U.K 100 100 - -62 Pentland Bonding Company Limited U.K 100 100 - -63 Ronald Morrison & Company Limited U.K 100 100 - -64 St Vincent Street (437) Limited U.K 100 100 - -65 Tamnavulin-Glenlivet Distillery CompanyLimitedU.K 100 100 - -66 TDL Realisations Limited U.K 100 100 - -67 The Sheep Dip Whisky Company Limited U.K 100 100 - -68 W & S Strong Limited U.K 100 100 - -69 Watson & Middleton Limited U.K 100 100 - -70 Whyte & Mackay Distillers Limited U.K 100 100 - -71 William Muir Limited U.K 100 100 - -72 WMB Realisations Limited U.K 100 100 - -73 Whyte and Mackay Property Limited U.K 100 100 - -74 Whyte and Mackay de Venezuela CA Venezuela 100 100 - -75 KI Trustees Limited U.K 100 100 - -76 Wauchope Moodle & Company Limited U.K 100 100 - -77 Whyte and Mackay Limited U.K 100 100 - -78 Whyte and Mackay Warehousing Limited U.K 100 100 - -79 Whyte and Mackay Holdings Limited U.K 100 100 - -93

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)2. Subsidiary and Associate Companies considered in the Consolidated Financial Statements: (Contd.)(B) Associate Companies (Note 4 below)Name of the CompanyCountry ofIncorporationProportion of owner-shipinterest (%)2009 20081 Utkal Distillery Limited (Utkal) (iv) India - 432 Wine Soc of India Private Limited India 49 49(i) Became subsidiaries/ associate during the year.(ii) Ceased to be subsidiaries due to amalgamation (Schedule 19 Note 2).(iii) Became wholly owned subsidiaries due to amalgamation (Schedule 19 Note 2).(iv) Sold during the year.(v) Consolidated Financial Statements also include financial statements of USL Benefit Trust and SWFSL BenefitTrust.3. Principles of ConsolidationThese Consolidated Financial Statements have been prepared by consolidation of the financial statements of theCompany and its subsidiaries on a line-by-line basis after fully eliminating the inter-Company transactions.4. Accounting for Investment in Associatesa) Accounting for Investments in Associate Companies has been carried out under the Equity Method of accountingprescribed under AS 23 wherein Goodwill/Capital Reserve arising at the time of acquisition and the Group’sshare of profits or losses after the date of acquisition have been adjusted in the investment value.b) U B Distilleries Limited (UBDL)UBDL, which was an associate company of erstwhile HL in view of significant influence, ceased its operationsin 2003-04, consequent to the order of the Hon’ble Supreme Court of India vesting the distillery unit with thestate of Bihar. Since the Company does not have any investment /significant influence in UBDL, the same hasnot been accounted for as an associate in these Consolidated Financial Statements under the Equity Method.5. Basis of presentation of Financial StatementsThe Consolidated Financial Statements of the Group have been prepared under historical cost convention, except asotherwise stated, in accordance with the Generally Accepted Accounting Principles (GAAP) in India, the AccountingStandards as specified in the Companies (Accounting Standard) Rules, 2006, and the relevant provisions of theCompanies Act,1956 of India.6. Fixed Assets(a) Fixed assets are stated at their original cost of acquisition and subsequent improvements thereto including taxes,duties, freight and other incidental expenses related to acquisition and installation of the assets concerned,except amounts adjusted on revaluation and amalgamation. Interest on borrowings attributable to qualifyingassets are capitalised and included in the cost of fixed assets as appropriate.(b) The costs of fixed assets acquired in amalgamations are determined at their fair values, on the date of acquisitionor nearer thereto, or as approved under the schemes of amalgamation.(c) Assets held for disposal are stated at their net book value or estimated net realisable values, whichever islower.94

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)(d) Goodwill represents the difference between the Company’s share in the net worth of a subsidiary and costof acquisition at each point of time of making the investment in the subsidiary. Negative goodwill is shownseparately as Capital Reserve on consolidation.(e) Intangible assets are stated at the consideration paid for acquisition less accumulated amortisation.7. LeasesAssets acquired under Leases, where the Company has substantially all the risks and rewards of ownership, areclassified as finance leases. Such leases are capitalised at the inception of the lease at lower of the fair value or thepresent value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rentalpaid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest onthe outstanding liability for each period.Assets acquired on leases, where a significant portion of the risk and rewards of ownership are retained by thelessor, are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis.Income from operating leases is credited to Profit and Loss Account on a straight line basis over the lease term.8. Depreciation and Amortisationa) Depreciation is provided on the Straight Line Method, including on assets revalued, at rates prescribed inSchedule XIV to the Companies Act, 1956 of India except for the following, which are based on management’sestimate of useful life of the assets concerned :i) Computers, Vehicles and Aircrafts over a period of three, five and eleven years respectively;ii) In respect of certain items of Plant and Machinery eligible for triple shift allowance, depreciation is providedfor the full year on triple shift basis;iii) In respect of fixed assets of Whyte and Mackay Group, depreciation is provided based on managementestimate of useful lives of the assets concerned as below:BuildingsPlant and MachineryVehiclesComputers50 years10 to 20 years4 years3 yearsAlso refer Note 6(b) on Schedule 19b) Fixed assets acquired on amalgamation, over the remaining useful life computed based on rates prescribed inSchedule XIV to the Companies Act, 1956 of India, as below:Buildings – Factory 1 to 30 years– Non Factory 1 to 54 yearsPlant & Machinery1 to 20 yearsVehicles1 to 4 yearsComputers1 to 2 yearsc) Assets taken on finance lease are depreciated over their estimated useful life or the lease term, whichever islower.d) Leasehold Land are not amortised.e) Goodwill arising on amalgamation is charged to the Profit and Loss Account in the year of amalgamation.f) Goodwill arising on Consolidation is not amortised.95

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)g) Intangible assets are amortised, on a straight line basis, commencing from the date the asset is available for itsuse, over their respective individual estimated useful lives as estimated by the management:9. ImpairmentTrademark , formulae and License10 YearsFranchise Rights in Perpetuity 50 Years (Refer Schedule 19 Note 4)Impairment loss, if any, is provided to the extent the carrying amounts of assets exceed their recoverableamounts.Recoverable amount is higher of the net selling price of an asset and its value in use. Value in use is the presentvalue of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal atthe end of its useful life.10. InvestmentsLong-term Investments are stated at cost to the Company. Provision for diminution in the value is made to recognisea decline, other than temporary, in the value of long-term investments.Current investments are valued at cost or market value, whichever is less.11. InventoriesInventories are valued at lower of cost and net realisable value. The costs are, in general, ascertained underWeighted Average Method. Finished goods and Work-in-Progress include appropriate manufacturing overheadsand borrowing costs, as applicable. Excise/ Customs duty payable on stocks in bond is added to the cost. Dueallowance is made for obsolete and slow moving items.12. Revenue RecognitionSales are recognised when goods are despatched from distilleries/ warehouses of the Company in accordance withthe terms of sale except where such terms provide otherwise, where sales are recognised based on such terms. GrossSales are inclusive of excise duty but are net of trade discounts and sales tax, where applicable.Income arising from sales by manufacturers under “Tie-up” agreements (Tie-up units) and income from brandfranchise are recognised in terms of the respective contracts on sale of the products by the Tie-up unit/Franchisees.Income from brand franchise is net of service tax, where applicable.Dividend income on investments are recognised and accounted for when the right to receive the payment isestablished.13. Foreign Currency TransactionsTransactions in foreign currency are recognised at the rates of exchange prevailing on the dates of thetransactions.Liabilities/ assets in foreign currencies are reckoned in the accounts as per the following principles:Exchange differences arising on a monetary item that, in substance, forms part of an enterprise’s net investmentin a non-integral foreign operation is accumulated in a foreign currency translation reserve in the enterprise’sfinancial statements until the disposal of the net investment.Exchange differences arising on reporting of long term foreign currency monetary items, with the exception ofexchange differences arising on a monetary item that, in substance, forms part of an enterprise’s net investmentin a non-integral foreign operation, at rates different from those at which they were initially recorded during theperiod or reported in previous financial statements are accounted as below:96

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)(a) In so far as they relate to the acquisition of depreciable capital assets, are added to or deducted from the costof the asset and are depreciated over the balance life of the asset; and(b) In other cases, the said exchange differences are accumulated in a ‘Foreign Currency Monetary Item TranslationDifference Account’ and amortised over the balance period of such long term asset/liability but not beyondMarch 31, 2011.All other monetary assets and liabilities denominated in foreign currency are restated at the rates ruling at theyear end and all exchange gains/ losses arising therefrom are adjusted to the Profit and Loss Account, except thosecovered by forward contracted rates where the premium or discount arising at the inception of such forwardexchange contract is amortised as expense or income over the life of the contract.Exchange differences on forward contracts are recognised in the Profit and Loss Account in the reporting periodin which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward contractsis recognised as income or expense for the year.For forward exchange contracts and other derivatives that are not covered by AS-11 ‘The Effects of Changes inForeign Exchange Rates’, the Company follows the guidance in the announcement of the Institute of CharteredAccountants of India (ICAI) dated March 29,2008 whereby for each category of derivatives, the Company records anynet mark- to- market losses. Net mark-to-market gains are not recorded for such derivatives. [Also refer Schedule19 Note 17 below]Foreign Company:In respect of overseas subsidiary companies, Income and Expenses are translated at average exchange rate for theyear. Assets and Liabilities, both monetary and non-monetary, are translated at the year-end exchange rates. Thedifferences arising out of translation are included in the foreign currency translation reserve. Any Goodwill orCapital Reserve arising on acquisition of non integral operation is translated at closing rate.14. Employee Benefitsa) Defined-contribution plansThese are plans in which the Group pays pre-defined amounts to separate funds and does not have any legalor informal obligation to pay additional sums. These comprise of contributions to the employees’ providentfund with the government, superannuation fund and certain state plans like Employees’ State Insuranceand Employees’ Pension Scheme. The Group’s payments to the defined contribution plans are recognised asexpenses during the period in which the employees perform the services that the payments cover.b) Defined-benefit plansGratuity:The Group provides for gratuity, a defined benefit plan (the Gratuity Plan), to certain categories of employees.Liability with regard to the Gratuity Plan is accrued based on actuarial valuation, based on Projected UnitCredit Method at the balance sheet date, carried out by an independent actuary. Actuarial Gains and Lossescomprise experience adjustments and the effect of changes in the actuarial assumptions and are recognisedimmediately in the Profit and Loss Account as income or expense.97

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)Pension:Whyte and Mackay Group operates and contributes in a defined benefit pension scheme (the Pension Plan).Liability with regard to Pension Plan is accrued based on actuarial valuation, based on Projected Unit CreditMethod at the balance sheet date, carried out by an independent actuary. Actuarial Gains and Losses compriseexperience adjustments and the effect of changes in the actuarial assumptions and are recognised immediatelyin the Profit and Loss Account as income or expense.Provident Fund:Group’s Provident Funds administered by trusts set up any company in the Group where the company’sobligation is to provide the agreed benefit to the employees and the actuarial risk and investment risk fall,in substance, on the company, are treated as a defined benefit plan. Liability with regard to such providentfund plans are accrued based on actuarial valuation, based on Projected Unit Credit Method, carried out by anindependent actuary at the balance sheet date. Actuarial Gains and Losses comprise experience adjustmentsand the effect of changes in the actuarial assumptions and are recognised immediately in the Profit and LossAccount as income or expense.Death Benefit:Death Benefit payable at the time of death is actuarially ascertained at the year-end and provided for in theaccounts.c) Other long term employee benefits:Compensated absences which are not expected to occur within twelve months after the end of the periodin which the employee renders the related services are recognised as a liability at the present value of thedefined benefit obligation at the balance sheet date based on actuarial valuation carried out at each balancesheet date.d) Short term employee benefits:Undiscounted amount of short term employee benefits expected to be paid in exchange for the servicesrendered by employees is recognised during the period when the employee renders the services. Thesebenefits include compensated absences such as paid annual leave and performance incentives.15. Expenditure on account of Voluntary Retirement SchemeExpenditure on account of Voluntary Retirement Scheme of employees is expensed in the period in which it isincurred.16. Research and DevelopmentRevenue expenditure on research and development is charged to Profit and Loss Account in the period inwhich it is incurred. Capital Expenditure is included as part of fixed assets and depreciated on the same basisas other fixed assets.17. Taxes on IncomeProvision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amountof tax payable in respect of taxable income for the period in accordance with the applicable laws.Deferred tax is recognised on timing differences between the accounting income and the taxable income forthe year and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheetdate.98

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)Deferred tax assets are recognised and carried forward to the extent that there is a reasonable / virtualcertainty that sufficient future taxable income will be available against which such deferred tax asset can berealised.Fringe Benefit Tax is determined at current applicable rates on expenses falling within the ambit of “FringeBenefit” as defined under the Income Tax Act, 1961.18. Earnings / (Loss) per Share (EPS)Basic EPS is arrived at based on Net Profit after Taxation available to equity shareholders to the weightedaverage number of equity shares outstanding during the year. The Diluted EPS is calculated on the same basisas Basic EPS, after adjusting for the effects of potential dilutive equity shares unless impact is anti-dilutive.19. ProvisionsA provision is recognised when an enterprise has a present obligation as a result of a past event and it isprobable that an outflow of resources will be required to settle the obligation, in respect of which a reliableestimate can be made. Provisions, other than employee benefits, are not discounted to their present value andare determined based on management estimate required to settle the obligation at the balance sheet date.These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.Onerous Lease Provision:When a leasehold property ceases to be used in the business or a commitment is entered into which wouldcause this to occur, provision is made for the entire amount by which the recoverable amount of interest inthe property is expected to be insufficient to cover future obligations relating to the lease.20. ContingenciesLiabilities which are material and whose future outcome cannot be ascertained with reasonable certainty aretreated as contingent and, to the extent not provided for, are disclosed by way of notes on the accounts.21. Share / Foreign Currency Convertible Bonds [FCCBs] issue expenses and Premium on Redemption of FCCB :Share/ FCCBs issue expenses incurred are expensed in the year of issue and premium payable on FCCBs isexpensed over the currency of FCCBs. Both are adjusted to the Securities Premium Account as permitted bySection 78(2) of the Companies Act, 1956.22. ExpenditureExpenses are net of taxes recoverable, where applicable.23. Government grantsGovernment grants related to revenue expenses are recognised on a systematic basis in the Profit andLoss Account over the periods necessary to match them with the related costs which they are intended tocompensate.24. Miscellaneous Expenditure (to the extent not written off)Expenditure incurred for raising borrowed funds represents ancillary costs incurred in connection with thearrangement of borrowings and is amortised over the tenure of the respective borrowings. Amortisation ofsuch Miscellaneous Expenditure is included under Interest and Finance charges.99

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)19. NOTES ON ACCOUNTS1. Contingent Liabilities Rs. Million2009 2008a) Guarantees given by the Company’s bankers for which CounterGuarantees have been given by the Company172.217 141.942b) Disputed claims against the Company not acknowledged as debts,currently under appeal / sub judice:(i) Excise demands for excess wastages and distillation losses 238.384 231.804(ii) Other miscellaneous claims 244.274 367.582(iii) Income Tax demand (including interest) under appeal 1,436.973 211.573(iv) Sales Tax demands under appeal in various states 604.036 682.086c) Co-accepted bills of Tie-up Units - since fully settled 15.016 216.740d) Claims from suppliers not acknowledged as debts 45.490 50.967The Management is hopeful of succeeding in the above appeals /disputes based on legal opinions / legalprecedents.2. A. The Scheme of Amalgamation under Section 391 to 394 of the Companies Act, 1956 for the amalgamationof Shaw Wallace & Company Limited (‘SWCL’), a subsidiary company, and Primo Distributors Private Limited(‘Primo’), a wholly owned subsidiary company, (together ‘Transferor Companies’) with the Company (‘theScheme’) and their respective shareholders, with effect from April 1, 2007 being the Appointed Date, hasbeen sanctioned by Hon’ble High Court of Karnataka, Hon’ble High Court of Judicature at Bombay andHon’ble High Court at Calcutta.Upon necessary filings with the respective Registrar of Companies, the Scheme has become effective on July6, 2009 and effect thereof have been given in the accounts. Consequently,a. In terms of the Scheme the entire business and undertaking of Transferor Companies including all assetsand liabilities, as a going concern, stand transferred to and vested in the Company (hereinafter referredto as ‘Amalgamation’) with effect from April 1, 2007 being the Merger Appointed Date.b. Primo ceased to be subsidiary of the Company and Shaw Wallace Breweries Limited (SWBL) became adirect subsidiary of the Company. Primo stand dissolved without being wound up. SWCL will be dissolvedwithout winding up by separate order by the Hon’ble High Court at Calcutta.c. The SWCL was engaged in manufacture and sale of potable alcohol and Primo was engaged in thebusiness of distribution of alcoholic beverages.(I)(a) In Consideration of the amalgamation, the Company will issue:7,749,121 equity shares of Rs.10/- each aggregating to Rs.77.491 Million in the ratio of 4 (four) fully paidup Equity Shares of the face value of Rs.10/- each of the Company for every 17 (Seventeen) fully paid upequity shares of Rs.10/- each held in SWCL. [also refer Note 2 A (II) below]:Pending issue of these Equity Shares, a sum of Rs. 77.491 million has been shown under Equity ShareCapital Suspense. Subsequently, on July 24, 2009, the allotment of the Company’s shares to the eligibleshareholders of SWCL has been completed. Steps have been taken to list the shares with the stockexchanges where existing shares of the company are currently listed.(b) As primo was a wholly owned subsidiary of the Company, no consideration was payable pursuant toamalgamation of Primo with the Company.100

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)2. A. (Contd.)(II) Pursuant to the Scheme, Equity Shares to be issued as above include 4,925,231 Equity Shares of Rs.10/- eachfully paid up to be issued to Palmer Investment Group Limited (Palmer), R.G.Shaw & Company Limited (R GShaw), JIHL Nominees Limited (JIHL Nominees), Shaw Scott & Company Limited (Shaw Scott), Shaw Darby &Company Limited (Shaw Darby) and Thames Rice Milling Company Limited (Thames Rice), subsidiaries of theCompany, in exchange for the 20,932,244 Equity Shares of Rs.10/- each fully paid up held by them in the sharecapital of SWCL, in the proportion of Equity Shares held by them respectively.(III) Pursuant to the Scheme, 10,282,553 Equity Shares of Rs.10/- each fully paid up held by SWCL and 1,306,431Equity Shares of Rs.10/- each fully paid up held by Primo in the share capital of the Company were to betransferred to the SWCL Benefit Trust and the Primo Benefit Trust established by virtue of trust deeds datedJuly 25, 2008 for the benefit of SWCL and Primo respectively. Upon the Scheme becoming effective, thebeneficial interest in SWC Benefit Trust and Primo Benefit Trust stands transferred and vested in the USLBenefit Trust established by virtue of trust deed dated September 26, 2006 for the benefit of the Company.Subsequent to the year end, on June 30, 2009 SWCL has sold 10,282,553 Equity Shares held by it in theCompany in the open market, through the stock exchanges and 1,306,431 Equity shares held by Primo in theCompany has been transferred to Primo Benefit Trust on July 6, 2009 which stands vested with USL BenefitTrust in terms of the scheme.(IV) Pursuant to the scheme, the Authorised Share Capital of the Company stands increased and reclassified,without any further act or deed on the part of the Company, including payment of stamp duty and Registrarof Companies fees, by the authorised share capital of the transferor companies amounting to Rs 2,092 Millionand the Memorandum of Association and Articles of Association of the Company stand amended accordinglywithout any further act or deed as the part of the Company.(V) Accounting for AmalgamationThe amalgamation of the Transferor Companies with the Company is accounted for on the basis of thePurchase Method as envisaged in the Accounting Standard (AS) -14 on Accounting for Amalgamationsspecified in the Companies (Accounting Standard) Rules 2006 and in terms of the Scheme, as below:a. All tangible assets [excluding investment in shares held by the Transferor Companies in the Company andthe interest in the USL Benefit Trust in accordance with the terms of the Scheme as explained in Note 2(A) (III) above] and liabilities of the Transferor Companies at their respective fair values.b. Interest in USL Benefit Trust, arising from the terms of the Scheme as explained in Note 2 (A) (III) above,has been accounted as Investment, valued and recorded, in the manner prescribed in the Scheme, at theaverage of the weekly high and low of the closing price of the Company, on the stock exchange wherethe shares of the Company are more frequently traded in terms of turnover, for the period ended sixmonths preceding the Appointed Date, i.e. April 1, 2007, aggregating to Rs. 9,256.006 Million.c. The equity shares directly held by the Company in the Transferor Companies stand cancelled and debitedto General Reserve of the Company. [refer (d) below].d. Rs.7,860.187 Million being the difference between the value of net assets of the Transferor Companiestransferred to the Company (determined as stated above) and the face value of equity shares to be issuedand after adjusting for the equity shares directly held by the Company in the Transferor Companieswhich are cancelled, is credited to General Reserve of the Company. This accounting treatment of thereserve has been prescribed in the Scheme. Had the Scheme not prescribed this treatment, this amountwould have been credited to Capital Reserve.101

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)2. A. (v) (Contd.)e. The Company, based on the reports by Independent valuer, has revalued, at their respective fair values, allfixed assets being Land, Buildings, Plant and Machinery, Furniture and Fixtures and Office Equipment andVehicles, at one location, as at April 1, 2007 and an amount of Rs. 80.704 Million, being diminution in valueof certain Plant and Machinery determined based on their respective disposal value as estimated by theindependent valuer, has been debited to General Reserve. This accounting treatment has been prescribed inthe Scheme. Had the scheme not prescribed this treatment, Rs.80.704 Million being diminution in value ofcertain fixed assets would have been debited to the Profit and Loss Account for the year instead of GeneralReserve, having corresponding impact on the net profit for the year.B. The Scheme of Amalgamation under Section 391 to 394 of the Companies Act, 1956 for the amalgamation ofZelinka Limited (‘Zelinka’ or the ‘Transferor Company’), Cyprus, with the Company (‘the ZL Scheme’) and theirrespective shareholders, with April 1, 2007 being the Appointed Date, has been sanctioned by Hon’ble High Courtof Karnataka and the certified copy of the Order of the Hon’ble High Court of Karnataka has been filed withthe Registrar of Companies. Zelinka has complied with the procedure required to be followed under the localcorporate laws of Cyprus to give effect to the ZL scheme. Accordingly, the ZL scheme became operative fromMarch 26, 2009. The Company has given effect to the ZL Scheme in these accounts with effect from April 1, 2007being the Appointed Date. Consequently, in terms of the ZL Scheme:a. The entire business and undertaking of Zelinka including all assets and liabilities, as a going concern, standtransferred to and vested in the Company with effect from April 1, 2007 being the Merger Appointed Date.b. Zelinka ceased to be subsidiary of the Company and Palmer Investment Group Ltd, British Virgin Island andMontrose International SA, Panama have became wholly owned subsidiaries of the Company and LiquidityInc, USA has become direct subsidiary of the Company.Zelinka was engaged in Investment related activities.I. As Zelinka was a wholly-owned subsidiary of the Company, no consideration was payable pursuant to theamalgamation of Zelinka with the Company.II. Accounting treatmentThe amalgamation of Zelinka with the Company is accounted on the basis of the Purchase Methodas envisaged in the Accounting Standard (AS) -14 on Accounting for Amalgamations specified in theCompanies (Accounting Standard) Rules 2006 and in terms of the Scheme, as below:a) All assets and liabilities of the Transferor Company at their respective book values.b) The investment held by the Company in the equity share capital of the Transferor Company standscancelled and debited to General Reserve of the Company. [refer (e) below].c) Rs.11.152 Million being the difference between the value of net assets of the Transferor Companytransferred to the Company (determined as stated above) after adjusting for investments cancelledis debited to General Reserve of the Company. This accounting treatment of the reserve has beenprescribed in the ZL Scheme. Had the ZL Scheme not prescribed this treatment, this amount wouldhave been debited to Goodwill, which would have been charged to the Profit and Loss Account forthe year as per the accounting policy of the Company, with a corresponding impact on the net profitfor the year.102

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)2. B. (ii) (Contd.)d) Interest free loans in foreign currency aggregating to Rs. 7,345.279 Million as on April 1, 2007, grantedby the Company to Zelinka for acquisition of long term strategic investments, stand cancelled.Exchange difference on such loans aggregating to Rs.144.912 million as on April 1, 2007, accumulatedby the Company in Foreign Currency Translation Reserve, has been transferred to General Reserve.This accounting treatment of the reserve has been prescribed in the ZL Scheme. Exchange differencesof Rs.570.131 million during the year ended March 31, 2008 stands reversed on cancellation ofsuch loans on amalgamation. Had the ZL Scheme not prescribed this treatment, this amount wouldhave been debited to the Profit and Loss Account for the year instead of General Reserve, havingcorresponding impact on the net loss for the year.e) The difference as on the appointed dated, i.e. April 1, 2007, between the cost of investment ofZelinka in the shares of its subsidiary viz., Palmer and similarly the cost of investment of Palmer inthe shares of its subsidiaries viz., RG Shaw, JIHL nominees, Shaw Scott, Shaw Derby and Thames Rice,and the cost of shares of the Company, if any, held by these subsidiaries after considering the bookvalues of the assets (net of liabilities), has been reflected as Goodwill on Consolidation. Had the ZLScheme not prescribed this treatment, Goodwill on Consolidation and General Reserves would havebeen lower by Rs.3,793.500 Million.C. All costs and expenses (including those of the Transferor Companies) incidental with the finalisation of theschemes and to put these into operation, including expenses in connection with excise and label re-registrations,all advisory fees, stamp duty charges, meeting expenses, professional fees, consultant fees including expenses andother expenses or charges attributable to the implementation of the Scheme (expenses relating to amalgamation),aggregating to Rs. 146.879 Million are debited to General Reserve in the books.This accounting treatment of the cost and expenses has been prescribed in the Schemes. Had the Scheme notprescribed this treatment, this amount would have been debited to the Profit and Loss Account for the yearinstead of General Reserve, having corresponding impact on the net loss for the year.D. From April 1, 2007, the Transferor Companies had carried out the business in trust on behalf of the Company.Accordingly, adjustment to the Profit for the year ended March 31, 2008 of the Transferor Companies onamalgamation aggregating to Rs. 162.543 have been debited to the Balance in Profit and Loss Account.E. Board of Directors of the erstwhile Central Distilleries & Breweries Limited (CDBL) (amalgamated with erstwhileSWDL amalgamated with the Company in an earlier year) on April 29, 1986 decided to issue 134,700 Equity Sharesof Rs.10 each, the allotment whereof was stayed by the Hon’ble High Court of Delhi on September 13,1988. TheHon’ble High Court of Delhi had vacated its order and has ordered to keep in abeyance the allotment on 72,556shares and the matter is sub-judice. The holders, in exchange of these shares will be entitled to 17,776 equityshares of Rs.10 each of the Company pursuant to a Scheme of Arrangement. Necessary adjustments in this respectwill be carried out on disposal of the matter pending before the aforesaid Court.F. Pursuant to the schemes of amalgamation, the bank accounts, agreements, licences and certain immovableproperties are in the process of being transferred in the name of the Company.3. The Board of Directors of the Company at their meeting held on November 29, 2008 have approved the proposalof merger of Balaji Distilleries Limited (‘BDL’) with the Company with effect from April 1, 2009 as per the Scheme ofArrangement between BDL, Chennai Breweries Private Limited (‘CBPL’) and the Company, subject to the necessaryapprovals.The Draft Rehabilitation Scheme along with the Scheme of Arrangement is pending with the Board for Industrial andFinancial Reconstruction formed under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 , forapproval.103

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)4. (a) The Group through Royal Challengers Sports Private Limited, a subsidiary Company, holds the perpetualright to the Bangalore Franchise of BCCI-IPL. Although this right is perpetual it would be prudent to considerthis as having a ‘finite’ rather than an ‘infinite’ life. The limited over version of the game which was firstintroduced in 1970s is continuing even now after 38 years and an even shorter version (20 over) has onlyrecently being introduced and is more popular than the 50 over format. The Management has held discussioninternally as well as with other experts in the field on the subject of useful life and the period of amortisation.Although the Management regards the useful life as indefinite, as a measure of prudence a useful life of 50years is considered as appropriate and the rights are amortised over 50 years having regard to the followingfactors:• The game of cricket has been in existence for over 100 years and there is no indication of interest in thegame and the commercial prospects waning• The shorter version of the game is increasingly popular.• The commercial exploitation of the shorter version is on an increasing scale and is expected to reach thescale which other games like soccer have reached.• This industry (cricket) is, therefore, highly stable and the market demand for this game is likely to remainfor more than 50 years with its spread to many countries.• IPL and its teams have acquired brand status and teams are not identified with countries or geographiesbut with brand names.• The franchisees have the intent and ability to provide the necessary financial and other resources requiredto obtain the expected future economic benefits from this for atleast 50 years.The carrying value of the capitalized Rights would be assessed for impairment at every balance sheet dateThe carrying amount of Franchise Rights as at March 31, 2009 is Rs.4,834.328 Million to be amortised overthe remaining period of 49 years.Term liability towards franchisee rights at the year end aggregating to Rs.4,431.413 Million is payable over aperiod of 9 years, of which Rs.492.379 Million is payable within one year.(b) The governing bodies of this sport in India and globally, over a period of last 7 to 15 years have experiencedan annualised growth of 19 to 35% in their Media/Central Rights. The management believes, given the sheerappeal of this format which has surpassed all expectations, an annualised growth of 20% from 2015 to 2025,a 15% annualized growth from 2026 to 2035 and a 4% annualised growth for the balance period of life. TheGate Receipts and Merchandising revenues are based on specific interventions designed to increase the samein the near to medium term, including geographical expansion in the case of Merchandising revenue, with a5-7% inflation / premiumisation assumptions built in. The key assumption in Local Rights has been indexedto Central Rights.Management has tested for impairment of Franchise Rights at the balance sheet date based on the cash flowprojection using the above assumptions, which did not indicate any impairment.104

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)5. Employee Benefitsa) Defined Contribution PlansThe Group offers its employees defined contribution plan in the form of Provident Fund (PF) with thegovernment, Superannuation Fund (SF) and certain state plans such as Employees’ State Insurance (ESI) andEmployees’ Pension Scheme (EPS). PF and EPS cover substantially all regular employees while the SF coverscertain executives and the ESI covers certain workers. Contribution to SF is made to trust managed by theGroup, while other contributions are made to the Government’s funds. While both the employees and theGroup pay predetermined contributions into the Provident Fund and the ESI Scheme, contributions into thePension Fund and the Superannuation Fund are made only by the Group. The contributions are normallybased on a certain proportion of the employee’s salary.During the year, the Group has recognised the following amounts in the Profit and Loss Account, which areincluded in Contribution to Provident and other funds in Schedule 16:Rs.Million2009 2008Provident Fund and Employees’ Pension Scheme* 95.887 96.287Superannuation Fund 33.494 29.726Employees’ State Insurance 8.738 8.819138.119 134.832* Excluding contribution to PF made to trusts managed by the Company.b) Defined Benefit PlansGratuity:The Group provides for gratuity, a defined benefit plan (the Gratuity Plan), to certain categories of employees.The Gratuity Plan provides a lump sum payment to vested employees at retirement or termination ofemployment, an amount based on the respective employee’s last drawn salary and years of employmentwith the Group. The Group has employees’ gratuity funds managed by the Group as well as by InsuranceCompanies. In certain subsidiaries gratuity plan is funded.Pension:Whyte and Mackay Group operates and contributes in a defined benefit Pension Scheme, under whichamounts are held in a separately administered trust.Provident Fund:For certain executives and workers of the Group, contributions are made as per applicable Indian lawstowards Provident Fund to certain Trusts set up and managed by the Group, where the Company’s obligationis to provide the agreed benefit to the employees and the actuarial risk and investment risk fall, in substance,on the Group. Having regard to the assets of the Fund and the return on the investments, shortfall in theassured rate of interest notified by the Government, which the Group is obliged to make good is determinedactuarially.Death Benefit:The Company provides for Death Benefit, a defined benefit plan, (the Death Benefit Plan) to certain categoriesof employees. The Death Benefit Plan provides a lump sum payment to vested employees on Death, anamount based on the respective employee’s last drawn salary and remaining years of employment with theCompany after adjustments for any compensation received from the insurance Company and restricted tolimits set forth in the said plan. The Death Benefit Plan is Non-Funded.105

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)b) Defined Benefit Plans (Contd.) Rs. MillionParticulars Gratuity2009 2008Funded Non-Funded Funded Non-FundedPensionFundPFGratuity PensionFundDeath-BenefitGratuity PFA) Reconciliation of opening and closingbalances of the present value of thedefined benefit obligationObligation at the beginning of the year 539.162 7,700.334 1,052.977 5.196 17.450 3.854 478.663 962.623 - 5.269 17.450 3.525Taken over on Acquisition - - 9,329.580 - - -Contributions by plan participants - 50.249 114.921 - - - - 195.705 39.312 - - -Current service cost 56.952 100.895 106.379 0.946 9.925 10.957 79.146 74.620 130.136 (0.077) - 0.329Interest cost 39.990 522.040 78.211 0.048 - - 37.199 68.228 448.538 0.005 - -Actuarial (gain)/ loss on obligations 46.667 (413.074) - 0.125 - - (1.077) - (1,975.957) (0.013) - -Benefits paid (53.020) (302.763) (183.650) (0.079) - - (56.668) (248.199) (271.275) - - -Exchange Fluctuation 0.950 (685.974) - 0.000 - - 1.899 - - 0.012 - -Obligation at the end of the year 630.701 6,971.707 1,168.838 6.236 27.375 14.811 539.162 1,052.977 7,700.334 5.196 17.450 3.854B) Reconciliation of opening and closingbalances of the fair value of plan assetsPlan Assets at the beginning of the year 438.144 8,214.975 973.462 - - - 427.553 896.106 - - - -Taken over on acquisition - - - - - - - - 7,399.872 - - -Contributions by plan participants - 50.249 114.921 - - - - 195.705 39.312 - - -Contributions by the Company 89.589 351.430 55.722 0.079 - - 43.430 48.878 1,584.514 - - -Expected return on plan assets 36.260 533.119 77.196 - - - 34.021 68.685 462.970 - - -Actuarial gains / (losses) (7.190) (2,159.302) 58.083 - - - (10.615) 12.287 (1,000.418) - - -Benefits paid (53.020) (302.763) (187.650) (0.079) - - (56.668) (248.199) (271.275) - - -Exchange Fluctuation 0.285 (609.490) - - - - 0.423 - - - - -Plan assets at the end of the year 504.068 6,078.218 1,091.734 - - - 438.144 973.462 8,214.975 - - -C) Reconciliation of present value of definedbenefit obligation and the fair value ofplan assets to the assets and liabilitiesrecognised in the balance sheet:Present value of obligation at the end ofthe year630.701 6,971.707 1,168.838 6.236 27.375 14.811 539.162 1,052.977 7,700.334 5.196 17.450 3.854Fair value of plan assets at the end of theyear504.068 6,078.218 1,091.734 - - - 438.144 973.462 8,214.975 - - -Liability Recognised in Balance Sheet 126.633 893.489 77.104 6.236 27.375 14.811 101.018 79.515 - 5.196 17.450 3.854[Included under Provisions in Schedule12(B)](Net Asset) Recognised in Balance Sheet - - - - - - - - (514.641) - - -[Included under Loans and Advances inSchedule 11]PensionFundGratuityPensionFundDeath-Benefit106

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)b) Defined Benefit Plans (Contd.)Particulars Gratuity2009 2008Funded Non-Funded Funded Non-FundedPensionFundPFGratuity PensionFundDeath-BenefitGratuity PFD) Expenses recognised in the Profit and LossAccountCurrent service cost 56.953 100.895 106.308 0.947 9.925 10.957 79.146 74.620 130.136 (0.079) - 0.329Interest cost 39.990 522.040 78.212 0.048 - - 37.199 68.228 448.538 0.005 - -Expected return on plan assets (36.212) (533.119) (72.522) - - - (34.021) (68.685) (462.970) - - -Actuarial (gains)/losses 53.809 1,746.228 (61.640) 0.125 - - 9.538 (12.287) (975.539) 0.013 - -Total Expenses recognised in the Profitand Loss Account 114.540 1,836.044 50.358 1.120 9.925 10.957 91.862 61.876 (859.835) (0.061) - 0.329Included in:Contribution to Provident and Other Fundsin Schedule 16 114.540 89.816 50.358 1.120 9.925 10.957 91.862 61.876 115.704 (0.061) - 0.329Actuarial Gain on Pension Scheme inSchedule 16- 1746.228-- - - - -PensionFund(975.539)GratuityPensionFundDeath-Benefit- - -114.540 1836.044 50.358 1.120 9.925 10.957 91.862 61.876 (859.835) (0.061) - 0.3292009 2008E) Investment details of plan assets Gratuity PF Pension Gratuity PF PensionGovernment securities - 38% 32% 17% 34% 27%Securities guaranteed by Government 1% - 16% 32% - -Private Sector Bonds - - - 2% - 15%Public Sector / Financial Institutional Bonds - 33% - 1% 29% -Special Deposit Scheme - 17% - 7% 19% -Fund balance with Insurance Companies 91% - - 32% - -Others (including bank balances) 8% 12% 52% 9% 18% 58%100% 100% 100% 100% 100% 100%Based on the above allocation and the prevailing yields on these assets, the long term estimate of the expected rate of return on fund assets has been arrived at.Assumed rate of return on assets is expected to vary from year to year reflecting the returns on matching government bonds.F) Actual return on plan assets 7.60% 7.75% (19.30)% 8.55% 8.25% (7.70)%G) AssumptionsDiscount Rate (per annum) 7.75% 8.00% 7.10% 8.00% 8.00% 6.90%Expected Rate of Return on Plan Assets 8.00% 8.19% 6.00% 8.00% 8.19% 6.40%Rate of increase in Compensation levels 5.00% Not Applicable 3.50% 5.00% Not Applicable 3.60%Average past service of employees (years) 14 Not Applicable 13 14.76 Not Applicable 12.00Mortality ratesLIC 1994-96ultimate tableLIC 1994-96ultimate tableTable PA00 yearof birth – 117%loading for currentpensioners and a123% loading forfuture pensionersLIC 1994-96ultimate tableLIC 1994-96ultimate tableTable PA00 year ofbirth – 117% loadingfor current pensionersand a 123% loadingfor future pensionersThe estimates of future increase in compensation levels, considered in the actuarial valuation, have been taken on account of inflation, seniority, promotionand other relevant factors such as supply and demand in the employment market.As per the best estimate of the management, contribution of Rs.90 million is expected to be paid to the plan during the year ending March 31, 2010.107

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)6. Fixed Assetsa) Estimated amount of contracts remaining to be executed on capital account and not provided for (net ofadvances) – Rs. 472.728 Million (2008: Rs. 553.079 Million).b) In view of different sets of environment in which foreign subsidiaries operate in their respective countries,provision for depreciation is made to comply with local laws and use of management estimate. It is practicallynot possible to align rates of depreciation of such subsidiaries with those of the Company. However onreview, the management is of the opinion that provision of such depreciation is adequate.Accounting policies followed by Whyte and Mackay Group in respect of depreciation on fixed assets aredifferent from accounting policies of the Company as mentioned in Note 8(iii) Schedule 18. The proportionof the fixed assets in the consolidated financial statement to which different accounting policies have beenapplied are as below:Rs. Million2009 2008Gross Block Proportion%Gross Block Proportion%Building 2,195.330 49% 2,325.689 54%Plant & Machinery 5,193.470 61% 5,361.108 62%Vehicles 28.880 16% 31.723 13%7. Current Assets, Loans and Advancesa) Loans and Advances include:(i)An amount of Rs. 736.429 Million (2008: Rs. 489.847 Million) due from a Tie-up unit secured by the assetsof the Tie-up unit.(ii) An amount of Rs. 250 Million (2008: Rs. Nil) due from a proposed tie-up unit secured by the shares of theproposed tie-up unit.b) Certain confirmation of balances from Sundry Debtors, Loans and Advances, Deposits and Sundry Creditorsare awaited and the account reconciliations of some parties where confirmations have been received are inprogress. Adjustment for differences, if any, arising out of such confirmations/reconciliations would be madein the accounts on receipt of such confirmations and reconciliation thereof. The management is of the opinionthat the impact of adjustments, if any, is not likely to be significant. In the opinion of the management, allCurrent Assets, Loans and Advances including advances on capital accounts would be realised at the values atwhich these are stated in the accounts, in the ordinary course of business.c) Bank balances with scheduled bank includes Rs 154.000 Million (2008: Rs. 715.055 Million) out of the proceedsof the beer business sold in the earlier year, kept under escrow pending resolution of various taxation matters.Subsequent to the year end, the taxation matters have been resolved and the escrow amount has beenreleased.d) The Company has granted interest free loans in foreign currency amounting to Rs.7,435.245 Million [2008: Rs.6190.725 Million, excluding Rs.6836.073 Million relating to Zelinka cancelled on amalgamation as referredto in Note 2(B)(II)(d) above] given to USL Holdings Limited (USL Holdings), BVI, a subsidiary of the Company,for acquisition of long term strategic investments. Management is of the view that out of these loans,Rs.3,630.300 Million (2008: Rs.3,987.000 Million), from the inception of the grant of loans, in substance, formpart of the Company’s net investment in the subsidiary, as the settlement of these loans is neither planned norlikely to occur in the foreseeable future and management intends to convert these loans into investment inshare capital of the subsidiary in near future. Accordingly, in accordance with AS 11 - The Effects of Changesin Foreign Exchange Rates (AS 11), exchange difference aggregating to Rs.463.905 Million (2008: Rs. 106.905Million excluding Rs.715.043 Million relating to loans to Zelinka referred in Note 2(B)(II)(d) above) arising onsuch loans has been accumulated in a foreign currency translation reserve, which at the time of the disposalof the net investment in these subsidiaries would be recognised as income or as expenses.108

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)8. As required under Section 205C of the Companies Act, 1956, the Company has transferred Rs. 4.678 Million (2008:Rs. 10.517 Million) to the Investor Education and Protection Fund (IEPF) during the year. On March 31, 2009, noamount was due for transfer to the IEPF.9. Interest on inter corporate deposit included under Unsecured Loan – others in Schedule 4 acquired onamalgamation, where negotiation/ settlement has not been finalised, has been provided in terms of the decreeand / or otherwise considered adequate by the management. In the opinion of the management, interest so farprovided is adequate and no further provision is necessary in this respect. Adjustments, if any, are carried out asand when the amounts are determined on final disposal / settlement of the matter.10. Borrowing Costs Rs. Million2009 2008a) Interest included in the Closing Stock of Malt and Grape Spirit under 82.643 38.117maturationb) Amortisation of Expenditure Incurred for Raising Borrowed Funds 160.140 112.07511. Segment ReportingThe Company is primarily organised into two main geographic segments:India: The ‘India’ segment is engaged in the business of manufacture, purchase and sale of Beverage Alcohol(Spirits and Wines) including through Tie-up units/ brand franchisees within India.Outside India: The ‘Outside India’ segment is engaged in the business of manufacture, purchase and sale ofBeverage Alcohol (Spirits and Wines) including through Tie-up units/ brand franchisees outside India.A. Primary Segmental Reporting Rs. Million(i)(ii)Geographic Segment India Outside IndiaUn allocated /EliminationTotal2009 2008 2009 2008 2009 2008 2009 2008RevenueExternal 75,414.761 58,607.017 18,722.267 17,631.059 - - 94,137.028 76,238.076Less: Excise Duty 33,655.018 24,616.008 4794.683 4377.741 - - 38,449.701 28,993.749Inter-segment 118.227 38.630 1803.187 314.774 (1,921.414) (353.404) - -Total Revenue 41,641.516 33,952.379 12,124.396 12,938.544 (1,921.414) (353.404) 55,687.327 47,244.327ResultSegment Result6,534.077 6,541.923 (2,558.988) 4,303.579 - - 3,975.089 10,845.502Profit/(Loss)Unallocated corporate- - - - - - - -expenses/(income)Income from Investments 7.964 - 23.732 - - 94.097 31.696 94.097Interest and Finance 3,496.371 - 3,679.272 - - 5,447.563 7,175.643 5,447.563ChargesProfit/(Loss) before3,045.670 6,541.923 (6,214.529) 4,303.579 - (5,353.466) (3,168.858) 5,492.036TaxationPrior Period, Exceptional- 181.258 - - - - - 181.258and Other Non-RecurringItemsProfit before taxation 3,045.670 6,360.665 (6,214.529) 4,303.579 - (5,353.466) (3,168.858) 5,673.294Provision for taxation - - - - 915.711 2,661.243 915.711 2,661.243Profit/(Loss) after Taxation 3,045.670 6,360.665 (6,214.529) 4,303.579 (915.711) (8,014.709) (4,084.569) 3,012.051Total Revenue 55,687.327 47,244.327Income from Investments 31.696 94.09755,719.023 47,338.424109

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)11 A. Primary Segmental Reporting (Contd.)(iii)Un allocated /Geographic Segment India Outside IndiaTotalElimination2009 2008 2009 2008 2009 2008 2009 2008Other informationSegment Assets 55,644.947 22,991.609 11,519.678 25,734.426 44,738.318 53,259.73 111,902.943 101,985.769Segment Liabilities 17,526.859 6,798.504 7,355.128 4,574.720 69,617.589 67,847.657 94,499.576 79,220.881Capital Expenditure 106.662 1215.284 844.847 1,426.254 - - 951.509 2,641.538Depreciation 463.294 322.780 462.545 15.081 - - 925.839 337.861Other non cash expenses 290.926 197.160 1,265.452 2.889 - - 1,556.378 200.049B. Secondary Segmental ReportingThe Group is engaged in the business of manufacture, purchase and sale of Beverage Alcohol (Spirits andWines) including through Tie-up units / brand franchisees, which constitutes a single business segment. TheGroup’s other operations did not exceed the quantitative threshold for disclosure as envisaged in AS 17-‘Segment Reporting’ specified in the Companies (Accounting Standard) Rules 2006.Notes:a. Segment accounting policies are in line with the accounting policy of the Company.b. Segment revenue includes sales and other income directly identifiable with/allocable to the segment includingintersegment revenues.c. Expenses that are directly identifiable with/allocable to segment are considered for determining the segmentresults. Expenses which relates to the group as a whole and not allocable to segments, are included under“Unallocable Corporate expenses”.d. Income which relates to the group as a whole and not allocable to segments is included in “UnallocableCorporate income”.e. Segment revenue resulting from transactions with other segments is accounted on the basis of transfer priceagreed between the segments. Such transfer prices are either determined to yield a desired margin or agreedon a negotiated basis.f. Segment assets and liabilities includes those directly identifiable with the respective segments. Unallocablecorporate assets and liabilities represents the assets and liabilities that relates to the company as a whole andnot allocable to any segment. Unallocable assets mainly comprise trade investments in associate companies.Unallocable liabilities include mainly loan funds and proposed dividend.12. Related Party Disclosuresa) Names of related parties and description of relationshipAssociates with whomtransactions have takenplace during the year(i) Utkal Distillers Limited(Utkal) (upto July, 2008)UB Distilleries Limited[Schedule 18 Note 4(b) ]^Wine Soc of India PrivateLimitedKey ManagementpersonnelMr.V.K.RekhiManaging DirectorEmployees' Benefit Plans where there is significant influenceMc Dowell & Company Limited Staff Gratuity Fund (McD SGF)McDowell & Company Limited Officers'Gratuity Fund(McD OGF)SWDL Group Officers Gratuity Fund (SWDL OGF)^SWDL Employees Gratuity Fund (SWDL EGF)^Herbertsons Limited Employees Gratuity Fund (HL EGF)^Phipson & Company Limited Management Staff Gratuity Fund.(PCL SGF)^Phipson & Company Limited Gratuity Fund. (PCL GF)^Carew & Company Ltd. Gratuity Fund (CCL GF)^Mc Dowell & Company Limited Provident Fund (McD PF)Herbertsons Limited Executives Provident Fund (HL EPF)^110

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)12 a) Names of related parties and description of relationship (Contd.)^ No transactions during the year.The Bengal Distilleries Company Limited Staff Provident Fund(BD PF)Shaw Wallce & Associated Companies Employees’ Gratuity Fund^Shaw Wallce & Associated Companies Executive Staff GratuityFund^Shaw Wallce & Associated Companies Provident Fund^Whyte and Mackay Pension Schemeb) Summary of the transactions with related parties: Rs. MillionSl.No.Nature of transactions *2009 2008AssociatesKey ManagementpersonnelEmployees’ BenefitPlans where thereis significantinfluenceTotalAssociatesKey ManagementpersonnelEmployees’ BenefitPlans where thereis significantinfluencea) Purchase of goods- Utkal - - - - 0.309 - - 0.309b) Sale of goods- Utkal 0.981 - - 0.981 6.328 - - 6.328c) Income from sale by Tie-up Units.- Utkal 30.858 - - 30.858 125.223 - - 125.223d) Sale/ (Purchase) of Fixed Assets- Utkal - - - - 0.336 - - 0.336e) Interest received fromassociates - Wine Soc 1.809 - - 1.809 - - - -f) Rental Deposit - 3.140 - 3.140 - 2.859 - 2.859g) Finance (including loans and equitycontributions in cash or in kind)- Wine Soc of India 49.320 - - 49.320 2.000 - - 2.000- Utkal (126.478) - - (126.478) (135.830) - - (135.830)h) Managing Directors’ Remuneration - 42.362 - 42.362 - 31.439 - 31.439i) Rent - 3.069 - 3.069 - 2.790 - 2.790j) Contribution to Gratuity Fund- McD OGF - - 43.693 43.693 - - 5.984 5.984- McD SGF - - 33.493 33.493 - - 33.621 33.621- SWC PF - - 0.654 0.654 - - - -k) Contribution to Provident Fund-McD PF - - 55.068 55.068 - - 48.015 48.015-HL EPF - - - - - - - -- BD PF - - - - - - 0.863 0.863l) Contribution to Pension SchemeWhyte and Mackay Pension Scheme - - 351.416 351.416 - - 1,584.514 1,584.514m) Amount due from- Utkal - - - - 489.847 - - 489.847- Wine Soc 49.320 - - 49.320 - - - -* Excludes Reimbursement of Expenses and Cost sharing arrangements.The above information has been determined to the extent such parties have been identified on the basis ofinformation provided by the Company, which has been relied upon by the auditors.Total111

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)13. (a) The Company’s significant leasing arrangements in respect of operating leases for premises (residential, office,stores, godown, manufacturing facilities etc), which are not non-cancellable, range between 11 months and3 years generally (or longer in certain cases) and are usually renewable by mutual consent on mutuallyagreeable terms.Leasing arrangements entered into prior to April 1, 2001 have not been considered for treatment under AS19 ‘Accounting for Leases’.The Whyte and Mackay Group entered into an operating lease agreement in September 2006 to rent aproperty over a 30 year period at an annual cost of Rs.69.31 Million. The annual rent payable is subject toreview every 5 years. There are no contingent rent payments.The aggregate lease rentals payable are charged as Rent under Schedule 16 to the accounts.Sub-lease payments received Rs. 322.776 Million (2008: Rs. 261.801 Million) have been recognised in thestatement of Profit and Loss for the year and are included under Schedule 14.Total of future minimum lease payments under non-cancellable operating leases for each of the followingperiods:Rs. Million2009 2008(i) Not later than one year; 30.228 8.611(ii) later than one year and not later than five years; 9.337 38.514(iii) later than five years; the total of future minimum sublease payments68.764 69.294expected to be received under non-cancellable subleases at thebalance sheet date;108.329 116.419(b) The Company has acquired computer equipment and cars on finance leases. The lease agreements are for aprimary period of 48 months for computer equipments and for 36 months to 60 months for cars. The Companyhas an option to renew these leases for a secondary period. There are no exceptional/restrictive covenants inthe lease agreements.The minimum lease payments and their present value, for each of the following periods are as follows:2009 2008Rs. MillionParticularsPresentValue ofpaymentsMinimumleasepaymentsPresentValue ofpaymentsMinimumleasepaymentsLater than one year and not later than five years 15.618 17.137 24.074 26.683Later than five years - - - -15.618 17.137 24.074 26.683Not later than one year 11.106 12.930 17.477 20.30426.724 30.067 41.551 46.987Less: Finance Charges 3.343 5.436Present value of net minimum lease payments 26.724 41.551112

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)2009 200814. Earnings / (Loss) per Share:Nominal Value of equity shares (Rs) 10 10a) Net Profit/(Loss) after tax and attributable to Minority (Rs. Million) (4,084.136) 2,720.584b) Basic number of Equity Shares of Rs.10 each outstanding during the year # 102,985,569 88,574,272c) Weighted Average number of Equity Shares of Rs.10 each outstandingduring the year 102,985,569 86,113,691d) Basic Earnings Per Share (Rs.) (a /c) (39.66) 31.59e) Dilutive Effect on Profit (Rs Million) * - 23.131f) Profit/(Loss) attributable to equity shareholders for computing DilutedEPS (Rs. Million) (a+e) (4,084.136) 2,743.715g) Dilutive Effect on Weighted average number of equity shares outstandingduring the year * - 2,080,338h) Weighted average number of Equity Shares and equity equivalent sharesfor computing Diluted EPS (c+g) 102,985,569 88,194,029i) Diluted Earnings Per Share(Rs.) (f / h) (39.66) 31.11* Diluted effect on weighted average number of equity shares and profit attributable is on account of ForeignCurrency Convertible Bonds.# Including Equity Shares to be issued referred to in Note 2(A)(I)(a).15. Taxes on Income:a) Current Taxation Rs. MillionProvision for current taxation includes:2009 2008i) Income Tax 1,802.351 1,828.799ii) Wealth Tax 13.000 12.500Total 1,815.351 1,841.299b) Deferred TaxationThe net Deferred Tax (Asset) / Liability as on March 31, 2009 has been arrived at as follows:ParticularsDeferredTax (Assets) /Liabilities ason 1.4.2008CurrentYear charge/ (credit)TranslationAdjustmentRs. MillionDeferred Tax(Assets) /Liabilities ason 31.03.2009Difference between book and tax depreciation 477.296 318.299 (9.614) 785.981Provision for Doubtful Debts (131.814) (71.496) - (203.310)Employee Benefits (220.526) (362.280) 37.816 (544.990)Others (106.927) (881.120) 32.389 (955.658)Total 18.029 (996.597) 60.591 (917.977)Less: Adjustment on adoption of notificationfor amendment to AS 11(48.014)(949.703)113

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)16. Onerous Lease ProvisionRs. Million2009 2008At the beginning of the year 600.601 -Add: Taken over on acquisition - 683.464Less: Translation Adjustment (94.289) -506.312 683.464Add/ (Less): Provisions made/ (Written back) during the year - (82.863)Charged/ (Credited) to income statement 403.578 (82.863)(Less): Utilised (incurred and charged against provision) during the year - -At the end of the year 909.890 600.601Note:These provisions were set up in relation to certain leasehold properties of Whyte and Mackay Group, which areun-let or sub-let at a discount. The provisions take account of current market conditions and expected futurevacant periods and are utilised over the remaining period of the lease, which at March 31, 2009 is between 7 and20 years.17. Foreign Currency Transactionsa) The Group has marked to market all the outstanding derivative contracts on the balance sheet date and hasrecognised the resultant loss amounting to Rs.1,350.142 Million (2008: Rs. 423.716 Million ) during the year.b) As on March 31, 2009, the Group has the following derivative instruments outstanding:i) Forward currency exchange contracts (Euro - GBP) amounting to Euro. 1 Million (2008: Nil) for the purposeof hedging its exposures to foreign currency loans.ii) Interest and Currency Swap arrangement (USD-INR) in connection with borrowings amounting to USD 35Million (2008: USD 35 Million).iii) Interest Rate Swap arrangements in connection with borrowings amounting to GBP 171.250 Million(2008: GBP. 171.250 Million).c) The year end foreign currency exposures that have not been hedged by a derivate instrument or otherwiseare as under :i) Receivables: USD 0.876 Million (2008: USD 0.845 Million), Euro 0.188 Million (2008: Euro 1.816 Million),ii)Canadian Dollars 0.298 Million (2008: Rs.Nil), Taiwan Dollar 3.639 Million (2008: Rs. Nil)Term Loans USD 641.175 Million (2008: USD 641.175 Million).d) The Central Government vide notification dated March 31, 2009 has amended Accounting Standard (AS-11)- The effects of changes in Foreign Exchange Rates, notified under the Company’s (Accounting Standard)Rules, 2006. The Company has exercised the option stated in Paragraph 46 of AS 11 retrospectively fromApril 1, 2007.As a result, the Company has changed its accounting policy for recognition of exchange differences arising onreporting of long term foreign currency monetary items, with the exception of exchange differences arisingon a monetary item that, in substance, forms part of an enterprise’s net investment in a non-integral foreignoperation, at rates different from those at which they were initially recorded during the period or reportedin previous financial statements, which hitherto were charged to the Profit and Loss Account, as below :114

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)17. Foreign Currency Transactions (Contd.)(i) In so far as they relate to the acquisition of depreciable capital assets, are added to or deducted fromthe cost of asset and are depreciated over the balance life of the asset. This, however, did not have anyimpact on the results for the year ended March 31, 2009; and(ii)In other cases, the said exchange differences are accumulated in a ‘Foreign Currency Monetary ItemTranslation Difference Account’ and amortised over the balance period of such long term asset/liabilitybut not beyond March 31, 2011. Exchange difference recognised in the Profit and Loss Account uptolast financial year ending March 31, 2008 relating to said long term monetary items in foreign currencyaggregating to Rs. 99.360 Million (net of deferred tax Rs. 48.014 Million) has been credited to the openingrevenue as provided in the rules. As a result of this change in accounting for exchange difference, netLoss for the year is lower by Rs. 8,817.723 Million. The amount remaining to be amortised in the financialstatement as on March 31, 2009 is Rs.5,597.523 Million.18. a) Previous year’s figures have been regrouped / re-arranged wherever necessary.b) In view of the amalgamation described in Note 2 above, the figures for the year ended March 31, 2009 arenot comparable with those of previous year.J. MAJUMDAR M. R. DORAISWAMY IYENGAR V. K. REKHIPartner Director Managing DirectorFor and on behalf ofPrice Waterhouse V. S. VENKATARAMAN P. A. MURALIChartered Accountants Company Secretary Chief Financial OfficerBangaloreBangaloreJuly 29, 2009 July 29, 2009115

116NOTES

NOTES117

118NOTES

The TeamSitting from left to right - V.S.Venkataraman, T.K.Subramanian, P.A.B.Sargunar, V.K.Rekhi,P.A.Murali, Ashok Capoor, K.Laxminarasimhan and K.Chatterjee.Standing from left to right - Dr. B.K.Maitin, Amrit Thomas, Ravi Nedungadi, S.D.Lalla, Vivek Prakash,Abhay Kewadkar, N.R.Rajsekher, P.S.Gill, Sanjay Raina, I.P.Suresh Menon and Ajay Baliga.Board of DirectorsS.R. GupteVice ChairmanV. K. RekhiManaging DirectorDr. Vijay MallyaChairmanM. R. D. IyengarB. M. LabrooSreedhara MenonS. K. Khanna

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