UBHL annual report - United Spirits Limited

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CERTIFICATE ON CORPORATE GOVERNANCEThe Members of,United Spirits LimitedWe have examined the compliance of conditions of Corporate Governance by United Spirits Limited, for the year ended onMarch 31, 2012 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 waslimited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditionsof Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.In our opinion and to the best of our information and according to the explanations given to us, we certify that the 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, 2012, 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 oreffectiveness with which the management has conducted the affairs of the Company.BangaloreMay 29, 2012M.R. GopinathCompany Secretary (in practice)FCS 3812 CP 1030CEO/CFO CERTIFICATEIn terms of the requirement of Clause 49 of the Listing Agreement with the Stock Exchanges, the certificates from CEO/CFOhave been obtained.MumbaiMay 29, 2012Ashok CapoorManaging DirectorDECLARATION REGARDING AFFIRMATION OF CODE OF CONDUCTIn terms of the requirement of Clause 49 of the Listing Agreement, Code of Conduct as approved by the Board of Directors ofthe Company on December 30, 2005 had been displayed at the Company’s website www.unitedspirits.in. All the members ofthe Board and the senior management personnel had affirmed compliance with the Code for the year ended March 31, 2012.MumbaiMay 29, 2012Ashok CapoorManaging Director17
Annexure to Report of the Directors (Contd.)Management Discussion & Analysis ReportA. INDUSTRY OVERVIEW:India is currently the 3rd largest market for brandedalcoholic beverages in the world by volume, and theIndian Spirits Industry accounted for an estimated13% of the global spirits volumes in calendar year2011 according to Euromonitor International. TheIndian Alcobev Industry has grown rapidly in recentyears primarily due to favorable demographic trends,substantial economic growth, increased per capitaconsumption and a marked shift in societal acceptanceof alcohol consumption.In our estimates, for fiscal 2011-12, the Indianbranded spirits industry was around 295 million cases(1 case = 9 Bulk Litres). Contrary to international trends,India continues to remain a ‘browns’ market withWhisky, Rum and Brandy being a dominant 95% of themarket.In 2010, your Company had become the largestdistilled spirits marketeer in the world by volume withworldwide sales of over 114 million cases. While latestfigures for other key players for calendar year 2011 arestill unavailable, it is our belief that having added onover 8 million cases in fiscal 2012, we would remainat the numero uno position. The worldwide sales ofthe Company during fiscal 2012 were over 122 millioncases, of this 119 million cases have been sold in a singlegeography, viz. India.The Indian Spirits market grew approximately 8% inFY12 which translates to about 22.5 million cases. Thesales of the Company grew by 7% during the sameperiod and added on 8 million cases. In contrast, theworld’s top 100 spirits brands grew under 3%*. In2011, 16 of the top 25 global premium brands eitherlost ground or grew under 3%*. Viewed in this light,the performance of the Company is even moreremarkable.The Indian Spirits market has grown at a CAGR of 12%over the last 5 years – your Company which has grownat 13% during the same period, thereby outperformedthe industry.B. REGULATORY ENVIRONMENT:The Indian alcoholic beverage market is highly regulatedresulting in significant barriers to entry, which in turnfosters a stable competitive environment. As directedby the Indian Constitution, the regulation, licensingand taxation of the alcoholic beverages industry is theprerogative of each of the Indian states, not of the UnionGovernment. This structure creates a complex tax andlicensing environment which limits the competitivenessof new manufacturers and new products. Introductionof new products and new brands must be approvedby each of the States where they are proposed to bemanufactured/sold, which is a highly time and capitalintensive process. Production of alcoholic beveragesrequires licenses from respective State Governmentswho also control production and movement of key rawmaterials. Additionally, levies on inter-state movementof spirits and costs associated with logistics often forcemanufacturers to develop production and distributioncapabilities in each of the Indian states in which theyoperate, requiring extensive capital investments. As aresult, only few Spirits manufacturers operating in Indiahave been able to find their way successfully around thislabyrinth.A Goods and Services Tax (GST) regime would haveplayed a part in smoothening inter-state tradeand commerce for the alcoholic beverages industry,but with states reluctant to give up their fiscalautonomy and control over this industry, and over afew others like Electricity, Coal and Real Estate, it isimprobable that GST will cover alcoholic beverages inthe near term.* Source – Impact Databank18
Page 10 and 11: The TeamAshok CapoorPresident & MDP
Page 16 and 17: Report of the DirectorsYour Directo
Page 18 and 19: Report of the Directors (Contd.)Cou
Page 20 and 21: Report of the Directors (Contd.)ANN
Page 22 and 23: Report of the Directors (Contd.)SL.
Page 24 and 25: Corporate Governance Report (Contd.
Page 34 and 35: Annexure to Report of the Directors
Page 40 and 41: Annexure to the Auditors' ReportAnn
Page 42 and 43: Appendix 1* to the Auditor's Report
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Page 80 and 81: Statement Pursuant to Section 212(1
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Auditors' Report to the Board of Di
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UBHL annual report - United Spirits Limited

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