president & cfo - UB Group

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