531013998USL Annual Report 2017

United Spirits Limited
Annual Report 2016-17
Proud to be
Diageo India
Company Secretary Registered & Corporate Office
V. Ramachandran “UB Tower”, #24, Vittal Mallya Road
Bengaluru - 560 001.
Auditors
Price Waterhouse & Co Chartered Accountants LLP, Registrars & Transfer Agents
5th Floor, Tower ‘D’, The Millenia, Integrated Registry Management Services Private Limited
1 & 2 Murphy Road, Ulsoor, Bengaluru - 560 008. (Formerly known as Integrated Enterprises (India) Limited),
Tel. No.: 080 4079 5000 30, Ramana Residency, 4th Cross, Sampige Road,
Malleswaram, Bengaluru - 560 003.
Tel. Nos.: 080 2346 0815-818
We are...
Part of something
bigger
Diageo is a global leader in beverage alcohol with an outstanding collection of brands
across spirits and beer. These brands include Johnnie Walker, Crown Royal, J&B, Buchanan’s
and Windsor whiskies, Smirnoff, Ketel One and Cîroc vodkas, Captain Morgan, Baileys, Don Julio,
Tanqueray and Guinness.
The company employs

Diageo is a global company, approximately 32,000
and its products are sold talented people worldwide
in more than 180 countries with offices in around 80
around the world. The countries.
company is listed on both
the London Stock Exchange
(DGE) and the New York Stock
Exchange (DEO).
Diageo was formed in 1997,

following the merger of
GrandMet and Guinness, and
is headquartered in London.
Its manufacturing facilities
The word Diageo comes from
are located across the globe
the Latin for day (dia) and
including Great Britain,
the Greek for world (geo).
Ireland, United States, Canada,
We take this to mean every
Italy, Africa, Australia, Latin
day, everywhere, people
America and Caribbean.
celebrate with our brands.
02 United Spirits Limited

Business Overview Strategic Review Statutory Reports Financial Statements
Global giants Regions

All five regions contributed to overall sales growth
Johnnie Walker Captain Morgan Smirnoff
North America Asia Pacific

No. Scotch
1 whisky in
the world
No. Standard
2 rum in the
world
No. Vodka in
1 the world
3% 3%
Tanqueray Baileys Guinness
Europe, Russia Latin America &
& Turkey Caribbean
No. Premium
1 gin in the No. Liqueur in
No. Stout in
1 the world1
5% 11%
United
States
1 the world
Africa
1. Canadean Intelligence
4%
Net Sales #
Categories
£6,421m +4%* Broadbase growth across categories
Volume# Scotch Gin
129.4EUm +2%** 6% 7%
North American
Operating Profit# Tequila
Whiskey
£2,065m +4%
(before exceptional items)
15% 18%
* Organic Net Sales Growth
** Organic Volume Growth
#
Half yearly results as on December 31, 2016 No. of people employed
32,000
Annual Report 2016-17 03
Chairman’s
have been on a journey to transform the
Company into a world-class organisation
that is known and recognised for its
message
performance, compliance culture, ethical
values and transparency, thereby gaining
the trust and respect of all stakeholders
and society at large. We have made fair
progress in the pursuit and achievement of
companies, including ours – but, I believe that vision leading to being accepted and
we have outperformed competition in this acknowledged as a valuable and integral
challenging environment. We have also part of the Diageo group. On our part, over
performed favourably compared to most the last few years we have aligned and
other fast-moving consumer goods (FMCG) strengthened our business strategy, brand
peer companies. We will continue to build portfolio and investments, compliance
on this momentum. standards, governance and financial/
operational control mechanisms, talent
For the year, while overall net sales grew development, environmental footprint
by a modest 4%, you will be happy and sustainability efforts and much more,
to note that our Company improved to those of Diageo’s standards globally, to
gross margins by 156 bps to 42.9% and pursue greater integration with the parent,
profit after tax grew 39%, both aided by in true spirit of inter-dependence. We now
improved productivity and operational identify and adhere to the Diageo ethos
efficiencies. The above, coupled with more closely than ever before, even while
stringent corporate governance and we build on the positive aspects of our
Dear Shareholders, compliance norms, your Company has legacy, including our understanding of the
adopted and adhered to, have led to a Indian market, consumer franchise of our
I write to you at an important moment in further upgradation of our long-term credit brands and well-established distribution
our Company’s history – our transition into rating to AA which will enable it to access network.
the next phase of our growth trajectory, more economical sources of debt. It will be
underpinned by performance momentum our endeavour to deleverage the balance I thank you all for your continued faith and
despite a subdued industry environment. sheet and reduce the level of overall debt, support which has in no small measure
including through the disposal of non- enabled the Company to adapt and face
Two policy developments during the year core assets, to further improve financial the challenges in a bold and determined
– demonetisation and the judicial ban on performance by optimising on total debt manner.
the sale of alcohol along national and state and financing costs.
highways – adding to the introduction of Yours sincerely,
prohibition in the State of Bihar, created a In the last three years since Diageo took Mahendra Kumar Sharma
volatile and tough environment for alcobev a controlling interest in United Spirits, we Chairman
Board of Directors
Mahendra Kumar Sharma V. K. Viswanathan Rajeev Gupta Randall Ingber
Chairman Independent Director Independent Director Non-Executive Director
Anand Kripalu Vinod Rao Dr. (Mrs.) Indu Shahani John Thomas Kennedy
Managing Director & Non-Executive Director Independent Director Non-Executive Director
Chief Executive Officer
D. Sivanandan Sanjeev Churiwala
Independent Director Executive Director

MD & CEO’s
governance norms this year with the
introduction of the Diageo Know Your
Business Partner Programme, a more
message
thorough due diligence of our business
partners.
We also restructured our organisation to fit

effectively as possible have helped us our strategic objectives and ensure that we
survive and grow in this tumultuous year. respond quickly to customer and consumer
needs, making it leaner, flatter and more
On the other hand, our industry agile; roles and spans are bigger; decision
fundamentals remain promising as making is faster; and accountability
demographic factors, increasing aspirations sharper.
and changing attitudes to alcohol continue
to fuel growth. We have significantly We firmly believe that when consumed
increased the quantum of investments responsibly, alcohol can be part of a
behind our focus brands during the year, balanced lifestyle and play a positive
communicating more creatively with role in social occasions and celebration.
consumers, and at scale. Our strategy of We champion responsible drinking and
premiumising offerings, refreshing and support road safety programmes all
renovating brands as well as innovating over India. This year we extended our
with new consumption occasions, led partnerships to other corporates such as
Dear Shareholders,
to strong, ahead-of-industry, growth of Essar Oil to create awareness and drive
It gives me great pleasure to share that the our Prestige and above segment, which behaviour change through their network
transformational journey we embarked grew net sales 14% during the year. Our of 3,200+ petrol pumps, many of which are
upon three years ago has led to holistic, renovated brands, McDowell’s No. 1 whisky situated along national highways.
impactful and sustainable change across net sales grew 8%, Royal Challenge grew
almost every single aspect of our Company. 16% and Signature grew by 29% in this Over the last few years, we have
No stone has been left unturned, and no year, gaining market share as well. Our transformed and aligned ourselves more
effort spared to examine every brand, Scotch category also grew net sales 32%, closely to the Diageo value system which
every assumption, every process or control driven by Johnnie Walker, Black Dog, Black has begun to underpin our entire business
and much more, in our quest to become & White and VAT 69. value chain, as well as our relationships
the best performing, most trusted and with all our stakeholders, including our
respected consumer products Company To stay focused on the most profitable employees and the community at large.
in India. parts of our business viz. Prestige and Moving forward, I see these values-led and
above, we created a fit-for-purpose value-creating relationships propelling our
I am very pleased with our performance business model to selectively participate growth even more appreciably forward. We
delivery in the year gone by and how we’ve in the Popular segment in certain states. are part of something bigger, and we are
held up against what can be described In others, we have begun franchising our certainly proud to have become an integral
as the single-most challenging year from Popular brands to local partners to improve and valuable part of Diageo.
a regulatory perspective. Our results are operational and cost efficiencies.
commendable seeing as they come in I would like to thank all our employees
the face of a very subdued economic At Diageo, standards are everything. Our for making this happen, and for their
environment and several regulatory high-quality standards are manifest in incredible support during the year.
changes. Beginning with the surprise every product in our portfolio and our
announcement of total prohibition state-of-the-art Technical Centre is the
I would also like to thank you, all our
in Bihar, coping with the aftermath of custodian of our valued portfolio. Our new
shareholders, for your continued support in
demonetisation and culminating in Packaging Centre at Kumbalgudu will more
our journey.
the Supreme Court banning the sale of fully serve our innovation agenda, going
alcohol near national and state highways! forward.
Timely interventions, out-of-the-bottle Yours sincerely,
thinking and employees rallying together We only do business the right way. Anand Kripalu
to mitigate these risks as quickly and We strengthened our compliance and Managing Director and CEO

We are...
Diageo India
`85,476m ` 9,826m `196,478m

Net Revenue EBITDA Contribution to
the Exchequer
2nd No.1 12
Largest spirits Largest spirits Millionaire
Company in the world Company in India brands
23% 90m 2.8m

Reduction in water Cases produced People benefited from
usage over last year annually our sustainability efforts
`11.69 AA 10,000+
Earnings (with positive outlook) Employment
Per Share Credit rating generated

We are India’s leading beverage alcohol Company with an outstanding portfolio of premium
brands. We are a high-performing business that is sensitive to consumer, community and
societal needs. We are proud of being a responsible producer and marketer of beverage
alcohol, and we champion responsible consumption as part of a balanced lifestyle.
A business built on the principles and foundations laid by the giants of the
industry. Our ambition is to become the best performing, most trusted and
respected consumer products Company in India.
We are a Company built and sustained through innovation, which gives us the
drive to create new products, new categories and new experiences for consumers,
to invent strong brands today and in the future for others to take further.
Our strength lies in our scale, the geographical diversity of our business, and our
desire to continuously improve our performance. Old and new, large and small,
global and local – the depth and breadth of our product portfolio is second to
none, with brands at almost every price point in every category to meet consumer
demand.
We invest to build our brands and in the routes for them to reach consumers’
hands.
With a purpose of Celebrating life, every day, everywhere, we take seriously our
obligation to market our brands responsibly, and to help people make informed
decisions about drinking, including choosing not to drink.
We invest in all of our partnerships big and small, holding a deep respect for
the relationships we build, playing a responsible role in enriching lives of local
communities, wherever we work.
As we collaborate with India, for India, we have a deep-rooted responsibility to

actively shape the future of our Company, the industry, and the country by doing
business the right way.

We are...
Custodians of consumer
aspirations
Diageo India is the leading beverage alcohol company in India - a business built on the
principles and foundations laid by the giants of the industry.
Alexander Walker, Arthur Guinness, Angus McDowell, and all those many talented people
that followed in their footsteps over hundreds of years, cared deeply about the people and
businesses they fostered. They were driven to produce the best spirits, wine and beer brands
they could, working hard to be successful, delivering the best performance possible, and creating
opportunities for people and their communities. Today, we stand on the shoulders of these giants
and act with the same entrepreneurial spirit and determination.

Key Brands
Luxury
Premium
Prestige
Popular
We are a Company built and sustained through innovation, which gives us the drive to create new products, new categories and new
experiences for consumers, to invent strong brands today and in the future for others to take further. And we are the present-day
custodians of some of the most iconic brands in the world, with a responsibility to ensure they remain as relevant today as they have
done in the past, and to pass them on to the next generation in even better shape.
Recent Renovations: Recent Innovations:
McDowell’s No. 1 Signature Royal Challenge Captain Morgan

- Celebrating the bonds - My Mark. My - To inspire the spirit of - To champion the
of true brotherhood Signature taking on life power of fun

We are...
Custodians of our
brands
We stand on the shoulders of giants – visionaries who conceptualised and created our brands. Today,
we are custodians of lifestyle brands that facilitate socialising. As custodians of our brands – (a) We are
continuously improving our understanding of socialising and status motivations, (b) We are renovating
and innovating on our brands to design socialising experiences for relevant consumption occasions,
(c) We are building capabilities to make our brands digitally native, and (d) We are continuing to build
our technical and R&D capability to better serve specific socialising occasions.

This approach is reflected in our ability to grow share across

key segments. Some of the key highlights are:
Strong market share gains achieved during the year as a result

of renovation of key brands - McDowell No. 1 Whisky, core
variant renovated in November 2015 grew by 8%. Signature has
grown almost 29% and Royal Challenge net sales grew 16% post
renovation.
For an insight
into our digital
initiatives, kindly
scan the QR Code
Introduced gifting and personalisation at the point of purchase for below, using your
smartphone:
some of our premium whisky brands for special occasions, whether it
is weddings or festivals like Holi and Diwali. Consumers loved these
gift packs, as evident in the fact that they were happy to pay the
premium for the beautiful packaging that they were proud to gift to
friends, family and business associates alike.
Our brand portfolio took a major leap with pioneering innovations

to power future growth. We launched Silk, another landmark
in McDowell’s No. 1 brand building journey and the first Indian
whisky with honey flavour, and also introduced our premium
Captain Morgan Original Rum to meet the evolving desires of rum
connoisseurs.
Simi Bartender is a chatbot - a conversational interface that helps

consumers with cocktail recipes. Launched during the year, this
innovative
Fizz digital experience offers bartending solutions, with over
2,000 DIY cocktail recipes, to enthusiastic consumers ready to play
host at parties.

We are...
Creating memorable
consumer
experiences
The consumer is at the heart of everything we do. Our scientific approach to consumer planning,
insights and analytics fuels our superior understanding of consumer tastes, preferences and occasions.
This understanding is backed by our continuous efforts to transform our brands to win the hearts and
minds of consumers by creating more memorable experiences for them. This strong commitment to the
consumer is what is driving our market share and brand performance growth.
We are also leveraging outlets as media to build brand imagery with quality, distribution, visibility, price,
promotion and persuasion, while automation as a key in-store driver has further helped augment our
customer connect.
Our dedicated brand ambassadors work with the F&B on-premise fraternity through global programmes,
such as World Class and Diageo Bar Academy, to further propel market expansion. We are recruiting
new consumers through brilliantly executed consumer activations in outlets, and also at Weddings and
Banquets.

Highlights:
Posted strong 43.5% volume share in the categories in which we operate

(including wine and flavoured spirits). P&A represents 41.13% in volume
and 60% of the overall business (net sales).
Deployed a fit-for-purpose model to optimise our Popular brands

business. In certain states such as Andhra Pradesh, Puducherry, Goa,
Andaman and Nicobar and Kerala, we believe that other local parties
are better advantaged to maximise value of our popular brands and
have appointed franchisees for these brands through a fixed fee model.
This will enable us to focus on the biggest growth opportunities.
We are now fully aligned to Diageo’s commercial capability standards

with an overall ‘stable’ rating and best practice showcase in certain
criteria. This is a significant improvement from the past year. These
standards help benchmark selling capabilities across the world, including
Customer Planning and Performance Management, Outlet Execution
Standards, Rewards & Recognition and Commercial Scorecards.
Partnered with innovative start-up ‘HipBar’, a cloud-based app catering

to drinks connoisseurs. Customers can use their smartphone to buy their
favourite spirits bottle through the HipBar app, which can be redeemed
by portion in any partner restaurant or hotel across the country.

We are...
Strengthening our
value chain
28% 850% 23%

Reduction in Carbon Increase in use of Reduction in water
Emissions Footprint renewable biomass usage over last year
over FY16 since FY07

It is our constant endeavour to bring cost and operational efficiencies into the system through
sustainable initiatives across the value chain of our business. These include creation of an
integrated supply team to boost collaboration and faster decision-making, besides greater
focus on productivity and savings. These initiatives led to ` 200 crore in cost savings during
FY17 - the highest ever till date.
In an industry-first initiative, we have successfully institutionalised an efficient and integrated Sales and
Operation Programme through a Centre of Excellence designed to further enhance our system and
process efficiencies.
Our journey towards sustainable growth started with our integration with the Diageo Global supply chain
and is underlined by several proactive initiatives - introduction of a structured tiered governance system,
application of regular review metrics, more robust processes, use of rapid deployment methodology on
the shop floor and lean manufacturing and factory rationalisation. With sustainable quality performance
an important facet of our business model, we have built robust manufacturing capabilities, which have
enabled us to earn certifications like - Food Safety Management - ISO 22000 and “National Safety Award”
from the National Safety Council of India for our Alwar unit in Rajasthan.

We are…
Constantly nurturing
the power
Built on a strong performance culture, our people philosophy is targeted at creating a ‘fit for
purpose’ organisation with the right capabilities and right enablement policies.
ORGANISATION
FIT FOR PURPOSE STRUCTURE: Implemented a flatter, leaner, more responsive and agile structure with the objective of winning
in the marketplace and creating a fit for purpose organisation. We embedded efficiencies in our HR services enabled with the
right technology.
MAPPING TO DIAGEO BLUEPRINT: To build closer alignment with Diageo’s global organisation structure, we rationalised our
grades to Diageo levels. To facilitate career movements within the global organisation.
LEADERSHIP
BUILDING CAPABILITIES: Enabled our employees to grow into functionally capable and inspirational leaders by closing 35% of
internal vacancies with job rotations. Employees also received a total of 5966-man days in training to help them succeed in their
current roles.
DEVELOPMENT: Launched the Career portal which depicts clear career pathways for each role. This helps employees identify
and build relevant capabilities in pursuit of their career aspirations. It also helps build a robust talent pipeline.
CULTURE
ENGAGED WORKFORCE: Connecting employees through open offices, fun at work activities, health study on employee value
score and ensuring our policies allow for flexibility and customisation as per individual’s need. Launched Recognition portal - a
peer-to-peer and team recognition framework for employees across locations on a social platform delivered through a Mobile
Application.
OFF FROM WORK: Enhanced our maternity leave policy to six months with an additional month of flexi-working from home.
Father’s-to-be are also entitled to two weeks’ of paternity leave. Employees can also avail sabbatical leave up to one year, to
pursue personal goals or exigencies.
IMPROVING GENDER DIVERSITY continues to be an executive priority with specific diversity goals, actions and milestones in
place. Compared to two years ago, we have more women in leadership roles - 25% representation on the Executive Committee
and Senior leadership roles are all headed by women leaders. We have also hired women in specialist roles at our R & D centre,
Innovation and Public Policy teams.
All the above efforts are inclined towards becoming the best performing, most trusted and respected consumer products
company in the world.

of our people
The highly regulated alcohol industry in India, necessitates a high degree of adherence to
regulatory compliance and governance, which is in line with Diageo’s global standards.
Compliance Framework
Our compliance and governance policies and practices influence the entire spectrum of
our business activities - from the way we promote our brands to how we engage with
government officials.
Compliance
Our efforts to ensure that we conduct business ethically begins with training employees to Committee
be aware and consciously meet the stringent compliance and governance standards set out
in our Code of Business Conduct (COBCE). Our Annual Compliance Certification programme
covered 2,176 employees during FY17, to certify that they have understood and follow the
governance and compliance framework. All 229 new joinees also underwent personal and on-
line COBCE training. Regular communication in the form of monthly newsletters, posters and
Audit
campaigns are also rolled out. Committee
During the year, we transitioned to Diageo’s global whistleblower system SpeakUp. As part of
our breach management system, there were 115 reported breaches during the year, of which
77 cases were in the nature of compliance and ethics issues. These were investigated in detail
by the Compliance Committee, comprising senior members of the leadership team, followed Global Audit
by remedial action. & Risk
Committee
While the Compliance Committee, Audit Committee, and the Global Audit & Risk Committee
ensure autonomy and supervision, the Internal Complaints Committee and Regional
Committees handle cases under the Sexual Harassment of Women at Workplace (Prevention, Internal
Prohibition & Redressal) Act, 2013. Complaints
Committee
In order to ensure that we manage our risk from doing business with third parties, we & Regional
initiated Diageo’s Know Your Business Partner programme, a due diligence programme for our Committees
business partners.

We are...
Proud to be living the
ethos of responsible
growth
Diageo India’s sustainable development agenda focusses on where we source, make and sell
because those communities have the biggest influence on our business, and us on them. We also
take seriously our obligation to market our brands responsibly, and to help people make informed
decisions about drinking, including choosing not to drink. We believe that when consumed
responsibly, alcohol can be a part of a balanced lifestyle and play a positive role in social occasions
and celebrations.
Championing Road Safety Institute of Road Traffic Education Campaign ambassador and youth
Road safety and anti-drink driving (IRTE), covered new ground, reaching icon, Virat Kohli together with leading
are central to our strategy to address 50 new cities in 15 states and trained celebrities Chris Gayle, Karisma Kapoor
alcohol harm and promote responsible over 3,900 traffic officials in road safety and Gul Panag amplified the message
consumption. Our signature ‘Diageo capacity-building, along with 6,000 of never drinking and driving.
Road to Safety’ programme, now in commercial vehicle drivers.
its 3rd year, is executed in partnership DIAGEO-ESSAR OIL (EOL) - ROAD TO
The DIAGEO-NDTV ROAD TO SAFETY
with state governments and reputed CONSUMER CAMPAIGN in FY16 SAFETY PARTNERSHIP, a first-of-its-
not-for-profit organisations. In reached 2.8 million citizens through kind CSR partnership was launched
February this year, we were proud its network of Radio, TV and Digital. in February this year. This Road Safety
recipients of the ‘National CSR Till date, the campaign has garnered campaign aimed at educating the
Excellence Award 2017’ for this over 3 million pledges in support commercial vehicle drivers is being
campaign. against drunken driving. Citizens rolled out across 3,200 Essar Oil’s
were encouraged to always have a retail outlets on the state and national
The USL-DIAGEO - ROAD TO SAFETY ‘Designated Driver’ and to ‘Never Drink highways.
programme, together with the & Drive’.

Road To Safety and attended by the excise commissioner

University Programme of New Delhi.
To ensure that the youth of today are
We have partnered with IIT Delhi for a
aware and involved in making our roads
safer, we partnered with Enactus India 3-month, pan India road safety festival
for the first ever ‘Young India Summit ‘Watch the Road’ and organised a
on Road Safety’ at the Delhi College marathon together with BITS Pilani, Goa
of Economics. The Summit consisted to create awareness against the perils of
of panel discussions, film-making drunk driving.
competition and case studies on how
to reduce the number of deaths on our Our University partnerships have helped
roads. The summit was covered by NDTV us reach and educate 16,000 students.
Empowering communities through of water through rainwater harvesting

Project S.H.E. structures, pond desilting and better
water management practices. These
Through our grassroots programme
villages now have 100% piped water
Project S.H.E. (Security-Health-Education),
facility at every villager’s home and
we aim to create shared value and
have achieved their goal of 100%
empowered communities around our
‘open defecation free’ which has been
five bottling plants in the semi-urban and
acknowledged by the government.
rural areas of the country.
• To improve menstrual hygiene and
• In Alwar, Rajasthan, we have
women health, we helped set up a
our distilling and bottling plant
self-help group (SHG) of 20 women
surrounded by three key villages from
that were trained and supported to
where most of our workforce comes.
set up a micro enterprise to produce
This unit scores very high on diversity,
low-cost sanitary napkins. Today, this
safety and performance amongst the
enterprise supplies sanitary napkins
peer units.
to over 20 villages touching 5,000
• Our combined efforts have helped women. This initiative provides both
in building an additional capacity of livelihood as well as improved hygiene
1,25,000 Cu Metre (equal to fill more for the women of the villages.
than 50 Olympic-size swimming pools)

We are…
Focused on financial
prudence
We remain committed business partners and support business to focus on cost reduction
through zero-based budgeting. This has helped liberate costs in COGS and overheads, coupled
with marketing efficiencies to invest in our brands and deliver on our margin ambition of mid-
high teens in mid-term.
Automation remains our key priority and we invested

in SAP enhancement, which has also enabled better
financial reporting compliance and digitisation of
various processes, enabling us to report faster and
better quality of quarterly earnings reporting.
We augmented risk management processes

In an industry subject to complex regulations, we and controls environment and this enabled the
continue to maintain a strong balance sheet, with debt management to protect financial, operational &
portfolio diversification and better sweating of assets reputational values of the Company. We delivered
as key focus areas of our business strategy. clean Internal Financial Control (IFC) certification and
statutory audit opinion. We keep the Company safe
and secure.
Our effort to efficiently manage capital structure

and funding strategy has resulted in better debt mix,
reduced debt value and strengthened our ability to We enabled improved credit ratings by judicious
renegotiate borrowing costs. This has delivered lower planning and ICRA upgraded our Long-Term rating from
interest costs by 17%, thus enabling us to improve A+ to AA (with positive outlook), while the Short-Term
earnings. rating was reaffirmed at highest A1+.

BUSINESS OVERVIEW STRATEGIC REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS
REPORT OF THE DIRECTORS
Your Directors are pleased to present the 18th Annual Report of your Company and the audited financial
statements for the year ended March 31, 2017.
1. Financial Results#
` Million
Standalone Consolidated
2016-17 2015-16 2016-17 2015-16
The working of your Company for the
year under review resulted in
Profit / Loss from operations 7,131 5,452 7,194 5,508
Exceptional and other non-recurring 3,262 1,280 3,681 274
items
Less:
Depreciation 1,323 1,017 1,886 1,572
Taxation (including deferred tax) 847 1,936 697 2,228
Profit / (Loss) after tax 1,699 1,219 930* 1,434*
Profit B/F from previous year (42,590) (52,244) (46,815) (56,621)
Minority Interest appropriation - - 71 -52
Foreign Currency Translation Reserve - - 29 -215
Considered separately
Total Comprehensive Income 499 86 468 290
Transfer between reserves 68 8,349 68 8,349
Profit / (Loss) available for appropriation (40,324) (42,590) (45,248) (46,815)
Your Directors have made the following
appropriations:
General Reserve - - - -
Dividend paid in respect to previous - - - -
years
Proposed dividend - - - -
Corporate Tax on Proposed Dividend - - - -
Corporate Tax on Dividend paid - - - -
Balance carried to the Balance sheet (40,324) (42,590) (45,248) (46,815)
EPS–Basic & Diluted(Rupees) 11.69 8.39 7.06 9.75
* Excluding minority interest

# Previous year’s figures varies compared to 17th Annual Report in view of the implementation of
Indian Accounting Standard (Ind AS) effective April 1, 2016.
ANNUAL REPORT 2016-17 21

REPORT OF THE DIRECTORS (CONTINUED)
1.1 Subsidiary Companies The issued, subscribed and paid-up equity share capital
In accordance with section 129(3) of the Companies Act, of your Company remain unchanged at ` 1,453,277,430/-
2013, (‘Companies Act’) a statement containing salient divided into 145,327,743 equity shares of ` 10/- each.
features of the financial statements of the subsidiary
companies in Form AOC1 is provided as Annexure - 1 to 7. Global Depository Shares
this report. During the financial year 2005-06, the Company had
issued 17,502,762 global depository shares (GDSs)
In accordance with the third proviso to section 136(1) representing 8,751,381 equity shares with 2 GDSs
of the Companies Act, the annual report and financial representing 1 equity share of face value of ` 10/- each
statements of each of the subsidiary companies have at US$ 7.4274 per GDS, aggregating to US$ 130 million,
also been placed on the website of the Company
listed on the Luxembourg stock exchange. These GDSs did
www.diageoindia.com
not carry any voting rights. The Company, as mentioned
in its letter dated September 22, 2016 addressed to
2. Board’s Responses to Observations, Qualifications and
Deutsche Bank Trust Company Americas, Depository for
Adverse Remarks in Auditor’s Report
the GDS, had elected to terminate the deposit agreement
The Statutory Auditors have given unqualified opinion in respect of the GDSs and the same was communicated
on the Financial Statements for the year ended March 31, to the Luxembourg Stock Exchange with the objective
2017 and hence this is not applicable. of delisting these GDSs listed with Luxembourg stock
exchange. The Company vide its letter dated January 09,
The Secretarial Auditor has given an unqualified opinion
2017, extended the termination date to February 10, 2017
in the Secretarial Audit Report for the year ended March
and eventually the Depository for global depository shares
31, 2017, referred to in Annexure 3 and hence this item is
(GDSs), was terminated by virtue of which the GDSs have
not applicable.
been cancelled. Notwithstanding this development, the
3. Material Changes and Commitments/ Events number of shares outstanding or issued and subscribed in
Subsequent to the date of the Financial Statements the share capital of the Company remains unchanged at
` 1,453 million being 145,327,743 equity shares of ` 10
The details of material changes and commitments/ each fully paid up and the Company’s shares continue to
event subsequent to the date of the financial statement
be listed with the National Stock Exchange of India Limited
is provided under Management Discussion and Analysis
and BSE Limited. Consequent to this, the GDS listed with
Report and the report on Risk Management forming part
the Luxembourg Stock Exchange had been delisted.
of this Annual Report.
4. Change in nature of Business, if any 8. Performance of the Company
The details of change in nature of business is provided under During the year under review, your Company has achieved
Management Discussion and Analysis Report and the Report a sales volume of over 90 million cases and this resulted in
on Risk Management forming part of this Annual Report. decline of 3.2% compared to prior period (previous year 93
million cases, excluding royalty / franchise markets). Net
5. Dividend sales/income from operations of the Company’s brands
grew 3.6% in the financial year ended March 31, 2017 and
In view of the accumulated losses of the preceding years,
stood at ` 85,476 million net of duties and taxes (previous
your directors have not recommended any dividend. No
amount is proposed to be carried to reserves. year ` 82,482 million). Sales volume of the Company’s
brands in the ‘Prestige and Above’ segment grew 7.7%
6. Capital in the financial year ended March 31, 2017 and stood
at 37 million cases (previous year 34 million cases). Net
The authorized share capital of your Company remains sales of the ’Prestige and Above’ segment grew 13% and
unchanged at ` 7,192,000,000 divided into 548,000,000
stood at ` 49,660 million net of duties and taxes (previous
equity shares of ` 10/- each amounting to ` 5,480
year ` 46,013 million). The ’Prestige and Above’ segment
million, 159,200,000 Preference shares of ` 10/- each
represents 41% of total sales volumes and 58% of total net
amounting to ` 1,592.0 million and 1,200,000 7% non-
sales with 4 basis points and 5 basis points improvement
cumulative redeemable Preference Shares of ` 100/- each
amounting to ` 120 million. respectively compared to previous year.
22 UNITED SPIRITS LIMITED


9. Details of Subsidiary Companies, Joint Ventures and Meeting (AGM) and being eligible, offers himself for
Associate Companies and their Financial Position reappointment.
Your Company continues to have 19 subsidiary companies in
the financial year ended on March 31, 2017. The information Members may please note that Mr Vinod Rao, who is
required under the first proviso to section 129(3)of the a nominee of Relay B V, was appointed as a Director at
Companies Act is given inform AOC- 1 in Annexure 1. The the 17th Annual General Meeting (AGM).
Company’s policy for determining material subsidiaries is
available at Company’s website www.diageoindia.com. A brief profile of Mr Vinod Rao is provided in the
Notice convening 18th AGM.
Performance of Associates, Subsidiaries and Joint Ventures
and their contribution to overall performance of the C. Independent Directors and Nominee Directors
Company is covered as part of the Consolidated Financial Mr Sudhakar Rao, an Independent Director of the
statement and in form AOC-1, annexed to and forming part Company resigned as director with effect from May
of this Annual Report. 19, 2016.
10. Prospects/Outlook Mr Ravi Rajagopal, a Non-Executive Director of

The details about prospects/ outlook of your Company are the Company resigned as director with effect from
provided under the Management Discussion and Analysis October 13, 2016.
Report forming part of this Annual Report.
Dr Nicholas Bodo Blazquez, a Non-Executive Director
11. Depository System of the Company resigned as director with effect from
January 22, 2017.
The trading in the equity shares of your Company is under
compulsory dematerialisation mode. As on March 31,
Your directors place on record their sincere
2017, equity shares representing 98.77% of the equity
appreciation of the valuable services rendered by
share capital are indematerialised form. As the depository
Mr Sudhakar Rao, Mr Ravi Rajagopal and Dr Nicholas
system offers numerous advantages, members are
Bodo Blazquez during their tenure as directors of the
requested to take advantage of the same and avail of the
Company.
facility of dematerialisation of the Company’s shares.
Mr V K Viswanathan was appointed as an Independent

12. Board Meetings, Board of Directors, Key Managerial
Director with effect from October 17, 2016
Personnel & Committees of Directors.
12.1 A.
Appointment, change in designation and Pursuant to nominations received from Relay B.V., the
resignation holding company of your Company, Mr Vinod Rao,
Details on appointments, changes in designation, Mr John Thomas Kennedy and Mr Randall Ingber,
resignation of Directors, key managerial personnel, were appointed as Directors of the Company with
and Committees of Directors, as well as on Board effect from May 24, 2016, August 17, 2016 and
and Committee meetings of your Company, and the February 2, 2017 respectively.
matters required to be specified pursuant to sections
134 and 178 of the Companies Act, 2013 and the SEBI Brief profiles of Mr V K Viswanathan, Mr Vinod Rao,
(Listing Obligations And Disclosure Requirements) Mr John Thomas Kennedy and Mr Randall Ingber are
Regulations, 2015 (SEBI (LODR) Regulations) are provided in the Notice convening 18th AGM.
provided in the Corporate Governance Report that is
annexed to and form part of this Annual Report. D. Executive Director
B. Re-appointment Mr Sanjeev Churiwala, Chief Financial Officer, was

nominated by Relay B V, for appointing him as an
As per the provisions of the Companies Act, Mr Vinod
Executive Director and accordingly the Board of
Rao retires by rotation at the ensuing Annual General
Directors of the Company appointed him as an

Executive Director and Chief Financial Officer of the with Section 198 of the Companies Act, as approved
Company with effect from April 1, 2017. by the shareholders at the AGM held on September
30, 2014. Such approval remain in force until revoked.
A brief profile of Mr Sanjeev Churiwala is provided in
The payment of Commission is to be decided by the
the Notice convening 18th AGM.
Board of Directors, based on the recommendation
E. Number of Meetings of the Board of the Nomination and Remuneration Committee.
Criteria for payment of remuneration to Non-
The details of the Board Meetings and other
Executive Directors is as below:
Committee Meetings held during the financial Year
2016-17 are stated in the Corporate Governance.
1. Membership of Committees
2. Chairmanship of the Committees/Board
F. Board Committees
3. Benchmarking with other companies
The Company has setup the following committees of
the Board: The Company has made a provision of ` 21.5 million
for paying commission to the Non-Executive Directors
Audit and Risk Management Committee, Nomination pursuant to the provisions of the Companies Act,
and Remuneration Committee, Stakeholders 2013.
Relationship Committee, Corporate Social
Responsibility Committee and General Committee of The criteria for payment of remuneration to executive
Directors. directors is determined by the Nomination and
Remuneration Committee.
The composition of each of the above Committees,
their respective roles and responsibilities are provided I. Board Evaluation Criteria
in the Corporate Governance Report.
Pursuant to the provisions of the Companies Act
G. Recommendations of the Audit and Risk and Regulation 17 of the SEBI (LODR) Regulations,
Management Committee the Board has carried out an annual performance
evaluation of its own performance, the Directors
All the recommendations of the audit and risk
individually as well as the Board Committees. The
managment committee have been accepted by the
evaluation process considered the effectiveness
Board.
of the Board and the committees with special
emphasis on the performance and functioning of
H. Details of remuneration to Directors
the Board and the Committees. The evaluation of
As required under Section 197(12) of the Companies the Directors was based on the time spent by each
Act, information relating to remuneration paid of the Board Members, core competencies, expertise
to Directors during the financial year 2016–17 is and contribution to the effectiveness and functioning
provided in the Corporate Governance Report and in of the Board and the Committees.
form MGT 9, that is annexed to and forming part of
this Annual Report as Annexure-4. 12.2 Vigil Mechanism
As stated in the Corporate Governance Report, Your Company has a well-established vigil mechanism
sitting fees are paid to Non-Executive Directors for in place, which is managed by the compliance & ethics
attending Board/ Committee meetings. They are also team. ‘SpeakUp’ is a confidential service available to
entitled to reimbursement of actual travel expenses, employees to make a report when they believe there to
boarding and lodging, conveyance and incidental be a potential breach of the code, policies or applicable
expenses incurred in attending such meetings, in laws. ‘SpeakUp’ is managed by an external agency with
accordance with the travel policy for Directors. In staff who are trained to deal with the calls and translators
addition, the Non-Executive Directors are also eligible who are immediately available to assist if required. Access
for commission every year, not exceeding 1% of the to the Chairman of the Audit Committee is provided for
net profits of the Company calculated in accordance in appropriate/ exceptional cases, as required under


the Companies Act and the SEBI (LODR) Regulations. All Exchange of India Limited (NSE). The listing fees due as on
complaints are investigated by the compliance and ethics date have been paid to the respective stock exchanges.
team and appropriate action taken in accordance with The GDS listed with Luxembourg Stock Exchange had
your Company’s policies. been delisted consequent upon the termination of
the Depository Agreement entered into with the
12.3 Related Party Transactions Depository namely Deutsche Bank Trust Company
Americas.
The Company’s policy on dealing with related party
transactions was adopted by the Board on June 15, 2015.
15. Corporate Governance
This policy has been amended from time to time and is
available on the Company’s website www.diageoindia. A Corporate Governance Report is annexed separately as
com. part of this report.
All related party transactions that were entered into 16. Management Discussion and Analysis Report
during the financial year, were on an arm’s length The Management Discussion and Analysis Report is
basis and were in the ordinary course of business. There annexed separately as part of this report.
are no materially significant related party transactions
made by the Company with promoters, directors, key 17. Fixed Deposits
managerial personnel or other designated persons which
As reported in the previous year’s annual report, your
may have a potential conflict of interest with the Company
Company discontinued accepting fixed deposits from
at large.
the public and shareholders effective January 1, 2014. In
addition, pursuant to section 74(1)(b) of the Companies
The details of related party transactions required under Act, the Board of Directors at their meeting held on
section 134(3)(h) of the Companies Act read with Rule 8 August 1, 2014 decided to repay all fixed deposits
of the Companies (Accounts) Rules, 2014 is given in form maturing on or after March 31, 2015 by March 31, 2015.
AOC-2 and the same is enclosed as Annexure-2. Fixed Deposits from the public and shareholders which
remained unclaimed and for which instructions had not
13. Auditors been received from the depositors as on March 31, 2017
stood at ` 1,12,05,419. This amount was transferred into
13.1 Financial Audit
a separate non-interest bearing escrow account opened
M/s. Price Waterhouse & Co Chartered Accountants LLP specifically for the purpose of re-payment, has been
(FRN 304026E/ E-300009) Statutory Auditors of your re-paid consistent with the provisions of the Companies
Company, were appointed as Auditors of your Company Act and the rules made thereunder. Of this amount, a
from the conclusion of the 17th AGM for a period of 5 sum of ` 49,02,310 (as of June 30, 2017) has since been
years subject to ratification of the appointment by the paid as per instructions received after the year end. The
members at every AGM. balance unclaimed fixed deposits continue to remain in
the escrow account.
13.2 Secretarial Audit
18. Extract of Annual Return
Pursuant to the provisions of Section 204 of the
The extract of the Annual Return in Form MGT-9 is annexed
Companies Act and the Companies (Appointment and
as Annexure 4.
Remuneration of Managerial Personnel) Rules, 2014,
a Secretarial Audit has been carried out by Mr Sudhir V 19. Transfer to Investor Education and Protection Fund
Hulyalkar, Practising Company Secretary, and his report is (IEPF)
annexed as Annexure 3.
An amount of ` 27,77,294/- and ` 5,60,826/- in respect
14. Listing of Shares of the Company of the unclaimed/unpaid dividend and fixed deposits
respectively, during the financial year 2009-10 have
The equity shares of your Company continue to be been transferred to Investors Education and Protection
listed with the BSE Limited and the National Stock Fund pursuant to the provisions of Sections 124 of

the Companies Act read with Rule 8 of the Companies 20. Human Resources
(Accounts) Rules, 2014. The details of the shareholders
Employee relations remained cordial at all the locations
and Fixed Deposit holders with the names of those
of the Company. Particulars of employees drawing an
shareholders and deposit holders are available on the
aggregate remuneration of ` 1,02,00,000/- or above per
website of the Company.
annum or ` 850,000/- or above per month, as well as
additional information on employee remuneration as
The details of unclaimed/unpaid Dividends and Fixed
required under the provisions of rule 5(1), 5(2) and 5(3)
Deposits which have not been transferred to the IEPF
of the Companies (Appointment and Remuneration of
account as the period of seven years has not been
Managerial personnel) Rules, 2014 is annexed as part of
completed is given below pursuant to the provisions of
this report in Annexure 5 hereto.
the Companies Act and the applicable Rules there under.
21. Employees Stock Option Scheme

Dividend:
Financial No. of Unclaimed Unclaimed Date of Last date Your Company has not offered any stock options to its
Year Members dividend as dividend declaration for claiming employees during the year 2016-17. During the year
who have on March 31, as% to the dividend 2015–16, the Board approved a Stock Appreciation Rights
not claimed 2017 total prior to its (SAR) plan for grant of 500,000 SARs and authorised the
their (Amount in `) dividend transfer to
dividend IEPF Nomination and Remuneration Committee to decide the
2009-10 12,416 2690870 0.86 29-Sep-2010 4-Dec-2017 criteria for grant and vesting of the SARs to employees
2010-11 14,390 2833572 0.86 29-Sep-2011 4-Dec-2018 and eligible directors. Since there will be no fresh issue of
2011-12 16,459 3138447 0.96 25-Sep-2012 30-Nov-2019 shares as a result of the SARs, there will be no dilution of
2012-13 10,356 2030605 0.56 24-Sep-2013 29-Nov-2020
2013-14 - Not applicable - Not applicable as Not
equity and earning per share.
no dividend was applicable
declared for the year 22. Particulars of Loans, Guarantees and Investments
2013-14.
2014-15 - Not applicable - Not applicable as Not Loans, guarantees and investments covered under Section
no dividend was applicable 186 of the Companies Act, are detailed in Notes to the
declared for the year financial statements, which are as follows:
2014-15.
2015-16 - Not applicable - Not applicable as Not Notes 4.1 and 4.2 relating to investments, Notes 5, 6 and 9
no dividend was applicable
declared for the year relating to loans given and Note 37 relating to guarantee
2015-16. given as per the standalone financial statements for the
year ended March 31, 2017 include these disclosures.
Fixed Deposits:
1. Accepted during the year NIL 23. Risk Management
2. Remained unpaid or unclaimed as at the end YEAR AMOUNT in ` Details on Risk Management are annexed as part of this
of the year 2016-17 Not Applicable
report in Annexure 6 hereto.
2015-16 Not Applicable
2014-15 2850572.00
2013-14 2527021.00 24. Internal Financial Controls
2012-13 3526798.00
2011-12 1076345.00
The Board considered materials placed before it and after
2010-11 796623.00 reviewing the confirmation from external parties and
3. Whether there has been any default in reviewing the effectiveness of the policies and procedures
repayment of deposits or payment of interest NIL adopted by the Company for ensuring orderly and efficient
thereon during the year and if so, number of
such cases and the total amount involved conduct of its business, including adherence to Company’s
4. The Details of deposits which are not in policy, safeguarding its assets, prevention and detection
compliance with the requirements of Chapter V Not Applicable of frauds and errors and completeness of accounting
of the Companies Act records and timely preparation of financial statements, the
Necessary compliance under Rule 3 of the Investor Board has satisfied itself that the Company has laid down
Education and Protection Fund (Uploading of information internal financial controls which commensurate with size
regarding unpaid and unclaimed amounts lying with of the company and that such internal financial controls
companies) Rules, 2012, has been ensured.


are broadly adequate and are operating effectively. The 20 subsidiary/associate companies, 13 are inoperative
certification by the auditors on internal financial control companies.
forms part of the audit report. A statement to this effect
is also appearing in the Directors’ Responsibility 30. Directors’ Responsibility Statement
Statement.
Pursuant to section 134 (5) of the Companies Act, in
25. Corporate Social Responsibility relation to financial statements (together with the notes
to such financial statements) for the year 2016-17, the
Information on the composition of the Corporate
Board of Directors report that:
Social Responsibility (CSR) Committee is provided
in the Corporate Governance Report that forms part (i) in the preparation of the annual accounts, the
of this Annual Report. Furthermore, as required by applicable accounting standards have been followed
section 135 of the Companies Act and the rules made along with proper explanation relating to material
thereunder, additional information on the policy and departures;
implementation of CSR activities by your Company
(ii) the Directors have selected such accounting policies
during the year are provided in Annexure 7 to this report.
and applied them consistently and made judgments
Business Responsibility Report under Regulation 34(2)
and estimates that are reasonable and prudent so as
(f ) of the SEBI (LODR) Regulations has been enclosed as
to give a true and fair view of the state of affairs of the
Annexure 9 and also uploaded on to the Company’s
Company at the end of the financial year and of the
website www.diageoindia.com
profit/ loss of the Company for that period;
26. Conservation of Energy, Technology Absorption, (iii) the Directors have taken proper and sufficient care
Foreign Exchange Earnings and Outgo for the maintenance of adequate accounting records
in accordance with the provisions of the Companies
The particulars prescribed under section 134(3)(m) of Act for safeguarding the assets of the Company
the Companies Act, read with Rule 8 of the Companies and for preventing and detecting fraud and other
(Accounts) Rules, 2014, are set out in Annexure 8 to this irregularities;
report.
(iv) the Directors have prepared the financial statements
27. Details of Significant and Material Orders Passed by on a going concern basis;
the Regulators or Courts Impacting the Going Concern (v) the Directors have laid down internal financial
Status and Company’s Operations in Future controls to be followed by the Company
commensurate with the size and nature of its
The Company has not received any significant or
material order passed by regulators or courts impacting business and the complexity of its operations and
the Company’s going concern status or the Company’s that such internal financial controls are adequate and
operations in future. The Management Discussion and are operating effectively and the control gaps noticed
Analysis Report read with the report on Risk Management in invoicing has since been appropriately addressed;
contains impact on the business due to regulatory and
changes. (vi) the Company has a system of getting reports
of compliance periodically from the units and
28. Disclosure as required Under Section 22 of Sexual has substantially implemented a process having
Harassment of Women at Workplace (Prevention, comprehensive systems to ensure compliance with
Prohibition and Redressal) Act, 2013 the provisions of all applicable laws and is operating
effectively.
The Company has implemented a prevention of sexual
harassment policy in line with the requirements of the Your Directors place on record their sincere
Sexual Harassment of Women at Workplace (Prevention, appreciation for the continued support from the
Prohibition and Redressal) Act, 2013 (SHWWA). An Internal shareholders, customers, suppliers, banks and
Complaints Committee (ICC) has been set up to redress financial institutions and other business associates.
complaints received regarding sexual harassment and on-
going training is provided to employees as required by the
A particular note of thanks to all employees of
SHWWA. During the financial year 2016-17 no complaint
your Company, without whose contribution, your
was received.
Company could not have achieved the year’s
performance.
29. Highlights of performance of subsidiaries, associates
and joint venture companies of the Company
By Authority of the Board
The highlights of performance of subsidiaries, associates
and joint venture companies of the Company and their Anand Kripalu Mahendra Kumar Sharma
contribution to the overall performance of the Company MD & CEO Chairman
is covered as part of the Consolidated Financial Statement Bengaluru
and form AOC-1 annexed as part of this report. Out of July 23, 2017

CORPORATE GOVERNANCE REPORT
1. Company’s Philosophy on Code of Corporate commitment to ethical business practices across our
Governance operations.
2. Board of Directors
1.1 Your Company is committed to good corporate
governance and adheres to the tenets of integrity, 2.1 As on the date of this report, the Board of Directors of the
accountability, fairness and transparency in all its Company comprises:
operations. The Company continuously endeavors to
l A Non-Executive Independent Director as Chairman;
improve upon these aspects on an ongoing basis and
l Two Executive Directors;
adopts innovative approaches for leveraging resources,
l Three Non-Executive Non-Independent Directors; and
converting opportunities into achievements through
l Five Independent Directors including the Chairman as
proper empowerment and motivation, fostering a
above.
healthy growth and development of human resources to
take the Company forward. 2.2 None of the Directors is related to any other Director.
2.3 Your Company has a balanced mix of executive and non-

1.2 Your Company pursues growth by adopting best
executive and Independent Directors from various diverse
corporate practices and timely disclosures, which will
backgrounds, which enables the Board to discharge its
enhance the long term value to all stakeholders and
duties and responsibilities in an effective manner.
also inspires us to follow best practices which not only
meet applicable legislation but go beyond in many areas 2.4 During the financial year under review, 10 Board Meetings
of our functioning. We are committed to doing things were held, i.e., on April 28, 2016, May 12, 2016, May 26,
the right way that is ethical and is in compliance with 2016, June 08, 2016, July 9, 2016, July 14, 2016, July 26,
applicable legislation. Our code of corporate governance 2016, October 27, 2016, January 21, 2017 and March 27,
is an extension of our values and reflects our continued 2017.
2.5 Attendance of each Director at the Board Meetings and at the previous AGM and details of the number of outside directorship
and committee positions held by each of the Directors are given below.
Name of Director Category of Directorship No. of Board Attendance at No. Of other No. of committees (other
Meetings last AGM held Companies in than the Company) as
attended on 14/07/2016 which Director Chairman / Chairperson /
during the as on the date Member
year
Mr Mahendra Kumar Sharma Independent Non-Executive Chairman 10 Yes 10 3
(Chairman in 2 out of 3)
Mr Anand Kripalu Managing Director and 10 Yes 1 Nil
Mr Sanjeev Churiwala1 Executive Director and NA Yes 3 Nil
Chief Financial Officer
Mr V K Viswanathan2 Independent Non-Executive Director 3 Not Applicable 8 6
Dr (Mrs) Indu Shahani Independent Non-Executive Director 8 Yes 7 5
Mr D. Sivanandhan Independent Non-Executive Director 10 No 12 4
Mr Rajeev Gupta Independent Non-Executive Director 7 No 8 4
Mr Vinod Rao Non-Executive Nominee Director 8 Not Applicable Nil Nil
Mr John Thomas Kennedy3 Non-Executive Nominee Director 3 Not Applicable Nil Nil
Mr Randall Ingber4 Non-Executive Nominee Director 1 Not Applicable Nil Nil
Dr Nicholas Bodo Blazquez5 Non-Executive Director 5 No Nil Nil
Mr Sudhakar Rao6 Independent Non-Executive Director 1 Not Applicable 11 7
(Chairman of 1)
Mr Ravi Rajagopal7 Non-Executive Director 5 No Nil Nil

CORPORATE GOVERNANCE REPORT (CONTINUED)

1
Appointed as an Executive Director of the Company Companies Act have been given and the requirements
with effect from April 1, 2017. in relation thereto complied with in accordance with the
2
Appointed as an Additional Director in the capacity requirements of the Companies Act.
of Independent Director with effect from October 17,
2016. Other requirements of Corporate Governance as per the
3
Appointed as a Non-Executive Nominee Director with SEBI (LODR) Regulations are disclosed on the Company’s
effect from August 17, 2016. website www.diageoindia.com
4
Appointed as a Non-Executive Nominee Director with
effect from February 2, 2017. 2. 7 Disclosures regarding appointment and reappointment
5
Resigned as a Non-Executive Director with effect from of directors
January 22, 2017.
a. Directors retiring by rotation and being proposed for
6
Resigned as a Non-Executive Independent Director reappointment:
with effect from May 19, 2016.
7
Resigned as a Non-Executive Director with effect from Mr Vinod Rao (DIN: 01788921)
October 13, 2016.
Mr Vinod Rao was appointed as Director in previous
NOTE: The above details are in respect of their AGM. He is liable to retire by rotation and has offered
Directorships only in Indian Companies and Committee himself for re-appointment. His brief profile is given
membership in only Audit Committee and Stakeholders in the Notice of the 18th AGM.
Relationship Committee.
b. Appointment of Directors
2.6. Other Corporate Governance Requirements
i. Mr V K Viswanathan (DIN: 01782934)
In compliance with Regulation 23, the Company has
framed policy on Related Party Transactions which can Mr V K Viswanathan was appointed as an
be viewed through the web link http://www.diageoindia. additional Director with effect from October
com/investor.aspx 17, 2016 and he will hold office of director upto
the date of the ensuing AGM pursuant to the
Regulation 24 with respect to Independent Directors on provisions of the Companies Act. He is proposed
Unlisted Material Subsidiaries is not applicable. During to be appointed as an Independent director at the
the financial year, the Independent Directors have 18th AGM. His brief profile is given in the Notice
been familiarised about the Company through various convening 18th AGM.
programs and the same can be viewed through the
web link http://www.diageoindia.com/investor.aspx and ii. Mr Randall Ingber (DIN: 07529943)
other requirements of Regulation 24 to the extent
applicable are complied with. Mr Randall Ingber was appointed as an additional
Director with effect from February 2, 2017 and
Regulation 25 with respect to Independent Directors are he will hold office of director upto the date of
complied with. the ensuing AGM pursuant to the provisions of
the Companies Act, 2013. He is proposed to be
Regulation 26 with respect to Directors and Senior appointed as a director at the 18th AGM. His brief
Management has been complied with to the extent profile is given in the Notice convening 18th AGM.
applicable.
iii. Mr John Thomas Kennedy (DIN: 07529946)
Regulation 27 with respect to quarterly compliance
Mr John Thomas Kennedy was appointed as an
report has been complied with.
additional Director with effect from August 17,
2016 and he will hold office of director up to
Regulation 46(2)(b) to Regulation 46(2)(i) pertaining to
disseminating information on website has been complied the date of the ensuing AGM pursuant to the
with. provisions of the Companies Act, 2013. He is
proposed to be appointed as a director at the
The declarations by the Independent Directors pursuant 18th AGM. His brief profile is given in the Notice
to Section 149(7) read with Section 149(6) of the convening 18th AGM.

3. Audit and Risk Management Committee i. To look into the reasons for substantial defaults in
the payment to the depositors, debenture holders,
3.1 The Audit and Risk Management Committee constituted shareholders (in case of non-payment of declared
by the Company is presently comprised of 5 directors as dividends) and creditors.
follows:
3.3 The Audit and Risk Management Committee, inter
Mr V K Viswanathan Non-Executive Independent Director alia, has reviewed the financial statements including
(Chairman)
Auditors’ Report for the year ended March 31, 2017 and
Dr (Mrs) Indu Shahani Non-Executive Independent Director
has recommended its adoption. In addition, the Audit
Mr D. Sivanandhan Non-Executive Independent Director and Risk Management Committee has also reviewed the
Mr Rajeev Gupta Non-Executive Independent Director unaudited quarterly results for quarter ended June 30,
Mr Vinod Rao Non-Executive Director 2016, quarterly and six months ended September 30,
2016 and quarterly and nine months ended December
3.2 Pursuant to the provisions of Section 177 of the Companies
31, 2016 (which were subjected to a limited review by
Act and the provisions of the SEBI (LODR) Regulations, the
the Statutory Auditors of the Company) and the audited
brief description of the terms of reference of the Audit
financial results for the year ended March 31, 2017.
and Risk Management Committee are given below:
a. Oversight of the Company’s financial reporting 3.4 During the financial year under review, 10 meetings of
process and the disclosure of its financial information the Audit and Risk Management Committee were held,
to ensure that the financial statement is correct, i.e., on April 28, 2016, May 12, 2016, May 25, 2016, June
sufficient and credible. 8, 2016, July 8, 2016, July 14, 2016, July 25, 2016,October
b. Recommending the appointment and removal 27, 2016, January 21, 2017 and March 27, 2017. The
of external auditor, fixation of audit fee and also details of attendance by members of the Audit and Risk
approval for payment for any other services. Management Committee at such meetings are as stated
below. (These details should be read with the information
c. Reviewing with management the annual financial
on appointment to and cessation of membership in the
statements before submission to the Board, focusing
Audit and Risk Management Committee, set out above).
primarily on:
i. Major accounting entries based on exercise of Name of the director No. of Meetings
judgment by management; meetings attended
ii. Qualifications in draft audit report; entitled
iii. Significant adjustments arising out of audit; and Mr V K Viswanathan1 3 3
iv. Disclosure of any related party transactions. (Chairperson)
Dr (Mrs) Indu Shahani 10 9
d. Reviewing with the management, performance of Mr Vinod Rao2 7 7
statutory and internal auditors, external and internal Mr D. Sivanandhan 10 9
auditors, the adequacy of internal control systems,
Mr Rajeev Gupta 10 7
risk management systems.
Mr Mahendra Kumar Sharma3 8 8
e. Reviewing the adequacy of internal audit function
Mr Ravi Rajagopal4 7 5
including the structure of the internal audit
department, reporting structure coverage and Mr Nicholas Bodo Blazquez5 7 4
frequency of internal audit. Mr Sudhakar Rao6 2 1
f. Discussion with internal auditors on any significant 1
Appointed as Member and as Chairman of the
findings and follow up thereon. Committee with effect from October 17, 2016 and
g. Reviewing the findings of any internal investigations January 1, 2017 respectively.
by the internal auditors and external consultants into
2
Appointed as member of the Committee with effect
matters where there is suspected fraud or irregularity from May 26, 2016
or a failure of internal control systems of a material
3
Ceased to be a Member of the Committee with effect
nature and reporting the matter to the board. from January 1, 2017
4
Ceased to be a Member of the Committee with
h. Discussion with statutory auditors before the audit effect from October 13, 2016 consequent upon his
commences, nature and scope of audit as well as post- resignation to the directorship.
audit discussions to ascertain any area of concern.


Ceased to be a Member of the Committee with effect
5
to the remuneration for the directors including
from January 22, 2017 consequent upon his resignation Independent directors, key managerial personnel
to the directorship. and other employees.
6
Ceased to be a Member of the Committee with effect The policy shall, inter alia, cover termination
from May 19, 2016 consequent upon his resignation to payments to the Executive Committee members and
the directorship. other Senior Executives and oversight of the same by
the Committee.
4. Nomination and Remuneration Committee The remuneration policy shall set guidelines for the
4.1 The Nomination and Remuneration Committee (NRC) Executive Committee/ Managing Director to approve
constituted by the Company comprises at present the remuneration to the Managing Committee members
following Directors: and their direct reports and other executives.
e. Review and recommend to the Board of Directors
Dr (Mrs) Indu Shahani Non-Executive
(chairperson) for approval any mandatory disclosures of the
Independent Director
Management compensation.
Mr D. Sivanandhan Non-Executive
Independent Director f. Review and reassess the adequacy of the charter and
Mr John Thomas Kennedy 1
Non-Executive Director perform annual self-evaluation of the performance of
the Committee.
1
Appointed as member of the NRC with effect from October
g. Carry out any other acts and deeds as may be
27, 2016
delegated by the Board of Directors and deal with
4.2 In addition, during the financial year, Dr Nicholas Bodo such other matters as may be prescribed under the
Blazquez has ceased to be a member of the NRC with effect Companies Act, the SEBI (LODR) Regulations and
from January 22, 2017. other statutory enactments.
4.3 Keeping in view of the provisions of Section 178 of the h. Provide guidance to the Human Resources
Companies Act and the provisions of the SEBI (LODR) Department to set up policy and procedure for
Regulations, brief description of the terms of reference of succession planning of Key Managerial Personnel and
the NRC are given below: other senior management of the Company.
a. Assist the Board of Directors of the Company to: i. Approve any share incentive or other plans for the
i. determine, review and propose compensation employees of the Company.
principles and policy of the Company 4.4 During the financial year under review four meetings
ii. assess and review compensation plans were held i.e., on April 28, 2016, June 8, 2016, July 26,
recommended by the management; 2016 and September 26, 2016. The details of attendance
iii. recommend the compensation packages of the by members of the Committee at such meetings are
Company’s Executive Directors. as stated below.(These details should be read with
the information on appointment to and cessation of
b. Identify persons who are qualified to become directors membership in the NRC, set out above.)
and who may be appointed in senior management in
accordance with the criteria laid down, recommend to Name of the director No. of Meetings
the Board of Directors their appointment and removal Meetings attended
and shall carry out evaluation of every director’s Dr (Mrs) Indu Shahani 4 4
performance. MrJohn Thomas Kennedy1 NA NA
c. Approve and recommend matters relating to Mr D. Sivanandhan 4 4
compensation by way of salary, perquisites, benefits, Dr Nicholas Bodo Balzquez2 4 1
etc., to the Managing/Whole Time/ Executive Directors
of the Company.
1
Appointed as member of the NRC with effect from
October 27, 2016
d. Formulate the criteria for determining qualifications, 2
Ceased to be a member of the NRC, due to resignation
positive attributes and independence of a director and to the directorship with effect from January 22, 2017.
recommend to the Board of Directors a policy, relating

4.5 Remuneration of directors securities/ convertible instruments were issued
or allotted to any of the non- executive directors
Policy: The policy on Directors/senior appointments
during the financial year.
sets out the guidelines for the executive committee
members/Managing Director/Key Managerial Personnel Name of the Non-Executive Sitting fees
based on the terms of reference of the committee. Director (`)
The said policy is available on the Company’s website
Mr Mahendra Kumar Sharma 1,400,000
www.diageoindia.com .
Mr V K Viswanathan 450,000
The details of remuneration paid/ payable to the directors Dr Nicholas Bodo Blazquez 250,000
during the financial year April 1, 2016 to March 31, 2017 Mr Sudhakar Rao 175,000
are given below. Mr D. Sivanandhan 1,600,000
A. Managing Director: Mr Anand Kripalu Mr Ravi Rajagopal 750,000
i. Mr Anand Kripalu was appointed as Chief Executive Mr Rajeev Gupta 1,050,000
Officer with effect from May 1, 2014 and as Managing Dr (Mrs) Indu Shahani 1,400,000
Director and Chief Executive Officer of the Company
for a period of five years with effect from August ii. Non-Executive Directors are also eligible for
14, 2014. The terms and conditions of appointment commission every year not exceeding one
and remuneration of Anand Kripalu were as set out per cent of the net profits of the Company as
in the resolution approved by the shareholders at approved by the shareholders at the AGM held
the AGM held on September 30, 2014 and as per the on September 30, 2014. Such commission are
applicable rules of the Company. The remuneration determined based on the recommendation of the
was revised at the AGM held on November 24, 2015 Nomination and Remuneration Committee and
with effect from July 1, 2015. There is no severance fee as approved by the Board of Directors.
and the notice period is six months. The performance
iii. Details of commission to the Non- Executive
criteria was as determined by the Nomination and
Directors for the Financial Year 2016-17 is given
Remuneration Committee.
below:
During the year, the remuneration was revised at the
Board meeting held on October 27, 2016 which is Sl. Name of the Directors Amount
within the overall limit approved by the shareholders No. (in `)
of the Company at their meeting as mentioned 1 Mr Mahendrakumar Sharma 4,651,745
above. The remuneration paid to Mr Anand Kripalu 2 Mr D Sivanandhan 3,872,485
as Managing Director and Chief Executive Officer 3 Mr Sudhakar Rao 523,203
during the year ended March 31, 2017 is given in 4 Mr Rajeev Gupta 3,300,000
Annexure 4 to the Directors Report. 5 Dr Indu Shahani 3,872,485
B. Non - Executive Directors 6 Mr Ravi Rajagopal 1,853,525
7 Mr V K Viswanathan 1,565,503
i. Sitting Fees have been paid to Non-Executive
Directors for attending Board/ Committee 8 Dr Nicholas Bodo Blazquez 1,908,281
Meetings as specified in the table below (which
C. Particulars of Equity Shares of the Company currently
table should be read with information regarding
held by Directors
the appointment, re-appointment, resignation
or retirement of such directors provided in the As on the date of this Report Mr V K Viswanathan is
preceding sections of this Corporate Governance holding 153 Equity shares in the Company and apart
Report). They are also entitled to reimbursement from that none of the other Directors are holding any
of actual travel expenses, boarding and lodging, Equity Shares in the Company.
conveyance and incidental expenses incurred for D. Performance Evaluation of Independent Directors.
attending such meetings in accordance with the
Board approved policies for such reimbursements. Pursuant to the provisions of the CompaniesAct
and Regulation 34(3) read with Schedule V(C)(4)
Other than the sitting fees and reimbursement (d) of the SEBI (LODR) Regulations, the Committee
of expenses, no other remuneration was paid. No has prescribed performance evaluation criteria for


independent directors as well as for the directors, the Investor Education and Protection Fund as specified
committee and the Board. under the Companies Act.
f. Review the status of claims received for unclaimed
5. Stakeholders’ Relationship Committee shares and dividend on unclaimed shares.
5.1 The Stakeholders’ Relationship Committee (SRC) g. Review the initiatives taken to reduce quantum of
constituted by the Company and is presently comprised unclaimed dividends / unclaimed deposits.
as follows : h. Act on such further terms of reference as may be
considered necessary and specified by the Board in
Mr D. Sivanandhan Non-Executive writing from time to time.
(Chairperson) Independent Director
i. Review service standards and investor service
Dr (Mrs) Indu Shahani Non-Executive
initiatives undertaken by the Company.
Independent Director
Mr John Thomas Kennedy1 Non-Executive 5.4 Mr V. Ramachandran, Company Secretary, is the
Director compliance officer of the Company.
1
Appointed as member of the SRC with effect from October
5.5 During the financial year under review one meeting was
27, 2016
held on May 26, 2016.
5.2 In addition,during the financial year, Mr Ravi Rajagopal 5.6 The details of attendance by members of the Committee
has ceased to be a member of the SRC with effect from are as below.(These details should be read with
October 13, 2016. the information on appointment to and cessation
5.3 Keeping in view the provisions of section 178 of the of membership in the Stakeholders’ Relationship
Companies Act and the provisions of the SEBI (LODR) Committee, set out above.)
Regulations, the terms of reference of the Stakeholders Name of the Director No. of Meetings
Relationship Committee are as follows: Meetings attended
a. Review the redressal of shareholders’, debenture Mr D Sivanandhan (Chairman) 1 1
holders’ and depositors’ or any other security holders’ Mr John Thomas Kennedy NA NA
grievances/ complaints like transfer of shares, non- Dr (Mrs) Indu Shahani 1 1
receipt of balance sheet, non-receipt of declared
dividends, non- receipt of interest warrants, etc., and 5.7 The Company/Company’s Registrars received 40
ensure cordial relation with the Stakeholders. complaints during the financial year, all of which were
resolved to the satisfaction of shareholders/investors.
b. Review the adherence to service standards relating
to the various services rendered by the Company and Sl. Complaints relating to No. of No. of
Company’s Registrars & Transfer Agents. No. Complaints Complaints
received resolved
c. Review the status of the litigations, complaints / suits 1 Non-receipt of refund order / Nil Nil
filed by or against the Company relating to the shares/ allotment letter
fixed deposits, debentures or any other securities of 2. Non-receipt of Dividend/Interest on 3 3
the Company before any Courts / other appropriate Shares/ Debentures/ Fixed Depos-
authorities, and in particular where directors are its/maturity amount on debentures
implicated or could be made liable. 3 Non-receipt of share certificates 36 36
d. Review the impact of enactments/ amendments 4 Non-receipt of Annual Report/ 1 1
made by the Ministry of Corporate Affairs/ Securities Rights forms/ Bonus shares/interest
on delayed refund/ Dividend and
and Exchange Board of India and other regulatory Interest
authorities on matters concerning the Stakeholders
5 others Nil Nil
in general.
Total 40 40
e. Review matters relating to transfer of unclaimed and
unpaid dividend, matured deposits, interest accrued The number of complaints received during each of the quarters
on the matured deposits, debentures etc., to the of the financial year 2016-17 were 17, 10, 10 and 3.

In addition to the above, there are a few shareholder 6.3 The CSR Report of the Company for the year ended March
litigations where the Company has been made a party to 31, 2017 has been approved by the board and is provided
such disputes. in Annexure 7 as part of the Board Report. The copy of
your Company’s CSR policy is available on the Company’s
5.8 Dividend Distribution Policy website at www.diageoindia.com.
Pursuant to Regulation 43A of SEBI (LODR) Regulations, 7. General Committee
2015 the Company has framed a Dividend Distribution
7.1 The Company also has a Committee of Directors with
Policy which lays out the parameters to be considered
authority delegated by the Board of Directors from time
while declaring dividend. The said policy is available on
to time, interalia, to approve transfer and transmission
the website of the Company www.diageoindia.com .
of shares, issue of new share certificates on account
of certificates lost, defaced, etc., dealing with matters
6. Corporate Social Responsibility Committee relating to post amalgamation of companies and for
6.1 The Corporate Social Responsibility (CSR) Committee other routine operations such as issue of power of
constituted by the Company is presently comprised as attorney, operation of bank account setc.
follows: 7.2 The Committee is presently comprised as follows:
Dr (Mrs) Indu Shahani Non-Executive Independent Mr D. Sivanandhan Non-Executive
(Chairperson) Director (Chairman) Independent Director
Mr D. Sivanandhan Non-Executive Independent Dr (Mrs) InduShahani Non-Executive
Director Independent Director
Mr Anand Kripalu Managing Director and Chief Mr John Thomas Kennedy1 Non-executive Director
Executive Officer Mr Anand Kripalu Managing Director and Chief
Executive Officer
6.2 During the financial year under review, one meeting
was held on May 26, 2016. The details of attendance 1
Appointed as member of the Committee with effect
by members of the CSR Committee are as below. from October 27, 2016
(These details should be read with the information on
appointment to and cessation of membership in the CSR
7.3 In addition Mr Sudhakar Rao, who was Chairman of the
Committee, set out above).
Committee of Directors and Mr Ravi Rajagopal who was
Name of the director No. of Meetings a member of the Committee ceased to be Chairman /
meetings attended member of the Committee of Directors, respectively,
following their resignation on May 19, 2016 and October
Mr D. Sivanandhan 1 1 13, 2016.
Dr (Mrs) Indu Shahani 1 1
Mr Anand Kripalu 1 1 No meetings were held by the committee during the
financial year.
8. General Meetings
8.1 The details of the last three AGMs held are furnished below:
Financial year ended Date Time Venue

March 31, 2016 July14, 2016 4.00 p.m. The Capitol Hotel, No. 3, Raj Bhavan Road,
Bengaluru – 560 001
March 31,2015 November 24, 2015 2.30 p.m. Level 1, UB Tower, #24, Vittal Mallya Road,
Bengaluru – 560 001
March 31, 2014 September 30,2014 2.30 p.m. Level 1, UB Tower, #24, Vittal Mallya Road,
Bengaluru– 560001


8.2 The Special Resolutions passed by the shareholders at the past three AGMs are summarized below:
AGM held on Subject matter of the Special Resolution

July 14, 2016 No Special Resolution was passed.
November 24, 2015 (i) Revision in the terms of remuneration payable to Mr Anand Kripalu as Managing Director and
Chief Executive officer.
September 30, 2014 (i) Appointment of and remuneration payable to, Mr Anand Kripalu as Managing Director and
chief executive officer
(ii) Revision in terms of remuneration payable to Mr P.A. Murali, executive Director
(iii) Approval of the borrowing limits
(iv) Payment of Remuneration to Non-Executive Directors
8.3 All the special resolutions set out in the AGM Notices as employees on matters of compliance. Your Company
above were passed by the Shareholders with the requisite is committed to conducting its business in an ethical
majority. manner. This code is reviewed by the Board from time
to time.
9. Postal Ballot & Extraordinary General Meeting b. As stated in the Board’s report, your Company has a
well-established vigil mechanism in place, which is
9.1 The company has not passed any resolution through managed by the Compliance & Ethics team. ‘SpeakUp’
postal ballot, which were required to be passed through is a confidential service available to employees to
postal ballot as per the provisions of the act, and the rules make a report when they believe there to be a breach
framed thereunder.
of the Code, policies or applicable law. ‘SpeakUp’ is
managed by an external agency, independent from
9.2 During the year, no Extraordinary General Meetings were
the Company, with staff who are trained to deal with
held.
the call, and translators who are immediately available
to assist if required. Access to the Chairman of the
9.3 As on the date of this report, no special resolution(s) is/
Audit Committee is made available in appropriate and
are proposed to be passed through postal ballot.
exceptional cases, as required under the Companies
Act and the SEBI (LODR) Regulations. All complaints
10. Disclosures
are investigated by the Compliance and Ethics team
and appropriate action taken in accordance with your
10.1 The related party transaction sentered in to by the
Company during the financial year ended March 31, Company’s policies.
2017, have been disclosed in the Notes to Accounts and c. In compliance with SEBI (LODR) Regulations, the
also in Form AOC-2, which forms part of Directors’ Report. Company has adopted a Code of Business Conduct
and Ethics (Code) for its Board members and Senior
10.2 During the financial year ended March 31, 2017, the Management Personnel, a copy of which is available
Company has complied with the statutory requirements on the Company’s website, www.diageoindia.
comprised in the SEBI (LODR) Regulations/ Guidelines com. All Board members and senior management
/ Rules of the Stock Exchanges / SEBI/ other statutory personnel have affirmed compliance with the code
authorities and there have been no other instances of for the year ended March 31, 2017 and a declaration
material non- compliance by the Company during such to this effect signed by the MD & CEO forms part of
financial year, nor have any penalties, strictures been this report. Pursuant to the requirements of the SEBI
imposed by Stock Exchanges or SEBI or any other statutory (LODR) Regulations, it is affirmed that no person who
authority on any matter related to capital markets. Please has sought access to the Audit Committee has been
refer to Secretarial Audit Report in Annexure 3. denied such access.
10.4 Code of Conduct d. Pursuant to the requirements of the SEBI (Prohibition

of Insider Trading) Regulations, 2015, the Company
a. Your Company believes that good governance has adopted a Code of Conduct for Prevention
practiced with in the Company fosters the confidence of Insider Trading, applicable to all Directors and
and trust of all stakeholders. Your Company has designated employees of the Company.
a Compliance & Ethics team, which guides the

e. The Company has complied with all mandatory which are also displayed on the Company’s website. In
requirements of SEBI (LODR) Regulationsand has addition presentations made to analysts or investors are
also adopted the non-mandatory requirements of also made available on the Company’s website.
the above mentioned regulations, to the extent
shown in the subsequent sections of this Corporate 11.2 The required disclosures to the extent applicable
Governance Report. including results were also sent to the Stock Exchanges.
11. Means of Communication 11.3 The Company has designated an exclusive email address,
i.e., uslinvestor@unitedspirits.in to enable investors to
11.1 The quarterly results are sent to all the Stock Exchanges post their grievances and monitor redressal.
where the shares of the Company a relisted. The results
are normally published in “Business Standard”(English 12. Management Discussion and Analysis Report
Daily) and “Kannada Prabha” (Kannada Daily). The
The Management Discussion & Analysis Report is
results are displayed on the Company’s website
appended to and forms an integral part of the Directors’
www.diageoindia.com. Press Releases are also issued
Report.
13. General Shareholder Information
A) Corporate Identification Number L01551KA1999PLC024991

B) AGM Date, Time and Venue Wednesday, August 30, 2017 at 4.00 p.m. at The Capitol, No. 3, Raj Bhavan
Road, Bengaluru–560001
C) Financial year April 1 to March 31
Tentative Board Meeting calendar:
First Quarterly Results (FY 2017-18) July 23, 2017
Second Quarterly Results October 26, 2017
Third Quarterly Results January 25, 2018
Audited yearly Financial Results May 24, 2018
In addition, Board may also
meet on other dates for
transacting other urgent business or due to any
specific requirements
D) Date of Book Closure Book Closure Date – August 24, 2017 to August 30, 2017
(both days inclusive)
E) Dividend payment date NA
F) Listing on Stock Exchanges The shares of the Company are listed on the following Stock Exchanges:
BSE Limited
Regular Office & Corporate Relations Dept)
Phiroze Jeejeebhoy Towers Dalal Street, Mumbai - 400 001
National Stock Exchange of India Limited
Exchange Plaza, C-1, Block G Bandra Kurla Complex,
Bandra (East), Mumbai - 400 051.
The listing fees dues as on date has been paid to the respective stock exchanges.
G) Stock Code
BSE Demat 532432 Physical 32432
NSE SYMBOL -MCDOWELL-N
H) ISIN NO. INE854D01016
I) Market price data (As per Annexure A)
J) Stock performance in comparison to BSE (As per Annexure B)
Sensex and NSE Nifty (As per Annexure B)


K) Registrar and Transfer Agents Integrated Registry Management Services Private Limited
(Formerly known as Integrated Enterprises (India)Limited),
30, Ramana Residency, 4th cross, Sampige Road,
Malleswaram, Bengaluru - 560003
Tel. Nos.(080) 23460815-818 Fax No.(080)23460819
L) Share Transfer System The power to consider and approve share transfers/ transmission/
transposition/ consolidation/subdivision,etc., has been delegated
to a Committee of Directors as indicated in para 7.1 of this report. The
requirements under the SEBI LODR Regulations, 2015/statutory regulations
in this regard are being followed.
M) Distribution of Shareholding As per Annexure C
N) Dematerialisation of shares (as on march 31, 2017) Depositories Shares %
NSDL 13,66,90,643 94.06
CDSL 68,51,079 4.71
Total 14,35,41,722 98.77
O) Outstanding GDRs/ ADRs/ Warrants or any During the year the agreement with Deutsche Bank Trust Company
other Convertible Instruments Americas, Depository for global depository shares (GDSs), was terminated
by virtue of which, the GDSs have been cancelled and the shares held by
the GDS holders had been converted to underlying shares. There are no
outstanding GDS as on March 31, 2017. There is no change in the equity
share capital of the Company during the year.
P) Plant locations 1. Alwar (Rajasthan)
2. Asansol (West Bengal)
3. Aurangabad (Maharashtra)
4. Baddi (Himachal Pradesh)
5. Baramati (Maharashtra)
6. Bhadrakali (West Bengal)
7. Bhopal-I (Madhya Pradesh)
8. Bhopal-II (Madhya Pradesh)
9. Cherthala (Kerala)
10. Gopalpur-On-Sea (Orissa)
11. Gulbarga (Karnataka)
12. Hathidah (Bihar)
13. Hospet (Karnataka)
14. Hyderabad I (Nacharam, Telangana)
15. Hyderabad II (Malkajgiri, Telangana)
16. Kumbalgodu (Karnataka)
17. Meerut (Uttar Pradesh)
18. Nasik-I (Maharashtra)
19. Nasik-II (Maharashtra)
20. Palakkad (Kerala)
21. Palwal (Haryana)
22. Pathankot (Punjab)
23. Ponda (Goa)
24. Rosa (Uttar Pradesh)
25. Serampore (West Bengal)
26. Udaipur (Rajasthan)
27. Zuari Nagar (Goa)

Q) Address for correspondence Shareholder correspondence should be addressed to the Company’s
Registrars and Transfer agents:
Integrated Registry Management Services Private Ltd
(Formerly known as Integrated Enterprises (India) Limited)
30, Ramana Residency, 4th Cross, Sampige Road, Malleswaram,
Bengaluru 560 003. Tel. Nos. (080) 2346 0815-818, Fax No.(080) 2346
0819, Email: bglsta@integratedindia.in
Investors may also write or contact Mr V. Ramachandran, Company
Secretary or Mr B.L. Akshara, General Manager–Secretarial at the
Registered Office of the Company at UB Tower, #24, Vittal Mallya Road,
Bengaluru 560 001 Tel. Nos. (080) 3985 6500 / 2221 0705, Direct No. (080)
3985 6905, Fax no. (080) 3985 6862
R) Email for investor grievances In compliance with the provisions of regulation 46(2)(j) of the SEBI (LODR)
Regulations, an exclusive email address, uslinvestor@unitedspirits.in has
been designated for registering Investor complaints, which is available on
the Company’s website www.diageoindia.com
13.1 Pursuant to Part F of Schedule V of the SEBI (LODR) Regulations, an Unclaimed Suspense Account was opened with Stock
Holding Corporation of India Limited on February 14, 2013 and the following unclaimed shares, were transferred to the Demat
account titled United Spirits Limited Unclaimed Suspense Account” after the Company’s Registrars & Transfer Agents sent
three reminders to all the share holders whose share certificates were returned undelivered and remained unclaimed. During
the year, your Company has released shares from the said suspense account upon receipt of requests from the shareholders
and after checking veracity of such shareholder’s claims. The details of such release of shares are given below.
Particulars No. of No. of equity

shareholders shares held
Aggregate number of shareholders and the outstanding shares in the Unclaimed Suspense 5,478 500,060
Account lying as on April 01, 2016
Number of shareholders who approached issues for transfer of shares from Unclaimed Suspense 35 15,154
Account during the year
Number of shareholders to whom shares were transferred from Unclaimed Suspense 35 15,154
Account during the year
Aggregate number of shareholders and the outstanding shares in the Unclaimed Suspense 5,443 484,906
Account lying as on Mach 31, 2017
13.2 Voting rights on the above unclaimed shares shall remain frozen until the rightful owner claims the shares.
14. Discretionary Requirements

Pursuant To Regulation 27(1) and Part E of Schedule II of SEBI (LODR) Regulations, Your Company also complied with the
following discretionary requirement.
14.1 Shareholder Rights

The Company’s quarterly results are published in English and Kannada Newspapers. The results are uploaded on the
Company’s website www.diageoindia.com. Hence, the same were not sent to the shareholders.
14.2 Audit qualifications

There are no qualifications in the Audit Report of the Statutory Auditors and the Secretarial Auditor for the year ended
March 31, 2017.
14.3 Separate posts of Chairman and CEO

The Company has appointed separate persons to the posts of Chairman and of MD & CEO.
14.4 Reporting of Internal Auditor

The internal auditor reports directly to the Audit Committee.

ANNEXURE A: MARKET PRICE DATA

United spirits limited - Monthly BSE United Spirits Limited-MonthlyNSE
Month High Price Low Price Close Price Volume Month High Price Low Price Close Volume
(`) (`) (`) (`) (`) Price (`)
Apr-16 2,573.20 2,232.00 2,374.15 5,59,430 Apr-16 2,573.70 2,230.00 2,376.00 64,38,406
May-16 2,729.40 2,350.00 2,468.30 12,47,080 May-16 2,729.00 2,350.10 2,470.10 97,46,320
Jun-16 2,536.20 2,325.25 2,484.20 3,90,172 Jun-16 2,537.00 2,325.20 2,500.15 42,26,506
Jul-16 2,702.65 2,351.05 2,453.60 5,50,440 Jul-16 2,698.70 2,351.00 2,454.30 64,73,557
Aug-16 2,473.95 2,120.00 2,317.60 13,69,084 Aug-16 2,472.80 2,118.00 2,313.05 98,75,758
Sep-16 2,470.00 2,230.00 2,462.90 7,07,695 Sep-16 2,478.00 2,150.00 2,466.45 72,14,886
Oct-16 2,598.00 2,240.10 2,268.55 6,18,948 Oct-16 2,600.00 2,240.10 2,266.80 56,63,573
Nov-16 2,276.00 1,775.05 1,922.75 8,35,066 Nov-16 2,287.00 1,773.45 1,918.45 80,11,977
Dec-16 1,979.00 1,818.60 1,940.75 3,23,415 Dec-16 1,981.80 1,819.95 1,942.80 44,50,600
Jan-17 2,329.30 1,882.00 2,177.45 14,33,222 Jan-17 2,328.10 1,894.95 2,178.50 1,12,81,910
Feb-17 2,428.95 2,133.00 2,342.55 7,70,765 Feb-17 2,427.70 2,130.80 2,345.10 70,91,259
Mar-17 2,375.00 2,116.00 2,173.45 5,70,962 Mar-17 2,377.20 2,114.20 2,174.70 67,51,255
ANNEXURE B: UNITED SPIRITS LIMITED, SHARE PRICES COMPARED TO BSE SENSEX

ANNEXURE C: DISTRIBUTION OF HOLDINGS (as on March 31, 2017)

Value Wise Category Wise
Shareholding of nominal value Shareholders Share amount Category No. Of Shares % of

Equity
` Number % to ` % to Capital
Total total
Upto - 5,000 93,448 96.88 60,507,280 4.16 Promoter Group 84,984,429 58.48
5,001 - 10,000 1,360 1.41 10,156,920 0.70 Resident body 7,681,873 5.29
Corporate (including
10,001 - 20,000 649 0.67 9,325,880 0.64 clearing members)
20,001 - 30,000 250 0.26 6,368,800 0.44 Banks/FI/FII/ MF/UTI/ 41,032,038 28.23
Trust/Central/State
30,001 - 40,000 106 0.11 3,742,030 0.26 Government
& Insurance
Companies
40,001 - 50,000 90 0.09 4,151,730 0.29 NRI / OCB / FCB/ 1,099,570 0.76
Foreign Nationals
50,001 - 1,00,000 200 0.21 13,984,300 0.96 Venture Capital 113,283 0.08
100,001 and above 356 0.37 1,345,040,490 92.55 Resident Individuals 10,416,550 7.17
Total 96,459 100 1,453,277,430 100.00 Total 145,327,743 100

CERTIFICATE ON CORPORATE GOVERNANCE

To,
The Members,
Bengaluru
I have examined the compliance of conditions of corporate governance, as stipulated in the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015 by United Spirits Limited (the Company) for the year ended
on March 31, 2017.
The compliance of conditions of corporate governance is the responsibility of the management. My examination was limited to
procedures and implementation thereof, adopted by the company for ensuring the compliance of the conditions of the Corporate
Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In my opinion and to the best of my information and according to the explanations given to me, I certify that the company has
complied with all the applicable conditions of Corporate Governance as stipulated in the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015.
I further state that such compliance is neither an assurance as to future viability of the Company nor the efficiency or effectiveness
with which the management has conducted the affairs of the company.
Sudhir Vishnupant Hulyalkar

Company Secretary in Practice
Place : Bengaluru FCS No: 6040, CP No. 6137
Date: July 23, 2017


CEO/CFO CERTIFICATE
A. We have reviewed the Standalone and Consolidated financial statements for the year ended March 31, 2017 and that to the
best of our knowledge and belief
1. these statements do not contain any materially untrue statement or omit any material fact or contain statements that
might be misleading;
2. these statements together present a true and fair view of the Company’s affairs and are in compliance with existing
accounting standards, applicable laws and regulations.
B. There are, to the best of our knowledge and belief, no transactions entered into by the company during the year which are
fraudulent, illegal or violative of the company’s code of conduct.
C. We accept responsibility for establishing and maintaining internal controls for financial reporting and we have evaluated the
effectiveness of internal control systems of the Company pertaining to financial reporting and have disclosed to the auditors
and the Audit committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and
the steps we have taken or propose to take to rectify these deficiencies.
D. We have indicated to the auditors and the Audit committee:

1. significant changes in internal control over financial reporting during the year;
2. significant changes in accounting policies during the year and that the same have been disclosed in the notes to the
financial statements; and
3. Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or
an employee having a significant role in the Company’s internal control system over financial reporting.
Bengaluru Sanjeev Churiwala Anand Kripalu

May 30, 2017 Executive Director and Managing Director and
Chief Financial Officer Chief Executive Officer
DECLARATION REGARDING AFFIRMATION OF CODE OF CONDUCT
In terms of the requirement of Regulation 26(3) read with Schedule V Para D of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, code of conduct of the Company has been displayed at the Company’s website
www.diageoindia.com. All the members of the Board and the senior management personnel had affirmed compliance with the
code for the year ended March 31, 2017.
Bengaluru Anand Kripalu

May 30, 2017 Managing Director and Chief Executive Officer

MANAGEMENT DISCUSSION AND ANALYSIS

ECONOMIC SCENARIO the year under review, and as a result, liquor consumption
remained by and large flat. Consumption of Whisky was
Global economy: After a lackluster out turn in 2016, economic estimated to grow at 1.15% for FY17 while Spirits remained
activity is projected to pick up pace in 2017 and 2018, flat. Bihar, the fourth largest state by population, went dry in
especially in emerging market and developing economies. April, impacting the overall growth for the year by ~1.5%. The
However, there is a wide dispersion of possible outcomes supply in Punjab was disrupted for a month due to procedural
around the projections, given uncertainty surrounding the technical issues. Significant rise in tax had put the burden of
policy stance of the incoming U.S. administration and its global overall cost on states like Andhra Pradesh, Telangana, Karnataka
ramifications. The global economy remained on a subdued and Maharashtra.
growth path, estimated to growth at 3.1% in 2016 against 3.2%
in 2015. With estimated growth of 6.3% in financial year (FY) Demonetisation impacted businesses by knocking off about
2016-17 (against 6.7% in the previous year), the emerging and 15%-20% of sales in November and December, impacting
developing Asian countries were the key contributors of the the overall year by another 1.5%. With many more police
global growth, led by India and China. checks taking place, there has also been increased clampdown
on drink-driving. The market has also been severely affected
Indian economy: Propelled by the central government’s by the Apex Court’s ruling banning liquor vendors within
500 metres of a state or national highway, which has
demonetization reform, market interest rates and yields on
caused significant disruption as many license holders simply
g-secs are expected to be lower in FY18 as compared to FY17,
stopped buying stocks. Due to this, some believe that up to
which is likely to provide a boost to the Indian economy. With
15% of retail outlets will be lost forever, although most expect
fiscal gains resulting from demonetisation and implementation
that over time this supply will be replaced by alternatives.
of GST also getting realized, India is likely to be the fastest
growing major economy in the world during FY18. GDP is
India: India is one of the largest markets for spirits globally.
expected to grow to in the range of 6.75% to 7.50% against the
Approximately 6% of the global alcohol beverage growth is
7.1% growth registered in FY17. (Source: Economic Survey
driven by our country. Going ahead, almost 11% of the global
2016-17 dated Jan 17)
spirits growth is expected to come from India.
INDUSTRY OVERVIEW Despite being a country with a population of about 1.3

Driven by the rapid increase in the urban population,the bn, of which about 58% lies in the age group of 25 years or
Indian spirits is on a high. Further boosting the market growth above, India’s per-capita consumption of alcoholic beverages
is the increasing disposable income and growing preference stands at approximately 4 litres per annum, which is quite low
for whiskies, coupled with changing demographics. With over compared to various other developing countries where per
half the country’s population (54%) above 25 years of age, and capita consumption of alcohol exceeds 10 litre per annum.
the estimated median age of the country’s population pegged
at 28 years, as of 2016, the growth metrics for the industry Due to rising income levels, the pace of growth of consumption
are quite favourable. A change in outlook towards social in Tier-2/3/4 cities as well as rural areas could outpace that
consumption of alcohol, improvement in life styles, increasing in urban cities, going forward. Moreover, with the rise in
disposable income, consumers would tend to upgrade their
aspirations, growing prominence of ‘pub and cocktail culture’
preferences, resulting in higher demand for prestige, premium
in urban cities and emergence of novel Food & Beverage
and luxury segments.
formats is further pushing demand for alcoholic beverages in
the country. The per capita consumption of alcohol, however,
Strong premiumisation trend: The Alcobev industry in India is
was just above 2 litres of pure alcohol (lpa)/head in 2016. The
witnessing significant changes influenced by western culture;
Total Beverage Alcohol (TBA) market in India is pegged at
thus a strong trend towards premiumisation is clearly visible.
` 378347 millions, of this, Western style spirits accounts for
For the industry as a whole, the premium and above segment
over 52%,
is expected to grow at a CAGR of 14% over 2016-2021, whereas
the prestige segment is estimated to grow at 12% over the
GLOBAL AND INDIAN SPIRITS MARKET OVERVIEW same period. Following the industry footprints, your Company
The year gone by was challenging for the Alcobev industry. is also strategically focusing on Prestige and above brands. Your
Industry growth was pulled down by several factors during Company is constantly working on renovation and innovation

MANAGEMENT DISCUSSION AND ANALYSIS (CONTINUED)
of its brands. To emphasize more on the same, your Company also creating some avenues for better pricing efficiencies
has chosen purpose-led marketing platforms and occasion in the system, which is also expected to gain from the
driven special packs. Government of India’s efforts to source ethanol from low-
cost alternative sources such as bio-waste and feedstock
REGULATORY SCENARIO IN INDIAN MARKET (wheat, straw, corn straw, rice straw, etc). Realisation of
these efforts would help improve availability of ethanol
In India, the alcohol industry works in a highly regulated
and stabilize prices.
environment under both central and state governments.
Additionally, national laws and regulatory bodies, such as
BUSINESS ANALYSIS
the Food Safety and Standards Authority of India (FSSAI), also
significantly impact the Alcobev industry. A spate of recent
Company overview
regulations has further tightened the regulatory controls on
the industry. Some of the recent regulatory changes in the Founded in 1826, United Spirits Limited (USL/your Company) is
industry include – India’s largest spirit company, involved in the manufacture, sale
1) Reduction in distance limit for liquor vendors to 220 and distribution of beverage alcohol. Your Company produces
meters from 500 meters in areas with population up to and sells around 90mn cases of Scotch whisky, IMFL whisky,
20,000; brandy, rum, vodka, gin and wine.
2) Exemption to hill states of Sikkim and Meghalaya; and
3) Permission to liquor shops whose licenses had not expired The Company’s portfolio includes brands such as McDowell’s
by April 1, 2017 to continue until their permits expire or No.1, Royal Challenge, Signature, and Antiquity, among others.
until September 30, 2017. Your Company also imports, manufactures and sells Diageo’s
iconic brands such as Johnnie Walker, VAT 69, Black & White,
As a result, nearly a third of liquor outlets will be impacted and Smirnoff and Ciroc in India.
migration of these could take time. The resultant disruption
will impact the revenues of liquor firms. This ruling will lead to Your Company is a subsidiary of Diageo plc - a global leader in
short-term disruptions as liquor vendors relocate, although it beverage alcohol with an outstanding portfolio of brands across
is unlikely to significantly impact medium to long term growth spirits, beer and wine categories. Pursuant to its acquisitions in
prospects for the industry. 2013 and 2014, Diageo plc has a 54.8% shareholding in your
Company, making India one of its largest markets.
l Goods and Services tax (GST):
Strengths
Under the GST regime, liquor is excluded from the GST net.
Undenatured ethyl alcohol, which is a key ingredient for
• Your Company has 18 brands in its portfolio which sell
the spirits industry, has been kept out of GST. GST rate on
more than a million cases every year, of which 4 brands sell
molasses has increased by 10% to 18%, whereas the rate
more than 10 million cases each annually. The Company
on new packaging materials has increased by 6% to 18%.
exports to over 37 countries across the globe.
The general tax on services has increased by 3% to 18%. As
a result of this new regime, the alcobev manufacturers will • With its 60 manufacturing facilities spread across states
not get input credit on all input taxes in the supply chain. and union territories in Indian and also its presence
This is likely to have an unfavourable impact on margins. through franchisee partners in other parts of countries.
Your Company will continue to work with the central Your Company not only ensures faster turnaround of
government to mitigate this impact, and will approach the products but also minimizes risks related to local states’
state governments for appropriate price increases. policy changes.
• The Company’s product portfolio caters to all types of
l Price control over material: customer needs. It has a wide range of products across
Despite the rising cost of ethanol, one of the major raw whisky, vodka and rum, and caters to the entire consumer
materials used by the industry, aggressive productivity- spectrum across the social strata with its luxury, premium,
led initiatives enabled the Company to save ` 2000 prestige and popular spirits categories.
million in material costs during the year. This compared
• The Company has long-term association with most of the
quite favourably with the ` 1400 million savings secured
raw material suppliers which has enabled uninterrupted
during FY16. Integration with the Diageo supply chain is


production and smooth supplies of key inputs. Similarly, 2. Evolve route to consumer
strong distribution ensures continuous supplies to all
The Company’s focus in this area is on leveraging outlet as a
key markets, as well as reach to all of the 81,000 retail
media to build brand imagery in the luxury, premium core
outlets.
and prestige core categories, especially keeping in view
• The Company has an in-house Technical Centre for research the prohibition on liquor advertising in India. Consumer-
on new products, analytics and sensory sciences, process winning activations are used to create demand, with trade
R&D, special spirits and flavour management. It also emerging as the ambassador for the Company’s business
employs highly qualified and experienced scientists, who in these categories. In the popular category, the Company
work consistently and with dedication towards innovative leverages scale to promote the route to consumer. The
product and process development. thrust on this front is on creation of a `sell-out’ culture,
with 20% of the country’s alcobev stores being converted
• Over 5,000 strong work force is a key to its success, with into `Perfect Stores’.
employees partnering it in realising the vision of being the
best performing, most trusted and respected consumer 3. Drive out costs to invest in growth
product Company in India.
To mitigate pricing shortfall and improve margins,
Business performance the Company continues to strengthen its
productivity programme, which was launched in
Post 2014, under the new leadership of Diageo, your Company FY15. Procurement efficiencies are continuously
has been on a transformational journey to improve its boosted and network optimization is also enabled to
operations. The Company has set out a strategic road map enhance productivity.
which includes its five strategic pillars to steer its future growth
trajectory. These are: 4. Corporate citizenship
As a responsible corporate citizen, the Company continues
1. Strengthen and accelerate core brands
to influence public policy through innovative initiatives,
Transformation of its key brands to win greater market along with programme activations to ensure road safety
share is a major agenda for the Company. The main and empower women.
beneficiaries of this approach are Signature, McDowells,
Royal Challenge, Black Dog among others. From renovating 5. Creating a future-ready organisation
brands, diversification within the geographies and To create a fit-for-purpose organization, the Company is
enhancing the customer reach, your Company has been going in for right sizing, while bringing in new capabilities
making significant strides in its journey of transformation. and creating a performance-led culture. Targeted
Your Company has upgraded three of its key brands viz. improvement interventions to measure employee
(1) McDowell’s No. 1 whiskey, (2) Royal Challenge whiskey engagement are also undertaken on a regular basis. Having
and (3) Signature whiskey and the Company’s innovation established a practice of following highest compliance
pipeline during the year has created new offering(s) in the and governance standards, the Company has also played
segment with the launch of McDowell’s No.1 “Silk”, Royal leadership role in shaping the regulatory landscape in the
Challenge “Bolt” and a new variant of Captain Morgan, industry. Your Company has added new capabilities in
which will help attract new consumers and drive future all business aspects, and has improved systems and key
growth. processes thereby right sizing the Company for future
growth.
It has been the Company’s endeavour to strengthen and
accelerate its core brands through continued investment, Operating model changes through Franchising
to win across each of the 3 India’s - Affluent, Middle and During the year under review, in line with the Company’s
Aspiring. Renovation and rejuvenation of the existing approach to selectively participate in the popular segment, the
brands is another key aspect of this strategy, which also Company has entered into agreements to franchise selected,
involves innovation and introduction of new to market mainly Popular segment brands in Andhra Pradesh, Goa and
brands. has moved to a complete franchise agreement for all your
Company brands in Kerala effective 1 January 2017.

The Company has entered into additional agreements despite a subdued economic environment mainly impacted by
to franchise popular segment brands in Union Territory demonetisation and the run up to the highway ban.
of Puducherry, Union Territory of Andaman and Nicobar,
Chandigarh and Rajasthan effective April 1, 2017, in Madhya The Prestige & Above segment represents 41% of total volumes
Pradesh, Himachal Pradesh, Jammu and Kashmir and Delhi and 58% of total net sales, up 4 ppts and 5 ppts respectively
effective 1 May 2017 and in Sikkim and Uttar Pradesh effective compared to last year. The Prestige and Above segment net
from June 1, 2017. sales were up 13% with 5ppts positive price/mix. Positive price/
mix was driven by selective price increases in certain states and
The individual agreements are for between 3 to 5 years. continued focus on premiumisation and brand renovation in
The franchisees will be responsible for manufacturing and the segment. Signature volume grew by 26% and grew net
sales by 29% supported by successful renovation. McDowell’s
distribution of the franchised brands in their respective states
No 1. whisky variants (excluding Platinum) volume grew by
on payment of an agreed royalty fee which will be accounted
7% and net sales grew by 8%.Royal Challenge volume grew
as part of net sales.
by 15% and net sales grew by 16%. The scotch portfolio in
the premium and luxury segment grew volume by 29% and
These changes will allow your Company to further improve
net sales by 32% driven mainly by Johnnie Walker, Black Dog,
it’s operating model and focus the business on the biggest Black & White and VAT 69.
profitable growth opportunities.
The Popular segment represents 59% of total volumes and
Volume and net sales for these franchised brands accounted 42% of total net sales, down 4ppts and 5ppts respectively
for 10.3 million cases and approximately ` 6,400 million net compared to last year. The total Popular segment witnessed
sales in the full year ended March 31, 2017. a decline of 10% in volumes and 9% in revenue during the
year, impacted by Bihar prohibition and one off impact of
Business Review - Revenue and revenue mix operating model changes. Excluding the Bihar prohibition and
one off impact of the operating model changes, the popular
The Company’s growth in the past few years has been
segment declined volume 3% and net sales 2% in the full year.
encouraging and was supported by a strategic revenue mix,
Priority states volume was flat and net sales grew 1% in
up gradation and strengthening of brands. With the Diageo
the full year driven by Hayward’s, Bagpiper and Director’s
brand portfolio integration, your Company is today a market
Special.
leader by volume and value, and it also holds a place of pride
in the Indian alcobev industry, with an outstanding portfolio Net Debt
of reputed brands across key categories and multiple price
points. During the year the company utilized its cash from operations
to repay its loans which has led to a reduction in net debt.
The Company has successfully improved both top line This reduction in debt value together with renegotiation of
borrowings and favourable mix of debt instruments reduced
and operating profit in a highly regulated and competitive
the total interest cost in the full year. Significant improvement
environment, while further strengthening its core brands
in your Company’s overall financial flexibility, corporate
to leadership position across all segments. The company’s
governance and compliance framework has led to further
performance in the popular segment reflects its prioritized
improvement in our credit rating. During the year, ICRA Limited
geographical participation strategy, while its double digit
upgraded the Long Term Rating from “A+” to “AA” with positive
net sales growth in the “Prestige and Above” segment clearly
outlook, while the Short Term Rating was reaffirmed at “A1+”
endorses the success of its premiumisation strategy. which is the highest rating. These improved ratings will enable
the Company to access more economical sources of debt
During the year, the Company has achieved a sales volume of leading to lower interest cost and increased shareholder value.
90mn cases and net sales of ` 85,480 million in the financial
year ended March 31, 2017. Overall volume declined 3% and OUTLOOK
net sales were up 4% impacted primarily by Bihar prohibition
Your Company is the market leader in terms of value (with
and one off impact of operating model changes. Excluding
a market share of 44%) and the market dynamics are highly
the one-off impact volumes were up 1% with net sales up 8%
attractive, given the foray of global players in the Indian market,

and a visible shift to premiumisation, as well as the shift to the Opportunities

franchisee model in some states. Your Company enjoys a strong
• Fixed fee-based franchise model in specific states is likely to
portfolio of brands (supported further by Diageo’s brands), and
aid in margin expansion as it may reduce your Company’s
a focused strategy towards profitability by new management
exposure in low-margin states.
could lead to meaningful gains on the margin front from
• The Company has strategically revamped its key brands
the current levels. Better pricing, strong cost optimization
and introduced them in ‘Prestige and Above’ segment, thus
focus and a more rational competitive landscape (focus on
making it well placed to tap the emerging opportunities.
profits vs volume) should lead to an overall higher industry
profit pool. Strategic initiatives such as moving selectively to • Favourable volume mix combined with changing consumer
asset light/franchisee model and monetizing non-core assets preferences towards premium brands will keep long-term
would further help boost medium-term returns. GST-related revenue growth healthy.
concerns, however, will likely continue to weigh on the stock • Strengthened governance structure and business
performance over the short term. (Source: JP Morgan’s Report synergies, and strong execution of Diageo shall also aid
dated 03.04.17) your Company’s in achieving new scales.
• India’s favourable demography and changing life styles are
RISKS & CONCERNS, OPPORTUNITIES & THREATS favourable for alcohol consumption.
Risks & Concerns
Threats
l The industry operates in a tightly regulated environment.
Regulations pertaining to pricing, licensing, setting up or • Stricter norms on distribution channels by regulators will
expansion of new facilities/ existing brewing / distilling and require distribution channels to be reorganised.
bottling capacities, manufacturing processes, marketing, • Increasing competition by foreign players especially in
sales & advertising and distribution pose a challenge. Any premium segment
adverse rulings for any of the business processes can lead • Your Company’s significant share of volume is from the
to disruptions. states; since states control pricing, the Company is exposed
l The Company operates in a scenario where there to pricing changes by state government.
are regulatory barriers for offsetting cost inflation • Rising prices and improved quality and packaging of
through pricing. The Company has to represent to Indian Made Indian Liquor (IMIL) has led to increase in
state governments to get price increase even to merely consumption of IMIL.
offset inflation, which may take several years in some
cases. INTERNAL CONTROL SYSTEMS
l Recent regulations from the apex court for the distance The Company’s internal control systems are commensurate
limit in highways and licensing requirements require the with the size and industry in which it operates. Your Company
industry to change its distribution reach. has well-defined and adequately documented systems,
l Along with Central Government regulations, every state policies, procedures and guidelines that have been reviewed
government has its own rules and regulations, tax rates by the Board and external parties. The Company strictly
and duties for inter-state movement of liquor. follows the laws, rules and statues of the land. It ensures
l Banning of alcohol in certain states of India is also a stringent compliance at all levels, and across all divisions
matter of concern, impacting industry growth whilst not and departments, for safeguarding its assets, prevention and
delivering the stated objectives of public health. detection of fraud and errors, completeness of accounting
records and timely preparation of financial statements.
l The Company has taken steps to mitigate risks due to
Statutory Auditors have also confirmed the same in their audit
drinking and driving through its ‘Responsible Drinking’
report on the Financial Statements for the year.
initiatives as highlighted in the CSR Report appearing
in Annexure 7 of the Directors’ Report, showcasing
the corporate social responsibility initiatives of the
Company.

MANAGEMENT AND BOARD to become much more agile, faster and accountable, thus
enabling faster decision-making.
Pursuant to the acquisition of shares of the Company by Diageo
plc’s subsidiary Relay BV, in 2013 and 2014, the Company is a During the year, the Company delivered 5965 mandays
direct subsidiary of Relay BV and an indirect subsidiary of of training to its employees. The Company continuously
Diageo plc. Details on the changes in the Board and senior invests in role-based training and upskilling of its employees
management are provided in the Corporate Governance at all levels to ensure that they remain at the forefront of
Report. skill-set upgradation in the industry. The Company has
always believed in nurturing the people to elevate them to
HUMAN RESOURCES higher leadership roles. Performance appraisals take place
every six months, giving every employee sufficient time to
Your Company believes that its people are its most important meet his/ her role requirements. The Company maintains
asset and thus continuously strives to scale up its employee cordial relationship with its employees at all its manufacturing
engagement through well-structured systems and a visionary units.
HR philosophy. Now a family of over 5,000+ (including
permanent employees at plants), the Company is focusing on FORWARD LOOKING STATEMENTS / CAUTIONARY
in its diversity and inclusion agenda, with special emphasis on STATEMENT
the induction and retention of more women in the workforce.
Your Company is committed to nurturing an open environment This Report contains forward-looking statements that
which allows for easy assimilation of ideas and enriches the involve risks and uncertainties. Your Company undertakes
organisation’s collective knowledge pool. no obligation to publicly update or revise any forward-
looking statements, whether as a result of new information,
The Company aspires to evolve into a future-ready organization, future events, or otherwise. Actual results, performances or
centred on promoting a collaborative and cohesive culture. In achievements could differ materially from those expressed
the process, it has undergone a rigorous restructuring exercise, or implied in such forward looking statements. Readers are
with its sights set on making it an even more functional cautioned not to place undue reliance on these forward-
organization. The year witnessed integration of all hierarchical looking statements. This Report should be read in conjunction
levels from 18 Levels to 6 Levels, in order to align it to the with the financial statements included herein and the notes
Diageo’s Global blueprint. This shall facilitate the organisation thereto.

ANNEXURE 1
Details of Subsidiaries, Associates and Joint Ventures

Form AOC 1
(Pursuant to the provisions of Section 129(3) of the Act, read with Rule 5 of Companies (Accounts) Rules,2014) Statement
containing as on March 31, 2017 salient features of the financial statement of subsidiaries/associate companies/joint ventures
Part A: Subsidiaries
Average Share Reserves Total Total Invest- Turn Profit/ Profit/

Sl. Name of the Subsidiary Financial Curr Closing (loss) Provision % of
(loss) Proposed share
year exch exch before taxation after dividend holding Country
for
No. ended ency rate rate capital & surplus assets liabilities ments over taxation taxation
1 Asian Opportunities & 31-03-17 USD 65.072 65.87 331 (1,008) 31 713 - - 357 357 - 100 Mauritius
Investments Limited -
(AOIL)
2 United Spirits Nepal 31-03-17 ` 0.62 5 78 337 254 - 750 70 34 49 82.47 Nepal
Private Limited
3 Palmer Investment 31-03-17 USD 65.072 65.87 994 (1,057) 1 81 - - (2) - (2) - 100 British
Group Limited (PIG) Virgin
Islands
4 Tern Distilleries Private 31-03-17 ` 1 1,027 (718) 328 19 - 1 (56) - (56) - 100 India
Limited (Tern)
5 Shaw Wallace Overseas 31-03-17 GBP 81.34 81.29 34 (11) 20 2 - - 1 - 1 - 100 U.K.
Limited (SWOL)
6 UB Sports Management 31-03-17 USD 65.072 65.87 - 12 15 3 - (3) - (3) - 100 Jersey
Overseas Limited ( Islands
Formerly known as JIHL
Nominees Limited (JIHL)
7 Montrose International 31-03-17 USD 65.072 65.87 33 (2) - - (2) - (2) - 100 Panama
S.A (MI) - -
8 USL Holdings Limited 31-03-17 USD 65.072 65.87 33 (55,316) 627 55,283 - (304) - (304) - 100 British
(UHL) Virgin
Islands
9 USL Holdings (UK) 31-03-17 GBP 81.34 81.29 - (55,404) 318 55,722 - - (7,102) - (7,102) - 100 U.K.
Limited (UHUKL)
10 United Spirits (UK) 31-03-17 GBP 81.34 81.29 - (21,364) 269 21,633 - - (41) - (41) - 100 U.K.
Limited (USUKL)
11 United Spirits (Great 31-03-17 GBP 81.34 81.29 - (21,344) 132 21,553 - - (41) - (41) - 100 U.K.
Britain) Limited (USGBL)
12 Four Seasons Wines 31-03-17 ` 1 663 (1,216) 556 1,109 - 201 (184) - (184) - 100 India
Limited (FSWL)
13 McDowell & Co. 31-03-17 GBP 81.34 81.29 149 (105) 150 1,135 766 - (110) - (110) - 100 Scotland
(Scotland) Limited (MSL)
14 Royal Challengers Sports 31-03-17 ` 1 (320) 4,675 4,995 - 1,621 32 32 - 100 India
Private Limited - -
15 Liquidity Inc. 31-03-17 USD 65.07 65.87 - (290) 72 274 - - (8) - (8) - 51 USA
16 United Spirits (Shanghai) 31-03-17 RMB 9.4 9.4 52 (62) 2 17 - - (4) - (4) - 100 China
Trading Company
Limited
17 Sovereign Distilleries 31-03-17 ` 1 4,851 (4,472) 560 180 - - -193 - (193) - 100 India
Limited
18 Pioneer Distilleries 31-03-17 ` 1 134 (583) 4,633 5,082 - 1,132 (435) (134) (301) - 75 India
Limited
19 United Spirits Singapore 31-03-17 USD 65.072 65.87 - =5 58 54 - 960 15 - 15 - 100 Singapore
Trading Pte Ltd
(Formerly known as
Whyte and Mackay
Singapore Pte Ltd )
Notes:
Closing exchange rate is applied for share capital, reserves and surplus, total assets, total liabilities and investments.
Average exchange rate is applied for turnover, profit / (loss) before taxation, profit / (loss) after taxation, and proposed dividend. All
amounts are in million `.

ANNEXURE 1 (CONTINUED)
Names of subsidiaries which are yet to commence operations: Nil.
1. During the year, SW Finance Company Ltd, through a Scheme of Amalgamation, merged with United Spirits Limited (USL).
2. Bouvet Ladubay and Chapin Landias, Subsidiaries of USL ceased to be the subsidiaries of USL during the year.
Part B: Associates and Joint Ventures
Sl. Name of Associates/ Joint Ventures Wine Society of India Pvt Ltd
No
1 Latest audited Balance Sheet Date 31 March 2016
2 Shares of Associates/ Joint Ventures held by the Company on the year
end
(Number). 324,812
Amount of Investment in Associates/Joint Venture ` 31,817,712
Extent of holding % 33.32
3 Description of how there is significant influence The shareholding in Wine society of India Private Limited
## is more than 20% due to which there is a significant
influence
4 Reason why the associate/ joint venture is not consolidated The investment in associate is accounted as per Ind AS
5 Net worth attributable to Shareholding as per latest audited Balance NIL. The loss in the associates exceeds the carrying value of
sheet the investment.
6 Profit/ Loss for the year
i. Considered in Consolidation NiL
ii. Not considered in Consolidation ` 39,366,881
# Winding up petition filed and the company is in the process of liquidation

1. Names of associates or joint ventures which are yet to commence operations : NiL
2. Names of associates or joint ventures which have been liquidated or sold during the year. : NiL
Mahendra Kumar Sharma Anand Kripalu

Chairman Managing Director and Chief Executive Officer
Sanjeev Churiwala V. Ramachandran

Executive Director and Chief Company Secretary
Financial Officer
Bengaluru
July 23, 2017

ANNEXURE 2
Related Party Transactions

FORM AOC 2
(Pursuant to section 134(3)(h) of the Act, and rule 8(2) of the Companies (Accounts) Rules, 2014)
Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in
Section 188(1) of the Companies Act, including certain arm’s length transactions under the third proviso thereto.
a) Details of Contracts or transactions not at arm’s length basis: There were no contracts or arrangements or transactions entered
into during the year ended March 31, 2017, which were not at arm’s length basis
b) Details of Contracts or transactions at arm’s length basis: The details of material contracts or arrangement or transactions at
arm’s length basis for the year ended March 31,2017 are as follows :
i) Agreement with Related Parties entered during the year 2016-17
(Amount in `)
Date on Amount
Salient Terms
Sl. Name of the Nature of Nature of which Duration of Paid as
(Transaction Justification Advance
No. related Party Contract Relationship Resolution Contract if
value)
was passed any
1 Pioneer Salary recharge- Subsidiary 28-April-2016 Perpetual Based on Salary recharge Nil
Distilleries Expense / Transfer Pricing with respect
Limited (Income) Guidelines ` 3 to employees
million deputed to related
Party
2 Diageo Great Expenses Promoter/ 28-April-2016 August 2015 to Based on Non-Salary Nil
Britain Limited reimbursed Promoter Group July 2017 Transfer Pricing expensesrecharge
Guidelines ` 9 of Prabhaharan
million Viswanathan
3 United Spirits Sale of goods Subsidiary 12-May-2016 Arm’s length Sale of IMFL Nil
Singapore Pte transaction
Limited ` 976 million
4 Diageo Salary recharge- Promoter/ 02-Nov-2015 1 April 2016 to Based on Salary recharge of Nil
Vietnam Expense / Promoter Group 31October 2016 Transfer Pricing Shivam Mishra
Limited (Income) Guidelines ` 3.9
million
5 Guiness Sale of goods Promoter/ 17- Mar- 2016 Perpetual Arm’s length Sale of raw Nil
Nigeria Limited Promoter Group transaction material and HBS
` 24 million
6 Diageo Great Expenses Promoter/ 17-Mar-2016 One time Arm’s length World Class Nil
Britain Limited reimbursed Promoter Group transaction Participation Fees
` 2.5 million
7 Diageo Brands Marketing Promoter/ 08-Jun-2016 One Time ` 1 million Received towards Nil
BV Expenses/ Promoter Group ‘Love Scotch’
(Income) marketing
Campaign
8 Pioneer Purchase of Subsidiary 08-Jun-2016 September 2016 PartofTie-up PartofTie-up Nil
Distilleries goods to March 2019 manufacture manufacture
Limited agreement agreement
` 5707 million
9 - Diageo India Salary recharge- Promoter/ 14-Jul-2016 01 July 2014 to Based on Salary recharge Nil
Private Limited Expense / Promoter Group 30 September Transfer Pricing of International
(Income) 2017 Guidelines assignees
10 Pioneer Purchase of Subsidiary NA Perpetual ` 520 million Purchase of Nil
Distilleries goods material
Limited

Date on Amount
Salient Terms
(Transaction Justification
No. related Party Contract Relationship Resolution Contract Advance if
value)
was passed any
11 Diageo plc Shared Service Promoter/ 14-Jul-2016 Perpetual Arm’s length Implementation Nil
Promoter Group transaction No of Whistle Blower
value involved Mechanism
through third
party vendor of
Diageo.
12 Diageo Great Expenses Promoter/ 27-Jan-2016 One time Arm’s length Anti-Counterfeit Nil
Britain Limited Recharge Promoter Group transaction ` 1 Project through
million Diageo Tech
Venture.
13 Diageo India Assignment of Promoter/ 26-Jul-2016 One time ` 3 million Diageo India Pvt Nil
Private Limited Receivables Promoter Group Ltd., has assigned
the receivables
from Jharkhand
State Beverages
Corporation to the
Company.
14 Diageo Salary recharge- Promoter/ 02-Nov-2015 Perpetual Based on Salary Recharge Nil
NorthAmerica Expense / Promoter Group Transfer Pricing of Mr William
Inc. (Income) Guidelines McDowell
` 31.0 million
15 Diageo Expenses Promoter/ 27-Oct-2016 1-Spet-2015 to Based on Non-Salary Nil
Scotland Recharge Promoter Group 28-Feb-2017 Transfer Pricing costs Recharge
Limited Guidelines of MrEamonn
` 0.74milion Anthony Power
was approved in
ACM on 2-Nov-
2015 to recharge
from Diageo
Ireland, which
is amended to
Diageo Scotland
now.
16 Four Seasons Salary recharge- Subsidiary 17-Mar-2016 1-April-2016 to Based on Salary recharge Nil
Wines Limited Expense / 31-Mar-2017 Transfer Pricing with respect
(Income) 27-Oct-2016 Guidelines to employees
` 62.83 deputed to/by
related Party
17 Sovereign Salary recharge- Subsidiary 27-Oct-2016 1-April-2016 to Based on Salary recharge Nil
Distilleries Expense / 31-Mar-2017 Transfer Pricing with respect
Limited (Income) Guidelines ` 2 to employees
million deputed to/by
related Party
18 Four Seasons Purchase of Subsidiary 27-Oct-2016 1-April-2016 to Based on Purchase of Wine Nil
Wines Limited goods 31-Mar-2017 Transfer Pricing and re-sale.
Guidelines ` 84
million
19 Diageo Promoter/ 21-Jan-2017 One time Based on The funding for Nil
Scotland Promoter Group Transfer Pricing Captain Morgan
Limited Guidelines ` 41 was approved
million as to receive
from DGBL on
27-10-2016 is now
amended as to be
received from DSL

Date on Amount
Salient Terms
value)
was passed any
20 Diageo Royalty Promoter/ 09-Jan-15 Financial Year Arm’s length Extension of Nil
Scotland Expenses Promoter Group 2017 to 2021 transaction ` 3 Captain Morgan
Limited million Brand in India
21 Diageo Purchase of Promoter/ 15-Jun-15 Perpetual Based on Purchase of Nil
Singapore Goods Promoter Group Transfer Pricing materials
Supply Pte. Guidelines ` 14
Limited million
22 Four Seasons Sharing office Subsidiary 21-Jan-17 22 Months (Till Arm’s length Share of office Nil
Wines Limited space Dec 2016) transaction ` 4 space in Embassy
million Heights
23 Diageo Salary and Promoter/ 02-Nov-2015 1-Aug-2015 Based on Recharge of salary, Nil
Scotland Expenses Promoter Group to 31-Jul-2016 Transfer Pricing non-salary and
Limited Recharge 27-Mar-2017 1-Aug-2016 to Guidelines ` 31 administration
30-Jun-2017 million costs of Mr Ajay
Baliga and Ms.
Sushma D’Souza
was approved on
27-Oct-2016 as to
be done by Diageo
Plc, is amended
to be recharged
by DSL
24 Diageo plc Recharge of Promoter/ 27-Mar-17 One time Based on Amount paid Nil
expenses Promoter Group Transfer Pricing under Settlement
Guidelines ` 75 with United
million Mohun Bagan
Limited
25 United Spirits Sale of goods Subsidiary NA 04-Mar-2011 to Based on Sale of goods for Nil
Nepal Private 04-Mar-2021 Transfer Pricing manufacturing of
Limited Guidelines brands
` 272 million
26 Pioneer Sale of goods Subsidiary 02-Sep-13 02-Sep-2013 to PartofTie-up PartofTie-up Nil
Distilleries 01-Sep-2016 manufacture manufacture
Limited agreement ` 21 agreement
million
27 Diageo Brands Purchase of Promoter/ 09-Jan-15 Perpetual Arm’s length Licence to Nil
BV goods Promoter Group transaction ` manufacture and/
2060 million or sale of Diageo
brands
28 United Spirits Income from Subsidiary NA 04-Mar-2011 to Based on Roalty and brand Nil
Nepal Private brand franchise 04-Mar-2021 Transfer Pricing development fee
Limited Guidelines ` payable by United
272 million Spirits Nepal
Private Limited
to the Company,
being the brand
owner
29 Four Seasons Brand fee Subsidiary NA 1-Jul-2015 to Arm’s length For sale and Nil
Wines Limited 30-Jun-2018 transaction manufacture of
brands owned by
` 3 million the Company

Date on Amount
Salient Terms
value)
was passed any
30 Diageo Royalty expense Promoter/ 09-Jan-15 Perpetual Distribution License to Nil
NorthAmerica Promoter Group in bottled in manufacture and/
Inc. origin product or sale of Diageo
in India ` 77 brands
million
31 United Spirits Advertisement Subsidiary NA NA Arm’s length Income from sales Nil
Singapore Pte and sales transaction ` 8 promotion made
Limited promotion million
expenses/
(Income)
32 Diageo Salary recharge Promoter/ 02-Nov-15 01-Jul-2014 to Based on Salary recharge Nil
Australia expense Promoter Group 30-Jun-2017 Transfer Pricing of Prabhaharan
Limited Guidelines ` Viswanathan
272 million
33 Pioneer Guarantee Subsidiary 02-Nov-15 Three years Based on Commission Nil
Distilleries commission Transfer Pricing received
Limited income Guidelines ` 3
million
34 Four Seasons Finance Subsidiary 13-Nov-14 Perpetual Arm’s length Funding for Nil
Wines Limited (including transaction ` 89 working capital
loans and million loan
advances, equity
contributions in
cash or in kind
and Exchange
gain / (loss))
35 Four Seasons Interest income Subsidiary 13-Nov-14 NA Arm’s length Interest Income Nil
Wines Limited transaction ` 7 on working capital
million loan
36 Pioneer Interest income Subsidiary 13-Nov-14 NA Arm’s length Interest Income Nil
Distilleries transaction ` 14 on working capital
Limited million loan
37 Royal Interest income Subsidiary 13-Nov-14 NA ` 27 million Interest Income Nil
Challengers on working capital
Sports Private loan
Limited
38 Royal Finance Subsidiary 13-Nov-14 NA ` 835 million Funding for Nil
Challengers (including working capital
Sports Private loans and loan
Limited advances, equity
contributions in
cash or in kind
and Exchange
gain / (loss))
39 Sovereign Finance Subsidiary 13-Nov-14 NA ` 5 million Funding for Nil
Distilleries (including working capital
Limited loans and loan
advances, equity
contributions in
cash or in kind
and Exchange
gain / (loss))

Date on Amount
Salient Terms
value)
was passed any
40 Tern Distilleries Finance Subsidiary 13-Nov-14 NA ` 9 million Funding for Nil
Private Limited (including working capital
loans and loan
advances, equity
contributions in
cash or in kind
and Exchange
gain / (loss))
41 Mc Dowell & Interest income Subsidiary 28-Sep-07 NA Arm’s length Interest Income Nil
Co (Scotland) transaction ` 2 on working capital
Limited million loan
42 Diageo Great Salary recharge- Promoter/ 02-Nov-15 01-Jul-2015 to Based on Salary recharge Nil
Britain Limited Expense / Promoter Group 30-06-2017 Transfer Pricing of Rhiju
(Income) Guidelines ` 10 Bhowmick and
million reimbursement of
employee benefits
of Tracey Barnes
43 Diageo Salary recharge- Promoter/ 02-Nov-15 01-08-2015 to Based on Salary recharge of Nil
Scotland Expense / Promoter Group 31-Jul-2017 Transfer Pricing Kedar Ulman
Limited (Income) Guidelines ` 35
million
44 Diageo Plc. Salary recharge- Promoter/ 02-Nov-15 01-Jan-2016 to Based on Non-Salary Nil
Expense / Promoter Group 01-Jun-2018 Transfer Pricing expenses recharge
(Income) Guidelines ` 2.5 of Richard Kugler
million
45 Diageo Plc. Salary recharge- Promoter/ 02-Nov-15 From 15-Jul- Based on Salary recharge of Nil
Expense / Promoter Group 2015 till end Transfer Pricing Vineet Chabbra
(Income) of employee Guidelines ` 24
assignment million
46 Diageo Plc. Salary recharge- Promoter/ 02-Nov-15 From 01-02- Based on Salary recharge of Nil
Expense / Promoter Group 2016 till the end Transfer Pricing Niraj
(Income) of employee Guidelines ` 0.3
assignment million
47 Guiness Expenses Promoter/ NA One time Arm’s length Expenses Nil

Nigeria Limited reimbursement Promoter Group transaction ` 5 reimbursed to the
received million Company
48 Pioneer Guarantee Subsidiary 02-Nov-15 Three years Based on Commission on Nil
Distilleries commission Transfer Pricing gurantee given
Limited given Guidelines
` 1000 million
(ii) Details of loans, advances and investments by the Company in its subsidiary and Associate Companies (as required under
Regulation 34(3) and 53(f ) of SEBI (LODR) Regulations, 2015 read with Schedule V Para A2 have been disclosed in Notes
to the Audited Financial Statements for the year ended March 31, 2017.

Sanjeev Churiwala V. Ramachandran

Executive Director and Chief Company Secretary
Financial Officer
Bengaluru
July 23, 2017

ANNEXURE 3
FORM NO. MR-3

SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2017
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To,
The Members,
Bengaluru
I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate
practices by United Spirits Limited (CIN: L01551KA1999PLC024991) (hereinafter called the Company). Secretarial Audit was
conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/ statutory compliances and
expressing my opinion thereon.
Based on my verification of the Company’s books, minute books, forms and returns filed and other records maintained by the
company and also the information provided by the Company, its officers, agents and authorized representatives during the
conduct of secretarial audit, I hereby report that in my opinion, the company has, during the audit period covering the financial
year ended on March 31, 2017, complied with the statutory provisions listed hereunder and also that the company has proper
Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.
I have examined the books, papers, minute books, forms and returns filed and other records maintained by United Spirits Limited
(“the Company”) for the financial year ended on March 31, 2017 according to the provisions of:
i. The Companies Act, 2013, (the Act) and the rules made thereunder;
ii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;
iii. The Depositories Act, 1996 and the Regulations and Bye-Laws framed thereunder;
iv. Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct
Investment, Overseas Direct Investment and External Commercial Borrowings;
v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI’);
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (No
instances for compliance requirements during the year);
(d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (No instances for
compliance requirements during the year);
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (No instances for
compliance requirements during the year);
(f ) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993
regarding the Companies Act and dealing with client;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (No instances for compliance
requirements during the year);
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998, (No instances for compliance
requirements during the year); and
(i) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;
vi. Various State Excise Laws relating to alcohol and related industry;
vii. Legal Metrology Act, 2009 and Rules thereunder;
viii. Food Safety and Standards Act, 2006 and Rules and Regulations made thereunder;
ix. The Environment (Protection) Act, 1986 and Rules thereunder;
x. The Water (Prevention & Control of Pollution) Act, 1974;

xi. The Air (Prevention & Control of Pollution) Act, 1981;
xii. The Factories Act, 1948 and Rules thereunder;
xiii. All other Labour, Employee and Industrial Laws to the extent applicable to the Company.
I have also examined compliance with the applicable clauses of Secretarial Standards issued by the Institute of Company Secretaries
of India.
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, etc as
mentioned above wherever applicable.
I further report that
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and
Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review
were carried out in compliance with the provisions of the Act.
Adequate notices were given to all Directors to schedule the Board meetings, agenda and detailed note on agenda were sent
at least seven days in advance and wherever sent at shorter period, the requisite consent from the directors was obtained and
a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for
meaningful participation at the meeting.
The Company has responded to notices received by various authorities, including show cause notices received from the Ministry of
Corporate Affairs for various alleged non compliances during the previous years. The Company has not received any further replies
from the Ministry of Corporate Affairs to these responses. The Company has also not received any responses on its reconsideration
application for approval of excess of managerial remuneration. The Company has initiated proceedings for excess remuneration
paid to former Executive Director and Chief Financial Officer. One notice of beneficial interest which was sent to former official of
the Company was received by the Company with the delay and accordingly there was an unavoidable delay in filing the Form MGT
6 beyond 300 days, for which, the Company had made an application for condonation of delay.
All decisions are carried through majority and recorded in the minutes and, unless stated otherwise, has been unanimous. Decision
has been taken by majority in all Board meetings during the year.
I further report that there are adequate systems and processes in the company commensurate with size and operations of the
company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
I further report that during the audit period the Company has following specific actions but these are not material and do not have
any major bearing on the Company’s affairs in pursuance of the above referred laws, rules, regulations, guidelines and standards:
1. Due to termination of agreement with Deutsche Bank Trust Company Americas, Depository for global depository shares
(GDSs), the GDSs (constituting about 0.5% of the paid up equity share capital) have been cancelled and have resulted in
underlying shares. However, the number of shares issued, subscribed and paid up and also listed in stock exchanges remains
unchanged at 14,53,27,743 equity shares of ` 10 each.
2. The Company has entered in to an agreement for the sale of its entire holding of 67,716 equity shares in United Spirits Nepal
Private Limited (constituting 82.46% of the paid up equity share capital of United Spirits Nepal Private Limited) and the sale
transaction is pending for various regulatory clearances.
SUDHIR VISHNUPANT HULYALKAR

Company Secretary in Practice
Place : Bengaluru FCS No.: 6040
Date : 23 July, 2017 C. P. No. : 6137

ANNEXURE 4
FORM MGT-9
EXTRACT OF ANNUAL RETURN
as on the financial year ended on March 31, 2017
[Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies
(Management and Administration) Rules, 2014]
I. Registration and Other Details:
Particulars Details
CIN L01551KA1999PLC024991
Registration date 31/03/1999
Name of the Company United Spirits Limited
Category/Sub-Category of the Company Company Limited by Shares
Indian Non Govt Company
Address of the Registered office and contact details ‘UB TOWER’
# 24, VITTAL MALLYA ROAD, Bengaluru
Karnataka-560001 Phone: +91 80 39856500
E-mail: uslinvestor@unitedspirits.in
Website: www.diageoindia.com
Whether listed company Yes / No Yes
Name, Address and Contact details of Registrar and Integrated Registry Management Services Private Limited
Transfer Agent, if any (Formerly known as Integrated Enterprises (India) Limited)
No. 30, Ramana Residency, 4thcross, Sampige Road,
Malleswaram, Bengalore-560003
Tel: (080)23460815-818
Fax: (080)23460819
II. Principal Business Activities of the Company:

All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-
SI. Name and Description of main products / services NIC Code of % to total turnover of
No. the Product/ service the company
1 Distilling, rectifying and blending of spirits; ethyl alcohol 1551 99.98
production from fermented material
Total 99.98
III. Particulars of Holding, Subsidiary and Associate Companies:
Sl. Name of the Address of the CIN/GLN Holding/ % of Applicable

No. Company Company Subsidiary / Shares Section
Associate held
1 Relay BV Molenwerf – 10-12, 1014, BG, NA Holding 54.78 2(46)
Amsterdam, Netherlands. Company
2 Asian Opportunities IFS Court, Twenty Eight, 22752/5112 Subsidiary 100 2(87)
& Investments Cybercity, Ebene, Mauritius Company
Limited (AOIL)
3 United Spirits Nepal Kamaladi, Kathmandu(Nepal) 124/39 Subsidiary 82.46 2(87)
Private Limited Company


Associate held
4 Palmer Investment Sea Meadow House, 447034 Subsidiary 100 2(87)
Group Limited (PIG) Blackburne Highway, P.O. Company
Box 116, Road Town, Tortola,
British Virgin Islands
5 Tern Distilleries Roxana Towers, Ground Floor, U15532TG1999PTC031318 Subsidiary 100 2(87)
Private Limited (Tern) M.No.7-1-24/1/RT/G1&G2 Company
Greenlands, Begumpet
Hyderabad Hyderabad TG
500016 IN
6 Shaw Wallace Lakeside Drive, Park Royal, 283393 Subsidiary 100 2(87)
Overseas Limited London, England, NW10 7HQ Company
(SWOL)
7 UB Sports Ordnance House,31 Pier Road 61000 Subsidiary 100 2(87)
Management St Helier , JE4 8PW Company
Overseas Limited
(Formerly known
as JIHL Nominees
Limited(JIHL)
8 Montrose EdificioVallarino Penthouse, 3147 Subsidiary 100 2(87)
International S.A (MI) Calle 52 Y ElviraMendez, Company
Ciudad De Panama, R.P
9 USL Holdings Sea Meadow House, PO Box 1385373 ( BVI ) Subsidiary 100 2(87)
Limited (UHL) 116, Road Town, Tortola, Company
VG1110 British Virgin Islands
10 USL Holdings (UK) Lakeside Drive, Park Royal, 6127302 Subsidiary 100 2(87)
Limited (UHUKL) London, England, NW10 7HQ Company
11 United Spirits (UK) Lakeside Drive, Park Royal, 6127303 Subsidiary 100 2(87)
Limited (USUKL) London, England, NW10 7HQ Company
12 United Spirits (Great Lakeside Drive, ParkRoyal, 6127260 Subsidiary 100 2(87)
Britain) Limited London,England, NW107HQ Company
(USGBL)
13 Four Seasons Wines UB Tower,#24,Vittal U15549KA2006PLC039931 Subsidiary 100 2(87)
Limited (FSWL) Mallya Road, Bengaluru, Company
Karnataka-560001
14 Pioneer Distilleries Roxana Towers, Ground L24116TG1992PLC055108 Subsidiary 75 2(87)
Limited Floor, M.No.7-1-24/1/RT/ Company
G1&G2Greenlands, Begumpet
Hyderabad- TG 500016 IN
15 McDowell & Co EdinburghPark, 5Lochside SC 145242 Subsidiary 100 2(87)
(Scotland) Limited Way, Edinburgh, Scotland, Company
EH12 9DT
16 Sovereign Distilleries Roxana Towers,Ground Floor, U15511TG2001PLC036282 Subsidiary 100 2(87)
Limited M.No.7-1-24/1/RT/G1&G2 Company
Greenlands, Begumpet
Hyderabad TG 500016 IN


Associate held
17 Liquidity Inc. 2711 Centerville Road, Suite - Subsidiary 51 2(87)
400, Wilmington, Delaware Company
19808
18 United Spirits Unit 215, Xinxing (S.W.Z.H.D.Z.Z. [2007] No. Subsidiary 100 2(87)
(Shanghai) Trading Building, No. 8, 1153 Company
Company Limited JiaFengRoad,WaiGaoQiaoFree
Trade Zone, Shanghai,China
19 Royal Challengers ‘UB Tower’, # 24, Vittal U92400KA2008PTC045565 Subsidiary 100 2(87)
Sports Private Mallya Road, Bengaluru, Company
Limited Karnataka-560001
20 United Spirits 9 Battery Road, #15-01 Straits 201216632N Subsidiary 100 2(87)
Singapore Trading Trading Building, Singapore Company
Pte Ltd (Formerly 049910
known as Whyte and
Mackay Singapore
Pte Ltd)
21 Wine Society of India 005, CNB Square, Sangam U51228MH2006PTC162593 Associate 33.33 2(6)
Pvt. Ltd* Cinema Complex, 127 Andheri Company
Kurla Road, Andheri (E),
Mumbai - 400059.
*in the process of being wound up
IV Shareholding Pattern (Equity Share capital Break up as % to total Equity)

(i) Category wise Shareholding
Category of Share No. of Shares held at the beginning of the year No. of Shares held at the end of the year % change
Holders Demat Physical Total % of Total Demat Physical Total % of Total during the
Shares Shares year
A. Promoters
(1) Indian
a) Individual/HUF 12510 0 12510 0.01 12,510 - 12,510 0.01 0.00
(ii) Central Govt. 0 0 0 - 0 0 0.00 0.00 0.00
(iii) State Govt.(s) 0 0 0 - 0 0 0.00 0.00 0.00
(iv) Bodies Corp. 5394573 0 5394573 3.71 5,359,573 0 5,359,573 3.69 0.02
(v) Banks/FIs 0 0 0 - 0 0 0.00 0.00 0.00
(vi)Any other 0 0 0 - 0 0 0.00 0.00 0.00
SUB TOTAL (A)(1) 5,407,083 0 5,407,083 3.72 0 0 5,372,083 3.70 0.02
(2) Foreign
a) NRI- Individuals 0 0 0.00 0 0 0.00 0.00 0.00
b) Other - Individuals 0 0 0 0.00 0 0 0.00 0.00 0.00
c) Bodies Corp. 79,612,346 0 79612346 54.78 79,612,346 0 79,612,346 54.78 0.00
d) Banks/FI 0 0 0 0.00 0 0 0.00 0.00 0.00
e) Any other… 0 0 0 0.00 0 0 0.00 0.00 0.00
SUB TOTAL (A)(2) 79,612,346 0 79612346 54.78 79,612,346 0 79,612,346 54.78 -
Total Share holding 85,019,429 0 85019429 58.50 84,984,429 0 84,984,429 58.48 0.02
of Promoter
(A)= (A)(1)+(A)(2)

Shares Shares year
B. PUBLIC
SHAREHOLDING
(1) Institutions
a) Mutual Funds 7,485,872 550 7486422 5.15 7,698,423 550 7,698,973 5.30 0.15
b) Banks/FI 165,320 11227 176547 0.12 125,802 11,227 137,029 0.09 -0.03
C) Central govt 27,439 - 27439 0.02 27,439 - 27,439 0.02 -
d) State Govt.(s) 0 7521 7521 0.01 0 7,521 7,521 0.01 -
e) Venture Capital 0 0 0 - - - - - -
Fund
f) Insurance 0 0 0 - 0 0 - - -
Companies
g) FIIS 33,808,538 2003 33810541 23.27 32,053,569 2003 32,055,572 22.06 -1.21
h) Foreign Venture - - - - - - - - -
i) Others (specify) QFI - - - - - - - - -
SUB TOTAL (B)(1) 41,487,169 21301 41508470 28.56 39.905,233 21301 39,926,534 27.47 -1.09
(2) Non Institutions
a) Bodies corporate
i) Indian 6,531,681 42764 6574445 4.52 6,788,275 42764 6,831,039 4.70 0.18
ii) Overseas - - - -
b) Individuals
i) Individual 6,578,383 1801192 8379575 5.77 7,557,552 1,721,956 9,279,508 6.39 0.62
shareholders holding
nominal share capital
upto ` 2 lakhs
ii) Individuals 2,365,256 - 2365256 1.63 2,218,779 - 2,218,779 1.53 -0.10
shareholders holding
nominal share capital
in excess of ` 2 lakhs
iii)Others 520,359 - 520359 0.36 600,117 - 600,117 0.41
Trust 76,418 - 76418 0.05 1,121,274 - 1,121,274 0.77 0.72
NRI 0 - 0 - - - - - -
Clearing Member 138,203 - 138203 0.10 366,063 - 366,063 0.25 0.16
Overseas Corporate 0 - 0 - - - - - -
Bodies
Unclaimed Suspense 0 - 0 - - - - - 0
Account
SUB TOTAL (B)(2) 16,210,300 1843956 18054256 12.42 18,652,060 1,764,720 20,416,780 14.05 1.57
Total Public 57,697,469 1865257 59,562,726 40.99 58,557,293 1,786,021 60,343,314 41.52 0.48
Shareholding
(B)=(B)(1)+(B)(2)
Shares held by 745,588 0 745,588 0.51 0 0 0 - -0.51
Custodian for GDRs
& ADRs
Sub Total (C ) 745,588 0 745,588 0.51 0 0 0 -
Grand Total (A+B+C) 143462486 1865257 145,327,743 100 143,541,722 1,786,021 145,327,743 100 -0.03

Shares Shares year
Non Resident Indians - - - 2,91,631 3,43,182 6,34,813 0.44 0.44-
(Reptriable)
Non Resident Indians - - - 4,42,594- 4,465 4,47,059 0.31 0.31
(Non Repatriable)
Directors 153 - 153 0.00
Relatives Of Directors
Trusts 76418 - 76418 0.05 1,121,274 - 1,121,274 0.77 Nil
SUB TOTAL (B)(2) 1,62,10,300 18,43,956 1,80,54,256 12.42 1,86,52,060 17,64,720 2,04,16,780 14.05 0.85
Total Public Shareholding 5,76,97,469 18,65,257 5,95,62,726 40.99 5,85,57,293 17,86,021 6,03,43,314 41.52 0.24
(B)=(B)(1)+(B)(2)
C. Shares held by 7,45,588 - 7,45,588 0.51 - - - 0.00 0.51
Custodian for GDRs & ADRs
Grand Total (A+B+C) 14,34,62,486 18,65,257 14,53,27,743 100.00 14,35,41,722 17,86,021 14,53,27,743 100.00 0.75
(ii) Shareholding of Promoters
Sl Promoter’s Name Shareholding at the beginning Shareholding at the % change

No. of the year end of the year in share
No. of % of total No. & % No. of % of total No. & % of holding
shares shares of shares shares shares shares pledged during the
of the pledged / of the / encumbered year
company encumbered company to total shares
to total
shares
1 RELAY B V 79612346 54.78 - 79612346 54.78 - 0
2 DEVI INVESTMENTS PRIVATE 2700 0 - 2700 0 - 0
LIMITED
3 KINGFISHER FINVEST INDIA 1208180 0.83 0.72 1173180 0.81 0.7 0.02
LIMITED
4 MALLYA PRIVATE LIMITED 1005 0 - 1005 0 - 0
5 ROSSI AND ASSOCIATES 35112 0.02 - 35112 0.02 - 0
PRIVATE LIMITED
6 UNITED BREWERIES 4116306 2.83 1.13 4116306 2.83 1.13 0
HOLDINGS LIMITED
7 VIJAY MALLYA 12510 0.01 - 12510 0.01 - 0
8 VITTAL INVESTMENTS PRIVATE 31270 0.02 - 31270 0.02 - 0
LIMITED
TOTAL 85,019,429 58.5 1.85 84,984,429 58.48 1.83 0.02
(iii) Change in Promoter’s Shareholding (Promoter wise) including Date wise increase / decrease in each of the
Promoter’s Shareholding during the year specifying the reasons for increase / decrease
Name Shares at the Date of Reason for No. of Cumulative

beginning of the Change Change Shares shareholding
year
KINGFISHER FINVEST INDIA 1,208,180 24-June-2016 Invocation of 35,000 1,173,180
LIMITED pledge

(iv) Shareholding Pattern of top ten Shareholders (other than Directors & Promoters and Holders of GDRs and
ADRs
Sl. Name of the Shareholding at the Date of Increase/ Reason Cumulative Shareholding
No. Shareholders beginning of the period Change Decrease in during FY 2016-17
01/04/2016 Shareholding
No. of Shares % of total
% of total
shares
No. of Shares shares of the
of the
Company
Company
1 CLSA GLOBAL MARKETS 2,347,009 1.61 01.04.2016 0 NA 2,347,009 1.61
PTE. LTD.
22.04.2016 2286 BOUGHT 2,349,295 1.62
06.05.2016 11794 BOUGHT 2,361,089 1.62
08.07.2016 8342 BOUGHT 2,369,431 1.63
15.07.2016 37904 BOUGHT 2,407,335 1.66
29.07.2016 2072 BOUGHT 2,409,407 1.66
12.08.2016 -924 SOLD 2,408,483 1.66
16.09.2016 -21005 SOLD 2,387,478 1.64
07.10.2016 6441 BOUGHT 2,393,919 1.65
28.10.2016 5237 BOUGHT 2,399,156 1.65
18.11.2016 -5025 SOLD 2,394,131 1.65
09.12.2016 -1161 SOLD 2,392,970 1.65
23.12.2016 444 BOUGHT 2,393,414 1.65
30.12.2016 7526 BOUGHT 2,400,940 1.65
13.01.2017 -3709 SOLD 2,397,231 1.65
20.01.2017 -950 SOLD 2,396,281 1.65
03.02.2017 7511 BOUGHT 2,403,792 1.65
03.03.2017 4000 BOUGHT 2,407,792 1.66
10.03.2017 -4000 SOLD 2,403,792 1.65
31.03.2017 2,403,792 1.65
2 CARMIGNAC GESTION 2,245,949 1.55 01.04.2016 0 NA 2,245,949 1.55
A\C CARMIGNAC 17.06.2016 267398 BOUGHT 2,513,347 1.73
PATRIMOINE 24.06.2016 512503 BOUGHT 3,025,850 2.08
30.06.2016 94725 BOUGHT 3,120,575 2.15
10.07.2016 435 BOUGHT 3,121,010 2.15
15.07.2016 6937 BOUGHT 3,127,947 2.15
22.07.2016 130377 BOUGHT 3,258,324 2.24
26.08.2016 698 BOUGHT 3,259,022 2.24
02.09.2016 4576 BOUGHT 3,263,598 2.25
16.09.2016 22527 BOUGHT 3,286,125 2.26
31.03.2017 3,286,125 2.26
3 RELIANCE CAPITAL 2,005,041 1.38 01.04.2016 0 NA 2,005,041 1.38
TRUSTEE CO. LTD-A/C
RELIANCE CAPI
22.04.2016 250100 BOUGHT 2,255,141 1.55
29.04.2016 -16000 SOLD 2,239,141 1.54
06.05.2016 48000 BOUGHT 2,287,141 1.57
13.05.2016 -54988 SOLD 2,232,153 1.54
20.05.2016 83500 BOUGHT 2,315,653 1.59
27.05.2016 4000 BOUGHT 2,319,653 1.6
03.06.2016 10000 BOUGHT 2,329,653 1.6
10.06.2016 -1 SOLD 2,329,652 1.6
17.06.2016 1 BOUGHT 2,329,653 1.6
24.06.2016 -80000 SOLD 2,249,653 1.55
15.07.2016 59750 BOUGHT 2,309,403 1.59

% of total
shares
of the
Company
Company
22.07.2016 13000 BOUGHT 2,322,403 1.6
05.08.2016 -25400 SOLD 2,297,003 1.58
02.09.2016 -15 SOLD 2,296,988 1.58
09.09.2016 29500 BOUGHT 2,326,488 1.6
16.09.2016 9000 BOUGHT 2,335,488 1.61
30.09.2016 -8000 SOLD 2,327,488 1.6
07.10.2016 20282 BOUGHT 2,347,770 1.62
21.10.2016 750 BOUGHT 2,348,520 1.62
28.10.2016 30250 BOUGHT 2,378,770 1.64
04.11.2016 4750 BOUGHT 2,383,520 1.64
11.11.2016 7867 BOUGHT 2,391,387 1.65
18.11.2016 174 BOUGHT 2,391,561 1.65
25.11.2016 -124 SOLD 2,391,437 1.65
02.12.2016 82 BOUGHT 2,391,519 1.65
09.12.2016 -23750 SOLD 2,367,769 1.63
16.12.2016 -49250 SOLD 2,318,519 1.6
23.12.2016 30 BOUGHT 2,318,549 1.6
30.12.2016 30 BOUGHT 2,318,579 1.6
06.01.2017 -24784 SOLD 2,293,795 1.58
13.01.2017 -1310 SOLD 2,292,485 1.58
20.01.2017 -38250 SOLD 2,254,235 1.55
27.01.2017 -60 SOLD 2,254,175 1.55
30.02.2017 -15000 SOLD 2,239,175 1.54
10.02.2017 1350 BOUGHT 2,240,525 1.54
24.02.2017 -30 SOLD 2,240,495 1.54
03.03.2017 29683 BOUGHT 2,270,178 1.56
17.03.2017 -84 SOLD 2,270,094 1.56
31.03.2017 -222 SOLD 2,269,872 1.56
31.03.2017 2,269,872 1.56
4 MORGAN STANLEY ASIA 1,808,876 1.24 01.04.2016 0 NA 1,808,876 1.24
(SINGAPORE) PTE. 08.04.2016 -258254 SOLD 1,550,622 1.07
15.04.2016 -791564 SOLD 759,058 0.52
22.04.2016 -121928 SOLD 637,130 0.44
29.04.2016 -27250 SOLD 609,880 0.42
06.05.2016 -123452 SOLD 486,428 0.33
13.05.2016 -9081 SOLD 477,347 0.33
20.05.2016 -10915 SOLD 466,432 0.32
27.05.2016 -13250 SOLD 453,182 0.31
03.06.2016 -94473 SOLD 358,709 0.25
10.06.2016 -9508 SOLD 349,201 0.24
17.06.2016 -8314 SOLD 340,887 0.23
24.06.2016 -2861 SOLD 338,026 0.23
30.06.2016 -6397 SOLD 331,629 0.23
08.07.2016 55574 BOUGHT 387,203 0.27
15.07.2016 -500 SOLD 386,703 0.27
29.07.2016 -14250 SOLD 372,453 0.26
05.08.2016 -1010 SOLD 371,443 0.26
19.08.2016 -166 SOLD 371,277 0.26
26.08.2016 -11750 SOLD 359,527 0.25
09.09.2016 -56254 SOLD 303,273 0.21
16.09.2016 -4000 SOLD 299,273 0.21

% of total
shares
of the
Company
Company
23.09.2016 -5000 SOLD 294,273 0.2
30.09.2016 -3573 SOLD 290,700 0.2
07.10.2016 -3000 SOLD 287,700 0.2
14.10.2016 -135000 SOLD 152,700 0.11
21.10.2016 -287 SOLD 152,413 0.1
28.10.2016 -413 SOLD 152,000 0.1
04.11.2016 -4950 SOLD 147,050 0.1
18.11.2016 -13713 SOLD 133,337 0.09
25.11.2016 -647 SOLD 132,690 0.09
02.12.2016 -974 SOLD 131,716 0.09
30.12.2016 1750 BOUGHT 133,466 0.09
06.01.2017 -157 SOLD 133,309 0.09
03.02.2017 250 BOUGHT 133,559 0.09
10.02.2017 -5489 SOLD 128,070 0.09
17.02.2017 -25848 SOLD 102,222 0.07
24.03.2017 -3148 SOLD 99,074 0.07
31.03.2017 -23710 SOLD 75,364 0.05
31.03.2017 75,364 0.05
5 ICICI PRUDENTIAL 1,684,459 1.16 01.04.2016 0 NA 1,684,459 1.16
VALUE FUND-SERIES 5 08.04.2016 -18477 SOLD 1,665,982 1.15
15.04.2016 130276 BOUGHT 1,796,258 1.24
22.04.2016 51852 BOUGHT 1,848,110 1.27
29.04.2016 104 BOUGHT 1,848,214 1.27
06.05.2016 -238082 SOLD 1,610,132 1.11
13.05.2016 -64609 SOLD 1,545,523 1.06
20.05.2016 8 BOUGHT 1,545,531 1.06
27.05.2016 79736 BOUGHT 1,625,267 1.12
03.06.2016 3033 BOUGHT 1,628,300 1.12
10.06.2016 -48 SOLD 1,628,252 1.12
30.06.2016 -48 SOLD 1,628,204 1.12
08.07.2016 -80329 SOLD 1,547,875 1.07
15.07.2016 6739 BOUGHT 1,554,614 1.07
29.07.2016 -38 SOLD 1,554,576 1.07
05.08.2016 -101418 SOLD 1,453,158 1
12.08.2016 41954 BOUGHT 1,495,112 1.03
19.08.2016 -67895 SOLD 1,427,217 0.98
26.08.2016 66055 BOUGHT 1,493,272 1.03
02.09.2016 -447 SOLD 1,492,825 1.03
16.09.2016 -27118 SOLD 1,465,707 1.01
23.09.2016 74 BOUGHT 1,465,781 1.01
30.09.2016 -145756 SOLD 1,320,025 0.91
07.10.2016 -88108 SOLD 1,231,917 0.85
14.10.2016 48 BOUGHT 1,231,965 0.85
21.10.2016 64 BOUGHT 1,232,029 0.85
28.10.2016 -74969 SOLD 1,157,060 0.8
04.11.2016 30025 BOUGHT 1,187,085 0.82
11.11.2016 68 BOUGHT 1,187,153 0.82
18.11.2016 442 BOUGHT 1,187,595 0.82
25.11.2016 221 BOUGHT 1,187,816 0.82
02.12.2016 -15 SOLD 1,187,801 0.82
09.12.2016 -75721 SOLD 1,112,080 0.77
23.12.2016 57 BOUGHT 1,112,137 0.77

% of total
shares
of the
Company
Company
30.12.2016 112 BOUGHT 1,112,249 0.77
13.01.2017 1500 BOUGHT 1,113,749 0.77
20.01.2017 -55 SOLD 1,113,694 0.77
27.01.2017 6 BOUGHT 1,113,700 0.77
03.02.2017 1 BOUGHT 1,113,701 0.77
10.02.2017 44 BOUGHT 1,113,745 0.77
17.02.2017 -39 SOLD 1,113,706 0.77
03.03.2017 33063 BOUGHT 1,146,769 0.79
10.03.2017 65 BOUGHT 1,146,834 0.79
17.03.2017 -62 SOLD 1,146,772 0.79
24.03.2017 28 BOUGHT 1,146,800 0.79
31.03.2017 37 BOUGHT 1,146,837 0.79
31.03.2017 1,146,837 0.79
6 KOTAK MAHINDRA 1,604,399 1.1 01.04.2016 0 NA 1,604,399 1.1
( I N T E R N AT I O N A L ) 07.10.2016 -47000 SOLD 1,557,399 1.07
LIMITED 04.11.2016 -36395 SOLD 1,521,004 1.05
31.03.2017 1,521,004 1.05
7 ABU DHABI 1,550,441 1.07 01.04.2016 0 NA 1,550,441 1.07
INVESTMENT 15.04.2016 -20000 SOLD 1,530,441 1.05
AUTHORITY - PEACOCK 29.04.2016 -46232 SOLD 1,484,209 1.02
06.05.2016 -74887 SOLD 1,409,322 0.97
13.05.2016 232440 BOUGHT 1,641,762 1.13
20.05.2016 6474 BOUGHT 1,648,236 1.13
03.06.2016 -20918 SOLD 1,627,318 1.12
10.06.2016 -98427 SOLD 1,528,891 1.05
08.07.2016 70936 BOUGHT 1,599,827 1.1
15.07.2016 23964 BOUGHT 1,623,791 1.12
22.07.2016 -44866 SOLD 1,578,925 1.09
29.07.2016 -70936 SOLD 1,507,989 1.04
05.08.2016 -253301 SOLD 1,254,688 0.86
12.08.2016 -256642 SOLD 998,046 0.69
19.08.2016 -23911 SOLD 974,135 0.67
02.09.2016 -25378 SOLD 948,757 0.65
11.11.2016 57698 BOUGHT 1,006,455 0.69
18.11.2016 314302 BOUGHT 1,320,757 0.91
02.12.2016 -24654 SOLD 1,296,103 0.89
09.12.2016 253031 BOUGHT 1,549,134 1.07
16.12.2016 25521 BOUGHT 1,574,655 1.08
23.12.2016 -71677 SOLD 1,502,978 1.03
30.12.2016 -20991 SOLD 1,481,987 1.02
06.01.2017 54000 BOUGHT 1,535,987 1.06
20.01.2017 -143338 SOLD 1,392,649 0.96
27.01.2017 -213320 SOLD 1,179,329 0.81
24.02.2017 -2667 SOLD 1,176,662 0.81
03.03.2017 8500 BOUGHT 1,185,162 0.82
31.03.2017 1,185,162 0.82

% of total
shares
of the
Company
Company
8 CARMIGNAC GESTION 1,392,386 0.96 01.04.2016 0 NA 1,392,386 0.96
A\C CARMIGNAC 26.08.2016 285 BOUGHT 1,392,671 0.96
INVESTISSEM ENT 02.09.2016 1868 BOUGHT 1,394,539 0.96
16.09.2016 9200 BOUGHT 1,403,739 0.97
31.03.2017 1,403,739 0.97
9 DEUTSCHE SECURITIES 1,038,506 0.71 01.04.2016 0 NA 1,038,506 0.71
MAURITIUS LIMITED 03.06.2016 -401 SOLD 1,038,105 0.71
17.06.2016 -265 SOLD 1,037,840 0.71
30.06.2016 -728 SOLD 1,037,112 0.71
15.07.2016 -23 SOLD 1,037,089 0.71
29.07.2016 -3250 SOLD 1,033,839 0.71
02.09.2016 -1817 SOLD 1,032,022 0.71
16.09.2016 -199 SOLD 1,031,823 0.71
07.10.2016 -2289 SOLD 1,029,534 0.71
21.10.2016 -200 SOLD 1,029,334 0.71
04.11.2016 -400 SOLD 1,028,934 0.71
11.11.2016 -3887 SOLD 1,025,047 0.71
18.11.2016 -3619 SOLD 1,021,428 0.7
25.11.2016 -45047 SOLD 976,381 0.67
02.12.2016 -295 SOLD 976,086 0.67
09.12.2016 -2004 SOLD 974,082 0.67
23.12.2016 -33420 SOLD 940,662 0.65
30.12.2016 -56130 SOLD 884,532 0.61
20.01.2017 -3290 SOLD 881,242 0.61
10.02.2017 -884 SOLD 880,358 0.61
24.02.2017 -3035 SOLD 877,323 0.6
03.03.2017 -21000 SOLD 856,323 0.59
31.03.2017 856,323 0.59
10 UTI MULTI CAP FUND 946,501 0.65 01.04.2016 0 NA 946,501 0.65
15.04.2016 10000 BOUGHT 956,501 0.66
30.06.2016 -712 SOLD 955,789 0.66
22.07.2016 2750 BOUGHT 958,539 0.66
29.07.2016 1750 BOUGHT 960,289 0.66
07.10.2016 -1000 SOLD 959,289 0.66
14.10.2016 1250 BOUGHT 960,539 0.66
21.10.2016 750 BOUGHT 961,289 0.66
18.11.2016 -8500 SOLD 952,789 0.66
09.12.2016 -250 SOLD 952,539 0.66
16.12.2016 -18250 SOLD 934,289 0.64
10.02.2017 750 BOUGHT 935,039 0.64
17.02.2017 2750 BOUGHT 937,789 0.65
24.02.2017 2250 BOUGHT 940,039 0.65
03.03.2017 1500 BOUGHT 941,539 0.65
10.03.2017 -5000 SOLD 936,539 0.64
17.03.2017 13500 BOUGHT 950,039 0.65
24.03.2017 -11978 SOLD 938,061 0.65
31.03.2017 938,061 0.65

V. Shareholding of Directors and Key Managerial Personnel
Sl. Shareholding of each Directors and each Shareholding at the Cumulative Shareholding
No. Key Managerial Personnel beginning of the year during the year
No. of shares % of total No. of shares % of total
shares of the shares of the
company company
1. At the beginning of the year 10 - 10 -
Mr V. Ramachandran, Company Secretary
Mr V K Viswanathan, Director - - 153* 0.000105
Date wise Increase / Decrease in Promoters - - - -
Shareholding during the year specifying
the reasons for increase /decrease (e.g.al-
lotment/transfer/bonus/sweatequityetc.):
(Please refer table IV(iii) above for date wise
change in promoter shareholding)
At the end of the year 10 - 163 0.000105
* - The shares were acquired before he became a director
V. Indebtedness
Indebtedness of the Company including interest outstanding/accrued but not due for payment
(` in Million)
Secured Loans Unsecured Loans Deposits Total
excluding deposits Indebtedness
Indebtedness at the beginning of
the financial year
(i) Principal Amount 18041 24,000 - 42,041
(ii) Interest due but not paid - - - -
(iii )Interest accrued but not due - - - -
Total (i+ii+iii) 18,041 24,000 - 42,041
Change in Indebtedness during the
financial year
Addition 35 12,500 - 12,535
Reduction -5,092 -8,750 - -13,842
Net Change -5,057 3,750 - -1,307
Indebtedness at the end of the
financial year
(i) Principal Amount 12,984 27,750 - 40,734
(ii) Interest due but not paid
(iii)Interest accrued but not due
Total (i+ii+iii) 12,984 27,750 40,734

VI. Remuneration of Directors and Key Managerial Personnel
A . Remuneration to Managing Director, Whole-time Directors and/or Manager:
(Amount in `)
Sl Particulars of Remuneration Anand Kripalu, Managing
No Director and Chief Executive
Officer
1 Gross Salary 7,41,94,409
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act,1961
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 76,68,481

(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961 4,59,80,802
2 Stock Option -
3 Sweat Equity -
4 Commission -
-as % of Profit
Others – Specify
5 Others – Please specify
Total 12,78,43,692
Ceiling as per the Companies Act @ 5% for 1 Executive Director ` 135.9 million for 1 executive
director u/s 197 read with section
198 of the Companies Act.
=
B. Remuneration to other directors (Amount in `)
Sl. Names of Directors Total
No
1 Independent Directors Mr M.K. Sharma MrV.K. Dr (Mrs) Indu Mr D Mr Sudhakar Mr
Viswanathan1 Shahani Sivanandhan Rao2 RajeevGupta
Fee for attending Board 14,00,000 4,50,000 14,00,000 16,00,000 1,75,000 10,50,000
Committee Meetings
Commission 46,51,745 15,65,503 38,72,485 38,72,485 5,23,203 33,00,000
Others, (Please specify)
Sub total 6051745 2015503 5272485 5472485 698203 43,50,000
2 Other Non-Executive Directors Mr Nicholas Mr John Thomas Mr Randall Mr Vinod Rao Mr Ravi
Bodo Blazquez3 Kennedy4 Ingber5 Rajagopal6
Fee for attending board 2,50,000 - - - 7,50,000 7075000
committee meetings
Commission 19,08,281 - - - 18,53,525 21547228
Others, please specify
Sub total 21,58,281 26,03,525 28622228
Grand total 28622228
Total Managerial
Remuneration
Ceiling as per the Companies ` 27.2 million (Excluding sitting fees) for all Non-Executive Directors pursuant to calculation U/s 197 read with Section
Act@ 1% for all Non-Executive 198 of the Companies Act.
Directors excluding Sitting
Fees, which is not subject to
limits.
1. Appointed as an Additional Director in the capacity of Independent Director with effect from October 17,
2016.
2. Resigned as a Non-Executive Independent Director with effect from May 19, 2016.
3. Resigned as a Non-Executive Director with effect from January 22, 2017.
4. Appointed as a Non-Executive Nominee Director with effect from August 17, 2016.
5. Appointed as a Non-Executive Nominee Director with effect from February 2, 2017.
6. Resigned as a Non-Executive Director with effect from October 13, 2016.

C. Remuneration to Key Managerial Personnel other than MD / Manager /Whole time Director
(Amount in `)
Sl. Particulars of Remuneration* V. Ramachandran Sanjeev Churiwala, Chief Total
No. Company Secretary Financial Officer (CFO)
1 Gross Salary 81,03,632 2,16,17,348 2,97,20,980
(a) Salary as per provisions contained
in section 17(1) of the Income-tax
Act,191
(b) Value of perquisites u/s 17(2) 20,71,920 60,47,941 81,19,861
Income- tax Act, 1961
(c) Profits in lieu of salary under section 62,43,555 1,27,49,325 1,89,92,880
17(3) Income-tax Act, 1961
2 Stock Option - - -
3 Sweat Equity - - -
4 Commission - - -
-as % of Profit
Others – Specify
5 Others
Total 1,64,19,107 4,04,14,614 5,68,33,721
VII. Penalties / Punishment/ Compounding of Offences

There has been no penalty or punishment under the Companies Act for the year ended March 31, 2017. However,
during the year the Company has applied for Compounding of certain offences under the Companies Act, the detail of
which are mentioned below
Type Section of the Brief Description Details of Penalty Authority [RD / Appeal made, if
Companies Act / Punishment/ NCLT/ COURT/ROC] any (give Details)
Compounding fees
imposed
A. COMPANY
Penalty Nil Nil Nil Nil Nil
Punishment Nil Nil Nil Nil Nil
Compounding 621A Delay in conducting the Await the Order Nil
Annual General Meeting for from Registrar of
the year 2015. Companies
621A Delay in Appointing the ` 100,000 Regional Director Nil
Chief Financial Officer of the
Company
B. DIRECTORS
Mr Anand Kripalu
Compounding 621A Delay in conducting the Await the Order Registrar of Com- Nil
Annual General Meeting for from Registrar of panies
Company

Type Section of the Brief Description Details of Penalty Authority [RD / Appeal made, if
Companies Act / Punishment/ NCLT/ COURT/ROC] any (give Details)
Compounding fees
imposed
Mr Sanjeev Churiwala
Compounding 621A Delay in conducting the Await the Order Registrar of Nil
Annual General Meeting for from Registrar of Companies
C. OTHER OFFICERS IN
DEFAULT
V Ramachandran Company Secretary
Compounding 621A Delay in conducting the Await the Order Registrar of Nil
Annual General Meeting for from Registrar of Companies
Company

ANNEXURE 5
Employee Details
Details of Ratio of Remuneration of Director
[Section 197(12), r/w Rule 5 of Companies (Appointment and Remuneration of
Managerial Personnel), Rules, 2014]
(i) the ratio of the remuneration Name of the Designation Ratio to the Percentage
of each director to the median Director Median Increase
remuneration of the employees Anand Kripalu Managing Director& CEO 339:1 8%
of the Company for the financial Sanjeev Churiwala CFO 107:1 145%
year; V Ramachandran Company Secretary 44:1 75%
Mahendra Kumar Independent 16:1 86%
(ii) (ii) the percentage increase in Sharma Non-Executive Chairman
remuneration of each director, V K Viswanathan Independent 6:1 Not Applicable*
Chief Financial Officer, Chief Non-Executive Director
Executive Officer, Company D Sivanandhan Independent 14:1 94%
Secretary or Manager, if any, in the Non-Executive Director
financial year;
Indu Shahani Independent 14:1 94%
Non-Executive Director
Rajeev Gupta Independent 12:1 65%
Nicholas Bodo Non-Executive Director 6:1 Not Applicable*
Blazquez
Sudhakar Rao Independent 2:1 73%
Ravi Rajagopal Non-Executive Director 7:1 7%
* For non executive Directors change in percentage denotes change in Commission only
and for the period of their Directorship during the year.
(iii) the percentage increase in The average increase in remuneration last year was 6.3% across the company. However,
the median remuneration of due to substantial number of employee exits during the year, the comparable median
employees in the financial year; remuneration shifted downwards and hence it is not comparable with the previous year
(iv) the number of permanent The Company had a permanent headcount of 5048 on the rolls as of 31 March 2017
employees on the rolls of
company;
(v) average percentile increase already The increase made in average salaries of employees other than the managerial personnel
made in the salaries of employees in the current financial year compared to the last financial year was 3% while the total
other than the managerial increase in the managerial remuneration was 16.4%. The increase in salaries of Key
personnel in the last financial Managerial Personnel does not includes performance based pay which varies from year
year and its comparison with to year based on business performance. The remuneration to Managerial Personnel is
the percentile increase in the not comparable since the variable pay was for part of the year in FY 2015-16 and is for
managerial remuneration and full year for FY2016-17. The annual average salary increase is based on company’s market
justification thereof and point competitiveness as against its peer basket companies.
out if there are any exceptional
circumstances for increase in the
managerial remuneration;
(vi) Affirmation that the The remuneration paid is as per the remuneration and reward policy of the Company
remuneration is as per
the remuneration policy of the
Company.

Bengaluru
July 23, 2017

Particulars of Employees
A. Information as required under Rule5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 and forming part of the Director’s Report for the Financial Year ended March 31, 2017.
Sl. EMP NAME Age No. of Grand Designation & nature of duties Qualification Experience Date of Particulars of previous
No. (as on 31 Shares Total employment employment
Mar ’ 17) held (Amount
in `)
1 Abanti 48 0 38633579 Chief Strategy & Corporate Affairs PGDBA 25 1-May-15 Managing Director - India, Diageo
Sankaranarayanan Officer India Pvt Ltd
2 Abhay Kewadkar 56 0 13940531 Senior Vice President and Business B.TECH (CHEM) 34 23-Aug-06 Vice President & Wine Maker -
Head- Wines Grover Vineyards Ltd
3 Abhishek Shahabadi 39 0 10599185 Assistant Vice President - Brand B.Com., PGDM-C 17 23-Feb-06 Group Head, Madison Commu-
Marketing nications
4 Ajay B Baliga 58 164 40421643 Executive Vice President - Manufac- B.TECH (CHEM 36 3-Nov-08 Allied Blenders & Distillers Pvt Ltd,
turing, Projects & Quality Control ENGG) SVP - Business Development & Mfg
5 Amarpreet Singh Anand 40 0 20866424 Vice President and Chief Innovation PGDM 16 2-Feb-15 Mondelez International Ltd
Officer
6 Amrit Kiran Singh 59 0 26270000 Chief Advisor - Corporate Relations B.TECH, MBA 35 15-Jan-15 -
& Public Policy
7 Amrit Thomas 51 0 71466571 President & Chief Marketing Officer B.TECH, PGDM 25 12-Jun-07 Category Head - Beverages, Hll
8 Anand Kripalu 59 0 127843692 Managing Director & Chief Execu- B.Tech, PGDM 32 1-May-14 Managing Director, Cadbury
tive Officer India Ltd
9 Arun Goyal 47 0 11780798 Assistant Vice President - Manu- BE, M Tech 20 21-Feb-11 Head-Project Engineer, Sika India
facturing Pvt Ltd
10 Deepak Kumar Katty 53 0 13568765 Divisional Vice President - Sales MBA 28 28-Oct-14 Pernod Ricard
Effectiveness
11 G Pulla Reddy 45 0 12517446 Vice President- Manufacturing B.Tech.;M.Tech. 22 15-Sep-97 Bhor Industries Limited
Operations (TMU)
12 Keshava Babu C S 45 0 11068826 Assistant Vice President - Quality BE 23 3-Nov-11 Motorola India Private Ltd Head
Quality Assurance
13 Lal Rangwani 51 350 12591905 Vice President and Sales Head B.Com, M.Com, 30 7-Aug-87 Herbertsons TSE
(West) PGDBM
14 Mamta Sundara 40 0 24829885 EVP and General Counsel LLB 14 15-Feb-15 Senior Counsel - India Projects,
Diageo India Pvt Ltd
15 Mathew Xavier 53 0 31369465 EVP and Chief Operating Officer PGDM / B.COM 28 10-Nov-03 VP MARKETING ERSTWHILE SWDL
(South)
16 Michelle D Souza 49 0 11858376 Vice President- Corporate Commu- B.Com 26 8-Sep-14 Head Communication - DIPL
nications
17 Narayanan 52 0 14461801 Senior Vice President- Information B.A, MBA 30 24-Oct-13 IT Director, Global End User Ser-
Subramanyam Technology vices, Hindustan Unilever Ltd.
18 Nischal Hindia 40 0 21796204 Vice President and Senior Counsel LLB 16 1-May-15 Legal Director - India, Diageo India
Pvt Ltd
19 Nitesh Chhapru 38 0 11593092 Vice President and Portfolio Head MBA 12 1-Jan-14 Founder Director, The Brahma
Innovation Company
20 Pankaj Gupta 46 0 31516517 Chief Supply Chain Officer BE chem IIT 25 1-Jul-15 Sr Expert Asia Operations _
Varanasi Mckinsey & Co
21 Paramjit Singh Gill 55 0 67084969 President - All India Operations B.SC, M.PHIL, DIP 34 1-Jul-92 EVP, UNITED NATIONAL BREWERIES
IN LABOUR LAW, (SA) (PTY) LIMITED, CENTURION
CHARTERED MARK

Sl. EMP NAME Age No. of Grand Designation & nature of duties Qualification Experience Date of Particulars of previous
No. (as on 31 Shares Total employment employment
Mar ’ 17) held (Amount
in `)
22 Pothen Jacob 46 0 10832130 Senior General Manager - Bachelor of Engi- 23 21-Mar-16 Director, Compensation and
Organization Effectiveness neering: Mechan- Benefits – India and APAC, Sapient
ical Engineering, (Publicis Groupe)
Master in Business
Administration
Griffith University,
Australia
23 Prashanth M S 44 0 18057854 Vice President and Customer BSC, MMS 16 18-Aug-14 Sales Director, Reckitt Benckiser
Marketing Head
24 Prathmesh Mishra 47 0 35046634 EVP and Chief Operating Officer PGDM, BA 19 18-Jun-14 Pernod Ricard
(West & CSD)
25 Ramachandran V 55 10 16419113 EVP and Company Secretary B.com(Hons), ACA, 29 24-Apr-15 Company Secretary- Wipro ltd
ACS
26 Rohini Seth 47 0 22707166 Vice President- National HR BA, MA in HR 23 29-Jun-15 Reckitt Benkiser as HR Head
Operations
27 S V S V Sastry 55 0 14481649 Vice President and Sales Head B.Sc. 31 14-Jun-12 ABD Pvt. Ltd VP South RPC
(South)
28 Sandeep Kumar Singal 53 0 19640039 EVP and Chief Operating Officer B.tech, M.B.A 18 14-Oct-15 Head- Branded Retail & Alternate
(East) Channels, tata tele services ltd
29 Sanjeev Churiwala 47 0 40414620 Executive Director & Chief Financial ACA, ACS, ACWA& 23 16-Nov-15 AMBUJA Cements
Officer Executive MBA from
London Business
School.
30 Sanjeev Ganesh 41 0 13863429 EVP- Procurement B.Tech, MBA 12 1-Apr-10 Managing Consultant, Aqua Man-
agement Consulting Group
31 Shankar Ramanathan 49 0 11917041 Vice President- Engineering & B.E., MS 22 16-Feb-15 Director, Capex and Engineering
Projects - Pepsi Co.
32 Shelley Sengupta 41 0 10910719 Vice President- Consumer Planning B.Com., PG Diploma 15 30-Nov-07 Head of Qualitative Research
& Insights Division, South, Synovate India
33 Shovan Ganguli 56 0 17414073 Senior Vice President- R&D Ph.d - Organic 26 25-Feb-13 Hindustan Unilever Limited Plat-
Chemistry form director-bioscience,
nutrition, health
34 Siddharth Rastogi 40 0 15088122 Vice President and Sales Head BE (Hons), PGDBM 16 23-Jun-14 Commercial Director - Diageo India
(North) Pvt. Ltd., Supply Chain Planning &
Head - India Procurement
35 Sridhar B 43 0 11736724 Vice President and Chief Digital B.COM, PGDBA 13 20-Feb-09 Director Marketing, Sulekha Com
Officer
36 Steve Correa 52 0 30218236 Chief Human Resources Officer B.Com, MBA, LLB 27 5-Sep-14 Chief Human Resource Officer,
Reliance Jio Infocomm Limited
37 Subroto Geed 42 0 18557349 Senior Vice President and Portfolio PGDISM 18 21-Sep-15 Nicholas Piramal India Ltd
Head
38 Vikram Jain 42 0 11134591 Assistant Vice President - Sales B.Com, MBA 12 19-Jan-09 Senior Manager, Pernod Ricard
39 Vineet Kumar Kapila 56 0 48289540 EVP and Chief Operating Officer B.Com, PDGM 32 5-Dec-12 President & CEO- Spencers Retail
(North)

B. Employed for the part of the year
Age Total
Sl. Date of Particulars of previous
EMP NAME (as on 31 (Amount Designation & nature of duties Qualification Experience
No. employment employment
Mar ’ 17) in `)
1 Alokesh Banerjee 51 11847508 AVP - Sales M TECH, MBA 15 22-Nov-04 Chief - Marketing, Lafarge India
2 Ajay Goel 41 12589189 EVP and Financial Controller B.Com, FCA, ACS 18 18-Apr-16 CFO, Supply Chain - GE India
3 Arup Halder 57 9649093 Dy General Manager - Mis Sales B.Com., Diploma 33 11-Aug-81 Executive, Lupin Laboratories Ltd.
4 Arvind Jain 55 26060622 Divisional Vice President - Sales PGDM 33 15-Feb-16 Area Manager-Titan Watches Ltd.
5 Avinaash Mundra 46 8003157 Vice President - Internal Audit Certification in 20 12-Apr-83 Nissan Motor Co., Regional Head – Inter-
Forensic Account- nal Audit for Africa, ME, India
ing & fraud detec-
tion techniques,
ICAI, March 2009
Associate Char-
tered Accountant,
Institute of Char-
tered Accountants
of India, May 1996
6 Baskaran Thiagarajan 46 5228724 Vice President - Manufacturing (TMU) Bachelor of 25 7-Mar-91 Heading India operations - Manufacturing
Engineering , AVERY DENNISON INDIA (P) LTD.
in Mechanical
Engineering,THIAG-
ARAJAR COLLEGE
OF ENGINEERING,
Madurai, Tamil
Nadu, India
7 Biju V John 50 6933557 Sr. General Manager - HR B.Sc.Diploma, MBA, 27 4-Nov-09 General Manager, HR, Manipal Health
MSW System Ltd.
8 Debashish Shyam 49 13893150 Senior Vice President and Head of BSC, PGDBM 26 12-Jan-17 Head - Marketing & Alliances (Internet
Emerging Markets & Franchise Services), Bharti Infotel Ltd, New Delhi
9 Dharmarajan S 59 9215953 Divisional Vice President - Finance & B.COM, ACA, LLB 33 19-Apr-10 Consultant, N M Raiji & Co, Bombay
Accounts
10 Feroze G Merchant 44 11659961 Assistant Vice President - Luxury & B.COM, PGDBA 20 22-Mar-16 Senior Officer, Tata Iron & Steel Company
Banquets Ltd
11 G R Khera 59 10261966 Sr General Manager - Sales B.Com. 35 4-Jan-96 SALES REPRESENTATIVE,Swastik House
Hold & Industrial Products
12 Gopal Singh Rana 38 2973463 Senior General Manager - Finance Diploma in 15 2-Sep-91 Director, PriceWaterhouseCoopers Private
Regulatory business finance, Limited, India
Institute of Char-
tered Accountants
of India, India
13 Javareh Daroga 43 4855186 National CP&A Lead PGDIB 20 1-Apr-15 Bilcare limited
14 K Vijay Kumar 52 14569737 Assistant Vice President - Manufacturing B.Sc.;DIFAT;PGDBM 19 10-Jan-94 Manager Technical Services, Udv India Ltd
15 Lalit Kumar Gupta 57 25686702 Senior Vice President and Senior Counsel B.SC, LLB, DLL 34 21-Jul-89 JOINT MANAGER - LEGAL, SHRIRAM
FOODS AND FERTILIZERS
16 Lokesh Saran 42 7354366 Senior General Manager - Sales BE Electrical, MBA 18 Zonal Head-North and CSD Head-India,
Allied Blenders & Distillers Pvt. Ltd.
17 Muthuraman 51 13861047 Vice President- Manufacturing B.E (Hons.) 31 1-Jul-87 General Manager - Dina Foods Ltd.
Ramanathan Operations Mechanical
18 Navdeep Singh Mehram 40 5088312 Lead Sustainability Development M.B.A(HR), 14 1-Jul-15 Essar Group Foundation
M.B.A(international
Business),Certified
SA8000 Auditor

Age Total
Sl. Date of Particulars of previous
EMP NAME (as on 31 (Amount Designation & nature of duties Qualification Experience
No. employment employment
Mar ’ 17) in `)
19 Nilanka Chatterjee 52 7147337 Senior General Manager - Training & BBA;MBA 27 17-Nov-80 Ispat Industries Ltd., Mumbai
Development
20 R Swaminathan 57 12861354 Audit Data Analytics & Reporting MSc 32 10-Feb-89 Corp. Vice President - Internal Audit,
United Breweries(Holdings) Ltd
21 Rajiv Garg 58 6778291 Assistant Vice President - Manufacturing M.Sc, PG Diploma 33 5-Jul-95 Pilkhani Distillery & Chemical works ( A
unit of Upper Doab Sugar Mills)
22 Rajiv Gupta 38 3189874 Vice President & Head - Internal Audit B.Com / ICAI - Char- 15 1-Apr-92 National Head - Internal Controls, India &
tered Accountant South West Asia, The Coca Cola Company,
from ICAI (First Gurgaon/Bengaluru
Attempt)
23 Ranesh Sinha 51 7477063 AVP - Manufacturing B.Tech (Mechanical) 27 20-Sep-04 Head Manufacturing Capability & Lean
Excellence, S C Johnson Products (P) Ltd
24 S R Dubey 54 14527350 Senior GM - PMO Lead BA-Economics,Bho- 29 17-Feb-04 Shawallace & Co. Ltd Deputy General
pal University Manager – CSD All India
25 S Sowmiyanarayan 50 6916299 Assistant Vice President - Financial B.Com.;PG Diploma 22 15-Nov-79 Ashok Leyland - Accounts Executive
Accounting - Other
26 S.N. Prasad 59 10722211 Sr. Vice President B.Com. 33 7-Nov-86 Comp Secretary & Internal Auditor,
Nutrine Confectionary Ltd
27 S. Satish 57 15999384 Assistant Vice President - P & C B.Com.-Commerce 36 19-Nov-02 Accounts Officer, BPL Sanyo Ltd
28 S. Suryanarayanan 57 17478567 Assistant Vice President - Engineering B.Tech.Other;Un- 34 15-Jun-11 Purchase Officer, Sundaram - Clayton
dergraduation Ltd, Hosur
29 Sabharwal M K 59 6941901 Assistant Vice President - Sales B.Com. 35 1-Apr-99 Sales representative Shinger Cosmetics
(P) Ltd.
30 Sandeep khurd 49 5971649 Dy General Manager - Sales B.Com.;Diploma 25 18-Apr-11 Vadilal Enterprises Ltd
31 Shyjinth P K 48 9477251 General Manager - Marketing Bachelors in Social 22 1-Jun-98 State Head, Sales, Maharastra - Shaw
& Legal Science, Wallace & Co. Ltd.
MBA
32 Sreenath K V 61 6200170 Assistant Vice President-Corporate BCOM 42 15-Jun-98 Steno-Accounts/Clerk-Bombay Paints &
Allied Products Ltd
33 Surender Singh Rathore 38 3345943 Senior General Manager - Accounting B.Com / ICAI 7 19-Oct-15 Whirlpool of India
& Reporting
34 T Sambandasamy 59 5960852 DVP - Corporate Relations BBA;MBA;PG 30 16-Jan-17 Shaw Wallace & Co Ltd
Diploma - OtherUn-
dergraduation
35 Tarun Behl 40 5062260 Senior General Manager - Manufacturing BE 19 12-Dec-16 Not applicable – Joined as Fresher
36 V. Murali 55 27183942 Assistant Vice President - Manufacturing MEPGDBA 27 12-Apr-91 McDowell&Co. Ltd./Carew Phipson Ltd.
37 Vineet Chhabra 52 16563120 Chief Operating Officer - Emerging B.COM, CA 24 4-Oct-90 CEO - Global Green
Markets
38 Vivek Prakash 57 28657551 Chief Operating Officer - CSD B.COM, LLB, MBA 35 18-Dec-06 Dy General Manager - Shaw Wallace &
Co. Ltd
39 Vinay Nautiyal 57 8013414 DGM - Sales BA-History,Garhwal 32 6-May-14 Pradeshik Co-operative Dairy Federation
University,DEHRA- Ltd
DUN
40 William McDowell 62 20960179 Production Manager Bachelaor degree 19 12-Dec-16 Quality & Governance Director, Asia
in Agricultural Pacific, Diageo
business &
management
41 Wilma Fernandes 53 7362765 BII Bulk Planner - Imports 19 1-Jul-15 Diageo India Pvt. ltd.
Olinda
Note:
1. None of the employees are related to the directors of the Company. None of the employees listed in B above hold any shares in the
Company.
2. Since employees listed above includes the names of top 10 employees in terms of remuneration drawn, the list of such names is
again not repeated in above table pursuant to sub rule 2 of Rule 5 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014

ANNEXURE 6
Risk Management
Your Company’s ambition is to create the best performing, most trusted and respected consumer Products Company in India. Risk
management lies at the heart of this ambition. To be best performing, we need to take well managed risks. To be most trusted and
respected, we need to avoid harm to our reputation and build a resilient, sustainable business in an increasingly volatile external
environment.
Our risk management objectives are to:
• Maximise the benefit from new opportunities, challenges and initiatives

• Avoid damage to our reputation
• Take appropriate risk for appropriate return
• Prioritise effectively between different risks
• Demonstrate good corporate governance by managing our risks effectively
Risk Management at your Company addresses all aspects of risk, including strategic, financial, operational, reputational, compliance,
fraud or other risks.
Our approach:
Our methodology for assessing risk is straightforward, and is designed to promote an insightful discussion that results in
effectivemitigation planning and positive business performance outcomes. We assign clear accountability for managing our risks
in the right way. In F-17, we have moved from regional structure to functional structure where each functions manage their risk
directly and then report on their risk to Executive risk committee. Your Company’s Executive risk management committee reviews
the effectiveness of risk management at functional level and also reviews impact of risks , mitigation plans at Company level to
minimise the adverse impact of these risks ,thus enabling the Company to leverage market opportunities effectively and enhance
its long term competitive advantage. The board exercises independent review through Audit Risk committee.
Key components of risk management framework:

Risk governance structure:
 Our risk management framework is implemented at various levels across
enterprise
 Risks are identified through insightful discussion by functional directors

considering both internal and external sources.
 Every risk is assigned to risk owner responsible for establishing mitigation plan.
 Each risk are subject to specific review by Risk management committee on

quarterly basis
Risk categories:
Following are the broad categories of risks considered in our risk management framework:
• Strategy – Risks which impacts the Company’s planned strategies and the risks to the successful execution of strategies. These
are called out from the choices we make on markets, product mix and resources that will impact our competitive advantage in
the medium and long term. Potential risks to the long term scalability and sustainability of the organisation are also analysed
and mitigated.
• Operational – Risks arising out of unexpected developments resulting from internal processes, systems or from external
events that are linked to actual running of business are covered in this category – for example virus attacks or breach of cyber
security
• Legal & Compliance – Risks arising out ofnon- compliance to various legal and compliance policies or non-conformance with
laws, regulations which poses threat to financial, organisational or reputational standing of are classified under legal and
compliance risk.
• Financial – Risk which impacts the Company’s financial strength & control environment are classified under financial risk – for
example Internal control weakness
Risk management highlights for the year
During the year the your Company’s Executive committee and Board focused on principal risks fall in to several categories including
increasingly volatile external environment, political changes, risk posed by critical industry development , leadership succession
planning , business disruptions due to cyber-attacks.
 Cyber security – Cyber security is the protection of information systems from the theft or damage to the hardware, the
software and to the information on them, as well as disruption to the service they provide to the business. During the year, we
had set mandatory security training for all employees with new joiners automatically enrolled, enhanced technical measures
to block phishing attacks & strengthened response capability to tackle serious attacks and breaches.
 Regulatory changes– Changes in the governmental regulations and unfavourable political conditions shall cascade to loss/
decline in sale. Though these risk are uncontrollable at company end, we have made detailed action points to address the risk
by partnering with Industry forum and engaging with Government.
 Financial risk – The Company maintains a system of internal control framework which has been designed to provide assurance
regarding reliability of financial control, compliance with applicable laws and regulations, effectiveness of operations. The
Company’s internal financial framework is based on “three lines of defence model”. Robust and continuous internal monitoring
mechanisms ensure timely identification of risks and issues. The effectiveness of our internal control are tested by independent
auditor through rigours testing procedures.
The above risks are covered in detail in the section on management discussion and analysis forming part of this report

ANNEXURE 7
Corporate Social Responsibility (CSR)

THE ANNUAL REPORT ON CSR ACTIVITIES
Outline of the Company’s CSR policy.
CSR Strategy of the Company supports our ambition to become the best performing, most trusted and respected consumer
Products Company in India. Your Company’s recognizes that its business activities directly affects the lives of people around our
plants and in the markets that we operate in. We believe that the communities in which we operate should benefit from our
presence. We are aware of the importance of being responsible about our brands, and the way we develop, produce and sell them.
As the world’s leading premium drinks business, we want to be at the forefront of industry efforts to promote responsible drinking
and reduce the harmful use of alcohol. Our Sustainability & Responsibility Strategy integrates social responsibility into our core
business to create value for society and our shareholders. All our programs are covered under the following fields:
a) Alcoholin Society
b) Community Development
The Company’s CSR Policy is available at www.diageoindia.com
1. The composition of the CSR Committee: The composition of the CSR Committee is as stated in the Corporate Governance
Report.
2. Average net profit of the Company for the last three financial years.
` in Million
Particulars FY15-16 FY14-15 FY13-14
Profits/(loss) for CSR Computation 4094.62 (460) (33011)
3. Prescribed CSR Expenditure (two per cent. of the amount as in item 3 above) Nil
4. Details of CSR spent during the financial year.

a. As the average net profit of the last three years has resulted in a loss, there was no mandatory requirement to spend on
CSR activities during the financial year.
b. Amount unspent, if any: - Not applicable.
c. Manner in which the amount spent during the financial year is detailed below:
(1) (2) (3) (4) (5) (6) (7) (8)
S. CSR projector Sector in which Projects or Amount out- Amount spent Cumulative Amount spent:
No activity identified the project is Covered programs (1) lay (budget) on the projects expendi- Directorthrough
Local area or project or or Programs ture up to implementing
other program Subheads: the report- agency*
(2) Specify the Wise (` ) (1) Direct expen- ing period
State and district diture on projects (`)
where projects or or Programs.
programs was (2) Overheads: (`)
undertaken
1 Partnership with Schedule VII (ii) under National level tele- 205 Lakhs 205 Lakhs 205 Lakhs Directly through
NDTV for a High visi- “promoting education”. cast on NDTV 24 Mind Share
bility program ‘Road Promotion of Road X7 and NDTV India
to Safety’ which has Safety through CSR: (i)
consumer outreach (a) Promotions of Edu-
to create awareness cation, “Educating the
about road safety, Masses and Promotion
drink driving & un- of Road Safetyaware-
deragedrinking ness in all facets of road
usage,

(1) (2) (3) (4) (5) (6) (7) (8)

undertaken
2 Capacity building (b) For drivers training Training held 83 Lakhs 83 Lakhs 83 Lakhs I m p l e m e n t e d
training on defensive etc. Schedule VII (ii) un- across 15 states through Institute
driving and hazards der “vocational skills” Delhi Pondicherry of Road Traffic
of driving under the Haryana Punjab Education
influence of alcohol RajasthanWest
with IRTE (Institute Bengal
of Road Traffic Edu-
Bihar Madhya
cation) and MORTH
(Ministry of Road Pradesh
Transport and High- Maharashtra
ways) Uttar Pradesh
Assam
Chhattisgarh
Odisha Telangana
Himachal Pradesh
3 University Partner- Schedule VII (ii) under New Delhi, 10 Lakhs 10 Lakhs 10 Lakhs Direct and
ship Programs on “promoting education”. Mumbai, through partner-
Road Safety Aware- Promotion of Road Bengaluru, Goa ship
ness amongst young Safety through CSR
students.
4 Curbing Underage Schedule VII (ii) under Maharashtra, 35 Lakhs 35 Lakhs 35 Lakhs Direct and
Drinking- Cool Teens “promoting education”. Karnatka, through partner-
program Delhi NCR, Punjab, ship
Rajasthan
5 Road Safety Aware- Schedule VII (ii) under Maharashtra, 5 Lakhs 5 Lakhs 5 Lakhs Direct in
ness campaign “promoting education”. Telangana partnership with
amongst driver in Promotion of Road Essar Oil
partnership with Safety through CSR: (i)
Essar Oil Ltd. (a) Promotions of Edu-
cation, “Educating the
Masses and Promotion
of Road Safety aware-
ness in all facets of road
usage,
6 Security Health & Schedule VII : Promot- 15 villages around 195 Lakhs 192 Lakhs 192 Lakhs Through NGO
Empowerment (SHE) ing gender equality and our bottling plants Partners
Programs empowering women. in Rajasthan, MP,
‘promoting healthcare, Odisha, UP and
including preventive Pondicherry
healthcare’ and sanita-
tion, including contribu-
tion to the Swach Bharat
Kosh set-up by the Cen-
tral Government for the
promotion of sanitation

(1) (2) (3) (4) (5) (6) (7) (8)
undertaken
7 Young Women Social Schedule VII : Promot- Maharashtra, 20 Lakhs 15 Lakhs 15 Lakhs Through NGO
Entrepreneurship de- ing gender equality and Assam, Telangana partners
velopment programs empowering women
in partnership with
British Council
8 Supporting Educa- Schedule VII (ii) under Chhattisgarh 42 Lakhs 38 Lakhs 38 Lakhs Directly
tion with transport “promoting education”.
and Computer lab
facility for Tribal chil-
dren
9 Promoting Sports by Schedule VII (vii) pro- Karnataka 100 Lakhs 100 Lakhs 100 Lakhs Karnataka
supporting Karnataka motion of sports ( Rural, Olympic
Olympic Association National, Paralympic Association
and Olympic)
TOTAL 695 Lakhs 683 Lakhs 683 lakhs
5. In case the Company has failed to spend the two per cent of the average net profit of the last three financial years or any part
thereof, the Company shall provide the reasons for not spending the amount in its Board report: Not applicable.
6. Responsibility statement of the CSR committee.

We hereby declare that implementation and monitoring of CSR activities, is in compliance with CSR objectives and Policy
of the Company. Though during the year, there was no requirement to spend due to the average net profit of the last three
year shaving resulted in loss, Company has still met its social objectives bys pending on CSR Activities.
Dr (Ms) Indu Shahani Mr Anand Kripalu

Chairperson of CSR Committee Managing Director and Chief Executive Officer
Bengaluru
July 21, 2017

ANNEXURE 8
Energy Conservation Technology Absorption & Foreign Exchange

Details of Conservation of Energy, Technology Absorption, Foreign Exchange Earning and Outflow
(Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014)
A) Conservation of Energy
With reference to energy conservation, steps taken by the Company at its various manufacturing units were as under:
l In two of the manufacturing operations, solar power installation completed, which will contribute to 10% of respective
factory power consumption and also plan to expand to other units depending on feasibility.
l Fuel change from coal to biomass firing completed in 7 out of 8, distillery manufacturing plants to reduce carbon emissions.
Feasibility study in progress for another distillery
l Treated effluent recycle through Reverse Osmosis plant is in operation at four manufacturing plants and planning to
extend at 2 plants.
B) Technology Absorption
l Adopted and implemented technology to achieve Zero Liquid Discharge at own operating distilleries, as per statutory
norm. One plant being operated on Bio Composting basis as per consent, is in the process of adopting Zero liquid discharge
l Implemented at one unit, ‘Bio Gas Engines’ for utilizing Methane Gas, produced in anaerobic Digester and generating
captive power for running distillery.
(C) Foreign Exchange earnings and Outgo-

(` In Millions)
Foreign exchange earned in terms of actual inflows during the year 1,398
Foreign exchange outgo in terms of actual outflows during the year 2,746

ANNEXURE 9
Business Responsibility Report
Environment, Society and Governance lie at the heart of our business ethics and philosophy. Pursuant to Regulation 34(2)(f ) of
SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, we provide below our Business Responsibility Report
describing the initiatives taken by the Company (‘USL”) from an environmental, social and governance perspective during the
financial year ended March 31, 2017.
On each of the nine Principles governing this Business Responsibility Report, USL has been at the forefront to follow the same in
letter and spirit. Our initiatives in this regard for each of the Principles are highlighted below in the prescribed format.
SECTION A: GENERAL INFORMATION ABOUT THE COMPANY

1. Corporate Identity Number (CIN) of the Company - L01551KA1999PLC024991
2. Name of the Company – UNITED SPIRITS LIMITED
3. Registered address – ‘UB TOWER’, #24, VITTAL MALLYA ROAD, Bengaluru – 560 001
4. Website – www.diageoindia.com
5. E-mail id – uslinvestor@unitedspirits.in
6. Financial Year reported – April 01, 2016 to March 31, 2017
7. Sector(s) that the Company is engaged in (industrial activity code-wise) – Manufacturing (Main Activity Group Code –C)
8. List three key products/services that the Company manufactures/provides (as in balance sheet)–Alcoholic Beverages, Extra Neutral
Alcohol, Indian Made Foreign Liquor
9. Total number of locations where business activity is under taken by the Company-27
(a) Number of International Locations (Provide details of major 5) - Nil
(b) Number of National Locations – 27
10. Markets served by the Company – Local/State/National/International – All the three.
SECTION B: FINANCIAL DETAILS OF THE COMPANY

1. Paid up Capital (INR) – ` 1,45,32,77,430
2. Total Turnover (INR) – ` 257560 million (Gross)
3. Total profit after taxes (INR) – ` 1,699 million
4. Total Spending on Corporate Social Responsibility (CSR) – Since average profits of the last three years are negative the Company is
not required to spend any amount on CSR. However the Company has still spent ` 68.3 million which as percentage of profit after
tax for the year ended March 31, 2017 is 4%.
5. List of activities in which expenditure in 4 above has been incurred:-
(a) As given in Annexure 7 of CSR Report, which is forming part of Report of Directors
SECTION C: OTHER DETAILS

1. Does the Company have any Subsidiary Company/ Companies?
Yes.
2. Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of
such subsidiary company(s)?
Pioneer Distilleries Limited.
3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, participate in the BR initiatives of
the Company? If yes, then indicate the percentage of such entity/entities? [Less than 30%, 30-60%, More than 60%] –
Not Applicable.

SECTION D: BR INFORMATION
1. Details of Director / Directors responsible for BR – The list of Directors along with details are given below:
(a) Details of the Director / Director responsible for implementation of the BR policy / policies as on March 31, 2017.
Sl. No. Name of the Director DIN Designation

1. Mr Mahendra Kumar Sharma 00327684 Non-Executive Independent Director – Chairman
2. Mr V K Viswanathan 01782934 Non-Executive Independent Director
3. Mr Randall Ingber 07529943 Non-Executive Director
4. Mr Anand Kripalu 00118324 Managing Director and Chief Executive Officer
5. Mr Vinod Rao 01788921 Non-Executive Director
6. Mr D Sivanandhan 03607203 Non-Executive Independent Director
7 Mr John Thomas Kennedy 07529946 Non-Executive Director
8. Dr (Mrs) Indu Shahani 00112289 Non-Executive Independent Director
9. Mr Rajeev Gupta 00241501 Non-Executive Independent Director
(b) Details of the BR head :

Overall review of BR is with the Board of Directors and the implementation with the Management.
2. Principle-wise (as per NVGs) BR Policy/policies

(a) Details of compliance (Reply in Y/N)
No. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
1 Do you have a policy/ policies Y Y Y Y Y Y Y Y Y
forCode of Business Conduct
and Ethics
2 Has the policy being Y Y Y Y Y Y Y Y Y
formulated in consultation
with the r e l e v a n t
stakeholders?
3 Does the policy conform to The Code of Business Conduct & Ethics (CoBCE), is the key policy governing the
any national / international compliance and ethics framework of the Company. In addition to Co BCE, it is
standards? If yes, specify? (50 mandatory for all employees to undergo training in Co BCE and a compliance
words) certification program anchored by policies and procedures, prescribed as per the
global standards, covering are as such asanti-bribery & corruption, including
guidelines on gifting & entertainment, anti-money laundering and prevention of
sexual harassment at workplace, in addition to the Employee Alcohol Policy, as a
part of its commitment to responsible drinking.
4 Has the policy being approved Y Y Y Y Y Y Y Y Y
by the Board?
Is yes, has it been signed by

MD/ owner/ CEO/ appropriate
Board Director?
5 Does the company have a Y Y Y Y Y Y Y Y Y
specified committee of the
Board/ Director/ Official to
over see the implementation
of the policy?
6 Indicate the link for the policy http://diageoindia.com/Investor_downloads/780678726Code%20of%20
to be viewed online? Business%20Conduct.pdf

7 Has the policy been formally Y Y Y Y Y Y Y Y Y
communicated to all relevant
internal and external
stakeholders?
8 Does the Company have Y Y Y Y Y Y Y Y Y
in-house structure to
implement the policy/
policies.
9 Does the Company have Y Y Y Y Y Y Y Y Y
a grievance redressal
mechanism related to the
policy/ policies to address
stakeholders’ grievances
related to the policy/ policies?
10 Has the Company carried Y Y Y Y Y Y Y Y Y
out independent audit/
evaluation of the working of
this policy by an internal or
external agency?
(b) If answer to the question at serial number 1 against any principle, is ‘No’, please explain why: (Tickupto 2 options)–NOT
APPLICABLE
1 The Company has not understood the
Principles
2 The Company is not at a stage where
it finds itself in a position to formulate
and implement the policies on specified
principles
3 The Company does not have financial or
manpower resources available for the task
4 It is planned to be done within next 6 months
5 It is planned to be done within the next 1
year
6 Any other reason (please specify)
3. Governance related to BR :
(a) Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of the
Company. Within 3 months, 3-6 months, Annually, More than 1 year

Annual.
(b) Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently it is
published?
Published annually as part of the Annual Report. Hyperlink is www.unitedspirits.in.

Principle 1 : Company’s efforts in the area of Ethics, Transparency and Accountability
1. Does the policy relating to ethics, bribery and corruption cover only the Company? Yes/ No. Does it extend to the Group/Joint
Ventures/ Suppliers/ Contractors/NGOs /Others?
The Code of Business Conduct & Ethics (Co BCE) is the key policy governing the compliance and ethics frame work of the
Company. All the employees are required to under go mandatory training within 30 days of joining the employment and a
yearly refresher training, along with a compliance certification program, for evaluation of the knowledge and understanding of
Co BCE on an annual basis. In addition, face to face and functional training is also provided by the members of the compliance
and ethics function on a regular basis.
In addition to Co BCE, the compliance program is also anchored by policies and procedures, prescribed as per the global
standards, covering areas such as anti-bribery & corruption, including guidelines on gifting & entertainment, anti-money
laundering and prevention of sexual harassment at workplace, in addition to the Employee Alcohol Policy, as a part of its
commitment to responsible drinking.
During the year revised Co BCE has been rolled out to subsidiaries of the Company also, namely, Pioneer Distilleries Limited,
Sovereign Distilleries Limited, Tern Distilleries Private Limited and Four Seasons Wines Limited, through adoption of the policy
by the respective Boards and provision of training to the employees of the respective subsidiaries.
The Company has a whistle blower/ vigil mechanism, Speakup, operated by a third party agency. Employees are encouraged
to raise their compliance concerns through this mechanism, apart from other internal reporting channels viz. Line Manager or
representatives of HR, Legal, Compliance & Ethics function, etc. Confidentiality and anonymity is guaranteed to all reporters.
Company has a structured Breach Management Standard in place, for timely and conclusive resolution of issues raised
through the whistle blower mechanism. Access is also provided to the Chairman of the Audit Committee in appropriate and
exceptional cases.

2. How many stakeholder complaints have been received in the past financial year and what percentage was satisfactorily resolved by
the management? If so, provide details thereof, in about 50 words or so.
During the year, 115 cases were logged in Speakup, which included 38 cases in the nature of HR grievances. Out of the above
99% cases are closed with 1/4th being substantiated. Decisions on the reported breaches are determined and monitored by
a compliance committee, ing key members of the leadership team, by ensuring that there is a collective and a fair decision
making process and consistent action in resolving the breaches. Quality of investigation and remedial actions are monitored
by the Global Risk & Compliance team.
As a part of the governance framework, details of significant breaches are tabled before the audit committee for its review
on a quarterly basis. Regular up dates are also provided to the senior leadership team on various aspects of the compliance
program, not only to sett one at the top but also as a part of management’s commitment to continuous improvement in
integrating compliance with the business.

Principle 2 : Company’s efforts to provide goods and services that are safe and contribute to sustainability throughout
their life cycle.
1. List up to 3 of your products or services whose design has incorporated social or environmental concerns, risks and/or opportunities.
We have been conscious of social and environmental concerns and our processes and practices reflect our concern for the
environment as can be seen from the details provided in the paragraphs below.

2. For each such product, provide the following details in respect of resource use (energy, water, raw material etc.) per unit of
product(optional):
(a) Reduction during sourcing/production/ distribution achieved since the previous year throughout the value chain?
We give below the list of projects and achievements during the year
Validated
Project Type Project Type Project Description COST in INR
Benefits (m3)
Bhopal Dam Construction of two new check dam for water storage purposes 20490 18.33
(Amla&Sarvar)
Alwar Desilting Rehabilitation of silted water holding ponds vis desilting 18774 32.67
(dredging) and community maintenance pondsHand pumps
Rehabilitation of silted water holding ponds vis desilting
Udaipur Desilting 11438 45.27
(dredging) and community maintenance ponds
Rehabilitation of silted water holding ponds vis desilting
Rosa Desilting 20936 35.48
(dredging) and community maintenance ponds
Total Water for Productive Use 71638 131.75
Your Company initiatives in 2017 to reduce packaging materials include further light weighting of glass bottles by 5-10%
on most leading brand bottles per design feasibility, film down-gauging in Tetra as well as pack resizing by nearly 10%,
reduction in carton weight by replacing older 5 Plyto 3 Ply RCT based paper liners. Your Company has initiated removal
of plastic based components in its print material, in anticipation of future waste management rules. In addition, your
Company uses recycled bottles across most popular & prestige brands, resulting in a lower carbon footprint.
(b) Reduction during usage by consumers (energy, water) has been achieved since the previous year?
Indirect benefits have accrued to customers from the steps taken above.
3. Does the company have procedures in place for sustainable sourcing (including transportation)?
(a) If yes, what percentage of your inputs was sourced sustainably? Also, provide details thereof, in about 50 words or so.
Your Company has initiated processes addressing the need for sustainable sourcing. In line with Diageo’s global statement
of intent on sustainable procurement, your Company is shortly issuing its own guideline on Partnering with Suppliers,
covering engaging with vendors on ethical business practices, protection of human rights, health and safety standards as
well as reduction of environmental impact.
Additionally, your Company has implemented the roll out of Sedex across its vendor base in a phased manner, a global
collaborative platform for sharing of responsible sourcing data.
4. Has the company taken any steps to procure goods and services from local & small producers, including communities surrounding
their place of work?
Your Company has identified certain categories of spend amenable to sourcing from MSME vendors, like corrugated boxes
or recycled bottles, and almost exclusively sources such categories from sources proximal to our manufacturing locations. In
addition, agri-commodities like grapes, broken rice & maize etc are sourced from local communities & cooperatives.
(a) If yes, what steps have been taken to improve their capacity and capability of local and small vendors?
In order to ensure such parties meet our specification requirements, your Company teams routinely conduct audits,
identify process gaps and educate vendors on performance improvement and best practices.
In line with the tenets of Principle 2 that businesses should raise the consumer’s awareness of their rights through
education, product labelling, appropriate and helpful marketing communication etc. and to provide full details of
contents and composition and to promote feusage and disposal of their products and services, your Company ensures
that its product labels comply to all statutory requirements per legal metrology, food & safety standard setc. Apart from
this, customers are also made a ware of mandatory requirements of individual states or markets, including but not limited
to a detailed ingredient list, clearly published manufacturing & licensing details, customer care contact details as well as
mandatory warnings as applicable for alcobev industry.

With regard to regular review to improve upon the process of new technology development, deployment and
commercialization, incorporating social, ethical, and environmental considerations, USL ensures minimization of our
resource usage footprint, by working collaboratively with our suppliers along the following dimensions:
- Product specification optimization: including but not limited to light-weighting of containers, gauge reduction
of metal components, weight optimization of print material etc., deploying available / new-age technologies &
manufacturing capabilities with our suppliers.
- Feature optimization: In select cases, we have removed surplus packaging components to reduce overall material use.
- Rationalization: your Company is working towards rationalization of our material components for both economies
of scale as well as maximizing utilization across our requirements, especially for recycled products like returnable
bottles.
In addition to above mentioned optimization drives, your Company has led in recycling through utilization of returnable
glass bottles across a significant part of our popular brand. In addition, your Company collaborates with supply partners
like Tetrapak to facilitate recycling & utilization of laminates, as well as glass suppliers for re-use of broken cullets.
Your Company is additionally working towards compliance on anticipated future requirements like proposed plastic
waste management rules and extended supplier responsibilities thereupon.
5. Does the company have a mechanism to recycle products and waste? If yes what is the percentage of recycling of products and
waste (separately as <5%, 5-10%, >10%). Also, provide details thereof, in about 50 words or so.
More than 90% of waste water generated in factories, post treatment, recycled back for use. Also more than 90% of the solid
waste generated in the manufacturing locations are recycled through authorized recyclers. We source significant proportion
of sustainable packing for the product packaging, with at least >20% recycled content and plan to increase further in future
Principle 3 : Company’s efforts to promote the wellbeing of all employees
1. Please indicate the Total number of employees.

We have 5048 employees including Executive, permanent workmen and staff.
2. Please indicate the Total number of employees hired on temporary/contractual/casual basis.

We have hired 4591 contract or temporary employees and retainers/ consultants.
3. Please indicate the Number of permanent women employees.

We have 486 permanent women employees.
4. Please indicate the Number of permanent employees with disabilities

NIL
5. Do you have an employee association that is recognized by management?

Yes.
6. What percentage of your permanent employees\ is members of this recognized employee association?
46% of our permanent employees are members of this recognized employee association.
7. Please indicate the Number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment in the last
financial year and pending, as on the end of the financial year.
During the financial year 2016-17, no complaints were reported
8. What percentage of your under mentioned employees were given safety and skill up-gradation training in the last year?
(a) Permanent Employees : 95%
(b) Permanent Women Employees : 95%
(c) Casual/Temporary/Contractual Employees : 95%
(d) Employees with Disabilities : NA

Principle 4: Company’s efforts to respect the interests of, and be responsive towards all stakeholders, especially those who
are disadvantaged, vulnerable and marginalized.
1. Has the company mapped its internal and external stakeholders? Yes/No
Yes.
2. Out of the above, has the company identified the disadvantaged, vulnerable & marginalized stakeholders?
Yes.
3. Are there any special initiatives taken by the company to engage with the disadvantaged, vulnerable and marginalized stakeholders.
If so, provide details thereof, in about 50 words or so.
Your Company, has launched Project S.H.E (Security-Heath-Education).It is a grass roots level community programme designed
to improve the lives of people in the communities around its plants with particular emphasis on empowering women. In the
first year of the program, five manufacturing site locations have been identified to roll out the program. For FY 2016-17, total
water replenished is 305 K m3 which is an integrated program under SHE which reaches out to more than 40,000 beneficiaries
at 6 bottling plant locations covering 15 villages.
The program targets to touch over 40,000 people in the 13 direct intervention villages in the five plan locations.The program
will focus on:
• Security: improving access and availability of drinking water & basic sanitation through water conservation.
• Health: Community preventive care and healthcare for women/young mothers & adolescent girls
• Education: job-oriented skills and entrepreneurship training for women.
Your Company, as part of their CSR activities has taken up two very crucial initiatives, relating to road safety - the dangers
of drinking and driving & Importance of having a ‘sober designated driver’. We have a robust program which helps create
awareness on road safety from university students to commercial drivers.
Principle 5: Company’s efforts to promote human rights
1. Does the policy of the company on human rights cover only the company or extend to the Group / Joint Ventures / Suppliers /
Contractors / NGOs / Others?
The Code of Business Conduct & Ethics (CoBCE) is the key policy governing the compliance and ethics framework of the
Company and extends to the Group / Joint Ventures / Suppliers / Contractors / NGOs.

Additionally, during the year revised Co BCE has been rolled out to other USL subsidiaries, namely, Pioneer Distilleries Limited,
Sovereign Distilleries Limited, TERN Distilleries Private Limited and Four Seasons Wines Limited, through adoption of the
policy by the respective Boards and training to the employees of the respective subsidiaries.
2. How many stakeholder complaints have been received in the past financial year and what percent was satisfactorily resolved by the
management?
During the year 115 cases were logged in Speakup (our whistle blower portal), which included 38 cases in the nature of HR
grievances and only one-fourth being substantiated. Out of the above 99% cases have been closed and satisfactorily resolved.
Principle 6: Company’s efforts towards environment protection.
1. Does the policy related to Principle 6 cover only the company or extends to the Group/Joint Ventures/Suppliers/Contractors/NGOs/
others.
The Policy is applicable to Group companies of your Company.
2. Does the company have strategies/ initiatives to address global environmental issues such as climate change, global warming, etc?
Y/N. If yes, please give hyperlink for webpage etc.
Yes, your Company’s sustainability strategies targets 2020, baseline reporting year as 2007 as explained below for each of the
parameters.

Water:
l Reduce water use through a 50% improvement in water use efficiency
l Return 100% of waste water from our operations to the environment safely.
l Replenish the amount of water used in our final product in water stressed areas.
Carbon:
l Reduce absolute greenhouse gas emissions from direct operations by 50%
Waste:
l Achieve zero waste to landfill
3. Does the company identify and assess potential environmental risks? Y/N
Yes the Company have any project related to Clean Development Mechanism(CDM)? If so,provided etailsthere of, in about 50
words or so. Also, if Yes, whether any environmental compliance report isfiled?
Your Company is committed to Carbon footprint reduction. USL has reduced carbon emission by 65% with respect to 2007
baseline through implementation of multiple projects to meet the heat demand of operation through renewable fuel and
in-house power generation. Your Company developed a strategy to generate 10% of total power demand through renewable
energy and implemented in two plants during F17
Your Company’s sustainability performance details are included and reported in Diageo’s sustainability and Responsibility
reporting, basis verification of data through PwC
4. Has the company undertaken any other initiatives on – clean technology, energy efficiency, renewable energy, etc? Y/N. If yes, please
give hyperlink for web page etc.
Yes, Your Company has invested in multiple projects over last few years and ensured significant reduction in emissions through
clean technology http://www.diageo.com/en-row/csr/casestudies/Pages/moving-fast-to-displace-fossil-fuels.aspx
5. Are the Emissions/Waste generated by the company within the permissible limits given by CPCB/SPCB for the financial year being
reported?
Yes.
6. Number of show cause/ legal notices received from CPCB/SPCB which are pending (i.e. not resolved to satisfaction) as on end of
Financial Year.
Notices received in the financial years are responded properly and resolved to satisfaction level.
Principle 7 : Company’s efforts to responsibly engage while influencing public and regulatory policy.
1. Is your company a member of any trade and chamber or association? If Yes, Name only those major ones that your business deals
with:
(a) International Spirits and Wines Association of India (ISWAI)
(b) Confederation Of Indian Alcoholic Beverage Companies (CIABC)
2. Have you advocated/lobbied through above associations for the advancement or improvement of public good? Yes/No; if yes
specify the broad areas ( drop box: Governance and Administration, Economic Reforms, Inclusive Development Policies, Energy
security, Water, Food Security, Sustainable Business Principles, Others)
Yes. USL Diageo is a founding signatory of the Beer, Wine and Spirits Producers’ Global Commitments, an ambitious set of
targets aimed at making measurable progress in the following five areas, which we have advocated through the associations:
l Reducing underage drinking
l Strengthening and expanding marketing codes of practice
l Providing consumer information and responsible product innovation
l Preventing drinking and driving
l Enlisting the support of retailers to reduce harmful drinking

Principle 8 : Company’s efforts to support inclusive growth and equitable development
1. Does the company have specified programmes/ initiatives/ projects in pursuit of the policy related to Principle 8? If yes details thereof.
Your Company’s priorities in India aim to enrich lives, communities and the environment through good business encompassing
3 key areas:
1. Tackling alcohol misuse and promoting Responsible Drinking, focusing on drunk driving; underage drinking and industry
collaboration
2. Empowering women, focusing on education and skills
3. Benefiting the communities around our plants, focusing on sanitation and health including Water.
Key campaigns / wins / achievements / leadership in Tackling alcohol misuse and promoting Responsible Drinking are given
below-
(a) Diageo and United Spirits: ‘Road to Safety’

Realizing that consumer goods companies like Diageo and your Company can succeed only when they fulfil their
responsibilities to society and the communities, and when they are committed to the safety and well-being of their
consumers, the company makes full use of its knowledge of consumer insights by designing suitable programmes that
are aimed at creating awareness, changing attitudes and shifting behaviour.
(b) The need of the hour: ‘Road Safety in India’

The alarming incidence of road accidents is a matter of serious concern. India alone accounts for more than 12 per cent of
the worldwide annual average of 1.24 million global road fatalities. Diageo and United Spirits’ “Road to Safety” programme
focuses on preventing drink driving, underage drinking and excessive drinking in India. There are two big programmes
under this campaign. The first is a national programme spanning 45 cities across 20 Indian states in partnership with the
Institute of Road Traffic Education (IRTE) and the Ministry of Road Transport & Highways. The second ‘Diageo-NDTV Road
to Safety’ is a partnership with NDTV to educate and inspire citizens to action by highlighting critical issues including lack
of safety awareness, public apathy towards accident victims and a widening gap between legislation and enforcement.
(c) Key community programmes

(i) Women Empowerment:
Our values, our reputation and our purpose are important drivers of our commercial success. In this context, our
Women’s Empowerment program is an investment in our business. It will help us to grow the economies in which we
operate, and to develop skills in the hospitality sector that are critical for our continued success. Those programmes
are summarized below.
India, our bottling plants and distilleries are mostly situated in semi-urban and rural areas, where communities often
lack basic infrastructure necessary for dignified living. We have consciously decided to take an integrated approach
by not just improving water efficiencies in our operations but also in our communities by providing access to clean
drinking water, sanitation, healthcare facilities, education and employable skills to bridge the developmental gap.
To ensure that we create shared value through our efforts, we collaborate with community, their local elected
institutions (Panchayats), government, NGOs and other community based organizations creating deeper and wider
impact.
In Alwar, Rajasthan we have our distilling and bottling plant surrounded by 3 key villages from where most of our
workforce comes from. This unit scores very high on diversity, safety and performance amongst the peer units.
Our integrated approach for holistic development in these three villages has won us great relationship, trust and
reputation with the key stakeholders. We have set up institutional mechanisms by first setting up Water, Sanitation
and Health (WASH) committee mostly represented by women in these villages. These WASH committees mobilize
larger community members to participate in identifying and solving challenges such as water, sanitation and
livelihood. The WASH Committees are technically supported by our NGO partner who have mainstreamed these
committee in the formal village development committees under Panchayat. Additional capacity of 125000 Cub Meter
(equal to fill more than 50 Olympic size swimming pools) was is generated through Rain water harvesting structures,
pond desilting and better water management practices. Earlier women had to walk the distance to fetch water,
now these villages have 100% piped water facility at home. With piped water availability, the village committed to
become 100% ‘open defecation free’, which they achieved and got rewarded by the government. The additional

water stored in these ponds was then used for fisheries for which the panchayat earns money by subletting that
facility to contractors.
1. In sanitation, the women had limited or expensive access to sanitary napkins. A self-help group (SHG) of 20
women was trained and supported to set up a micro enterprise to produce low cost sanitary napkins. They are
producing and marketing it to more than 20 villages by not only earning but improving sanitation for more than
5000 women.
2. Through our efforts where we are empowering, guiding, mentoring and handholding the communities around
our units have learnt to solve their issues and challenges through collaboration in more sustainable way which
is driving value for our business, our communities and our partners.
• Project SHE:
• Benefited over 40000 people in the villages, of which 45% are women
• Established resource centres, and water, sanitation and health (WASH) committees in 12 villages to oversee
water resource management.
• Constructed 104 soak pits, rainwater harvesting structures, drainage systems, and repaired 51 hand pumps.
• Constructed toilet blocks in schools
• Trained villagers on groundwater management
• Installed 3 RO water purification systems in schools.
• Built 58 community & SMART toilets
• Conducted health and hygiene programmes to spread awareness on reproductive health, menstrual and
personal hygiene
• Imparted employable skill training to community women
The Young Women Social Entrepreneurship Programme trains master trainers in social entrepreneurship skills,
equipping them to train others insetting up small businesses. The training focuses on practical businesss kills such
as management, finances, communications, leadership, marketing and fundraising. In Phases I and 2, a critical mass
of 60 master trainers have been trained across 30 cities / locations in India. They in turn have conducted training
workshops across the country to a further 4000 women in India, promoting social entrepreneurship amongst the
women. We have been working with the relevant ministries and Ms Maneka Gandhi, Union Cabinet Minister for
Women & Child Welfare and the UK High Commissioner to India Sir James Bevan were gracious enough to evangelize
those programmes.
(ii) WASH: Water, Safety, Health, Education

We have a grass-roots program to build thriving communities around our plants. Your Company’s bottling plants are
mostly situated in semi- urban areas with its distilleries mostly situated in rural areas. These communities lack basic
infrastructure necessary for a dignified living. We are investing in programmes to benefit 18,000 women and 22,000
men in and around five key plants to develop safety, health and education through:
l Safe access to water
l Healthcare
l Employable skills training
For FY 2016-17, total water replenished is 305 K m3 which is an integrated program under SHE which reaches out to
more than 40,000 beneficiaries at 6 bottling plant locations covering 15 villages.
2. Are the programmes/projects undertaken through in-house team/own foundation/external NGO/government structures/any other
organization?
The programs are undertaken through reputed NGO partners and relevant organizations. We look at government partnerships
in all our programs.
3. Have you done any impact assessment of your initiative?

Yes, all our programs have strong measurement metrics built into them.
4. What is your Company’s direct contribution to community development projects- Amount in INR and the details of the projects
undertaken.

Amount spent on various areas are summarized below-
l Road to Safety- ` 40 million
l Women Empowerment program: ` 14.5 Million
l Underage Drinking: ` 5 Million
l Community empowerment program : ` 15 Million
5. Have you taken steps to ensure that this community development initiative is successfully adopted by the community? Please explain
in 50 words, or so.
Extensive community outreach has been built in our programs. We have created strong Self Help Groups (SHG) and WASH
(Water, Sanitation and Hygiene) committees to ensure engagement, involvement and adoption by the community.
A common thread across locations has been the many effective meetings of the WASH (Water, Sanitation and Hygiene)
committees to understand the counteracting forces by assessing cultural backgrounds of the users of the water and sanitation
facilities planned under S.H.E to:
l Raise ownership
l Increase potential of success
l Mitigate risks
l Diminish failure (e.g. to ensure that systems are not used to sabotage/ vandalise)
Principle 9: Company’s efforts to engage with and provide value to their customers and consumers in a responsible manner
1. What percentage of customer complaints/consumer cases are pending as on the end of financial year.
0% pending. In this financial year we received 68 complaints and all have been addressed and closed. 6 Consumer cases were
registered with the respective Forums, out of which 2 are closed and 4 are still pending.
2. Does the Company display product information on the product label, over and above what is mandated as per local laws? Yes/
No/N.A. / Remarks(additional information)
Yes. Generally we have front and back label for few brands and few have a single label.
Back Label – We print following mandatory details

1. Branding
2. MRP
3. Manufacturing unit address
4. Reg. office address
5. FSSAI License number
6. Customer care phone number and Mail ID.
7. Ingredients
8. Quantity and strength declarations
9. Batch number and date of manufacturing
10. Bar code
11. Excise mandates as per state excise regulation.
12. Country of Origin.
Front label – We include:

1. Branding
2. Brand Claim / Brand Story
3. Brand Assets
3. Is there any case filed by any stakeholder against the company regarding unfair trade practices, irresponsible advertising and/or
anti-competitive behaviour during the last five years and pending as on end of financial year. If so, provide details thereof, in about
50 words or so.
Nil
4. Did your Company carry out any consumer survey/ consumer satisfaction trends?
Your Company conducts various researches to make sure the best in class offer goes in the market; and also there is a regular survey
in place to track consumer feedback on brand metrics. We use Neurotool to evaluate blends,packs,communication for our core
brands; we have Brand track to monitor brand equity, Quality, awareness, penetration at regular intervals.
There is another study currently running, which is about ‘Quality at shelf display’ – this is a qualitative survey to understand consumer
acceptability of our brands from both retailer and consumers perspective.

INDEPENDENT AUDITORS’ REPORT
To the Members of United Spirits Limited Institute of Chartered Accountants of India. Those Standards
and pronouncements require that we comply with ethical
Report on the Standalone Indian Accounting Standards (Ind
requirements and plan and perform the audit to obtain
AS) Financial Statements
reasonable assurance about whether the standalone Ind AS
1.
We have audited the accompanying standalone Ind financial statements are free from material misstatement.
AS financial statements of United Spirits Limited (“the
6. An audit involves performing procedures to obtain audit
Company”), which comprise the Balance Sheet as at March
evidence about the amounts and the disclosures in the
31, 2017, the Statement of Profit and Loss (including Other
standalone Ind AS financial statements. The procedures
Comprehensive Income), the Cash Flow Statement and the
selected depend on the Auditors’ judgment, including the
Statement of Changes in Equity for the year then ended, and
assessment of the risks of material misstatement of the
a summary of the significant accounting policies and other
standalone Ind AS financial statements, whether due to
explanatory information.
fraud or error. In making those risk assessments, the auditor
Management’s Responsibility for the Standalone Ind AS considers internal financial control relevant to the Company’s
Financial Statements preparation of the standalone Ind AS financial statements that
give a true and fair view, in order to design audit procedures
2. The Company’s Board of Directors is responsible for the that are appropriate in the circumstances. An audit also
matters stated in Section 134(5) of the Companies Act, includes evaluating the appropriateness of the accounting
2013 (“the Act”) with respect to the preparation of these policies used and the reasonableness of the accounting
standalone Ind AS financial statements to give a true and estimates made by the Company’s Board of Directors, as well
fair view of the financial position, financial performance as evaluating the overall presentation of the standalone Ind
(including other comprehensive income), cash flows and AS financial statements.
changes in equity of the Company in accordance with the
accounting principles generally accepted in India, including 7. We believe that the audit evidence we have obtained is
the Indian Accounting Standards specified in the Companies sufficient and appropriate to provide a basis for our audit
(Indian Accounting Standards) Rules, 2015 (as amended) opinion on the standalone Ind AS financial statements.
under Section 133 of the Act. This responsibility also includes Opinion
maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets 8. In our opinion and to the best of our information and according
of the Company and for preventing and detecting frauds and to the explanations given to us, the aforesaid standalone Ind
other irregularities; selection and application of appropriate AS financial statements give the information required by the
accounting policies; making judgments and estimates that Act in the manner so required and give a true and fair view in
are reasonable and prudent; and design, implementation conformity with the accounting principles generally accepted
and maintenance of adequate internal financial controls, in India, of the state of affairs of the Company as at March
that were operating effectively for ensuring the accuracy 31, 2017, and its total comprehensive income (comprising of
and completeness of the accounting records, relevant to profit and other comprehensive income), its cash flows and the
the preparation and presentation of the standalone Ind AS changes in equity for the year ended on that date.
financial statements that give a true and fair view and are free Emphasis of Matter
from material misstatement, whether due to fraud or error. 9. We draw attention to the following Matters:
Auditors’ Responsibility a) As explained in Note 44 to the standalone Ind AS
financial statements, the Managerial remuneration for
3. Our responsibility is to express an opinion on these standalone the year ended March 31, 2015 included amounts paid to
Ind AS financial statements based on our audit. managerial personnel in excess of the limits prescribed
4. We have taken into account the provisions of the Act and under the provisions of Schedule V to the Act by INR 51
the Rules made thereunder including the accounting and million to the Managing Director and Chief Executive
auditing standards and matters which are required to be Officer (MD & CEO) and by INR 134 million to the former
included in the audit report under the provisions of the Act Executive Director and Chief Financial Officer (ED & CFO).
and the Rules made thereunder. With regard to excess remuneration paid to MD & CEO
the Company has made the necessary application, along
5. We conducted our audit of the standalone Ind AS financial with the required clarifications, for Central Government
statements in accordance with the Standards on Auditing approval, response to which is awaited. Further, in
specified under Section 143(10) of the Act and other respect of excess remuneration paid to the former ED &
applicable authoritative pronouncements issued by the CFO the Company has initiated steps, including by way

INDEPENDENT AUDITORS’ REPORT (CONTINUED)

of filing a suit for recovery before the jurisdictional court, Company is in the process of transferring its stock of raw
to recover the excess remuneration. materials and finished goods lying in its premises and
the ‘billed stocks’ currently in the possession of Bihar
b) As explained in Note 41 to the standalone Ind AS financial State Beverages Corporation Limited, outside the state
statements, upon completion of the Initial Inquiry, which of Bihar. The statutory duties (VAT and Excise duty) paid
identified references to certain Additional Parties and on such stocks aggregating to INR 553 million (including
certain Additional Matters , the MD & CEO, pursuant to receivable from tie-up manufacturing units) have been
the direction of the Board of Directors, had carried out considered as good and receivable from the Bihar State
an Additional Inquiry that revealed actual or potential Government and is disclosed as Other non-current asset.
fund diversions arising from improper transactions
aggregating to INR 9,135 million and other potentially e) Note 45 to the standalone Ind AS financial statements:
improper transactions aggregating to INR 3,118 million
involving the erstwhile non-executive Chairman of the i. regarding clarifications sought by Securities and
Company and entities that appear to be affiliated or Exchange Board of India on matters covered by the
associated with the said non-executive Chairman. The Company’s Initial Inquiry and Additional Inquiry
amounts identified in the Additional Inquiry have been and certain aspects of the agreement between the
fully provided for or expensed by the Company or its Company and its erstwhile non-executive chairman
subsidiaries in earlier periods except for INR 217 million to which the Company has responded;
which has been accounted for as exceptional item during ii. regarding various issues raised and show cause
the year (Refer Note 41(c) to the standalone Ind AS notices issued pursuant to an inspection under
financial statements). Management is currently unable Section 206(5) of the Companies Act, 2013
to estimate the financial impact on the Company, if any, by Ministry of Corporate Affairs/ Registrar of
arising from potential non-compliances with applicable Companies, alleging violation of certain provisions
laws in respect of the above. of the Companies Act, 1956 and Companies Act,
2013, to which the Company has responded;
c) As explained in Note 46 to the standalone Ind AS financial
statements, the Company is in litigation with a bank (‘the iii. regarding the ongoing investigation by the
Bank’) that continues to retain the pledge of certain Enforcement Directorate under the provisions of
assets of the Company and of the Company’s shares Foreign Exchange Management Act, 1999 and
held by USL Benefit Trust (of which the Company is sole Prevention of Money Laundering Act, 2002 to which
beneficiary) despite the Company prepaying the term the Company has responded; and
loan to that bank along with the prepayment penalty iv. regarding clarifications sought by Authorised
and further depositing an additional sum of INR 459 Dealers in relation to certain queries from Reserve
million demanded by the Bank and as directed by the Bank of India with regard to remittances made
Honourable High Court of Karnataka (the ‘Court’). The in prior years to subsidiaries and branch of
Court has directed the Bank not to deal with the pledged the Company in the United Kingdom and past
assets of the Company (including the shares held by USL acquisition of the Whyte and Mackay group, to
Benefit Trust) as mentioned above till the disposal of the which the Company has responded.
original writ petition filed by the Company in the Court.
f ) Note 61 to the standalone Ind AS financial statements
d) Note 48 to the standalone Ind AS financial statements which states that the Company has adopted Ind AS
which describes the uncertainty related to the outcome for the financial year commencing from April 1, 2016,
of Special Leave Petition (the “SLP”) filed by the Bihar and accordingly, the financial statements have been
State Government with the Honourable Supreme prepared by the Company’s Management in compliance
court, in relation to the ban imposed by the Bihar with Ind AS.
State Government on trade and consumption of Indian
Made Foreign Liquor and Foreign Liquor in the State of Our opinion is not qualified in respect of the matters
Bihar with effect from April 5, 2016 which was set aside described above.
by Honourable High Court of Patna in its judgment Other Matter
dated September 30, 2016. Further, consequent to
the notification dated January 24, 2017 issued by the 10. The comparative financial information of the Company for the
Bihar State Government, which as a consequence, year ended March 31, 2016 and the transition date opening
criminalises the continued storage of all stock of raw balance sheet as at April 1, 2015 included in the standalone
materials and finished goods in the State of Bihar, the Ind AS financial statements, are based on the previously

issued statutory financial statements for the years ended the operating effectiveness of such controls, refer to our
March 31, 2016 and March 31, 2015 prepared in accordance separate Report in Annexure A.
with the Companies (Accounting Standards) Rules, 2006 (as h) With respect to the other matters to be included in
amended) which were audited by the predecessor auditor the Auditors’ Report in accordance with Rule 11 of the
who expressed modified opinions vide their reports dated Companies (Audit and Auditors) Rules, 2014, in our opinion
May 26, 2016 and May 27, 2015, respectively. The adjustments and to the best of our knowledge and belief and according
to those financial statements for the differences in accounting to the information and explanations given to us:
principles adopted by the Company on transition to Ind AS
i. The Company has disclosed the impact, if any,
have been audited by us.
of pending litigations as at March 31, 2017 on its
Report on Other Legal and Regulatory Requirements financial position in the standalone Ind AS financial
statements – Refer Notes 18, 42, 46, 48 and 54 to the
11. As required by the Companies (Auditor’s Report) Order,
standalone Ind AS financial statements;
2016, issued by the Central Government of India in terms of
Section 143(11) of the Act (“the Order”), and on the basis of ii. The Company did not have any long term contracts
such checks of the books and records of the Company as we including derivative contracts for which there were
considered appropriate and according to the information any material foreseeable losses – Refer Note 60 to the
and explanations given to us, we give in the Annexure B a standalone Ind AS financial statements;
statement on the matters specified in paragraphs 3 and 4 of iii. There has been no delay in transferring amounts,
the Order. required to be transferred, to the Investor Education
12. As required by Section 143 (3) of the Act, we report that: and Protection Fund by the Company during the year
ended March 31, 2017; and
a) We have sought and obtained all the information and
explanations which to the best of our knowledge and iv. The Company has provided requisite disclosures
belief were necessary for the purposes of our audit. in the standalone Ind AS financial statements as
to holdings as well as dealings in Specified Bank
b) In our opinion, proper books of account as required by law
Notes during the period from November 8, 2016
have been kept by the Company so far as it appears from
to December 30, 2016. Based on audit procedures
our examination of those books of account.
and relying on the management representation we
c) The Balance Sheet, the Statement of Profit and Loss report that the disclosures are in accordance with
(including other comprehensive income), the Cash Flow books of account maintained by the Company and as
Statement and the Statement of Changes in Equity dealt produced to us by the Management – Refer Note 62
with by this Report are in agreement with the books of to standalone Ind AS financial statements. However,
account. as stated in Note 62 to the standalone Ind AS financial
d) In our opinion, the aforesaid standalone Ind AS financial statements, amounts aggregating to INR 145,500
statements comply with the Indian Accounting Standards as stated by the management were received from
specified under Section 133 of the Act. transactions which were not permitted.
e) The matters described in sub-paragraphs (b), (c), (d) and
(e) of paragraph 9 above titled “Emphasis of Matter”, in our for Price Waterhouse & Co Chartered Accountants LLP
opinion, may have an adverse effect on the functioning of Firm Registration Number:304026E/E-300009
the Company. Chartered Accountants
f) On the basis of the written representations received from
the directors as on March 31, 2017 and taken on record by Pradip Kanakia
the Board of Directors, none of the directors is disqualified Partner
as on March 31, 2017 from being appointed as a director in Membership Number: 039985
terms of Section 164 (2) of the Act.
Stockholm
g) With respect to the adequacy of the internal financial
May 30, 2017
controls over financial reporting of the Company and

ANNEXURE A TO THE INDEPENDENT AUDITORS’ REPORT
Referred to in paragraph 12(g) of the Independent Auditors’ 5. We believe that the audit evidence we have obtained is
Report of even date to the members of United Spirits sufficient and appropriate to provide a basis for our audit
Limited on the Standalone Ind AS financial statements as opinion on the Company’s internal financial controls
of and for the year ended March 31, 2017 system over financial reporting.
Report on the Internal Financial Controls under Section Meaning of Internal Financial Controls Over Financial
143(3)(i)of the Act Reporting
1. We have audited the internal financial controls over 6. A company’s internal financial control over financial
financial reporting of United Spirits Limited (“the reporting is a process designed to provide reasonable
Company”) as of March 31, 2017 in conjunction with our assurance regarding the reliability of financial reporting
audit of the standalone Ind AS financial statements of the and the preparation of financial statements for external
Company for the year ended on that date. purposes in accordance with generally accepted
accounting principles. A company’s internal financial
Management’s Responsibility for Internal Financial control over financial reporting includes those policies
Controls and procedures that (1) pertain to the maintenance of
2. The Company’s management is responsible for records that, in reasonable detail, accurately and fairly
establishing and maintaining internal financial controls reflect the transactions and dispositions of the assets
based on the internal control over financial reporting of the company; (2) provide reasonable assurance
criteria established by the Company considering the that transactions are recorded as necessary to permit
essential components of internal control stated in the preparation of financial statements in accordance with
Guidance Note on Audit of Internal Financial Controls generally accepted accounting principles, and that
Over Financial Reporting (the “Guidance Note”) issued by receipts and expenditures of the company are being made
the Institute of Chartered Accountants of India(“ICAI”). only in accordance with authorisations of management
These responsibilities include the design, implementation and directors of the company; and (3) provide reasonable
and maintenance of adequate internal financial controls assurance regarding prevention or timely detection
that were operating effectively for ensuring the orderly of unauthorised acquisition, use, or disposition of the
and efficient conduct of its business, including adherence company’s assets that could have a material effect on the
to company’s policies, the safeguarding of its assets, financial statements.
the prevention and detection of frauds and errors, the Inherent Limitations of Internal Financial Controls Over
accuracy and completeness of the accounting records, and Financial Reporting
the timely preparation of reliable financial information, as
required under the Act. 7. Because of the inherent limitations of internal financial
controls over financial reporting, including the possibility
Auditors’ Responsibility of collusion or improper management override of controls,
3. Our responsibility is to express an opinion on the material misstatements due to error or fraud may occur
Company’s internal financial controls over financial and not be detected. Also, projections of any evaluation
reporting based on our audit. We conducted our audit in of the internal financial controls over financial reporting
accordance with the Guidance Note and the Standards to future periods are subject to the risk that the internal
on Auditing deemed to be prescribed under Section financial control over financial reporting may become
143(10) of the Act to the extent applicable to an audit of inadequate because of changes in conditions, or that the
internal financial controls, both applicable to an audit of degree of compliance with the policies or procedures may
internal financial controls and both issued by ICAI. Those deteriorate.
Standards and the Guidance Note require that we comply Opinion
with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether adequate 8. In our opinion, the Company has, in all material respects,
internal financial controls over financial reporting was an adequate internal financial controls system over
established and maintained and if such controls operated financial reporting and such internal financial controls
effectively in all material respects. over financial reporting were operating effectively as
at March 31, 2017, based on the internal control over
4. Our audit involves performing procedures to obtain audit financial reporting criteria established by the Company
evidence about the adequacy of the internal financial considering the essential components of internal control
controls system over financial reporting and their stated in the Guidance Note issued by ICAI.
operating effectiveness. Our audit of internal financial
controls over financial reporting included obtaining for Price Waterhouse & Co Chartered Accountants LLP
an understanding of internal financial controls over Firm Registration Number: 304026E/E-300009
financial reporting, assessing the risk that a material Chartered Accountants
weakness exists, and testing and evaluating the design Pradip Kanakia
and operating effectiveness of internal control based on Partner
the assessed risk. The procedures selected depend on Membership Number: 039985
the Auditors’ judgement, including the assessment of the
risks of material misstatement of the financial statements, Stockholm
whether due to fraud or error. May 30, 2017

ANNEXURE B TO THE INDEPENDENT AUDITORS’ REPORT
Referred to in paragraph 11 of the Independent Auditors’ Report of even date to the members of United Spirits Limited on
the standalone Ind AS financial statements as of and for the year ended March 31, 2017
i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed
assets.
(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the
items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and
the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the
Management during the year and no material discrepancies have been noticed on such verification.
(c) The title deeds of immovable properties, as disclosed in Note 3.1 (Property, plant and equipment) and Note 13 (Assets
classified as held for sale) to the standalone Ind AS financial statements, are held in the name of the Company except as
disclosed below:
Amounts in INR million
Particulars Freehold land Leasehold land Buildings
Property, plant and equipment:
Number of cases 9 3 Various
Gross Carrying amount as at March 31, 2017 262 48 465
Net Carrying amount as at March 31, 2017 262 27 436
Assets classified as held for sale:
Number of cases - - 5
Gross and Net carrying amount as at March 31, 2017 - - 39
The Company is in the process of collating and identifying title deeds.
ii. The physical verification of inventory excluding stocks with third parties and stock in transit have been conducted at
reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have
substantially been confirmed by them. The discrepancies noticed on physical verification of inventory as compared to book
records were not material.
iii. There are no companies covered in the register maintained under Section 189 of the Act for the purpose of loans granted by
the Company.
iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions
of Sections 185 and 186 of the Act in respect of a guarantee provided by it. The Company has not granted any loans or made
any investments to the parties covered under Sections 185 and 186 of the Act.
v. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions
of Sections 73, 74, 75 and 76 or any other relevant provisions of the Act and the Rules framed thereunder to the extent
notified, with regard to the deposits accepted from the public. According to the information and explanations given to us, no
order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court
or any other Tribunal on the Company in respect of the aforesaid deposits.
vi. The Central Government of India has not specified the maintenance of cost records under Section 148(1) of the Act for any of
the products of the Company.
vii. (a) According to the information and explanations given to us and the records of the Company examined by us, the Company
is generally regular in depositing undisputed statutory dues in respect of tax deducted at source, tax collected at source,
service tax, employee state insurance, provident fund, sales tax, valued added tax, krishi kalyan cess and swachh bharat
cess though there has been delays in some cases and is regular in depositing other undisputed statutory dues, including,
duty of customs , duty of excise, and other material statutory dues, as applicable, with the appropriate authorities. The
undisputed dues in respect of stamp duty relating to earlier years have not been deposited till date. The extent of the
arrears of statutory dues outstanding as at March 31, 2017, for a period of more than six months from the date they
became payable are as follows:
Name of the Nature of dues Amount Period to which the Due date# Date of Payment
statute (INR million) amount relates#
Maharashtra Stamp duty and 200 September 2006 September Not yet paid
Stamp Act, 1958 interest thereon 2006
# Interest pertains to the period from September, 2006 to March 31, 2017.

ANNEXURE B TO THE INDEPENDENT AUDITORS’ REPORT (CONTINUED)
(b) According to the information and explanations given to us and the records of the Company examined by us, the
particulars of dues of income tax, sales tax, service tax, duty of customs, duty of excise, entry tax and value added tax
as at March 31, 2017 which have not been deposited on account of a dispute are disclosed in Appendix 1.
viii. According to the records of the Company examined by us and the information and explanation given to us, the Company
has not defaulted in repayment of loans or borrowings to any financial institution or bank as at the balance sheet date. The
Company does not have any loans or borrowings from Government or dues to debenture holders as at the balance sheet
date.
ix. The Company has not raised any money by way of initial public offer or further public offer (including debt instruments)
during the year. In our opinion, and according to the information and explanations given to us, term loans have been applied
for the purposes for which they were obtained during the year.
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally
accepted auditing practices in India, and according to the information and explanations given to us, except for the matter
mentioned below, for which the Management has taken appropriate steps, we have neither come across any instance of
material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have
we been informed of such case by the Management.
As explained in Note 41 to the standalone Ind AS financial statements and in Paragraph 9 (b) of our report of even date on
the standalone Ind AS financial statements, upon completion of the Initial Inquiry, which identified references to certain
additional parties and certain additional matters, the MD & CEO, pursuant to the direction of the Board of Directors, had
carried out an Additional Inquiry that revealed improper transactions indicating actual or potential fund diversions arising
from improper transactions aggregating to INR 9,135 million and other potentially improper transactions aggregating to
INR 3,118 million involving the erstwhile non-executive Chairman of the Company and entities that appear to be affiliated
or associated with the said erstwhile non-executive Chairman. The amounts identified in the Additional Inquiry have been
fully provided for or expensed by the Company or its subsidiaries in earlier periods except for INR 217 million which has been
accounted for as exceptional item during the year (Refer Note 41 (c) to the Ind AS standalone financial statements).
xi. Read with paragraph 9 (a) of our report of even date on the Ind AS standalone financial statements, the Company has paid/
provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197
of the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of
the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188
of the Act. The details of such related party transactions have been disclosed in the standalone Ind AS financial statements
as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures, specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014.
xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures
during the year.
xv. The Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly,
the provisions of Clause 3(xv) of the Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the
provisions of Clause 3(xvi) of the Order are not applicable to the Company.
for Price Waterhouse & Co Chartered Accountants LLP

Firm Registration Number: 304026E/E-300009
Chartered Accountants
Pradip Kanakia
Partner
Membership Number: 039985
Stockholm
May 30, 2017

APPENDIX 1 – PARTICULARS OF TAX DUES NOT DEPOSITED ON ACCOUNT OF A DISPUTE*
Referred to in paragraph vii. (b) of Annexure B to the Independent Auditors’ Report to the members of United Spirits Limited on the
standalone Ind AS financial statements as of and for the year ended March 31, 2017.
Disputed Paid Unpaid Period to which the amount relates Forum where the dispute
Name of the statute Nature of dues
Amount Amount Amount (Financial Year) is pending
Income Tax Act, 1961 Income Tax 762 762 - 2005-06 to 2008 -09 Assessing Officer of Income
Tax
Income Tax Act, 1961 Income Tax 4,996 - 4,996 2012-13 Dispute Resolution Panel
Income Tax Act, 1961 Income Tax 2,165 376 1,789 2003-04, 2005-06, 2007-08 to Commissioner of Income
2012-13 Tax (Appeals)
Income Tax Act, 1961 Income Tax 2,529 - 2,529 1988-89 to 1992-93, 1995-96, 1999- Income Tax Appellate
00 to 2003-04, 2006-07 to 2008-09 Tribunal
and 2011-12
Income Tax Act, 1961 Income Tax 1,679 - 1,679 1993-94 to 2004-05 High Courts
Customs Act, 1962 Custom Duty 5 - 5 1995-96 to 1997-98 High Courts
Service Tax - Finance Act Service Tax 293 31 262 2004-05 to 2006-07, 2009-10 and Customs, Excise and Service
1994 2010-11 Tax Appellate Tribunal
Service Tax - Finance Act Service Tax 118 116 2 2004-05 and 2015-16 High Courts
1994
Central Excise Act, 1944 Central Excise 1,095 70 1,025 1993-94 and 2000-01 Customs, Excise and Service
Duty Tax Appellate Tribunal
Central Excise Act, 1944 Central Excise 1 - 1 1994-95 and 1995-96 Commissioner of Central
Duty Excise
Respective State Excise State Excise 69 3 66 1983-84, 2001-02 to 2003-04 Additional Commissioner
Acts of Excise
Respective State Excise State Excise 9 - 9 1993-94, 2003-04, 2009-10, 2012-13, Additional District Mag-
Acts 2013-14 and 2016-17 istrate
Respective State Excise State Excise 29 4 25 1995-96, 2001-02, 2003-04 to 2007- State Taxation Tribunal
Acts 08, 2011-12 to 2013-14
Bengal Excise Act, 1909 State Excise 13 - 13 1992-93 to 1998-99 Civil Court
and Bengal Excise
(Amendment) Act, 2012
Respective State Excise State Excise 2 1 1 1994-95, 1998-99 and 2014-15 Collector of State Excise
Acts
Respective State Excise State Excise 124 11 113 1963-64 to 1972-73, 1976-77 and Commissioner of State
Acts 1977-78, 1980-81 to 1991-92, Excise
1993-94 to 1996-97, 1998-99,
2001-02, 2003-04 to 2007-08,
2012-13, 2015-16 and 2016-17
Respective State Excise State Excise 2 - 2 1994-95 District Magistrate and
Acts Collector of State Excise
Respective State Excise State Excise 541 187 354 1972-73 and 1973-74, High Courts
Acts 1979-80 to 2015-16
Respective State Excise State Excise 6 - 6 1994-95 State Taxation Tribunal
Acts
Respective State Excise State Excise 13 - 13 1986-87, 1992-93, 1997-98, Superintendent of State
Acts 1998-99 and 2015-16 Excise
Respective State Excise State Excise 1,234 75 1,159 1971-72, 1996-97 to 2011-12 Supreme Court
Acts
* As represented by Management.

APPENDIX 1 – PARTICULARS OF TAX DUES NOT DEPOSITED ON ACCOUNT OF A DISPUTE* (CONTINUED)

Disputed Paid Unpaid Period to which the amount relates Forum where the dispute
Name of the statute Nature of dues
Amount Amount Amount (Financial Year) is pending
Central and Respective Sales Tax/ Value 10 - 10 2003-04 to 2013-14 Additional Commissioner of
State Sales Tax Acts Added Tax Commercial Taxes
Central and Respective Sales Tax/ Value 119 85 34 1982-83 2000-01, 2004-05 and 2005- Commercial Tax Appellate
State Sales Tax Acts Added Tax 06, 2007-08, 2009-10 to 2012-13 Tribunal
Central and Respective Sales Tax/ Value 4 - 4 1993-94, 2003-04, 2005-06 and Commercial Taxes Appellate
State Sales Tax Acts Added Tax 2006-07 and Revisional Board
Central and Respective Sales Tax/ Value 106 - 106 1994-95 to 1996-97, 2005-06 to Assistant Commissioner of
State Sales Tax Acts Added Tax 2007-08, 2010-11 and 2012-13 Commercial Taxes
Karnataka sales Tax Act, Sales Tax/ Value 43 - 43 1995-96 and 2006-07 Civil Court
1957 and Karnataka Value Added Tax
Added Tax Act, 2003
Central and Respective Sales Tax/ Value 32 - 32 1990-00, 2010-11 to 2014-15 Commercial Tax Officer
State Sales Tax Acts Added Tax
Central and Respective Sales Tax/ Value 773 - 773 1978-79, 1980-81 and 1981-82, Commissioner of Commer-
State Sales Tax Acts Added Tax 1984-85 and 1985-86, 2002-03 and cial Taxes
2015-16
Central and Respective Sales Tax/ Value 271 - 271 1985-86, 2003-04, 2006-07 to 2011- Deputy Commissioner of
State Sales Tax Acts Added Tax 12, 2013-14, and 2016-17 Commercial Taxes
Central and Respective Sales Tax/ Value 182 - 182 1978-79 to 1986-87, 1988-89 and High Courts
State Sales Tax Acts Added Tax 1989-90, 1992-93 and 1993-94, 1996-
97 to 2002-03, 2005-06, 2007-08 and
2009-10 to 2012-13
Central and Respective Sales Tax/ Value 342 - 342 1999-00 to 2012-13 Joint Commissioner of
State Sales Tax Acts Added Tax Commercial Taxes
Respective State Entry Entry Tax 8 - 8 2007-08, 2012-13 and 2013-14 Additional Commissioner of
Tax Act Commercial Taxes
Respective State Entry Entry Tax 12 - 12 2005-06 Commercial Taxes Appellate
Tax Act and Revisional Board
Respective State Entry Entry Tax 150 28 122 1987-88, 2000-01, 2004-05, 2007-08, Commercial Tax Appellate
Tax Act 2009-10 to 2011-12 Tribunal
Respective State Entry Entry Tax 0 0 0 1989-90 Assessing Officer
Tax Act
Respective State Entry Entry Tax 37 - 37 2010-11 to 2012-13 Deputy Commissioner of
Respective State Entry Entry Tax 58 2 56 1984-86, 2005-06 and 2012-13 High Courts
Tax Act
Respective State Entry Entry Tax 7 1 6 2007-10 Joint Commissioner of
Respective State Entry Entry Tax 249 33 216 2003-04 to 2013-14 Supreme Court
Tax Act
* As represented by Management.

BALANCE SHEET
All amounts in INR Million
Notes As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Assets
Non-current assets
Property, plant and equipment 3.1 11,751 10,749 10,679
Capital work-in-progress 851 2,449 645
Intangible assets 3.2 121 13 15
Financial assets
Investments 4.1 - 82 8,582
Loans 5 124 903 951
Other financial assets 6 1,310 526 440
Investments in subsidiaries 4.2 9,354 9,831 10,632
Deferred tax assets (net) 7 1,241 1,539 1,099
Advance income tax (net) 8 2,886 1,906 2,281
Other non-current assets 9 3,484 2,930 3,460
Total non-current assets 31,122 30,928 38,784
Current assets
Inventories 10 18,538 18,999 16,868
Financial assets
Investments 4.1 - 11 11
Trade receivables 11 29,605 23,140 16,510
Cash and cash equivalents 12.1 439 48 1,821
Bank balances other than cash and cash equivalents 12.2 84 79 355
Other financial assets 6 1,729 3,235 5,305
Other current assets 9 6,132 5,419 4,340
Assets classified as held for sale 13 316 66 1
Total current assets 56,843 50,997 45,211
Total assets 87,965 81,925 83,995
Equity and liabilities
Equity
Share capital 14 1,453 1,453 1,453
Other equity
Reserves and surplus 15.1 17,925 15,619 5,965
Other reserves 15.2 - 68 8,417
Total equity 19,378 17,140 15,835
Non-current liabilities
Financial liabilities
Borrowings 16 8,569 7,057 10,470
Other financial liabilities 17 - 84 251
Provisions 18 422 683 661
Total non-current liabilities 8,991 7,824 11,382

BALANCE SHEET (CONTINUED)

Current liabilities
Borrowings 16 28,272 29,941 36,213
Trade payables 19 11,798 10,018 8,716
Other financial liabilities 17 9,153 7,528 3,876
Provisions 18 2,615 2,359 2,295
Current tax liabilities (net) 8 3,317 3,477 3,177
Other current liabilities 20 4,441 3,638 2,501
Total current liabilities 59,596 56,961 56,778
Total liabilities 68,587 64,785 68,160
Total equity and liabilities 87,965 81,925 83,995
Significant accounting policies 1
The above balance sheet should be read in conjunction with the accompanying notes.
As per our report of even date attached

for Price Waterhouse & Co Chartered Accountants LLP for and on behalf of the Board of Directors
Firm registration number: 304026E/E-300009
Chairman Managing Director &
Pradip Kanakia Sanjeev Churiwala V. Ramachandran

Partner Executive Director & Company Secretary
Membership number: 039985 Chief Financial Officer
Place : Stockholm Place : Bengaluru

Date : May 30, 2017 Date : May 30, 2017

STATEMENT OF PROFIT AND LOSS
Note For the For the
year ended year ended
March 31, 2017 March 31, 2016
Revenue
Revenue from operations 21 253,988 234,442
Other income 22 1,111 1,057
Total Income 255,099 235,499
Expenses
Cost of materials consumed 23 46,342 48,409
Purchase of stock-in-trade 2,058 1,956
Change in inventories of finished goods, work-in-progress and stock-in-trade 24 444 (1,959)
Excise duty 168,512 151,960
Employee benefits expense 25 6,674 6,427
Finance costs 26 3,690 4,469
Depreciation, amortisation and impairment expense 3.1, 3.2 1,323 1,017
Others:
Advertisement and sales promotion 6,667 6,138
Other expenses 27 13,581 12,647
Total expenses 249,291 231,064
Profit before exceptional items and taxation 5,808 4,435

Less: Exceptional items (net) 28 (3,262) (1,280)
Profit before taxation 2,546 3,155

Income tax expense:
Current tax 29 549 1,744
Current tax relating to earlier years - 568
Deferred tax charge/ (credit) 271 (349)
MAT credit utilised/ (availed) 27 (27)
Profit for the year 1,699 1,219
Other comprehensive Income

Items that will not be reclassified to profit or loss
Changes in fair value of FVOCI equity instruments 18 187
Remeasurements of post-employment benefit obligations 735 (165)
Tax relating to these items (254) 64
Other comprehensive income for the year, net of tax 499 86
Total comprehensive income for the year 2,198 1,305

Basic and diluted earnings per share (INR) 30 11.69 8.39
The above statement of profit and loss should be read in conjunction with the accompanying notes.
Date : May 30, 2017 Date : May 30, 2017

CASH FLOW STATEMENT

Notes For the year ended For the year ended
March 31, 2017 March 31, 2016
A. CASH FLOW FROM OPERATING ACTIVITIES
Profit / (loss) before taxation 2,546 3,155
Adjustments for
Depreciation, amortisation and impairment expense 3.1, 3.2 1,323 1,017
Employee share based expense 35 57 -
Impairment in the value of Investment in subsidiaries 28 882 3,880
Provision for advances to subsidiaries written back 28 (819) (2,480)
Write down in the value of plant and equipment 28 217 -
Reversal of provision against claims 28 (28) -
Allowance for doubtful receivables/ advances/ deposits 28 (370) (6,209)
written back
Bad debts/ advances/ deposits written off 28 358 5,666
Allowance for doubtful receivable towards sale of 28 - 316
Property, Plant and Equipment
Provision for doubtful debts / advances / deposits 27 43 894
Bad debts/ advances/ deposits written off 27 19 -
Unrealised foreign exchange loss 129 (165)
Liabilities, provisions or allowances no longer required 22 (514) (330)
written back
Loss / (gain) on disposal of property, plant and 22, 27 (337) 12
equipment (net)
Dividend income 22 (50) (17)
Interest Income 22 (202) (479)
4,398 6,574
Operating profit before working capital changes 6,944 9,729
(Increase) / decrease in trade receivables (6,712) (6,902)
(Increase) / decrease in loans and other financials assets 1,882 1,399
(Increase) / decrease in non-financials assets (327) (851)
(Increase) / decrease in inventories 461 (2,131)
Increase / (decrease) in trade payables 2,027 1,302
Increase / (decrease) in other financial liabilities 3,572 299
Increase / (decrease) in other liabilities 804 1,137
Increase / (decrease) in provisions 714 2,421 (79) (5,826)
Cash generated from operations 9,365 3,903
Income taxes paid (1,943) (1,637)
Net cash inflow from operating activities 7,422 2,266

CASH FLOW STATEMENT (CONTINUED)
March 31, 2017 March 31, 2016
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (2,037) (2,490)
Proceeds from sale of property, plant and equipment 528 18
Proceeds from sale of investments 111 8,686
Investment in subsidiaries (432) (598)
Proceeds from sale of manufacturing unit - 250
Interest received 202 1,171
Dividend received 50 17
Net cash in flow / (outflow) from investing activities (1,578) 7,054
C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from non-current borrowings 5,000 3,500
Repayment of non-current borrowings (5,000) (3,791)
Proceeds from current borrowings 17,250 9,000
Repayment of current borrowings (18,919) (15,272)
Finance lease payments (86) (43)
Interest paid (3,698) (4,487)
Net cash inflow / (outflow) from financing activities (5,453) (11,093)
Net increase / (decrease) in cash and cash equivalents 391 (1,773)
Cash and cash equivalents as at the beginning of the year 48 1,821

Cash and cash equivalents as at the end of the year 439 48
391 (1,773)
The above statement of cash flows should be read in conjunction with accompanying notes.



Date : May 30, 2017 Date : May 30, 2017

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH 31, 2017
A. Equity share capital (Refer Note 14) All amounts in INR Million
Particulars Amount
As at April 1, 2015 1,453
Changes in equity share capital -
As at March 31, 2016 1,453
As at March 31, 2017 1,453
B. Other equity (Refer Note 15)

Reserves and surplus Other Total
reserves
Capital Capital Securi- Central Share Contin- General Retained Total FV OCI
reserve redemp- ties subsidy based gency reserve Earnings - Equity
tion premium incentive reserve Instru-
reserve account reserve ments
Balance as at April 1, 2015 683 699 45,682 2 - 110 11,033 (52,244) 5,965 8,417 14,382
Profit for the year - - - - - - - 1,219 1,219 - 1,219
Other Comprehensive income - - - - - - - (165) (165) 187 22
(OCI)
Tax impact of OCI items - - - - - - - 64 64 - 64
Total comprehensive income - - - - - - - 1,118 1,118 187 1,305
Transferred to retained earnings - - - - - - - 8,536 8,536 (8,536) -
on sale of equity investments
Balance as at March 31, 2016 683 699 45,682 2 - 110 11,033 (42,590) 15,619 68 15,687
Profit for the year - - - - - - - 1,699 1,699 - 1,699
Other Comprehensive income - - - - - - - 735 735 18 753
(OCI)
Tax impact of OCI items - - - - - - - (254) (254) - (254)
Total comprehensive income - - - - - - - 2,180 2,180 18 2,198
Share based incentives - - - - 40 - - - 40 - 40
Transferred to retained earnings - - - - - - - 86 86 (86) -
on sale of equity investments
Balance as at March 31, 2017 683 699 45,682 2 40 110 11,033 (40,324) 17,925 - 17,925
The above statement of changes in equity should be read in conjunction with accompanying notes.



Date : May 30, 2017 Date : May 30, 2017

NOTES TO THE FINANCIAL STATEMENTS
Company overview
United Spirits Limited (“the Company” or “USL”) is a public company domiciled and headquartered in Bengaluru, Karnataka, India.
It is incorporated under the Companies Act, 1956 and its shares are listed on the BSE Limited and National Stock Exchange of India
Limited. The Company is engaged in the business of manufacture, purchase and sale of beverage alcohol (spirits and wines).
These financial statements are approved for issue by the Company’s Board of Directors on May 30, 2017.
Note 1 - Significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these financial statements. These
policies have been consistently applied to all the years presented, unless otherwise stated.
1.1 Basis of preparation of financial statements
(i) Compliance with Ind AS
The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section
133 of the Companies Act, 2013 (the ‘Act’) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant
provisions of the Act.
The financial statements up to year ended March 31, 2016 were prepared in accordance with the accounting standards
notified under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act
(previous GAAP).
These financial statements are the first financial statements of the Company under Ind AS. Refer Note 61 for an explanation
of how the transition from previous GAAP to Ind AS has affected the Company’s financial position as at March 31, 2016
and April 1, 2015 and financial performance and cash flows for the year ended March 31, 2016.
(ii) Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following:
• certain financial assets and liabilities which are measured at fair value;
• defined benefit plans- plan assets measured at fair value;
• share-based payment obligations; and
• assets held for sale – measured at lower of cost and fair value less costs to sell
All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and
other criteria set out in the Schedule III (division II) to the Companies Act, 2013. Based on the nature of products and the
time between the acquisition of asset for processing and their realization in cash and cash equivalents, the Company
has ascertained its operating cycle as twelve months for the purpose of current / non- current classification of assets and
liabilities.
1.2 Foreign currency translation
(i) Functional and presentation currency
The financial statements are presented in Indian Rupee (INR), which is Company’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are
recognised in Statement of profit and loss. A monetary item for which settlement is neither planned nor likely to occur in
the foreseeable future is considered as a part of the entity’s net investment in that foreign operation.
1.3 Property, plant and equipment and Intangible assets
Property, plant and equipment
Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at historical cost less
depreciation, and impairment loss, if any. Historical cost includes expenditure that is directly attributable to the acquisition of
the items.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

1.3 Property, plant and equipment and Intangible assets (continued)
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it
is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be
measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced.
All other repairs and maintenance are charged to Statement of profit and loss during the reporting period in which they are
incurred.
The cost of property, plant and equipment which are not ready for their intended use before such date, are disclosed as
capital work-in-progress.
Depreciation methods, estimated useful lives and residual value
Depreciation is calculated using the straight line method as per the estimated useful lives of assets as below:
Asset category Useful life (in years) Basis of determination of useful lives
Buildings
- Roads 5 Schedule II of the Act
- Buildings 30 - 60 Schedule II of the Act
Plant and equipment
- Wooden casks 7.5 - 15 Management estimate
- Others 7.5 – 15 Schedule II of the Act and management estimate
Furniture and Fittings 10 Schedule II of the Act
Office Equipment
- Computers 3 Schedule II of the Act
- Servers 3 Management estimate
- Others 5 Schedule II of the Act
Vehicles 5 Management estimate
Useful lives of asset classes determined by management estimate, which differ from those prescribed under Schedule II of the
Act are supported by internal technical assessment of the useful lives.
In respect of certain items of plant and equipment for which rates are prescribed in Part C of Schedule II of the Act based on
the number of shifts, depreciation is provided for the full year on triple shift basis.
Property, plant and equipment acquired on amalgamation are depreciated as per the above policy over the remaining useful
life at the date of acquisition.
Assets taken on finance lease are depreciated over their estimated useful lives as stated above or the lease term, whichever is
shorter, if there is no reasonable certainty that the Company will obtain ownership at the end of the lease term.
Disposals
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in Statement
of profit and loss within Other income/ Other expenses.
Intangible assets
Brands and Licenses
Licenses acquired are carried at cost less accumulated amortisation and impairment losses, if any. Brands are regarded as
having indefinite useful economic lives and are not amortised.
Computer software
Costs associated with maintaining software programs are recognized as an expense as incurred. Development costs that are
directly attributable to the design and testing of customised computer software applications are recognised as intangible
assets when the following criteria are met:
a) it is technically feasible to complete the software so that it will be available for use.
b) there is an ability to use or sell the software.
c) it can be demonstrated how the software will generate probable future economic benefits.
d) adequate technical, financial and other resources to complete the development and to use or sell software are available,
and
e) the expenditure attributable to the software during its development can be reliably measured.

1.3 Property, plant and equipment and Intangible assets (continued)
Directly attributable costs that are capitalised as part of the customised computer software applications include employee
costs and other directly attributable costs.
Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is available for
use.
Research and development costs
Research costs are expensed as incurred. Product development costs are expensed as incurred unless technical and
commercial feasibility of the project is demonstrated, further economic benefits are probable, the Company has an intention
and ability to complete and use or sell the product and the costs can be measured reliably.
Amortisation methods and periods
The Company amortises intangible assets with a finite useful life using the straight-line method over their estimated useful
life as follows:
 Licenses – over the license period
 Computer software – 5 years
Impairment of property, plant and equipment and Intangible assets
Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment,
or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other
than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting
period.
Transition to Ind AS
On transition to Ind AS, the Company has elected to continue with the carrying value of all its property, plant and equipment
and intangible assets recognized as at April 1, 2015 measured as per previous GAAP and use that carrying value as deemed
cost of the property, plant and equipment and intangible assets.
1.4 Leases
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the
risks and rewards incidental to ownership to the Company is classified as a finance lease. All other lease arrangements are
classified as operating leases.
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the
inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of
a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly
specified in an arrangement.
As a lessee
Leases of property, plant and equipment where the Company, as lessee, has substantially all the risks and rewards of ownership
are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value of the leased property or,
if lower the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are
included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and
finance cost. The finance cost is charged to the Statement of profit and loss over the lease period so as to produce a constant
periodic rate of interest on the remaining balance of the liability for each period.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are
classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are
charged to Statement of profit and loss on a straight-line basis over the period of the lease unless the payments are structured
to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases.


1.4 Leases (continued)
As a lessor
Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line basis over
the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the
expected inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.
1.5 Investments in subsidiaries and associates
Investments (including deemed investments) in subsidiaries and associates are carried at deemed cost less accumulated
impairment losses. Where an indication of impairment exists, the carrying amount of the investment is assessed and written
down immediately to its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of
disposal and value in use. From time to time, Company provides loans to subsidiaries on mutually agreed terms. Where
Company expects to recover these loans only on sale or liquidation of the subsidiary, such loans are treated as a deemed
equity investment in subsidiary. The loans are presented under ‘Investments in subsidiaries’ and carried at cost (net of
impairment allowance) in accordance with Ind AS 27.
On disposal of investments in subsidiaries and associates the difference between net disposal proceeds and the carrying
amounts are recognized in the Statement of profit and loss.
1.6 Financial Instruments
Classification
The Company classifies its financial assets in the following measurement categories:
 those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss),
and
 those measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the
cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For
investments in debt instruments, this will depend on the business model in which the investment is held. For investments
in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial
recognition to account for the equity investment at fair value through other comprehensive income.
The Company reclassifies debt investments when and only when its business model for managing those assets changes.
Financial assets - Initial recognition
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
Subsequent measurement
Financial assets, other than equity instruments, are subsequently measured at amortised cost, fair value through other
comprehensive income or fair value through profit or loss on the basis of both (a) the entity’s business model for managing
the financial assets and (b) the contractual cash flow characteristics of the financial asset.
Debt instruments measured at amortised cost
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and
interest are measured at amortised cost. A gain or loss on a debt investment that is subsequently measured at amortised cost
and is not part of a hedging relationship is recognised in profit or loss when the asset is derecognised or impaired. Interest
income from these financial assets is included in finance income using the effective interest rate method. Amortised cost is
calculated using the effective interest rate (“EIR”) method by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the EIR.

1.6 Financial Instruments (continued)
Measured at fair value through other comprehensive income (FVOCI):
A financial asset is measured at FVOCI, if it is held with an objective to collect contractual cash flows and selling such
financial asset and the contractual cash flows are solely payments of principal and interest on the principal outstanding.
It is subsequently measured at fair value with fair value movements recognised in the Other Comprehensive Income (OCI),
except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are
recognised in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in
OCI is reclassified from equity to profit or loss and recognised in other gains/ (losses). Interest income from these financial
assets is included in other income using the effective interest rate method.
Measured at fair value through profit and loss (FVPL):
Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. Interest
income from these financial assets is included in other income.
Equity instruments
The Company subsequently measures all equity investments at fair value. Where the Company’s management has elected
to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent
reclassification of fair value gains and losses to profit or loss. Dividends from such investments are recognised in profit or loss
as other income when the Company’s right to receive payments is established.
Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately
from other changes in fair value.
Impairment of financial assets
The Company recognises a loss allowance for expected credit losses on financial assets that are measured at amortised cost
and at FVOCI. The credit loss is difference between all contractual cash flows that are due to an entity in accordance with the
contract and all the cash flows that the entity expects to receive (i.e. all cash shortfalls), discounted at the original effective
interest rate. This is assessed on an individual or collective basis after considering all reasonable and supportable information
including that which is forward-looking.
For trade receivables, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which
requires expected lifetime losses to be recognised from initial recognition of the receivables.
The losses arising from impairment are recognised in the Statement of profit and loss.
Derecognition of financial assets
A financial asset is derecognised only when:
 The Company has transferred the rights to receive cash flows from the financial asset or
 retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay
the cash flows to one or more recipients.
Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards
of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the entity has not transferred
substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised.
Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the
financial asset, the financial asset is derecognised if the Company has not retained control of the financial asset.
Derivative financial instruments
The Company uses derivative financial instruments, such as forward foreign exchange contracts, to hedge its foreign currency
risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is
entered into and are subsequently re-measured at fair value, with changes in fair value recognised in Statement of profit and
loss.


Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently
enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets
and settle the liabilities simultaneously. The legally enforceable right must not be contingent on future events and must be
enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the
counterparty.
Recognition of Income from Investments and other financial assets
Dividend income on investments is recognised and accounted for when the right to receive the payment is established.
Interest income and guarantee commission is accounted for on a time-proportion basis using amortised cost taking into
account the amounts invested and the rate of interest.
1.7 Inventories
Inventories which comprise of raw materials, work-in-progress, finished goods, stock-in-trade, packing materials and stores
and spares are carried at the lower of cost or net realisable value. Cost of inventories comprises all costs of purchase, cost of
conversion and other costs incurred in bringing the inventories to their present location and condition. In determining the
cost, weighted average cost method is used. In case of manufactured finished goods and work-in-progress, fixed production
overheads are allocated on the basis of normal capacity of production facilities. Costs of purchased inventory are determined
after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business,
less the estimated costs of completion and the estimated costs necessary to make the sale. The comparison of cost and net
realisable value is made on an item-by-item basis. Adequate allowance is made for obsolete and slow moving items.
1.8 Trade receivables
Trade receivables are initially recognised at their transaction price (fair value) and subsequently measured at amortised cost
using the effective interest method, less provision for impairment.
1.9 Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand and balances
with banks that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in
value. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
1.10 Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are inclusive
of excise duties and net of returns, trade allowances, rebates and amounts collected on behalf of third parties.
The Company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic
benefits will flow to the entity and specific criteria have been met for each of the Company’s activities as described below.
The Company bases its estimates on historical results, taking into consideration the type of customer, the type of transaction
and the specifics of each arrangement.
a. Sale of products
Revenue is recognised on dispatch of goods or on delivery to customer, in accordance with the terms of sale.
b. Revenue from tie-up manufacturing arrangements
The company has entered into arrangements with tie-up manufacturers (TMU), where-in TMUs manufacture and sell on
behalf of the Company. Accordingly, the transactions of the tie-up units under such arrangements have been recorded
as gross revenue, excise duty and expenses as they were transactions of the Company.
c. Income from brand franchise arrangements
Income from brand franchise is recognised in terms of the respective contracts upon sale of the products by the
franchisees. Revenue in respect of fixed value brand franchise arrangements is recognized proportionately in each
period. Income from brand franchise is net of service tax.

1.11 Employee benefits
(a) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and performance incentives that are expected to
be settled wholly within 12 months after the end of the period in which the employees render the related service are
recognised in respect of employee’s services up to the end of the reporting period and are measured at the amounts
expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations
in the balance sheet.
Defined contribution plans
These are plans in which the Company pays pre-defined amounts to publicly administered funds as per local regulations
and does not have any legal 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’ State
Insurance and Employees’ Pension Scheme. The Company’s payments to the defined contribution plans are recognised
as employee benefit expenses when they are due.
(b) Other long-term employee benefit obligations
The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 months after the end of the
period in which the employees render the related service. They are therefore measured as the present value of expected
future payments to be made in respect of services provided by employees up to the end of the reporting period using
the projected unit credit method. The benefits are discounted using the market yields of government bonds at the end of
the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result
of experience adjustments and changes in actuarial assumptions are recognised in Statement of profit and loss.
The obligations are presented as current / non-current liabilities in the balance sheet if the entity does not have an
unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the
actual settlement is expected to occur.
(c) Post-employment obligation
The Company’s defined benefit plans comprise of gratuity, pension and provident fund (administered by trusts set up
by the Company, where the Company’s obligation is to provide the agreed benefit to the qualifying employees and the
actuarial risk and investment risk if any, fall in substance, on the Company).
The liability or asset recognised in the balance sheet in respect of defined benefit plans is the present value of the defined
benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is
calculated annually by actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by
reference to market yields at the end of the reporting period on government bonds that have terms approximating to
the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and
the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are
recognised in the period in which they occur, directly in other comprehensive income. They are included in retained
earnings in the statement of changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are
recognised immediately in profit or loss as past service cost.
(d) Share-based payments
Share based compensated benefits are provided to certain grades of employees in the form of United Spirits Limited-
Stock Appreciation Rights Plan, a cash settled scheme, and the Diageo Incentive Plan, an equity settled scheme.
Stock appreciation rights
Liabilities for the Company’s share appreciation rights are recognised as employee benefit expense over the relevant
service period. The liabilities are remeasured to fair value at each reporting date and are presented as provisions in the
balance sheet.


1.11 Employee benefits (continued)
Diageo incentive plan

The fair value of equity settled share options based on shares of Diageo Plc. (the ultimate holding company) is initially
measured at grant date and is charged to the Statement of profit and loss over the vesting period, which is the period over
which all of the specified vesting conditions are satisfied, and the credit is included in equity. At the end of each period,
the Company revises its estimates of the number of options that are expected to vest based on the non-market and
service conditions. It recognizes the impact of revision to original estimate, if any, in profit or loss, with a corresponding
adjustment to equity. Once the costs towards share option plan are recharged by Diageo Plc, the same is accounted for
as a reduction from equity.
1.12 Income tax
The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the
applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and
to unused tax losses, if any.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period in countries where Company has taxable income. Management periodically evaluates positions taken in
tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions
where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax rates
(and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply
when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to
settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in Statement of profit and loss, except to the extent that it relates to items recognised
in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively. Interest and penalties on Income-tax has been disclosed with current tax charge.
Minimum Alternative Tax (‘MAT’) credit is recognised as an asset only when and to the extent there is reasonably certain that
the Company will pay normal income-tax during the specified period. In the year in which the MAT credit becomes eligible to
be recognised as an asset, the said asset is created by way of a credit to the statement of profit and loss. The Company reviews
the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no
longer reasonable certainity to the effect that Company will pay normal income-tax during the specified period. MAT credit
entitlement is presented as deferred tax asset in the balance sheet.
1.13 Earnings per share (EPS)
Basic EPS is arrived by dividing profit attributable to equity shareholders by the weighted average number 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.
1.14 Provisions and contingencies
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. A
provision is made in respect of onerous contracts, i.e., contracts in which the unavoidable costs of meeting the obligations
under the contract exceed the economic benefits expected to be received under such contracts. Provisions are not recognised
for other future operating losses. The carrying amounts of provisions are reviewed at each balance sheet date and adjusted to
reflect the current best estimate.

1.14 Provisions and contingencies (continued)
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined
by considering the class of obligations as a whole.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the
present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate
that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the
provision due to the passage of time is recognised as interest expense.
A disclosure for contingent liabilities is made where there is a possible obligation or a present obligation that may probably
not require an outflow of resources or an obligation for which the future outcome cannot be ascertained with reasonable
certainty. When there is a possible or a present obligation where the likelihood of outflow of resources is remote, no provision
or disclosure is made.
1.15 Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised
in Statement of profit and loss over the period of the borrowings using the effective interest method. Fees paid on the
establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or
all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no
evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment and
amortised over the period of the facility to which it relates.
Borrowings are derecognized from the balance sheet when the obligation specified in the contract is discharged, cancelled
or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to
another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in
Statement of profit and loss as other gains/(losses).
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting period.
1.16 Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended
use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or
sale.
Other borrowing costs are expensed in the period in which they are incurred.
1.17 Exceptional items
When an item of income or expense within Statement of profit and loss from ordinary activity is of such size, nature or
incidence that their disclosure is relevant to explain the performance of the Company for the year, the nature and amount of
such items is disclosed as exceptional items.
1.18 Segmental information
Company is engaged in the business of manufacture, purchase and sale of beverage alcohol (spirits and wines), including
through tie-up manufacturing/brand franchise. The Company has identified its Executive Committee as the Chief Operating
Decision Maker. The Executive Committee assesses performance and allocates resources for ‘Prestige and Above’ and ‘Popular’
brand segments. Since both these segments meet the aggregation criteria as per the requirements of Ind AS 108 on ‘Operating
segments’, the management considers these business activities as a single reportable segment.
1.19 Equity
Own shares represent shares and share options of the Company that are held in treasury by USL Benefit trust. Pursuant
to order of High Court of Karnataka and Bombay, shares held in aforesaid trust shall be treated as part of investment in
subsidiary.
Dividends - Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.


1.20 Assets (or disposal groups) held for sale and discontinued operations
Assets (or disposal groups) are classified as held for sale under current assets if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use and a sale is considered highly probable and is
expected to be sold within one year from the balance sheet date. They are measured at the lower of their carrying amount
and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits and
financial assets which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less
costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but
not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date
of the sale of the non-current asset (or disposal group) is recognised at the date of de-recognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are
classified as held for sale. Non-current assets classified as held for sale and the assets of a disposal group classified as held for
sale are presented separately from the other assets in the balance sheet under the heading Current assets. The liabilities of a
disposal group classified as held for sale are presented separately from other liabilities in the balance sheet.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that
represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to
dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results
of discontinued operations are presented separately in the statement of profit and loss.
1.21 Financial guarantee contracts
Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability is initially
measured at fair value and subsequently at the higher of the amount determined in accordance with Ind AS 37 and the amount
initially recognised less cumulative amortisation, where appropriate. The fair value of financial guarantees is determined as
the present value of the difference in net cash flows between the contractual payments under the debt instrument and the
payments that would be required without the guarantee, or the estimated amount that would be payable to a third party for
assuming the obligations.
1.22 Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which
are unpaid. The amounts are unsecured and are usually paid as per credit period. Trade and other payables are presented as
current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their
fair value and subsequently measured at amortised cost using the effective interest method.
1.23 Common control transactions
Business combinations involving entities that are controlled by the Company are accounted for using the pooling of interests
method as follows:
• The assets and liabilities of the combining entities are reflected at their carrying amounts.
• No adjustments are made to reflect fair values, or recognise any new assets or liabilities. Adjustments are only made to
harmonise accounting policies.
• The financial information in the financial statements in respect of prior periods is restated as if the business combination
had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of
the combination. However, where the business combination had occurred after that date, the prior period information
is restated only from that date.
• The balance of the retained earnings appearing in the financial statements of the transferor is aggregated with the
corresponding balance appearing in the financial statements of the transferee or is adjusted against general reserve.
• The identity of the reserves are preserved and the reserves of the transferor become the reserves of the transferee.
• The difference, if any, between the amounts recorded as share capital issued plus any additional consideration in the
form of cash or other assets and the amount of share capital of the transferor is transferred to capital reserve and is
presented separately from other capital reserves.

1.24 Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest million as per the
requirement of Schedule III to the Companies Act, 2013, unless otherwise stated. The sign ‘0’ in these Ind AS standalone
financial statements indicates that the amounts involved are below INR five lacs and the sign ‘-’ indicates that amounts are nil.
1.25 Recent accounting pronouncements
Standards issued but not yet effective
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules,
2017, notifying amendments to Ind AS 7, ‘Statement of Cash Flows’ and Ind AS 102, ‘Share-based payment’. These amendments
are in accordance with the amendments made by International Accounting Standards Board (IASB) to IAS 7, ‘Statement of
Cash Flows’ and IFRS 2, ‘Share-based payment’, respectively. The amendments are applicable to the Company from April 1,
2017.
Amendment to Ind AS 7:
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate
changes in liabilities arising from financial activities, including both changes arising from cash flows and non-cash changes,
suggesting inclusion of a reconciliation between the opening and the closing balances in the balance sheet for liabilities
arising from the financing activities, to meet the disclosure requirement.
The Company is evaluating the requirements of the amendment and believes that the effect on the financial statements is
unlikely to be material.
The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-
settled awards and awards that include a net settlement feature in respect of withholding taxes.
It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-settled
awards. Market-based performance conditions and non-vesting conditions are reflected in the ‘fair values’, but non-market
performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to
vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are
modified with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for
as such from the date of the modification. Further, the amendment requires the award that includes a net settlement feature
in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is treated
as if it was part of an equity settlement.
The Company is evaluating the requirements of the amendment and believes that the impact on the financial statements is
2. Critical estimates and judgements
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the
actual result. This note provides an overview of the areas that involved a higher degree of judgement or complexity, and
of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than
those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes
together with information about the basis of calculation for each affected line item in the financial statements.
The areas involving critical estimates or judgements are:
• Estimation of defined benefit obligation – Note 39
• Estimation of provisions and contingent liabilities – Notes 18 and 54
• Impairment of investments in subsidiaries – Note 36
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under
the circumstances.


3.1 Property, Plant and Equipment
Owned Leased Total
Freehold Buildings Plant and Furniture Office Vehicles Land Office Vehicles
Land [Notes (a) Equipment and Equipment Equipment
and (b) Fittings
below]
Year ended March 31, 2016
Gross carrying amount
Deemed cost as at April 1, 2015 2,581 2,672 4,839 252 94 16 112 100 13 10,679
Additions - 170 794 41 64 3 9 35 - 1,116
Disposals - (12) (13) (4) (3) - - - (3) (35)
Closing gross carrying amount 2,581 2,830 5,620 289 155 19 121 135 10 11,760
Accumulated depreciation
Depreciation charge for the year - 93 751 52 61 13 - 42 3 1,015
Disposals - - (3) - (1) - - - - (4)
Closing accumulated depreciation - 93 748 52 60 13 - 42 3 1,011
Net carrying amount as at 2,581 2,737 4,872 237 95 6 121 93 7 10,749
March 31, 2016
Opening gross carrying amount 2,581 2,830 5,620 289 155 19 121 135 10 11,760
Additions - 912 1,742 99 90 3 10 107 4 2,967
Assets classified as held for sale (35) (202) (38) (4) (2) - - - - (281)
(refer Note 13)
Disposals [Note (c) below] (21) (84) (352) (15) (16) (6) - - - (494)
Opening accumulated depreciation - 93 748 52 60 13 - 42 3 1,011
Depreciation charge for the year - 166 889 66 64 3 44 72 3 1,307
Assets classified as held for sale - (9) (18) (2) (2) - - - - (31)
(refer Note 13)
Disposals - (7) (57) (3) (13) (6) - - - (86)
Closing accumulated - 243 1,562 113 109 10 44 114 6 2,201
depreciation
Net carrying amount as at 2,525 3,213 5,410 256 118 6 87 128 8 11,751
March 31, 2017
Notes:
(a) Buildings include an amount of INR 357 (2016: INR 357, 2015: INR 357) in respect of which title deeds are yet to be
registered in the name of the Company.
(b) Cost of buildings includes the following payments made for the purpose of acquiring the right of occupation:
i) 660 equity shares (unquoted) of INR 100/- each fully paid in Shree Madhu Industrial Estate Limited INR 0.066 (2016
and 2015: INR 0.066).
ii) 199, 6 % Debentures (unquoted) of INR 1,000/- each fully paid in Shree Madhu Industrial Estate Limited INR 0.199
(2016 and 2015: INR 0.199).
iii) Deposit with Shree Madhu Industrial Estate Limited INR 0.132 (2016 : INR 0.132 ; 2015: INR 0.132).
iv) Fully paid shares INR 0.006 (2016 : INR 0.006 ; 2015: INR 0.006) held in a Co-operative Housing Society.
(c) Disposal includes write down of INR 217 in the value of certain plant and equipment disclosed as exceptional items
(refer Note 28).

3.1 Property, Plant and Equipment (Continued)
Leased assets
Refer Note 40(a)
Property, plant and equipment pledged as security
Refer to Note 34 for information on property, plant and equipment pledged as security by the Company.
Contractual obligations
Refer to Note 53 for disclosure of contractual commitments for the acquisition of property, plant and equipment.
3.2 Intangible assets

Brand Licenses Computer Total
software
Deemed cost as at April 1, 2015 9 6 - 15
Additions - - - -
Disposals - - - -
Closing gross carrying amount 9 6 - 15
Accumulated amortisation
Amortisation charge for the year - 2 - 2
Disposals - - - -
Closing accumulated amortisation - 2 - 2
Net carrying amount as at March 31, 2016 9 4 - 13
Opening gross carrying amount 9 6 - 15
Additions - 32 - 32
Additions- Internal development - - 92 92
Disposals - - - -
Closing gross carrying amount 9 38 92 139
Opening accumulated amortisation - 2 - 2
Amortisation charge for the year - 4 3 7
Impairment charge for the year 9 - - 9
Disposals - - - -
Closing accumulated amortisation 9 6 3 18
Net carrying amount as at March 31, 2017 - 32 89 121


4.1. Investments All amounts in INR Million
Face As at March 31, 2017 As at March 31, 2016 As at April 1, 2015
value Number of Amount Number Amount Number of Amount
shares of shares
shares
Non-current
Investments in equity instruments carried at
FVOCI (fully paid-up)
In others
Quoted
McDowell Holdings Limited INR 10/- - - 50,000 1 50,000 1
United Breweries Limited INR 1/- - - - - 85,00,000 8,503
Mangalore Chemicals & Fertilizers Limited INR 10/- - - 6,150 1 6,150 1
Housing Development Finance Corporation INR 2/- - - 1,200 1 1,200 2
Limited
ICICI Bank Limited INR 2/- - - 44,580 11 44,580 14
HDFC Bank Limited INR 2/- - - 1,000 1 1,000 1
Vijaya Bank INR 10/- - - 42,100 1 42,100 2
Radico Khaitan Limited INR 2/- - - 5,37,850 51 5,37,850 48
Khaitan Chemicals & Fertilizers Limited INR 1/- - - 1,38,800 1 1,38,800 1
Total investments in equity instruments - 68 8,573
Investment in mutual funds at FVPL
Quoted
Unit Trust of India
UTI Balance Fund - Income - Retail - - 14 9
(formerly known as Unit Scheme 2002)
Total investment in mutual funds - 14 9
Total non-current investments - 82 8,582
Current
Investments in mututal funds carried at FVPL
Quoted
HSBC Mutual Fund - 2 2
ICICI Prudential Liquid Fund - 9 9
SBI - Premier Liquid Fund - 0 0
Total current investments - 11 11
Aggregate amount of quoted investments and - 93 8,593
market value thereof

Face Number As at Number As at Number As at
value of March 31, of March 31, of April 1,
shares 2017 shares 2016 shares 2015
4.2 Investments in subsidiaries
Investment in equity instruments carried at cost
(fully paid-up)
Quoted
Pioneer Distilleries Limited INR 10/- 10,041,150 - 10,041,150 - 10,041,150 -
Unquoted
United Spirits Nepal Private Limited (Refer Note 49) NRS 100/- - - - - 67,716 66
McDowell & Co (Scotland) Limited GBP 1/- 1,575,000 126 1,575,000 126 1,575,000 126
Shaw Wallace Overseas Limited [Refer Note 51(a)] GBP 1/- 357,745 - 357,745 - 357,745 -
Sovereign Distilleries Limited (Refer Note 50) INR 10/- 485,139,152 4,267 485,139,152 4,267 58,442,746 -
Less: Impairment in the value of investment 3,158 2,681 -
1,109 1,586 -
Tern Distilleries Private Limited (Refer Note 50) INR 10/- 102,676,347 987 102,676,347 987 4,000,000 -
Less: Impairment in the value of investment 602 527 -
385 460 -
Asian Opportunities & Investments Limited USD 1/- 4,998,706 - 4,998,706 - 4,998,706 -
Palmer Investment Group Limited USD 1/- 15,000,000 - 15,000,000 - 15,000,000 -
Montrose International S.A USD 1000/- 500 - 500 - 500 -
Liquidity Inc. USD 0.0001/- 4,000,000 - 4,000,000 - 4,000,000 -
Four Seasons Wines Limited INR 10/- 27,668,899 - 27,668,899 - 27,668,899 -
USL Holdings Limited USD 1 500,000 - 500,000 - 500,000 -
United Spirits (Shanghai) Trading Company Limited RMB 10 500,000 - 500,000 - 500,000 -
Royal Challengers Sports Private Limited INR 10/- 14,690 421 14,690 421 14,690 421
Total investments in equity instruments 2,041 2,593 613
Investments in others carried at cost
Investment as sole beneficiary in USL Benefit Trust 1,197 1,197 1,197
[refer Note (a) below]
Investments in preference shares carried at cost
(fully paid-up)
Unquoted
12% Non-cumulative redeemable optionally convert- INR 10/- 30,612,245 145 30,612,245 145 30,612,245 145
ible preference shares of Four Seasons Wines Limited
- - 145
12% Cumulative Redeemable preference shares of Four INR 10/- 8,000,000 80 8,000,000 80 8,000,000 80
Seasons Wines Limited
- - 80
Total investments in preference shares - - 225


4.2 Investments in subsidiaries (continued)
As at As at As at
March 31, March 31, April 1,
2017 2016 2015
Advances considered deemed investment in subsidiaries
Asian Opportunities & Investments Limited 213 255 1,557
- - 1,557
Four Seasons Wines Limited 667 624 535
406 499 535
Pioneer Distilleries Limited 1,354 1,354 1,354
Less: Impairment in the value of investment 194 - -
1,160 1,354 1,354
Liquidity Inc. - - -
McDowell & Co (Scotland) Limited 404 431 396
Sovereign Distilleries Limited 5 - 1,101
Tern Distilleries Private Limited 9 - 461
USL Holdings Limited - - -
Royal Challengers Sports Private Limited 4,132 3,757 3,193
United Spirits (Shanghai) Trading Company Limited - - -
Total deemed investments 6,116 6,041 8,597
Total investments 9,354 9,831 10,632
Aggregate amount of quoted investments and market value thereof 1,640 1,295 703
Aggregate amount of unquoted investments 14,007 13,644 10,632
Aggregate amount of impairment in the value of investments (refer Note 36) (4,653) (3,813) -
Notes:
(a) Investment as a sole beneficiary in USL Benefit Trust was made as per the terms of composite scheme of arrangement
approved by the Honourable High Courts of Karnataka and Bombay, for amalgamating various companies with the United
Spirits Limited. The trust has been established for the exclusive benefit of the Company and holds 3,459,090 shares of the
Company. As per the terms of the aforesaid scheme of arrangement, Company has carried this investment at the aggregate
of book value as per the books of the concerned transferor companies. Also refer Notes 34 and 46, for assets pledged.
(b) Additional information
The Company has measured its investments in subsidiaries at cost in accordance with Ind AS 27. On adoption of Ind
AS, Company has measured these investments at deemed cost using the net carrying value as per previous GAAP as at
March 31, 2015.

4.2 Investments in subsidiaries (continued) All amounts in INR Million
The gross amount of investments in subsidiaries as at March 31, 2015 and the related impairment allowances as at that date
have been provided below as additional information-
Gross Less Deemed
investment impairment cost as at
allowance April 1, 2015
Investment in equity instruments carried at cost (fully paid-up)
Quoted
Pioneer Distilleries Limited 1,117 1,117 -
Unquoted
United Spirits Nepal Private Limited 66 - 66
McDowell & Co (Scotland) Limited 126 - 126
Shaw Wallace Overseas Limited 14 14 -
Sovereign Distilleries Limited 315 315 -
Asian Opportunities & Investments Limited 301 301 -
Palmer Investment Group Limited 6,918 6,918 -
Montrose International S.A 134 134 -
Liquidity Inc. 119 119 -
Four Seasons Wines Limited 291 291 -
USL Holdings Limited 22 22 -
United Spirits (Shanghai) Trading Company Limited 27 27 -
Royal Challengers Sports Private Limited 1,699 1,278 421
Tern Distilleries Private Limited 140 140 -
Total investments in equity instruments 11,289 10,676 613
Investments in others
Investment as sole beneficiary in USL Benefit Trust 1,197 - 1,197
Investments in preference shares (fully paid-up)
Unquoted
12% Non-cumulative redeemable optionally convertible preference shares of Four Seasons Wines Limited 322 177 145
12% Cumulative Redeemable preference shares of Four Seasons Wines Limited 80 - 80
Total investments in preference shares 402 177 225
Advances considered deemed investment in subsidiaries
Asian Opportunities & Investments Limited 1,802 245 1,557
Liquidity Inc. 54 54 -
McDowell & Co (Scotland) Limited 396 - 396
Pioneer Distilleries Limited 1,354 - 1,354
Royal Challengers Sports Private Limited 3,193 - 3,193
Sovereign Distilleries Limited 3,308 2,207 1,101
Tern Distilleries Private Limited 733 272 461
USL Holdings Limited 46,432 46,432 -
United Spirits (Shanghai) Trading Company Limited 16 16 -
57,921 49,324 8,597
Total investments at deemed cost as at April 1, 2015 10,632


As at As at As at
5. Loans
Non-current
Unsecured
Loan to UBHL (refer Note 42)
Considered doubtful 13,681 13,972 14,220
Loans to related parties [refer Note 37(c)]
Considered good 124 903 951
Total loans to related parties 2,787 3,399 3,158
16,468 17,371 17,378
Less: Allowance for doubtful loans (16,344) (16,468) (16,427)
Total non-current loans 124 903 951
6. Other financial assets

Non-current
Security deposits 204 258 193
Balances with banks [refer Note (a), (b) and (c) below] 729 268 247
Advances to tie-up manufacturing units
Considered good 377 - -
Considered doubtful - 128 134
1,310 654 574
Less: Allowance for doubtful balances - (128) (134)
Total other non-current financials assets 1,310 526 440
Notes :
(a) Includes deposit of INR 459 (2016 : Nil and 2015 : Nil) with a bank in suspense account (refer Note 46)
(b) Includes deposit of INR 268 (2016 : INR 267 and 2015 : INR 246 ) with a bank kept under escrow pending resolution of
various taxation matters.
(c) Margin money against bank guarantees INR 2 (2016 : INR 1 and 2015: INR 1)
Current
Interest accrued on loans - related parties [Refer note 37(c)]
Considered good 783 783 1,475
Considered doubtful 126 126 126
Receivable from related parties [Refer note 37(c)]
Considered good 104 9 -
Advances to Tie-up manufacturing units
Considered good 504 1,516 1,623
Receivable towards sale of Property, plant and equipment
Considered good 72 - 871
Considered doubtful 621 621 -
Loans and advances to employees
Security deposits
Considered doubtful 73 63 1,417
Other advances
3,205 4,705 9,165
Less: Allowance for doubtful receivables and advances (1,476) (1,470) (3,860)
Total other current financial assets 1,729 3,235 5,305

As at As at As at
2017 2016 2015
7. Deferred tax assets (net)
MAT credit receivable - 27 -
Deferred tax assets
Allowance for doubtful debts / advances / deposits 1,015 971 1,111
Provisions 948 1,108 592
Others 39 29 -
2,002 2,108 1,703
Deferred tax liabilities
Depreciation and amortisation 761 596 604
1,241 1,512 1,099
Total - Deferred tax assets (net) 1,241 1,539 1,099
Movement in deferred tax assets Allowance for Provisions Depreciation Others Total
doubtful debts/ and
advances / amortisation
deposits
As at April 1, 2015 1,111 592 (604) - 1,099
(Charged) / Credited:
- to profit and loss (140) 452 8 29 349
- to other comprehensive income - 64 - - 64
As at March 31, 2016 971 1,108 (596) 29 1,512
(Charged) / Credited:
- to profit and loss 44 (160) (165) 10 (271)
- to other comprehensive income - - - - -
As at March 31, 2017 1,015 948 (761) 39 1,241
As at As at
March 31, March 31,
2017 2016
8. Income tax balances
Current tax liabilities
Opening balance 3,477 3,177
Add: Current tax payable for the year - 2,312
Add / (Less) : Reclassification to advance tax (net) (149) (375)
Less : Taxes paid (11) (1,637)
Closing balance 3,317 3,477
Advance tax (net)
Add : Taxes paid 1,932 -
Less: Current tax payable for the year (803) -
Less : Reclassification from current tax liabilities (149) (375)


As at As at As at
2017 2016 2015
9. Other assets
Non-current
Capital advances 44 165 467
Balances with government authorities
Considered good 1,076 654 654
Net surplus in gratuity plan [Refer Note 39(b)] 473 - -
Pre-paid expenses 1,891 2,111 2,339
5,363 4,828 5,368
Less: Allowance for doubtful balances (1,879) (1,898) (1,908)
Total other non-current assets 3,484 2,930 3,460
Current
Indirect taxes and duties paid in advance 2,701 3,356 2,279
Advances to related parties [Refer note 37(c)]
Advances to suppliers
Pre-paid expenses 994 968 925
6,971 7,176 6,141
Less: Allowance for doubtful advances (839) (1,757) (1,801)
Total other current assets 6,132 5,419 4,340
10. Inventories
(Valued at lower of cost and net realisable value)
Raw materials 1,479 1,783 2,469
[including materials in transit INR 279 (2016: INR 145, 2015: INR 250)]
Work-in-progress 9,200 8,965 8,519
[including held by a branch outside India INR 4,024
(2016: INR 4,271, 2015: INR 4,481)]
Finished goods 5,453 5,457 3,523
[including goods in transit INR 283 (2016: INR 1,069, 2015: INR 925)]
Stock-in-trade 510 484 19
[including goods in transit INR 202 (2016: INR 55, 2015: INR Nil)]
Packing materials 1,812 2,240 2,270
[including materials in transit INR 59 (2016: INR 58, 2015: INR Nil)]
Stores and spares 84 70 68
Total inventories 18,538 18,999 16,868
Amounts recognised in profit and loss
Allowance for obsolete inventories for the year amounted to INR 301 (2016: INR 353). The net allowance is recognised as an
expense during the year and included in ‘change in inventories of finished goods, work-in-progress and stock-in-trade’ in
statement of profit and loss. Further an allowance of INR 168 (2016: Nil) has been recognised as an expense as exceptional
item [refer Note 28(a)].
For details of inventories pledged as security refer Note 34.

As at As at As at
2017 2016 2015
11. Trade receivables
(Unsecured)
Considered good 29,390 22,657 15,590
29,845 23,464 18,556
Less: Allowance for doubtful debts (Refer Note 32) (455) (807) (2,966)
29,390 22,657 15,590
Receivables from related parties [Refer note 37(c)]
Total trade receivables 29,605 23,140 16,510

Balances with banks
In current accounts 47 39 1,649
In EEFC accounts - - 8
Cheques on hand 392 7 162
Cash on hand - 2 2
Total cash and cash equivalents 439 48 1,821
12.2 Bank balances other than cash and cash equivalents

In unpaid dividend accounts 12 14 17
In unpaid public deposit accounts [refer note (a) below] 18 32 269
Bank deposits due to mature within 12 months from the reporting date 54 33 69
Total bank balances other than cash and cash equivalents 84 79 355
Note:
(a) includes INR 11 (2016: INR 16; and 2015: INR 215) transferred to a separate non-interest bearing escrow account pertaining
to unclaimed public deposits wherein duly discharged deposit receipts were not received from deposit holders.
13. Assets classified as held for sale

Investments in United Spirits Nepal Private Limited (Refer Note 49) 66 66 -
Property, plant and equipment (Refer Note 3.1) 250 - 1
Total assets classified as held for sale 316 66 1
Description of the facts and circumstances which led to classification as held for sale
The Company has identified certain properties, vehicles etc. as non-core to its operations. These planned assets are readily available
for sale and an active programme to locate the buyer and complete the sale has been initiated by the management.


As at As at As at
2017 2016 2015
14. Equity Share capital
Authorised
548,000,000 (2016: 548,000,000 ; 2015: 395,000,000) Equity Shares 5,480 5,480 3,950
of INR 10/- each
159,200,000 (2016: 159,200,000; 2015: 159,200,000) Preference Shares 1,592 1,592 1,592
of INR 10/- each
1,200,000 (2016: 1,200,000; 2015: Nil) 7% Non Cumulative Redeemable 120 120 -
Preference Shares of INR 100/- each
7,192 7,192 5,542
Issued, subscribed and paid-up
145,327,743 (2016: 145,327,743; 2015: 145,327,743) Equity Shares 1,453 1,453 1,453
of INR 10/- each fully paid up
1,453 1,453 1,453
(a) Reconciliation of the number of shares outstanding

No. of As at No. of As at No. of As at
Shares March 31, Shares March 31, Shares April 1,
2017 2016 2015
Balance at the beginning of the year 145,327,743 1,453 145,327,743 1,453 145,327,743 1,453
Add: Equity shares issued during the year - - - - - -
Balance at the end of the year 145,327,743 1,453 145,327,743 1,453 145,327,743 1,453
(b) Rights, preferences and restrictions attached to equity shares

The Company has one class of equity shares having a face value of INR 10 per share. Each holder of the equity shares
is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting, except in the case of interim dividend. In the event of liquidation,
the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential
amounts, if any in proportion to their holdings.
(c) Shares held by holding / ultimate holding company and / or their subsidiaries / associates
Out of the equity shares issued by the Company, shares held by the holding company and its subsidiaries / associates are
as below:

2017 2016 2015
Relay B V (wholly owned subsidiary of 79,612,346 796 79,612,346 796 79,612,346 796
Diageo Plc) *
79,612,346 796 79,612,346 796 79,612,346 796
* On December 20, 2013, the Honorable Karnataka High Court passed an order in the matter involving United Breweries (Holdings)
Limited (UBHL) and its creditors and the Diageo Plc. setting aside an earlier leave order which permitted UBHL to sell 10,141,437
equity shares in the Company to Relay B V (included above), pending disposal of the winding up petitions against UBHL. On the
above matter, UBHL and Diageo Plc. have approached the Honorable Supreme Court by way of special leave petitions (SLPs)
challenging the order of the division bench. Pending, disposal of the above SLPs, the Honorable Supreme Court has directed that
status quo be maintained in respect of the above mentioned transaction of sale of shares to Relay B V.

(d) The Company has not issued any shares for consideration other than cash during the period of five years
immediately preceding the reporting date.
(e) Details of shareholders holding more than 5% shares in the Company.
As at As at As at
No. of % of No. of % of No. of % of
Shares Holding Shares Holding Shares Holding
Relay B V 79,612,346 54.78% 79,612,346 54.78% 79,612,346 54.78%
(f) During the financial year 2005 – 06, the Company had issued 17,502,762 Global Depository Shares (GDSs) representing
8,751,381 equity shares with 2 GDSs representing 1 equity share of face value of Rs. 10/- each at US$ 7.4274 per GDS,
aggregating to US$ 130 million, listed on the Luxembourg stock exchange. These GDSs did not carry any voting rights. The
Company during the year has terminated the deposit agreement in respect of the GDSs and has communicated to the
Luxembourg Stock Exchange with the objective of delisting these GDSs listed with Luxembourg stock exchange. There are
no GDS outstanding as at March 31, 2017. Notwithstanding this development, the number of shares outstanding or issued
and subscribed in the share capital of the Company remains unchanged and the Company’s shares continue to be listed
with the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE).
(g) There are no shares reserved for issue under options and contracts / commitments for the sale of shares /
disinvestments.
(h) There are no bonus shares issued, bought back during the period of five years immediately preceding the reporting
date.
(i) Details of shares in the Company held by Company, subsidiaries or associates
As at As at As at
USL Benefit Trust (refer Note 4.2) 3,459,090 2.38% 3,459,090 2.38% 3,459,090 2.38%
15.1 Reserves and surplus

As at As at As at
2017 2016 2015
Capital reserve arising from common control transaction 683 683 683
Capital redemption reserve 699 699 699
Securities premium account 45,682 45,682 45,682
Central subsidy 2 2 2
Contingency reserve 110 110 110
General reserve 11,033 11,033 11,033
Share based incentive reserve 40 - -
Retained Earnings (40,324) (42,590) (52,244)
17,925 15,619 5,965
15.2 Other reserves

FVOCI - Equity Instruments - 68 8,417
- 68 8,417


16. Borrowings
Maturity date Terms of Coupon/ As at As at As at
repayment interest rate March 31, March 31, April 1,
2017 2016 2015
Non-current
Secured
Term loans from banks March 3, 2017 Single repayment at the 10.85% - 5,000 5,000
end of the term
Finance lease obligations 2015 - 2020 Monthly installments 3% - 10% 135 100 109
[refer Note 40(a) and Note (a) below]
Unsecured
Term loans from banks January 5, 2018 Single repayment at MCLR + 20bps 3,500 3,500 3,500
June 29, 2018 the end of the term of (presently 3,500 3,500 -
March 3, 2020 each loan 7.9%) 5,000 - -
September 9, Repayable in 2 equal 11.5% - - 3,791
2016 instalments
12,135 12,100 12,400
Less: Current maturities on long term
borrowings (refer Note 17)
Term loan from banks - 5,000 -
Finance lease obligation 66 43 34
Unsecured
Term loan from banks 3,500 - 1,896
Total non-current borrowings 8,569 7,057 10,470
Current
Secured
Loans repayable on demand
Working capital loans from banks [refer note Payable on Payable on demand 7.9% 3,099 6,291 15,913
(b) below] demand
Others
Term loans from banks [refer note (b) below] April 2017 - Single repayment at the 7.9% 4,750 6,650 4,800
May 2017 end of the term of each
loan
Unsecured
Term loans from banks April 2017 - Single repayment at the 7.9% - 7.95% 3,500 12,250 13,000
loan
Term loans from others April 2017 - Single repayment at the 7.9% - 8% 4,750 4,750 2,500
loan
Commercial papers issued to banks and May 2017 - Single repayment at the 6.7% - 7.1% 12,173 - -
others November end of the term of each
2017 commercial paper
Total current borrowings 28,272 29,941 36,213
Notes:
Secured borrowings and assets pledged as security
a) Finance lease obligations are secured by assets underlying the finance lease [refer Note 40(a)]
b) Working capital loans and certain short term loans are secured by hypothecation of inventories (excluding maturation stock held by third party in UK)
and book debts.
The carrying amounts of financial and non-financial assets pledged as security for current and non-current borrowings are disclosed in note 34.

As at As at As at
2017 2016 2015
17. Other financial liabilities
Non-current
Capital creditors - 84 251
Total other non-current financial liabilities - 84 251
Current
Current maturities of
Borrowings (Refer Note 16) 3,500 5,000 1,896
Finance lease obligation (Refer Note 16) 66 43 34
Interest accrued but not due - 8 27
Unpaid / unclaimed dividends* 12 14 17
Unpaid / unclaimed debentures* 0 0 0
Unpaid / unclaimed public deposits (Including accrued interest)** 18 32 259
Others
Liability for customer claims (refer Note 47) 3,280 250 -
Due to tie-up manufacturing units [refer Note 38(a)] 905 578 417
Capital creditors 224 685 426
Employee payables 1,011 743 612
Total other current financial liabilities 9,153 7,528 3,876
* Investor Education and Protection Fund (IEPF) shall be credited when due. As at March 31, 2017 no balances were due to
be transferred to IEPF.
** Includes unclaimed public deposit of INR 11 (2016: INR 16, 2015: INR 215) in case of which the duly discharged fixed
deposit receipts were not received from the deposit holders.
18. Provisions
Non-Current
Employee benefits
Shortfall in provident fund trust [refer Note 39(b)] - 40 97
Compensated absences [refer Note 39(f )] 389 625 545
Pension liability [refer Note 39(b)] 16 18 19
Share appreciation rights (refer Note 35) 17 - -
Total non current provisions 422 683 661
Current
Employee benefits
Gratuity [refer Note 39(b)] - 356 553
Pension liability [refer Note 39(b)] 2 - 2
Provision for indirect taxes (refer Note below) 2,431 1,843 1,569
Provision for onerous contracts (refer Note below) 75 - -
Total current provisions 2,615 2,359 2,295


Note:
Movement in provisions
Description As at Additions Amounts As at
April 1, 2016 used March 31, 2017
Indirect taxes 1,843 642 54 2,431
Onerous contracts (refer Note 47) - 75 - 75
Description As at Additions Amounts used As at

April 1, 2015 March 31, 2016
Indirect taxes 1,569 366 92 1,843
Provision is made for probable cash outflow arising out of pending disputes / litigations with various regulatory authorities.
It is not practicable for the Company to estimate the timing of the cash outflows, if any, in respect of the above, pending
resolution of respective proceedings.
As at As at As at
2017 2016 2015
19. Trade payables
Trade payables (refer Note 56) 10,726 9,398 8,362
Dues to related parties [refer Note 37(c)] 1,072 620 354
Total trade payables 11,798 10,018 8,716
20. Other current liabilities

Advances from customers 736 129 435
Statutory dues 1,922 1,995 1,240
Liability for excise duty on closing finished goods inventory 1,783 1,514 826
(net of prepaid excise duty)
Total other current liabilities 4,441 3,638 2,501

For the For the
March 31, 2017 March 31, 2016
21. Revenue from operations
Sale of products (including excise duty) 252,947 233,107
Income from brand franchise 595 739
Other operating revenue:
Scrap sales 351 318
Miscellaneous 95 278
Total revenue from operations 253,988 234,442
22. Other income

Interest income on financial assets held at amortised cost 152 17
Interest income from loans to subsidiaries carried at cost [Refer Note 37(b)] 50 462
Dividend income from subsidiary company carried at cost [Refer Note 37(b)] 49 16
Dividend income from investments measured at FVPL 1 1
Exchange gain (net) - 209
Gain on disposal of property, plant and equipment (net) 337 -
Liabilities, provisions or allowances no longer required written back 514 330
Miscellaneous income 8 22
Total other Income 1,111 1,057
23. Cost of materials consumed

Raw materials 28,497 30,894
Packing materials 17,845 17,515
Total cost of materials consumed 46,342 48,409
24. Changes in inventories of finished goods, work-in-progress and stock-in-trade

Opening inventory:
Finished goods 5,457 3,523
Work-in-progress 8,965 8,519
Stock-in-trade 484 19
Total opening balance 14,906 12,061
Closing inventory:
Finished goods 5,453 5,457
Work-in-progress 9,200 8,965
Total closing balance 15,163 14,906
Increase / (decrease) in excise duty on finished goods (net) 701 886
Total changes in inventories of finished goods, work-in-progress and 444 (1,959)
stock-in-trade


For the For the
March 31, 2017 March 31, 2016
25. Employee benefits expense
Salaries, wages and bonus 5,754 5,406
Contribution to provident and other funds [refer Note 39(a)] 206 242
Contribution towards interest shortfall in PF trusts [refer Note 39(b)] 160 175
Gratuity [refer Note 39(b)] 178 145
Share based payment expense (refer Note 35) 57 -
Staff welfare expenses 319 459
Total Employee benefits expense 6,674 6,427
26. Finance costs

Interest and finance charges on financial liabilities at amortised cost (borrowings) 3,690 4,469
Total finance costs 3,690 4,469
27. Other expenses

Consumption of stores and spares 206 157
Sub-contracting wages 757 782
Power and fuel 273 300
Rent [refer Note 40(b)] 2,064 1,509
Repairs and maintenance:
Buildings 32 29
Plant and machinery 113 142
Others 273 258
Insurance 90 107
Rates and taxes # 2,158 1,995
Travel and conveyance 430 466
Legal and professional 1,683 947
Auditor remuneration (Refer Note below) 73 41
Freight outwards 2,343 2,230
Royalty 80 68
Trade mark license fees 582 576
Loss on disposal of Property, Plant and Equipment (net) - 12
Exchange loss (net) 116 -
Remuneration to non-executive directors:
Sitting fee 7 15
Commission 22 13
Bad debts / advances / deposits written off [net of write back of provision of INR 335 19 -
(2016: Nil)]
Provision for doubtful debts / advances / deposits 43 894
IT and communication expenses 443 332
Administrative expenses 300 326
Distribution costs 1,321 993
Miscellaneous expenses 153 455
Total Other expenses 13,581 12,647
# includes provision for demands in respect of indirect taxes (Refer Note 18)
Note
Auditors’ remuneration*
a) as auditors 30 25
b) for other services 43 10
c) out-of-pocket expenses - 6
Total payment to auditors 73 41
* Excluding service tax

For the For the
March 31, 2017 March 31, 2016
28. Exceptional items (net)
(a) Provision towards matters arising consequent to prohibition in the state of Bihar (377) (107)
(refer Note 48)
(b) Write down in the value of certain equipment (refer Notes 3.1 and 41) (217) -
(c) Impairment in the value of Investment in subsidiaries (refer Note 36) (882) (3,880)
(d) Allowances for doubtful receivable from related party written back [refer Note 819 2,480
37(b)]
(e) Customer claim (refer Note 47) (2,645) -
(f ) Reversal of provision against claims (refer Note 41) 28 -
(g) Allowance for doubtful receivables/ advances/ deposits written back (refer Note 41) 370 6,209
(h) Bad and doubtful advances, deposits and trade receivables written off (358) (5,666)
(refer Note 41)
(i) Allowance for doubtful receivable towards sale of Property, Plant and Equipment - (316)
Total Exceptional items (net) (3,262) (1,280)
29. Reconciliation of tax expense and accounting profit multiplied by India’s tax rate
Profits before income tax expense 2,546 3,155
Tax at Indian tax rate @ 34.608% (2016: 34.608%) 881 1,092
Tax effects of amounts which are not deductible / (allowable) in calculating taxable
income:
- Deduction for investment allowance u/s 32AC (89) (37)
- Non deductible expenses (Donations, CSR etc) 51 8
- Short Term Capital Gain on Vehicles 20 -
- Deferred tax credit on indexation benefit (23) -
- Impairment/ provision on investment in subsidiaries and loans and advances 21 485
(including reversals)
- Provision/ write off (including reversals) relating to certain receivables considered (16) (166)
exceptional in nature
- Tax relating to earlier years - 568
- Others 2 (14)
Income tax expense as per Statement of Profit and Loss 847 1,936
30. Earnings per share

Nominal value of equity shares (INR) 10/- 10/-
(a) Profits attributed to equity holders of the Company (INR ) 1,699 1,219
(b) Weighted average number of equity shares used as denominator 145,327,743 145,327,743
(Refer Note below)
(c) Basic and diluted earnings per share (INR) 11.69 8.39
There are no dilutive equity shares in the Company.
Note:
In calculating the weighted average number of outstanding equity shares during the year, Company has not reduced the
own shares held by USL Benefit Trust (of which Company is the sole beneficiary), as the investment in the said trust has been
accounted under a scheme approved by courts (Refer Note 4.2).


31. Fair value measurements:
Financial instruments by category All amounts in INR Million
Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015
Amor- Amor- Amor-
FVOCI tised FVPL FVOCI tised FVPL FVOCI tised FVPL
cost cost cost
Financial assets (net of allowances)
Investments
Equity instruments - (quoted) - - - 68 - - 8,573 - -
Mutual funds - - - - - 25 - - 20
Loans - 124 - - 903 - - 951 -
Trade receivables - 29,605 - - 23,140 - - 16,510 -
Cash and cash equivalents - 439 - - 48 - - 1,821 -
Bank balances other than cash and cash equivalents - 813 - - 347 - - 602 -
Other financial assets
Security deposits - 355 - - 480 - - 478 -
Advances to tie-up manufacturing units - 881 - - 1,516 - - 1,623 -
Interest accrued on loans - related parties - 783 - - 783 - - 1,475 -
Receivable from related parties - 104 - - 9 - - - -
Receivable towards sale of Property, plant and
- 72 - - - - - 871 -
equipment
Loans and advances to employees - 38 - - 26 - - 13 -
Other advances - 77 - - 679 - - 1,037 -
Total financial assets - 33,291 - 68 27,931 25 8,573 25,381 20
Borrowings - 40,407 - - 42,041 - - 48,613 -
Trade payables - 11,798 - - 10,018 - - 8,716 -
Other financial liabilities
Interest accrued but not due - - - - 8 - - 27 -
Unpaid/unclaimed dividends and public
- 30 - - 46 - - 276 -
deposits
Liability for customer claims - 3,280 - - 250 - - - -
Due to tie-up manufacturing units - 905 - - 578 - - 417 -
Capital creditors - 224 - - 769 - - 677
Employee payables - 1,011 - - 743 - - 612 -
Total financial liabilities - 57,792 - - 54,628 - - 59,526 -

Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are
recognised and measured at fair value. To provide an indication about the reliability of the inputs used in determining fair
value, the Company has classified its financial instruments into the three levels prescribed under Ind AS 109 and all financial
instruments measured at fair value fall under Level 1.

31. Fair value measurements (continued)
Financial assets measured at fair value - recurring fair value measurements
Level 1
Listed equity investments FVOCI 4.1 - 68 8,573
Mutual funds FVPL 4.1 - 25 20
Total financial assets - 93 8,593
The carrying amounts of trade receivables, deposits and advances, trade payables, borrowings, capital creditors, dues to em-
ployees and other parties and cash and cash equivalents are same as their fair values, due to their short-term nature.
An explanation of each level follows is provided below:
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments
and mutual funds that have quoted price. The fair value of all equity instruments which are traded on the stock exchanges is
valued using the closing price as at the reporting date. The mutual funds are valued using the closing NAV (Net Asset value).
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the
counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as
little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the
instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in
level 3.
32. Financial risk management

The Company’s activities expose it to market risk, liquidity risk and credit risk. This note explains the sources of risk which the
entity is exposed to and how the entity manages the risk.
Risk Exposure arising from Measurement Management
Credit risk Cash and cash equivalents, deposits Aging analysis Diversification of bank
with banks and financial institutions, deposits and monitoring of
trade receivables, derivative financial credit limits
instruments and financial assets
measured at amortised cost
Liquidity risk Borrowings and other liabilities Rolling cash flow Availability of committed
forecasts credit lines and borrowing
facilities
Market risk — foreign Future commercial transactions, Cash flow fore- Forward foreign exchange
exchange Financial assets and liabilities not casting, Sensitivity contracts
denominated in INR analysis
Market risk — interest rate Long-term borrowings at variable Sensitivity analysis Diversified portfolio of fixed
rates of interest rates and variable interest rate loans
Market risk — security prices Investments in equity securities Sensitivity analysis Continuous monitoring
The Company’s risk management is carried out by a central treasury department under policies approved by the Board of
Directors. Central treasury identifies, evaluates and hedges financial risks in close co-operation with the Company’s other
functions. The board provides written principles for overall risk management, as well as policies covering specific areas, such
as foreign exchange risk, interest rate risk and credit risk use of derivative financial instruments and non-derivative financial
instruments, and investment of excess liquidity.


32. Financial risk management (continued) All amounts in INR Million
(A) Credit risk
Credit risk arises from cash and cash equivalents, financial assets measured at amortised cost and deposits with banks and
financial institutions, as well as credit exposures to trade receivables.
Credit risk management
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum
exposure to the credit risk at the reporting date is primarily from trade receivables amounting to INR 29,605, INR 23,140
and INR 16,510 as of March 31, 2017, March 31, 2016 and April 1, 2015, respectively.
Trade receivables are typically unsecured and are derived from revenue earned from 2 main classes of trade receivables,
receivable from sales to government corporations and receivables from sales to private third parties. Receivables from
government corporation customers amounted to INR 18,985 and 64% (2016: INR 12,059 and 52%; 2015: INR. 9,286 and
56%) and private customers amounted to INR 10,620 and 36% (2016: INR 11,081 and 48%; 2015: INR 7,224 and 44%), of
total trade receivables, respectively, on the reporting date.
Credit risk is managed by the Company through credit approvals, establishing credit limits and continuously monitoring
the credit worthiness of customers to which the Company grants credit terms in the normal course of business. On
account of adoption of Ind AS 109, the Company uses an expected credit loss model to assess the impairment loss or gain.
The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision
matrix takes into account available external and internal credit risk factors such as regulatory developments which may
impact the customers’ ability to repay, and the Company’s historical experience for each of its customers.
At March 31, 2017, the Company was exposed to trade receivables of INR 30,060 (2016: INR 23,947 and 2015: INR 19,476)
against which the Company is carrying an expected credit loss allowance of INR 455 as at the year-end (2016: INR 807 and
2015: INR 2,966).
Reconciliation of loss allowance for trade receivables
Particulars March 31, 2017 March 31, 2016

Balance at the beginning of the year 807 2,966
Loss allowance recognised 162 32
Write offs (514) (2,191)
Balance at the year end (Refer Note 11) 455 807
The Company’s financial assets also includes investments, loans, advances and deposits amounting to INR 20,254 (2016:
INR 22,555 and 2015: INR 35,462)
The Company actively monitors the performance of each party to whom loans has been advanced, and based on the
historical performance and future anticipated cash flows, the ability of the entity to generate sufficient cash flows to
service its loan commitments to the Company is assessed. Where the Company believes that the entity will not be able to
service its loan commitments over the next 12 months or over the lifetime of the loan, a suitable provision for impairment
of the loan receivable is created.
Reconciliation of loss allowance measured at life-time expected credit losses for credit impaired financial assets other
than trade receivables
Balance at the beginning of the year 18,066 20,420
Write offs (net of write backs) (703) (2,535)
Balance at the year end 17,820 18,066
Significant estimates and judgements in Impairment of financial assets
The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and
expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the
impairment calculation, based on the Company’s past history, existing market conditions as well as forward looking
estimates at the end of each reporting period.

(B) Liquidity Risk
Changes in regulations, guidelines and operating models influences liquidity risk. A prudent liquidity risk management
is to ensure maintaining the required cash and / or have access to funds required through committed banking lines from
banks or markets to address such risks, when they arise.
(i) Company has developed three year ‘Capital structure and funding strategy’ with an objective to gauge potential risk,
project and strategically address funding needs, among others and ensure continued operations within acceptable
tolerance limits.
(ii) Treasury team monitors rolling forecasts of the company’s liquidity position on a periodic basis. Funds are optimally
used through centralised cash management system across the company and deficit if any are availed from the
undrawn committed borrowing facilities (as below). Internal stake holders are aligned to provide ‘early warning’
surprises should they occur, so as to enable treasury to pro-actively align the appropriate source and cost of
borrowing to mitigate funding and interest risk (comprising the undrawn borrowing facilities below).
(iii) Management has planned monetisation of certain non-core assets to infuse liquidity and reduce debts, thereby
freeing up the banking lines to access in future, if required.
Financing arrangements
The Company had access to the following undrawn borrowing facilities at end of the reporting period:
As at As at As at
Particulars
Floating rate
Expiring within one year 16,170 11,059 3,287
(cash credit/ working capital demand loans)
The above facilities may be drawn at any time and repayable on demand. The Company has fully utilized fixed rate
borrowing facilities as at the end of each of the reporting periods.
Maturities of financial liabilities
The tables below analyse the Company’s financial liabilities into relevant maturity groupings based on their contractual
maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted
cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
March 31, 2017
Contractual maturities of Less than 3 3 months to 6 6 months to 1 Between 1 Between 2 Total

financial liabilities months months year and 2 years and 5 years
Borrowings 21,595 3,681 7,838 4,033 5,593 42,740
Obligation under finance lease 18 18 37 46 28 147
Trade payables 11,798 - - - - 11,798
Other financial liabilities 5,587 - - - - 5,587
Total liabilities 38,998 3,699 7,875 4,079 5,621 60,272
March 31, 2016
Contractual maturities of Less than 3 3 months to 6 6 months to 1 Between 1 Between 2 Total

Borrowings 10,779 14,348 11,892 3,999 3,999 45,017
Trade payables 10,018 - - - - 10,018


April 1, 2015
Contractual maturities of Less than 3 3 months to 6 6 months to 1 Between 1 Between 2

Total
Borrowings 13,840 3,811 25,141 5,570 3,999 52,361
Trade payables 8,716 - - - - 8,716
(C) Cash flow and fair value interest rate risk
Company’s main interest rate risk arises from Long-Term borrowings with variable rates, which expose the Company
cashflow interest rate risk.
Presently interest rates seems to be bottomed out and the Company expects this to be stable in the near term. In view
of this the Company has kept long term borrowings at variable interest rate, however the Company has an option to exit
at the end of interest reset period which is one month. This allows flexibility and insulates the Company from adverse
movements.
Majority of the Company’s short term and long term borrowings are benchmarked to Bank’s MCLR (Marginal Cost of
Lending Rates) and are already fair valued.
The exposure of the Company’s borrowings to interest rate changes at the end of reporting period are as follows:
As at As at As at
Variable rate borrowings 40,272 36,941 39,713
Fixed rate borrowings 135 5,100 8,900
Total borrowings 40,407 42,041 48,613
Sensitivity
Profit or loss is sensitive to higher / lower interest expense from borrowings as a result of changes in interest rates.
Impact on Profit after tax

Interest rates Year ended Year ended
March 31, 2017 March 31, 2016
Increase by 50 bps (131) (102)
Decrease by 50 bps 131 102
(D) Foreign currency risk
The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect
to the USD, EUR and GBP. Foreign Exchange risk arises from future commercial transactions and assets and liabilities
denominated in a currency that is not the Company’s functional currency (INR). The risk is measured through a forecast of
highly probable foreign currency cash flows.
Foreign currency risk management
The Company’s risk management policy is to assess the Company’s net exposures which is mainly represented by
receivable towards exports and payable towards imports. The Company hedges its net exposures with a view on
forex outlook. The Company’s overall forex net exposures is not material and given that INR is stable against USD and
strengthening against GBP, the Company has kept its exposures presently open. However, the present forex policy is
being revised to assess the exposures in a robust and structured manner and align mitigation plan.

Foreign currency risk exposure:
The Company’s exposure to foreign currency risk at the end of the reporting period expressed in INR is as follows:
As at March 31, 2017 As at March 31, 2016 As at April 1, 2015

Financial assets USD GBP EUR USD GBP EUR USD GBP EUR
Trade receivables 131 - - 405 - - 625 - -
Non-current loans - 123 - - 903 - - 951 -
Balances in EEFC account - - - - - - - 8 -
Derivative assets
Foreign exchange forward contract - - - (41) - - (39) - -
Net Exposure to foreign currency risk
131 123 - 364 903 - 586 959 -
(assets)
Financial Liabilities
Trade payables 106 100 - 257 188 - 38 143 1
106 100 - 257 188 - 38 143 1
(liabilities)
Impact on Profit after Tax
The sensitivity of profit or loss due to changes in exchange rates arises mainly from foreign currency denominated net
trade exposures. There is no material impact on foreign currency loans given to subsidiaries as they are largely provided
for.
Sensitivity - foreign currency
Year ended March 31, 2017 Year ended March 31, 2016
USD GBP EUR USD GBP EUR
Currency increases by 5% 1 1 - 23 (1) -
Currency decreases by 5% (1) (1) - (23) 1 -
33. Capital management

Risk management
The Company’s objectives when managing capital is to:
a) have a balanced financial profile from short term (1 year) to mid-term (3 years) for sustainable leverage, providing;
• Headroom for future growth / expansion
• Financial flexibility in case of adverse business cycles
b) ensure the capital structure is at competitive advantage when compared to peers and other sector players through
optimum debt mix through:
• Diversification of funding sources to manage liquidity and rollover risk
As at As at As at
Net debt 39,968 41,993 46,792
Total equity 19,378 17,140 15,835
Net debt to equity ratio 2.06 2.45 2.95


34. Assets pledged as security All amounts in INR Million
The carrying amounts of assets pledged as security for current and non-current borrowings are as follows:
Current Notes As at As at As at
Financial assets
Floating charge
Investments 4.1 - 11 11
Non-financial assets
Floating charge
Inventories 10 14,514 14,728 12,386
Other current assets (excluding taxes paid in advance) 9 3,518 2,062 2,061
Non-current assets
Plant and equipment 3.1 - 5,000 5,000
Total assets pledged as security 49,859 48,257 43,163
Further the following assets (not included in the above table) have been pledged with a bank with whom the Company is
involved in litigation (Refer Note 46)
Non-current Notes As at March 31, As at March 31, As at April 1,
2017 2016 2015
First charge
Freehold land 3.1 1,198 1,198 1,198
Freehold building 3.1 856 658 505
Lease hold land 3.1 40 61 61
Plant and equipment 3.1 779 732 432
Investments as a sole beneficiary in USL benefit trust 4.1 1,197 1,197 1,197
Certain brands of the Company - - -
Total Non-current assets pledged as security 4,070 3,846 3,393
35. Share based payments

Diageo Incentive Plan (DIP)
DIP is a one-time long term incentive scheme for select employees who were active on Company’s payroll on September
1, 2016. A single grant was made in September 2016 with zero pay out for any leaver prior to vesting in September 2019
(vesting period – 3 years). Diageo Plc.’s share options (one option equivalent to one share) were granted to such employees
as a percentage of salary. Vesting is subject to conditions such as continuity of employment, Diageo’s productivity and NSV
growth and individual’s net promoter score. As at March 31, 2017 such outstanding share options were 97,904 (2016: Nil) and
the charge recorded for the current year included in employee benefit expense was INR 40 (2016: Nil) (Refer Note 25). The
carrying amount of liability of INR 40 has been included in other equity (Refer Note 15).
Share Appreciation Rights (SAR)
The India SAR Plan creates an opportunity to link the employee reward to Company’s share price performance. Under this plan,
Company grants stock appreciation rights (based on USL share price) to select employees. The grant is made in September
every year, as a percentage of salary. Cash pay-out equivalent to the value of shares will be made at the end of three years from
the date of grant (the vesting period).

35. Share based payments (continued) All amounts in INR Million
The fair value of the SARs was determined using the Black-Scholes model using the following inputs at the grant date and as
at March 31, 2017:
As at
March 31, 2017
Number of share appreciation rights outstanding 47,445
Share price at measurement date (INR per share) 2,313
Expected volatility (%) 10.83
Dividend yield (%) -
Risk-free interest rate (%) 6.69
Carrying amount of liability — included in non-current provision for employee benefits(Refer Note 18) 17
Expenses recorded for the year under Employee benefits expense 17
There were no SARs granted in prior years and none of the SARs has vested as at March 31, 2017.
36. Impairment of investment in subsidiaries
The Company has performed an assessment for impairment of its investment in subsidiaries owing to continuing losses
incurred by subsidiaries and decline in the value of underlying net assets held by these subsidiaries, based on which
company has recognised/ reversed impairment charge in its investments in Asian Opportunities Investments Limited (AOIL), Four
Seasons Wines Limited (FSWL), Sovereign Distilleries Limited (SDL), Pioneer Distilleries Limited (PDL) and Tern Distilleries
Limited (TDL).
The Company has determined recoverable values of its investments as fair value, less cost of disposal. Company has used the
‘cost approach’ valuation technique for determining fair value of its investment in subsidiaries using Level 3 inputs. An analysis
of investments in subsidiaries where impairment charge/ reversal has been recognised, is provided below:
For the year ended March 31, 2017 AOIL FSWL SDL PDL TDL Total
Carrying amount of investments (Gross)
Investments in equity / preference shares - 225 4,267 - 987
Loans considered deemed investment 213 667 5 1,354 9
Total 213 892 4,272 1,354 996
Recoverable amount - 406 1,114 1,160 394
Shortfall in recoverable amount over carrying value 213 486 3,158 194 602
Impairment allowance recognized in earlier years 255 350 2,681 - 527 3,813
Impairment allowance recognized / (reversed) in current year - 136 477 194 75 882
Impairment allowance recognized / (reversed) under
(42) - - - - (42)
exchange differences
Closing impairment allowance 213 486 3,158 194 602 4,653
For the year ended March 31, 2016 AOIL FSWL SDL PDL TDL Total
Carrying amount of investments
Investments in equity - 225 4,267 - 987
Loans considered deemed investment 255 624 - 1,354 -
Total 255 849 4,267 1,354 987
Recoverable amount - 499 1,586 1,354 460
Shortfall in recoverable amount over carrying value 255 350 2,681 - 527 3,813
Impairment allowance recognized in current year 255 350 2,681 - 527 3,813
Closing impairment allowance 255 350 2,681 - 527 3,813


36. Impairment of investment in subsidiaries (continued) All amounts in INR Million
Sensitivity analysis
The below table summarises the impact of increases/ decreases in fair values of property, plant and equipment included in
determining the recoverable amounts of Company’s investment in subsidiaries:
Key underlying values Impact on impairment
decrease / (increase)
Year ended Year ended
March 31, 2017 March 31, 2016
Change in fair value by:
+ 5% 235 206
- 5% (235) (206)
37. Related party disclosures

(a) Names of related parties and description of relationship
(i) Parent entities
• Diageo Plc. (Ultimate Holding company)
• Relay B V (Holding company)
Pursuant to settlement agreement entered on February 25, 2016 with Dr. Vijay Mallya, erstwhile Chairman and non
-executive director and the parties mentioned below have not be considered as related parties post the settlement
date [Refer Note 43 and 58(a)].
• United Breweries (Holdings) Limited
• Kingfisher Finvest India Limited
• City Properties Maintenance Company Bangalore Limited
• United Breweries Limited
(ii) Subsidiaries
Name of the Subsidiary % of
Country of Incorporation
ownership interest
• Asian Opportunities and Investments Limited (AOIL) 100 Mauritius
• United Spirits Nepal Private Limited (USNPL) 82.47 Nepal
• Palmer Investment Group Limited (PIG) 100 British Virgin Islands
• Tern Distilleries Private Limited (Tern) 100 India
• Shaw Wallace Overseas Limited (SWOL) 100 U.K.
• UB Sports Management Overseas Limited 100 Jersey Islands
• Montrose International S.A (MI) 100 Panama
• USL Holdings Limited (UHL) 100 British Virgin Islands
• USL Holdings (UK) Limited (UHUKL) 100 U.K.
• United Spirits (UK) Limited (USUKL) 100 U.K.
• United Spirits (Great Britain) Limited (USGBL) 100 U.K.
• Four Seasons Wines Limited (FSWL) 100 India
• McDowell & Co. (Scotland) Limited (MSL) 100 Scotland
• Royal Challengers Sports Private Limited 100 India
• Liquidity Inc. 51 USA
• United Spirits (Shanghai) Trading Company Limited 100 China
• Sovereign Distilleries Limited 100 India

37. Related party disclosures (continued)
Name of the Subsidiary % of

Country of Incorporation
ownership interest
• Pioneer Distilleries Limited 75 India
• United Spirits Singapore Trading Pte Ltd 100 Singapore
• Bouvet Ladubay S.A.S $ 100 France
• Chapin Landais S.A.S $ 100 France
$ Bouvet Ladubay S.A.S and Chapin Landais S.A.S ceased to be subsidiaries effective from November 18,
2015.
(iii) Fellow subsidiaries
• Diageo Scotland Limited
• Diageo India Private Limited
• Diageo Brands BV
• Diageo Vietnam Limited
• Diageo Great Britain Limited
• Diageo Australia Limited
• Diageo North America Inc.
• Diageo Singapore Pte Limited
• Diageo Singapore Supply Pte Limited
• Guinness Nigeria Limited
• UDV Kenya Limited
• Diageo Business Services India Private Limited
(iv) Entity where there is control

• USL Benefits Trust
(v) Employees’ Benefit Plans :

• McDowell & Company Limited Staff Gratuity Fund (McD SGF)
• McDowell & Company Limited Officers’ Gratuity Fund (McD OGF)
• Phipson & Company Limited Management Staff Gratuity Fund (PCL SGF)
• Phipson & Company Limited Gratuity Fund (PCL GF)
• Carew & Company Limited Gratuity Fund (CCL GF)
• McDowell & Company Limited Provident Fund (McD PF)
• Shaw Wallace & Associated Companies Employees Gratuity Fund (SWCEGF)
• Shaw Wallace & Associated Companies Executive Staff Fund (SWCSGF)
• Shaw Wallace & Co. Associated Companies Provident Fund (SWCPF)
• United Spirits Superannuation Fund (with effect from 15 June 2015)
Refer note 39 for information on transactions with post-employment benefit plans mentioned above.
(vi) Key management personnel

Non-executive directors
• Mahendra Kumar Sharma
• Indu Ranjit Shahani
• Rajiv Gupta
• Sivanandhan Dhanushkodi
• Nicholas Bodo Blazquez (till January 21, 2017)
• Vegulaparanam Viswanathan (w.e.f October 16, 2016)
• John Thomas Kennedy (w.e.f August 17, 2016)


37. Related party disclosures (continued) All amounts in INR Million
• Randall David Ingber (w.e.f February 2, 2017)

• Vinod Rao (w.e.f May 24, 2016)
• Ravi Rajagopal (till October 13, 2016)
• Vijay Mallya (till February 25, 2016)
Executive directors
• Anand Kripalu (Managing Director & Chief Executive Officer)
• Sanjeev Churiwala (Chief Financial Officer) (w.e.f. April 1, 2017)
• P A Murali (Chief Financial Officer) (till April 22, 2015)
37. (b) Summary of the transactions with related parties

For the year For the year
ended March ended March
31,2017 31,2016
Sale of products (including excise duty) to
Subsidiaries
United Spirits Nepal Private Limited 272 94
Pioneer Distilleries Limited 21 6
United Spirits Singapore Trading Pte Ltd 976 838
Fellow subsidiaries
Guinness Nigeria Limited 24 -
Total - Sale of products 1,293 938
Purchase of traded goods
Subsidiaries
Four Seasons Wines Limited 84 117
Tern Distilleries Private Limited - 46
Fellow subsidiaries
Diageo Brands BV 1,264 1,255
Diageo Singapore Supply Pte Limited 14 60
Diageo India Private Limited - 71
Total - Purchase of traded goods 1,362 1,549
Purchase of materials
Fellow subsidiaries
Diageo Brands BV 796 202
Subsidiaries
Total - Purchase of materials 1,316 719
Goods manufactured on behalf of the company by subsidiary (as tie-
up manufacturing unit) including excise duty and included in cost of
materials)
Pioneer Distilleries Limited 5,707 2,803
Loans advanced (including deemed investments) to
Subsidiaries
Sovereign Distilleries Limited 5 91
Royal Challengers Sports Private Limited 835 565
Tern Distilleries Private Limited 9 34
McDowell & Co (Scotland) Limited - 19
Total - Loans advanced 938 798

37. (b) Summary of the transactions with related parties (continued)

31,2017 31,2016
Loans repaid (including deemed investments) by
Subsidiaries
Royal Challengers Sports Private Limited 460 -
USL Holdings Limited 689 -
Four Seasons Wines Limited 46 -
Asian Opportunities & Investments Limited - 1,434
Sovereign Distilleries Limited - 3,399
Total - Loans repaid 1,195 5,600
Allowances against loans made (including on deemed investments)
Subsidiaries
Tern Distilleries Private Limited 75 527
Sovereign Distilleries Limited 477 2,681
USL Holdings Limited - 198
Asian Opportunities & Investments Limited - 124
Pioneer Distilleries Limited 194 -
Total – allowances made [Refer Note 28(c)] 882 3,880
Allowances reversed
On Receivables from subsidiaries
Loans to subsidiaries (including deemed investment)
Sovereign Distilleries Limited - 2,208
Total - allowances reversed [Refer Note 28(d)] 819 2,480
Royalty and brand franchise expense / (income)
Subsidiaries
United Spirits Nepal Private Limited (65) (50)
Four Seasons Wines Limited (3) (3)
Fellow subsidiaries
Diageo Scotland Limited 3 2
Diageo North America Inc. 77 66
Total - Royalty and brand franchise expense / (income), net 12 15
Trade mark license fees
Entities having significant influence over the Company
United Breweries (Holdings) Limited - 576


37. (b) Summary of the transactions with related parties (continued) All amounts in INR Million

31,2017 31,2016
Reimbursement of expenses paid
Parent
Diageo Plc. - 85
Subsidiaries
Sovereign Distilleries Limited 2 -
Pioneer Distilleries Limited - 21
United Spirits Singapore Trading Pte Ltd 8 119
Fellow subsidiaries
Diageo Australia Limited 25 33
Diageo Singapore Pte Limited - 7
Diageo Brands BV 1 -
Diageo North America Inc 31 -
Diageo Great Britain Limited 1 14
Total- reimbursement of expenses paid 68 361
Indemnification settlement receivable from parent
Diageo Plc. 75 -
Guarantee given
Subsidiaries
Pioneer Distilleries Limited 1,000 -
Guarantee expired
Subsidiaries
Reimbursement of expenses received
Parent
Diageo Plc. 32 20
Relay B V - 1
Subsidiaries
Four Seasons Wines Limited - 1
United Breweries Limited - 22
Fellow subsidiaries
Diageo Vietnam Limited - 17
Total - Reimbursement of expenses received 170 97

37. (b) Summary of the transactions with related parties (continued)
31,2017 31,2016
Income from Agency commission
Fellow subsidiaries
Dividend received from subsidiary
United Spirits Nepal Private Limited (Refer Note 22) 49 16
Assignment of receivables in favour of the Company from fellow
subsidiary
Diageo India Private Limited 3 62
Interest income from subsidiaries
Royal Challengers Sports Private Limited 27 28
McDowell & Co. (Scotland) Limited 2 2
Sovereign Distilleries Limited - 337
Total - Interest income from subsidiaries (Refer Note 22) 50 462
Guarantee Commission income from subsidiary
Guarantee / security commission paid to
31,2017 31,2016
Purchase of fixed assets from fellow subsidiary
Payment for house keeping and security services
City Properties Maintenance Company Bangalore Limited - 47

37. (c) Summary of closing balances with related parties
The following balances are outstanding at the end of the reporting period in relation to transactions with related parties:
As at As at As at

Loans outstanding
Principal amount (Refer Note 5)
Subsidiaries
USL Holdings Limited 2,787 3,399 3,158
United Breweries (Holdings) Limited - 13,972 14,220


37. (c) Summary of closing balances with related parties (continued)
As at March 31, As at March 31, As at April 1,

2017 2016 2015
Interest accrued
Subsidiaries
Royal Challengers Sports Private Limited 313 313 313
Asian Opportunities & Investments Limited - - 2
Pioneer Distilleries Limited 377 377 377
McDowell & Co. (Scotland) Limited 4 4 -
Sovereign Distilleries Limited 4 4 554
Tern Distilleries Private Limited - - 144
USL Holdings Limited 101 101 101
Total interest accrued on loans to related parties
909 909 1,601
(Refer Note 6)
Allowance for interest accrued
Subsidiaries
USL Holdings Limited 101 101 101
Total allowance for interest accrued (Refer Note 6) 126 126 126
Receivables from related parties

Parent
Diageo Plc 80 2 -
Fellow subsidiaries
Diageo Scotland Limited 24 5 -
Diageo Great Britain Limited - 1 -
Diageo Vietnam Limited - 1 -
Total (Refer note 6) 104 9 -
Subsidiaries
Four Seasons Wines Limited 18 - 2
Total (Refer note 9) 1,342 1,400 1,483
Fellow subsidiaries
Diageo India Private Limited - - 88
Subsidiaries
United Spirits Nepal Private Limited 84 78 109
United Spirits Singapore Pte Limited 123 405 723
Total (Refer note 11) 215 483 920
Allowance at the year end for
Loans (Refer Note 5)
Subsidiaries
USL Holdings Limited 2,663 2,496 2,207
Trade advances (Refer Note 9)
Subsidiaries
Pioneer Distilleries Limited - 819 819

37. (c) Summary of closing balances with related parties (continued)
As at As at As at

Payable to related parties
Subsidiaries
United Spirits Singapore Trading Pte Ltd 87 243 99
Sovereign Distilleries Limited - 1 -
Four Seasons Wines Limited - 11 -
Fellow subsidiaries
Diageo Brands BV 937 254 255
Diageo India Private Limited 5 43 -
Diageo Great Britain Limited 5 - -
Diageo Australia Limited 3 29 -
Diageo North America Inc. 20 18 -
Diageo Singapore Supply Pte Limited 15 17 -
Diageo Singapore Pte Limited - 4 -
Total trade payables to related parties (Refer Note 19) 1,072 620 354
Guarantees given and outstanding
Pioneer Distilleries Limited 1,000 934 934
37. (d) Key management personnel compensation

ended ended
March 31, 2017 March 31, 2016
Remuneration 123 146
Long-term employee benefits - -
Employee share-based payments 5 -
Rent - 1
Total compensation 128 147
Other payments:
Sitting fee 7 15
Commission 22 13
37. (e) General terms and conditions for transactions with related parties
Transactions with related parties are carried out in the normal course of business and are generally on normal commercial
terms.
Loans to subsidiaries which are generally for an indefinite period or for a period of three years with an option to roll-
over based on mutually agreed terms. Interest rates range from nil to 12%. All loans to related parties are unsecured.
Further,the Company has granted loans to certain subsidiaries, in substance, these loans form part of the Company’s net
investment in the subsidiary, as the settlement of these loans is neither planned nor likely to occur in the foreseeable
future and the management intends to convert these loans into investment in equity of the respective subsidiary in near
future.
The Company has not recognised interest amounting to INR 431 during the year (2016: INR 479) on loans to certain
subsidiaries as recoverability of interest is not reasonably certain. Aggregate of amounts of such unrecognised interest as
at year end is INR 910 (2016: INR 479, 2015: Nil).


38. Offsetting of financial assets and financial liabilities
The following table presents the recognised financial instruments that are offset, as at March 31, 2017, March 31, 2016 and
April 1, 2015:
March 31, 2017 Effect of offsetting on the balance

Gross Set offs Net amounts
amounts effected presented in
the balance
sheet
Financial assets
Trade receivables 30,768 (1,163) 29,605
Cash and cash equivalents 510 (71) 439
Other current financial assets 1,809 (80) 1,729
Total 33,087 (1,314) 31,773
Trade payables 12,224 (426) 11,798
Other current liabilities 10,041 (888) 9,153
Total 22,265 (1,314) 20,951

the balance
sheet
Financial assets
Total 28,810 (2,387) 26,423
Trade payables 11,761 (1,743) 10,018
Total 19,933 (2,387) 17,546
April 1, 2015 Effect of offsetting on the balance

the balance
sheet
Financial assets
Cash and cash equivalents 1,922 (101) 1,821
Total 25,589 (1,953) 23,636
Trade payables 10,234 (1,518) 8,716
Total 14,545 (1,953) 12,592

38. Offsetting of financial assets and financial liabilities (continued)
Nature of offsetting arrangements
(a) The Company provides working capital support to certain tie-up manufacturers (TMUs), who are responsible for
manufacturing and distribution of certain products on behalf of the Company. The aforesaid working capital is represented
by inventories, trade receivables, other financial assets and other financial liabilities. The Company has reported net
working capital excluding inventory as other financial assets /liability (net) in lieu of working capital exposure to TMUs, as
these amounts are expected to be settled on net basis.
(b) The Company gives volume based rebates to certain customers. As a practice amounts payable by Company are offset
against receivables from such customers and only the net amounts are settled. The relevant amounts have therefore been
presented net in the balance sheet.
39. (a) Defined contribution plans
The Company contributes to defined contribution plans for employee such as Provident Fund (PF), Employees’ Pension Scheme
(EPS), Superannuation Fund (SF), Death benefit plan and Employees’ State Insurance (ESI). PF and EPS cover substantially all regular
employees while the SF covers certain executives and ESI covers eligible employees. Contribution to SF is made to United Spirits
Superannuation Fund (‘USSF’). Other contributions are made to the Government funds or insurance companies. While both the
employees and the Company pay predetermined contributions into the Provident Fund and the ESI Scheme, contributions into
the pension fund, death relief fund and the superannuation fund are made only by the Company. The contributions are normally
based on a certain percentage of the employee’s salary.
During the year, the Company has recognised the following amounts in the Statement of profit and loss, which are included in
contribution to provident and other funds in the employee benefits expense.
ended ended
March 31, 2017 March 31, 2016
Provident fund and employee’s pension scheme* 105 114
Superannuation fund 74 107
Employees’ state insurance 6 7
Death benefit 10 10
National pension scheme 11 4
Total (Refer Note 25) 206 242
* Excluding contribution to PF made to trusts which are in the nature of defined benefit plans managed by the Company.
(b) Defined benefit plans

Gratuity:
The Company provides for gratuity, a defined benefit plan (the Gratuity Plan), to its employees. The Gratuity Plan provides
a lump sum payment to vested employees, at retirement or termination of employment, of an amount based on the
respective employee’s last drawn salary and years of employment with the Company. The Company has employees’
gratuity funds managed by the Company as well as by Insurance Companies.
Pension:
The Company operates a defined benefit pension plan for certain executives and workers of the Company. This plan is final salary
pension plan, which provide benefits to members in the form of a guaranteed level of pension payable for life. The level of benefits
provided depends on their salary in the final year leading up to retirement.
Provident fund:
For certain executives and workers of the Company, contributions are made as per applicable Indian laws towards Provident Fund
to certain Trusts set up and managed by the Company, where the Company’s obligation 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 if any, in the assured rate of interest notified by the Government, which the Company
is obliged to make good is determined actuarially.


39. (b) Defined benefit plans (continued)
Funded Gratuity and Provident Fund
A. Reconciliation of opening and closing balances of the present value of the defined benefit obligation:
As at March 31, 2017 As at March 31, 2016
Gratuity Provident fund Gratuity Provident fund
Obligation at the beginning of the year 2,180 2,455 2,093 2,291
Current service cost 166 161 147 171
Interest Cost 154 111 148 106
Benefit payments from plan assets (456) (545) (384) (449)
Participant contributions - 380 - 321
Actuarial (Gain) / Loss - Financial assumption changes (322) 132 - 15
Actuarial (Gain) / Loss – Experience adjustments (258) - 176 -
Obligation at the end of the year 1,464 2,694 2,180 2,455
B. Reconciliation of opening and closing balances of the fair value of plan assets:
Plan Assets at the beginning of the year 1,824 2,415 1,540 2,194
Adjustment for opening fair value - - 6 13
Contribution by plan participants - 380 - 320
Contribution by the Company 357 161 550 171
Expected return on plan assets 142 112 151 102
Actuarial gains / (losses) 71 222 (39) 64
Benefits paid (457) (544) (384) (449)
Plan assets at the end of the year 1,937 2,746 1,824 2,415
C. Reconciliation of present value of defined benefit obligation and the fair value of plan assets to the assets and
liabilities recognised in the Balance sheet at the end of the year:
Provident Provident Provident
Gratuity Gratuity Gratuity
fund fund fund
Present value of obligation 1,464 2,694 2,180 2,455 2,093 2,291
Fair value of plan assets 1,937 2,746 1,824 2,415 1,540 2,194
Asset ceiling - 52 - - - -
Liability/ (asset) recognised in
Balance sheet (Refer Notes 18 (473) - 356 40 553 97
and 9)
D. Expenses recognised in the statement of profit and loss:

For the year ended For the year ended
March 31, 2017 March 31, 2016
Pension Pension
Gratuity Gratuity
fund fund
Current service cost 166 161 147 171
a. Interest expense on DBO 154 111 148 106
b. Interest (income) on plan assets (142) (112) (150) (102)
Net interest cost 12 (1) (2) 4
Defined benefit cost (Refer Note 25) 178 160 145 175

39. (b) Defined benefit plans (continued) All amounts in INR Million
E. Re-measurement effects recognized in other comprehensive income (OCI):

March 31, 2017 March 31, 2016
Provident Provident
Gratuity Gratuity
fund fund
a. Actuarial (Gain) / Loss due to Financial
(320) - - -
Assumption changes in DBO
b. Actuarial (Gain) / Loss due to Experience on DBO (258) 132 176 15
c. Return on Plan Assets (Greater) / Less than Discount
(71) (221) 38 (64)
rate
Total Actuarial (Gain)/Loss included in OCI (649) (89) 214 (49)
F. Total Cost Recognised in Comprehensive Income:

March 31, 2017 March 31, 2016
Provident Provident
Gratuity Gratuity
fund fund
Expense recognised in P&L 178 160 145 175
Remeasurements Effects Recognised in OCI (649) (89) 214 (49)
Total Cost Recognised in Comprehensive Income (471) 71 359 126
G. Investment details of plan assets:
As at As at
March 31, 2017 March 31, 2016
Provident Provident
Gratuity Gratuity
fund fund
Government securities - 17% - 17%
Private sector bonds - 5% - 5%
Public sector / financial institutional bonds - 68% - 68%
Special deposit scheme - 5% - 5%
Fund balance with insurance company 99% - 99% -
Others (including bank balances) 1% 5% 1% 5%
100% 100% 100% 100%
H. Assumptions:

Provident Provident
Gratuity Gratuity
fund fund
Discount rate (per annum) 6.90% 7.10% 7.80% 7.80%
Expected rate of return on plan assets 9.25% 7.70% 9.25% 8.33%
Rate of increase in compensation levels 10.00% NA 15.00% NA
Attrition rate 13.20% 13.20% 13.20% 13.20%
Average past service of employees (years) 13.01 NA 13.00 NA
Mortality rates IALM IALM IALM IALM
(2006-08) (2006-08) (2006-08) (2006-08)
Ultimate table Ultimate table Ultimate table Ultimate table


39. (b) Defined benefit plans (continued)
Non-funded Pension
A. Reconciliation of opening and closing balances of the present value of the defined benefit obligation
As at As at
March 31, 2017 March 31, 2016
Obligation at the beginning of the year 18 21
Adjustment to opening obligation - -
Contribution by plan participants - -
Current service cost - -
Interest cost 1 2
Actuarial (gain) / loss on obligations 3 (5)
Benefits paid (4) -
Obligation at the end of the year 18 18
B. Reconciliation of present value of defined benefit obligation and the fair value of plan assets to the assets
and liabilities recognised in the Balance sheet
As at As at
March 31, 2017 March 31, 2016
Present value of obligation at the end of the year 18 18
Fair value of plan assets at the end of the year - -
Liability / (net asset) recognised in Balance sheet (Refer Note 18) 18 18
Current 2 -
Non-current 16 18
C. Expenses recognised in the Statement of profit and loss

ended ended
March 31, 2017 March 31, 2016
Current service cost - -
Interest cost 1 1
Expected return on plan assets - -
Actuarial (gains) / losses - -
Total expenses recognised in the Employee benefits expense in the
1 1
Statement of profit and loss
D. Remeasurement effects recognized in Other Comprehensive Income (OCI)

ended ended
March 31, 2017 March 31, 2016
a. Actuarial (Gain) / Loss due to Demographic Assumption changes in DBO -
b. Actuarial (Gain) / Loss due to Financial Assumption changes in DBO -
c. Actuarial (Gain) / Loss due to Experience on DBO 3 (4)
d. Return on Plan Assets (Greater) / Less than Discount rate
Total Actuarial (Gain)/Loss included in OCI 3 (4)

39. (b) Defined benefit plans (continued) All amounts in INR Million
E. Total Cost Recognised in Comprehensive Income
31, 2017 31, 2016
Cost Recognised in P&L 1 1
Remeasurements Effects Recognised in OCI 3 (4)
Total Cost Recognised in Comperhensive Income 4 (3)
F. Assumptions
As at As at
March 31, 2017 March 31, 2016
Discount rate (per annum) 6.90% 7.80%
Expected rate of return on plan assets - -
Rate of increase in compensation levels NA NA
Attrition rate NA NA
Average past service of employees (years) NA NA
Mortality rates LIC (a) 1996-98 LIC (a) 1996-98
annuitants annuitants
39. (c) Sensitivity analysis:

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:
Impact on defined benefit obligation

Changes in assumptions Increase in assumption Decrease in assumption

March 31, 2017 March 31, 2016 March 31, 2017 March 31, 2016 March 31, 2017 March 31, 2016
Decrease by Decrease by Increase by Increase by
Discount rate 1% 1%
6.30% 6.68% 3.69 % 3.72%
Rate of increase in Increase by Increase by Decrease by Decrease by
1% 1%
compensation levels 3.32% 2.92% 6.12% 6.15%
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant.
In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the
defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been
applied as when calculating the defined benefit liability recognised in the balance sheet. The methods and types of
assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
39. (d) Risk exposure:

Through its defined benefit plans, Company is exposed to number of risks, the most significant of which are detailed
below:
The plan liabilities are calculated using a discount rate set with reference to bond yields; if
plan assets underperform this yield, this will create a deficit. Most of the plan asset invest-
Asset volatility ments is in government securities and pre-defined insurance plans. These are subject to
interest rate risk and the fund manages interest rate risk through continuous monitoring
to minimise risk to an acceptable level.
A decrease in bond yields will increase plan liabilities, although this will be partially offset
Change in bond yields
by an increase in the value of the plans’ bond holdings.


39. (d) Risk exposure (continued) All amounts in INR Million
The Company actively monitors how the duration and the expected yield of the investments are matching the expected
cash outflows arising from the employee benefit obligations. Investments are well diversified, such that the failure of any
single investment would not have a material impact on the overall level of assets. A large portion of assets in 2017 consists
of government and public sector bonds, although the Company also invests in private sector bonds, special deposit
schemes and bank balances. The plan asset mix is in compliance with the requirements of the respective local regulations.
39. (e) Effect of the defined benefit plan on the entity’s future cash flows
Funding levels are monitored on an annual basis and the current agreed contribution rate is 12% of the basic salaries for
PF and 4.7% for Gratuity. The Company considers that the contribution rates set at the last valuation date are sufficient
to eliminate the deficit over the agreed period and that regular contributions, which are based on service costs, will not
increase significantly.
Expected contributions to post-employment benefit plans for the year ending March 31, 2018 is INR 266. The weighted
average duration of the defined benefit obligation is 13 years (2016: 13 years, 2015: 13.1 years). The expected maturity
analysis of undiscounted pension, gratuity and other post-employment benefits is as follows:
March 31, 2017 Less than a year Between 1-2 years Between 2-5 years Over 5 years Total
Gratuity 244 204 549 600 1,597
Provident fund 522 378 976 1,144 3,020
Total 766 582 1,525 1,744 4,617
Gratuity 404 269 754 928 2,355
Provident fund 500 522 1,075 1,235 3,332
Total 904 791 1,829 2,163 5,687
April 1, 2015 Less than a year Between 1-2 years Between 2-5 years Over 5 years Total
Gratuity 388 259 724 891 2,262
Provident fund 384 500 1,261 1,355 3,500
Total 772 759 1,985 2,246 5,762
Note: 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.
39. (f) Compensated absences
Particulars For the year For the year

ended ended
March 31, 2017 March 31, 2016
Expense/ (income) for the year recognised in the Employee benefits expense in
(159) 169
the Statement of Profit and Loss
Payments during the year (129) (100)
Obligation at the end of the year (Refer Note 18) 496 785
Current provision 107 160
Non-current provision 389 625

40. Leases All amounts in INR Million
(a) Finance lease:
The Company has acquired land, office equipment and vehicles on finance leases. The lease agreements for office
equipment and vehicles are generally a primary period of 36 to 60 months. The Company has an option to renew these
leases for a secondary period. Lease arrangement for land is generally for a period of 95-99 years.
The minimum lease payments and their present value for the finance leases, are as follows:
Particulars Minimum Minimum Minimum
Present value Present value Present value
lease lease lease
of payments of payments of payments
payments payments payments
Not later than one year 67 73 43 48 34 41
Later than one year and not
68 74 57 61 75 83
later than five years
Later than five years - - - - - -
135 147 100 109 109 124
Less: Finance charges 12 9 15
Total (Refer Note 16) 135 100 109
(b) Operating lease:

The Company’s significant operating leasing arrangements are in respect of premises (residential, office, manufacturing
facilities, etc.) and plant and equipment, which are for a period generally ranging between 11 months and 3 years and
are cancellable. These arrangements are usually renewable on mutually agreeable terms.
Rental expense relating to operating lease:
As at As at
March 31, 2017 March 31, 2016
Minimum lease payments 1,135 618
Contingent rent 929 891
Total rental expense relating to operating lease (Refer note 27) 2,064 1,509
Contingent rent represents bottling fees paid to tie-up manufacturers under an arrangement which are in nature of
operating lease, where rent is determined based on the output/ volume.
There are no commitments for non-cancellable operating leases during the current and comparable reporting period.
41. As disclosed in the financial statements for the years ended March 31, 2015 and March 31, 2016, the Board initiated an inquiry
(“Initial Inquiry”), which was completed in April 2015. The Initial Inquiry revealed (amongst other things), past instances of
improper transactions concerning USL and its subsidiaries in India, including what appeared, prima facie, to be diversions
of funds from USL and its subsidiaries to various UB Group companies including Kingfisher Airlines Limited (“KFA”). All such
diverted amounts were provided for by the Company in the financial statements for the year ended March 31, 2015. In
connection with the funds that were identified by the Initial Inquiry to have been diverted from the Company and/or its
subsidiaries, the Company executed settlement agreements with ten parties as of March 31, 2017. These settlements resulted
in write-off of receivables balance of INR 358 (2016: INR 5,666) outstanding from such parties, corresponding write back of
provisions against such receivables amounting to INR 370 (2016: INR 6,209) and interest claims from such parties amounting
to INR 28 (2016: Nil) all of which have been treated as exceptional items during the year (refer Note 28). Settlements with
four parties have not been reached as yet. Discussions with two of these parties are continuing and the Company is hopeful
of reaching settlements with them. Discussions with the third party have turned adverse and the matter appears likely to
manifest itself into a dispute with claims and counter-claims by both parties. The last remaining party identified in the Initial
Inquiry has ceased to be in business and therefore it is not possible to reach any settlement with this party. As all the amounts
including the likely exposure of counter-claims have been fully provided for, there is no further material exposure to the
Company.


41. (continued) All amounts in INR Million
The documents reviewed during the Initial Inquiry contained references to certain additional parties (“Additional Parties”)
and matters (“Additional Matters”) indicating possible existence of other improper transactions. While such references could
not be fully analysed during the Initial Inquiry, the nature of these references raised concerns regarding the propriety of the
underlying transactions. Therefore, after the Initial Inquiry was concluded, and as disclosed in the Company’s financial results
and financial statements from time to time, the Board mandated that USL’s managing director and chief executive officer
(“MD & CEO”) conduct a further inquiry (“Additional Inquiry”) into historical transactions involving the Additional Parties
and Additional Matters, to determine whether transactions with these Additional Parties and/or involving these Additional
Matters also suffered from improprieties. Pending the Additional Inquiry, and as disclosed in the audited financial statements
for the years ended March 31, 2015 and March 31, 2016, certain audit qualifications were made in respect of USL’s financial
statements for those financial years, as the statutory auditors were unable to comment on the nature of those matters,
the provisions established therefore, or any further potential impact on the financial statements. Pursuant to the Board’s
directions, the MD & CEO engaged independent experts with specialised forensic skills to assist with this Additional Inquiry
and provide inputs and expert advice in connection therewith. Notwithstanding the limitations posed by lack of access to
complete documentation despite best efforts, in July 2016 the MD & CEO submitted his report, taking into account the inputs
and expert advice of the independent experts, to the Board. The Board, at its meeting held on July 9, 2016, discussed and
considered in detail the report submitted by the MD & CEO in relation to the Additional Inquiry.
a) The Board noted that while only a court or concerned regulatory authority would be in a position to make final
determinations as to fault or culpability, the Additional Inquiry, prima facie, revealed further instances of actual or
potential fund diversions arising from improper transactions amounting to approximately INR 9,135 using March 31,
2015 exchange rates (approximately INR 9,504 using March 31, 2016 exchange rates) as well as other potentially improper
transactions involving USL and its Indian and overseas subsidiaries amounting to approximately INR 3,118 using March
31, 2015 exchange rates (approximately INR 3,260 using March 31, 2016 exchange rates). These transactions occurred
during the review period covered by the Additional Inquiry, i.e., from October 2010 to July 2014 (“Review Period”, which
was substantially the same as the period covered by the Initial Inquiry), although certain transactions appear to have
been initiated in years prior to the Review Period.
b) The improper transactions identified in the Additional Inquiry involved, in most cases, diversion of funds to overseas
and Indian entities that appear to be affiliated or associated with USL’s former non-executive chairman, Dr. Vijay Mallya.
The overseas beneficiaries or recipients of these funds include entities such as Force India Formula One, Watson Ltd,
Continental Administrative Services, Modall Securities Limited, Ultra Dynamix Limited and Lombard Wall Corporate
Services Inc., in each of which Dr. Mallya appears to have a material, direct or indirect, interest. The Indian beneficiaries
or recipients of the funds identified by the Additional Inquiry included, in most cases, KFA.
c) Most of the amounts identified in the Additional Inquiry have been previously provided for or expensed in the financial
statements of USL or its subsidiaries for prior periods (including by way of provision made in relation to impairment
in the value of or loss on sale of USL’s overseas subsidiaries). With an additional charge of INR 217 in respect of a write
down in the value of certain items of plant and equipment made in the current reporting period and disclosed under
exceptional items (Refer Note 28), there are no other improper transactions identified by the Additional Inquiry, which
have not been expensed or provided. At this stage, it is not possible for the management to estimate the financial
implications, if any, arising out of potential non-compliance with applicable laws on the Company.
d) In connection with the recovery of funds that are prima facie identified by the Additional Inquiry to have been diverted
from the Company and its subsidiaries, the Company has been undertaking a detailed review of each case of fund
diversion to assess the Company’s legal position and is in the process of initiating such action as is necessary to recover
the funds from the relevant parties and individuals, to the extent possible. The Company has taken appropriate action in
relation to employees named in the Additional Inquiry. In respect of on-going relationships with counter-parties involved
in the improper transactions identified by the Additional Inquiry, the Company has undertaken a detailed review of such
relationships and ascertained whether they were entered into on an arms-length basis and with appropriate controls
and has taken appropriate action on the basis of these findings.

e) During the course of the Additional Inquiry, certain other matters pertaining to historical transactions (carried out
during the Review Period of October 2010 to July 2014) were identified, which raised concerns in relation to internal
controls regarding vendor invoices with certain vendors and in relation to certain historical sales promotion schemes.
The amounts involved were charged off in the relevant prior financial years. Management has carried out a further
review which indicates that the said matters did not continue post the Review Period.
42. As disclosed in the financial statements for the years ended March 31, 2015 and March 31, 2016, the Company had pre-
existing loans/ deposits/ advances/accrued interest that were due to the Company and its wholly-owned subsidiaries from
United Breweries (Holdings) Limited (“UBHL”) and its subsidiaries aggregating INR 13,374 and that were consolidated into, and
recorded as, an unsecured loan by way of an agreement entered into between the Company and UBHL on July 3, 2013 (“Loan
Agreement”). The Company has already made provision in prior financial years for the entire principal amount due, of INR
13,374, and for the accrued interest of INR 846 up to March 31, 2014. The Company has also not recognised interest income on
said loan aggregating to INR 3,748 for the period from April 1, 2014 to March 31, 2017. During the year Company has set-off
payable to UBHL under the trademark agreement amounting to INR 290 (2016: INR 249) (cumulatively INR 539) against the
interest receivable from UBHL and consequently corresponding allowance for interest receivable has been reversed to ‘Other
Income” in the related periods.
The Company is seeking redressal of these disputes and claims through arbitration under the terms of the Loan Agreement
and the arbitration proceedings have commenced. On February 7, 2017, the High Court of Karnataka ordered, inter alia, that
UBHL be wound up, and that the Official Liquidator be appointed as the liquidator of UBHL. The Company has subsequently
secured leave from the Hon’ble High Court of Karnataka to continue the arbitration proceedings.
43. As disclosed in the financial statements for the year ended March 31, 2016 the Company entered into a settlement agreement
with its former non-executive chairman, Dr. Mallya (“Agreement”), pursuant to which he resigned from his positions as a director
and chairman of the Company and its subsidiaries. In connection with the settlement, Dr. Mallya procured or undertook to
procure the termination by the relevant counterparties of certain historical agreements to which the Company was party
and which were not approved by the shareholders of the Company at the extraordinary general meeting (“EGM”) held on
November 28, 2014. Pursuant to the Agreement, the Company entered into mutual release and termination agreements with
all the respective counterparties of these historical agreements, save one. The Company has executed an Agreement with
the said remaining party by paying a sum of INR 75 (“Amount”) during the quarter ended September 30, 2016. The Company
made a claim against Dr. Mallya seeking refund of the Amount in terms of the Agreement. Since the refund of the Amount
was not forthcoming from Dr. Mallya, the Company has sought indemnification and made a claim against Diageo Plc., for the
refund amount which has been recorded as ‘Receivable from related parties’ under Other current financial assets as at March
31, 2017 and has been realized post the balance sheet date. There is therefore no financial impact on the Statement of profit
and loss of the Company. As previously disclosed by the Company, the Company and Dr. Mallya agreed a mutual release in
relation to civil claims arising out of the Initial Inquiry. The Agreement does not extend to matters covered by the Additional
Inquiry, any claims connected with the UBHL loan, or any recovery proceedings by USL connected with the Additional Inquiry.
As part of the Agreement with Dr Mallya, the Company, inter alia, also entered into certain principles, pursuant to which Dr
Mallya or a party nominated by him would have a limited period option to purchase up to thirteen non-core properties from
the Company. The Company secured independent valuation for these properties and had shared the same with Dr. Mallya.
Though the Company received call notices from a party nominated by Dr. Mallya indicating its intention to purchase four
non-core properties from the Company, the said call notices have since expired due to inaction by the party nominated
by Dr.Mallya. As a result, the period of this option has now expired with Dr Mallya (or his nominee) not purchasing any of
the non-core properties. The Company now intends to divest these non-core assets at market value through a transparent
process, under the overalll supervision and direction of the concerned Board Committee.
The Company had received certain undertakings from Dr. Mallya in relation to termination of the Shreholders’ Agreement.
During the quarter ended September 30, 2016, on seeking a further update on the status of the termination of the
Shareholders’ Agreement by UBHL, the Company was informed by Dr. Mallya that UBHL would not be seeking leave of court
to terminate the Shareholders’ Agreement.


44. The managerial remuneration for the financial year ended March 31, 2015 aggregating INR 63 and INR 153 to the Managing
Director & Chief Executive Officer (“MD & CEO”) and the former Executive Director and Chief Financial Officer (“ED & CFO”),
respectively, was approved by the shareholders at the annual general meeting of the Company held on September 30, 2014.
The aforesaid remuneration includes amounts paid in excess of the limits prescribed under the provisions of Schedule V to
the Companies Act, 2013 (“Act”) by INR 51 to the MD & CEO and INR 134 to the former ED & CFO. Accordingly, the Company
applied for the requisite approval from the Central Government for such excess remuneration. The Central Government, vide
letters dated April 28, 2016 did not approve the Company’s application for the waiver of the excess remuneration. On May 24,
2016 the Company resubmitted the applications, along with detailed explanations, to the Central Government to reconsider
approving the waiver of the excess remuneration paid. In light of the findings from the Additional Inquiry as set out in Note
41 above, the Company has withdrawn its application for approval of excess remuneration paid to the former ED & CFO of
the Company through a letter dated July 12, 2016. The Company is awaiting response from the Central Government to its
resubmitted application in respect of the MD & CEO. As notified to the Central Government, the Company initiated steps
seeking refund of excess remuneration paid to the former ED & CFO. Since the refund was not forthcoming, the Company has,
on January 5, 2017, filed a suit before the jurisdictional court to recover the excess remuneration paid by the Company to the
former ED & CFO.
45. The Company has received and continues to receive letters and notices from various regulatory authorities and other
government authorities. The Company has responded to the respective letters and notices and is cooperating with the
regulatory authorities. Amongst others, the following letters and notices have been received and/ or responded to by the
Company:
a. From the Securities Exchange Board of India (“SEBI”), in relation to the Initial Inquiry, Additional Inquiry, and matters
arising out of the Agreement entered into by the Company with Dr. Mallya;
b. From the Ministry of Corporate Affairs (“MCA”) in relation to its inspection conducted under section 206(5) of the
Companies Act, 2013 during the year ended March 31, 2016 and subsequent show cause notices alleging violation of
certain provisions of the Companies Act, 1956 and Companies Act, 2013;
c. From the Enforcement Directorate (“ED”) in connection with agreements entered into with Dr. Mallya and investigations
under the Foreign Exchange Management Act, 1999 and Prevention of Money Laundering Act, 2002;
d. From the Company’s authorised dealers in relation to certain queries from Reserve Bank of India (“RBI”) with regard to
remittances made in prior years to subsidiaries of the Company and branch in the United Kingdom and past acquisition
of the Whyte and Mackay group; and
e. From the Central Bureau of Investigation (CBI) relating to the Initial Inquiry and Additional Inquiry.
46. As disclosed in the financial statements for the years ended March 31, 2015 and March 31, 2016, during the year ended
March 31, 2014, the Company decided to prepay a term loan taken in earlier years under a consortium from bank, secured
by assets of the Company and pledge of shares of the Company held by the USL Benefit Trust (of which the Company is the
sole beneficiary) with the security trustee. The Company deposited a sum of INR 6,280, including prepayment penalty of INR
40, with the bank and instructed the bank to debit the amount from its cash credit account towards settlement of the loan
and release the assets and shares pledged by the Company. The bank, however, disputed the prepayment. The Company
has disputed the stand taken by the bank and its writ petition is pending before the Hon’ble High Court of Karnataka. On
completion of the loan tenure on March 31, 2015, the bank demanded an amount of INR 474 towards principal and interest
on the said loan, which the Company contested in the Hon’ble High Court of Karnataka. As per the order of the Hon’ble
High Court of Karnataka directing the parties to consider a negotiated settlement, the Company engaged with the bank
to commence discussions towards settlement. In August 2015, the bank obtained an ex parte injunction in proceedings
between the bank and KFA, before the Debt Recovery Tribunal, Bangalore (“DRT”), restraining the USL Benefit Trust from
disposing of the pledged shares until further orders. The Company and USL Benefit Trust, upon receiving notice of the said
order, filed their objections against such ex parte order passed in proceedings in which neither the Company nor the USL
Benefit Trust are or have been enjoined as parties. In December 2015, the Hon’ble High Court of Karnataka issued a stay order

restraining the bank from dealing with the above mentioned pledged shares until further orders. Thereafter in February 2016,
the Company received a notice from the bank seeking to recall the loan and demanding a sum of INR 459, and the Company
also received a subsequent notice in March 2016 issued under section 13(2) of SARFAESI Act in relation to the same loan.
Pursuant to an application filed by the Company before the Hon’ble High Court of Karnataka, in the writ proceedings, the
Hon’ble High Court directed that if the Company deposited the sum of INR 459 with the bank, the bank should hold the same
in a suspense account and should not deal with any of the secured assets including shares pledged with the Bank till disposal
of the original writ petition filed by the Company before the Hon’ble High Court of Karnataka. During the quarter ended June
30, 2016, the Company accordingly deposited the said sum and replied to the bank’s various notices in light of the above.
The aforesaid amount has been accounted as other non-current financial assets. On January 19, 2017, the DRT dismissed the
application filed by the bank seeking the attachment of USL Benefit Trust shares. The Company on March 13, 2017 issued
a legal notice to the bank asking them to provide the ‘no-objection’ for the release of the pledged shares, withdrawing the
notices under SARFESI and also to pay compensation on account of loss of interest, value of differential share price, loss of
reinvestment opportunity, reputational damage etc to which the bank has responded denying the claim. The Company is in
the process of sending an appropriate rejoinder and is also making efforts to expedite the hearing of its Writ Petition before
the Karnataka High Court.
47. Consequent to a voluntary disclosure made by the Company to a customer regarding prices historically charged by the
Company to said customer being inconsistent with trading terms that apply between the Company and the said customer,
the Company received a claim during the quarter ended September 30, 2016 and thereafter a debit note for the period
upto December 31, 2016, in the quarter ended March 31, 2017. After considering an accrual of INR 250 which was made on
this account in the financial year ended March 31, 2016, an additional liability has been recorded for the balance amount of
INR 3,030 (including potential liability of INR 130 for the period January to March 2017) during the current year (of which
INR 460 relate to claims for current year sales which has been recorded as reduction from Revenue from Operations) and
INR 2,570 pertaining to earlier years which has been disclosed as exceptional item in the Statement of profit and loss. In
respect of some of the specific products the prices demanded by the Customer result in the Company incurring a forseeable
loss and accordingly a provision for the onerous element in such contracts amounting to INR 75 has been made and included
in exceptional item. The aggregate amount included in exceptional items is therefore INR 2,645 (Refer Note 28).
48. The Bihar State Government by its notification dated April 5, 2016 imposed a ban on trade and consumption of Indian Made
Foreign Liquor and foreign liquor in the state of Bihar with immediate effect. Writ petitions were filed with the Hon’ble High
Court of Patna challenging the said notification and seeking payment for supplies made by the Company and its tie-up
manufacturing units to Bihar State Beverages Corporation Limited (“BSBCL”). By an order dated September 30, 2016, the
Hon’ble High Court of Patna set aside the notification dated April 5, 2016 and Section 19(4) of the Bihar Excise Act, 1915,
as ultra vires the Constitution of India. Subsequently, the Bihar Government re-imposed prohibition by notifying a new
legislation i.e. The Bihar Prohibition and Excise Act, 2016, on October 02, 2016. The Bihar Government also preferred a special
leave petition (“SLP”) before the Hon’ble Supreme Court against the judgment of the Hon’ble High Court of Patna pursuant
to which the Hon’ble Supreme Court has stayed the order of the Hon’ble High Court of Patna. During the quarter ended
December 31, 2016, the Company filed an application seeking compensation from the Government of Bihar towards losses
suffered as a result of arbitrary imposition of prohibition.
On January 24, 2017, the Government of Bihar issued a Notification prohibiting the manufacture of alcoholic beverages in
the State (w.e.f April 1, 2017) the consequences of which criminalises the continued storage of all stock of raw material and
finished goods in the State of Bihar (including the stock lying at BSBCL). Pursuant to an application by Confederation of Indian
Alcoholic Beverage Companies (CIABC) in the Supreme Court, the Bihar Government extended this timeline to April 30, 2017
and the Hon’ble Supreme Court thereafter extended this to July 31, 2017 to allow additional time for companies to transfer
said materials out of the state of Bihar. In light of the challenges in carrying out this unique and one time exercise, CIABC has
sought an extension of the deadline from the Supreme Court.
The Company has initiated the process of transferring such stocks of raw materials and finished goods outside the state of
Bihar. The ‘billed stocks’ supplied by the Company pursuant to valid orders for sales which are currently in the possession of
BSBCL, are also in the process of being transferred out of the state of Bihar. The Company will take appropriate steps in due


course to persuade the Bihar Government to refund the statutory duties i.e. VAT and Excise duty paid in respect of the said
stocks aggregating to INR 553 which is considered good and receivable and disclosed as other non-current financial assets.
The Company has made a provision during the current reporting period of INR 267 (2016: INR 107) towards reprocessing
charges for inventory and INR 110 (2016: Nil) towards employee retrenchment totalling INR 377 (2016: Nil) which has been
disclosed as exceptional item under Note 28.
49. Agreement for sale of United Spirits Nepal Private Limited
On January 15, 2016, the Company entered into an agreement for the sale of its entire holding in United Spirits Nepal Private
Limited of 67,716 equity shares (constituting 82.46% of the paid up equity share capital of United Spirits Nepal Private Limited).
The sale is subject to various regulatory approvals (both in India and Nepal) and other conditions precedent which are normal
for such transactions, and which the Company is in the process of seeking. Pending such approvals, the investment in United
Spirits Nepal Private Limited amounting to INR 66 (2016: INR 66) has been classified as asset held for sale under current assets
(Refer Note 13).
50. During the year ended March 31, 2016, the Company has infused:
(a) Equity capital of INR 987 in Tern Distilleries Private Limited, a wholly owned subsidiary of the Company (“Tern”). Tern
has repaid the loans of INR 767 and accrued interest of INR 208 to the Company. Subsequent to the infusion, Tern has
made an application to the Board for Industrial and Financial Reconstruction (“BIFR”) for deregistering its name from the
list of sick industrial undertakings. Accordingly, the Draft Rehabilitation Scheme for the amalgamation of Tern with the
Company, as submitted to the BIFR, stands abandoned.
(b) Equity capital of INR 4,267 in Sovereign Distilleries Limited, a wholly owned subsidiary of the Company (“SDL”). SDL has
repaid the loans of INR 3,399 and accrued interest of INR 857 to the Company.
(c) Company has recognised exceptional gain of INR 2,480 during the year ended March 31, 2016 pursuant to aforesaid
transaction and recovery loans, whose deemed cost was considered lower by INR 2,480.(Refer Note 28).
51. (a) The Scheme of Amalgamation between the Company and SW Finance Co. Limited, a wholly owned subsidiary of the
Company (“SWFCL”), under Section 391 and 394 read with Sections 100 to 103 of the Companies Act, 1956 (the “Scheme”)
with the appointed date of January 1, 2014 has been sanctioned by the Hon’ble High Court of Karnataka and Hon’ble High
Court of Judicature at Bombay under the orders dated June 12, 2015 and August 28, 2015, respectively. Upon necessary
filings with the respective Registrars of Companies, the Scheme has become effective from September 28, 2015 (the ‘Effective
Date’) and effect thereof have been given in these financial statements. Consequently:
(i) the Share capital of SWFCL to the extent held by SWFSL Trust stood cancelled;
(ii) the entire business and undertakings of SWFCL including all assets and liabilities, as a going concern transferred to and
vested in the Company in accordance with the provisions of the Scheme with effect from the appointed date;
(iii) the Authorised capital of the Company increased to INR 7,192 divided into 548,000,000 equity shares of INR 10/- each,
159,200,000 preference shares of INR 10/- each and 1,200,000 preference shares of INR 100/- each; and
(iv) SWFCL ceased to be subsidiary of the Company, and as SWFCL was a wholly owned subsidiary (WOS) of the Company,
no consideration was payable pursuant to amalgamation of SWFCL with the Company. Shaw Wallace Overseas Limited,
a WOS of SWFCL has become a direct subsidiary of the Company.
The Company has given effect to the Scheme in the accounts with effect from April 1, 2015 being the date of transition in
accordance with Ind AS 101 as this is a common control transaction under Ind AS 103.
(i) Surplus arising out of cancellation of equity shares to the extent held by SWFSL Trust in SWFCL has been credited to
“Capital Reserve” for an amount of INR 683.
(ii) Difference between the values of net assets of SWFCL (including reserves) transferred to the Company after adjusting for
investments cancelled has been debited to “General Reserve” for an amount of INR 742.

51. (b) During the year ended March 31, 2016 USL’s wholly owned subsidiary Asian Opportunities & Investments Limited (AOIL),
has sold its entire interest in Bouvet Ladubay S.A. (and its wholly owned subsidiary Chapin Landais S.A.S). Consequent to
the above sale Bouvet Ladubay S.A. (and its wholly owned subsidiary Chapin Landais S.A.S) ceased to be subsidiaries of the
Company.
52. Effective December 1, 2016, the provisions of Sick Industrial Companies Act, 1985 was repealed. As a result, Board of Industrial
Finance and Reconstruction (BIFR) ceases to exist and all proceedings before BIFR stand automatically dropped. The Company
and its four subsidiary companies namely, Pioneer Distilleries Limited, Sovereign Distilleries Limited, Tern Distilleries Private
Limited and Four Seasons Wines Limited had been referred to BIFR due to the erosion of more than 50/100% of the net worth
of those companies. As a result, the requirement to report erosion of net worth of the Company to the shareholders is not
required.
53. Capital and other commitments

Capital commitments for property, plant and equipment 341 816 1,474
Other commitments relating to trade mark fee 1,751 2,688 3,617
The Company has also given letter of support to the following subsidiaries to conduct their operations in such a manner as to
enable them to meet their obligations, as and when they fall due for a period of twelve months:
i) Pioneer Distilleries Limited ii) Sovereign Distilleries Limited iii) Tern Distilleries Private Limited iv) Four Seasons Wines
Limited v) Royal Challengers Sports Private Limited vi) Asian Opportunities & Investment Limited vii) United Spirits Singapore
Pte Limited viii) Montrose International SA ix) Palmer Investment Group Limited x) UB Sports Management Overseas Ltd
(Formerly known as “ JIHL Nominees Limited”) xi) USL Holdings Limited xii) USL Holdings (UK) Limited xiii) United Spirits (UK)
Limited xiv) United Spirits (Great Britain) Limited xv) Liquidity Inc. xvi) United Spirits (Shanghai) Trading Co. Limited
54. Contingent Liabilities
As at As at As at
Particulars
(a) Disputed dues against the Company not acknowledged as debts:
(i) State Excise demands primarily for excess wastages and
1,978 2,186 1,997
distillation losses
(ii) Central Excise matters 2 119 2
(iii) Service tax disputes 233 290 233
(iv) Property, labour and civil litigations 2,692 3,274 1,188
(v) Expenses relating to Historical agreements not recognised - 121 486
(vi) Income tax disputes (including interest) 7,176 2,849 2,604
(vii) Sales tax and entry tax disputes in various states 2,069 2,264 2,084
(b) Bills receivables discounted - - 295
(c) Claims from suppliers not acknowledged as debts 65 62 83
Management is optimistic of succeeding in the above appeals / disputes based on legal opinions / legal precedents.


55. Research and development expenses

31, 2017 31, 2016
Salaries and wages 48 45
Contribution to provident fund and other funds 5 5
Rent 4 4
Total Research and development expenses 80 86
56. Dues to Micro, Small and Medium Enterprises (MSME)
Particulars As at As at As at
Principal amount due to suppliers registered under the MSMED Act
195 183 164
and remaining unpaid as at year end
Interest due to suppliers registered under the MSMED Act and
8 2 1
remaining unpaid as at year end
Principal amounts paid to suppliers registered under the MSMED
435 331 314
Act, beyond the appointed day during the year
Interest paid, other than under Section 16 of MSMED Act, to suppliers
registered under the MSMED Act, beyond the appointed day during 3 - -
the year
Interest paid, under Section 16 of MSMED Act, to suppliers registered
- - -
under the MSMED Act, beyond the appointed day during the year
Interest due and payable towards suppliers registered under MSMED
9 6 5
Act, for payments already made
Further interest remaining due and payable for earlier years 14 8 6
The above information has been determined to the extent such parties have been identified on the basis of information
provided by the Company, which has been relied upon by the auditors.
57. Corporate Social Responsibility:

Since the average net profit of the Company during the three immediately preceding financial years is negative, the Company
has no obligation to spend towards the Corporate Social Responsibility as required under the provisions of Section 135 of the
Act.

168
58. (a) Details of loans during the year as per Section 186 (4) of Companies Act, 2013 All amounts in INR Million
Below mentioned amounts are at gross of provision
Secured / Rate of As at March As at March As at April 1,
Name of the borrower Relationship Purpose Term/ Repayment schedule
unsecured Interest* 31, 2017 31, 2016 2015
Domestic subsidiaries
Royal Challengers Sports Private Wholly owned Unsecured Working capital 10% Principal and interest to be repaid on 2,913 2,538 1,974
Limited subsidiary March 31, 2019
Royal Challengers Sports Private Wholly owned Unsecured Working capital Interest free Principal to be repaid on March 1,219 1,219 1,219
Limited subsidiary 31, 2019
UNITED SPIRITS LIMITED

Four Seasons Wines Limited Wholly owned Unsecured Working capital 10% Principal and interest to be repaid on 765 722 539
subsidiary March 31, 2019
Tern Distilleries Private Limited Wholly owned Unsecured Working capital 10% Principal and interest to be repaid on 9 - 677
subsidiary December 4, 2019
Sovereign Distilleries Limited Wholly owned Unsecured Working capital 10% Principal and interest to be repaid on 5 - 3,308
subsidiary December 18, 2019
Pioneer Distilleries Limited Subsidiary Unsecured Working capital / Capex 10% Principal and interest to be repaid on 1,354 1,354 1,354
funding March 31, 2019
Overseas Subsidiaries
Asian Opportunities & Investments Wholly owned Unsecured Working capital / Funding to- Interest free Refer note below
Limited subsidiary wards acquisition of Bouvet 458 500 1,735
Ladubay
Asian Opportunities & Investments Wholly owned Unsecured Working capital / Funding to- 12% No outstanding balance.
Limited subsidiary wards acquisition of Bouvet - - 67
Ladubay
McDowell & Co. (Scotland) Limited Wholly owned Unsecured Working capital Interest free Refer note below 388 412 396
subsidiary
McDowell & Co. (Scotland) Limited Wholly owned Unsecured Working capital 12% No stipulated repayment term
subsidiary 16 19 -
USL Holdings Limited Wholly owned Unsecured Working capital / Funding Interest free Refer note below
subsidiary towards acquisition of Whyte 50,382 52,216 49,361
and Mackay Limited
United Spirits (Shanghai) Trading Wholly owned Unsecured Working capital Interest free Refer note below
Company Limited subsidiary 16 16 16
Liquidity Inc. Subsidiary Unsecured Working capital Interest free Refer note below
54 54 54
Others
United Breweries (Holdings) Entity having Unsecured Refer Note 42 9.50% 8 years
Limited significant influence - 13,374 13,374
[Refer Note 37(a)]
57,579 72,424 74,074
* Rate of Interest as at March 31, 2017
Note: The loans and advances granted to these companies in earlier years are interest free without any repayment term stipulated and were largely
intended towards acquisition of long term strategic investments.
(b) Details of guarantee given

As at As at As at
Name of the party Relationship Nature Purpose
Pioneer Distilleries Limited Subsidiary Financial Guarantee given for loans Security towards working capital loan given by
1,000 934 934
a bank
Total 1,000 934 934

59. Disclosure as per Regulation 34 (3) and 53 (f) read with Part A of Schedule V of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 in respect of loans and advances, the amount in the nature of loans
outstanding as at year end
Particulars Value of Investments Loans outstanding as Maximum amount of

in equity held as at at March 31, 2017 loans and advances
March 31, 2017 outstanding during
the year
i) Amount of Investment, loans and advances in the
nature of loans outstanding from subsidiaries
Asian Opportunities & Investments Limited 301 458 502
Four Season Wines Limited 693 765 765
Shaw Wallace Overseas Limited 14 - -
USL Holdings Limited 22 50,382 52,270
United Spirits Nepal Private Limited 66 - -
Palmer Investment Group Limited 6,918 - -
Montrose International S.A 134 - -
United Spirits Shanghai Trading Co. Limited 27 16 16
Tern Distilleries Private Limited 1,127 9 9
Liquidity Inc. 119 54 54
Sovereign Distilleries Limited 4,582 5 5
Particulars Value of Investments Loans outstanding as Maximum amount of

held at March 31, 2016 loans and advances
outstanding during
the year
i) Amount of Investment, loans and advances in the
nature of loans outstanding from subsidiaries
Asian Opportunities & Investments Limited 301 501 1,998
Four Season Wines Limited 693 722 722
Shaw Wallace Overseas Limited 14 - -
USL Holdings Limited 22 50,994 53,814
United Spirits Nepal Private Limited 66 - -
Palmer Investment Group Limited 6,918 - -
Montrose International S.A 134 - -
United Spirits Shanghai Trading Co. Limited 27 16 16
Tern Distilleries Private Limited 1,127 - 767
Liquidity Inc. 119 54 54
Sovereign Distilleries Limited 4,582 - 3,399
ii) Loans and advances in the nature of loans to firms /
companies in which directors are interested
The aforesaid amount are gross of provisions, if any made based on Management assessment of recoverability. For repayment
schedule and interest related terms, Refer note 58(a).

60. During the year ended March 31, 2017 no material foreseeable loss was incurred for any long-term contracts including
derivative contracts.
61. First-time adoption of Ind AS

These are the Company’s first financial statements prepared in accordance with Ind AS.
The accounting policies set out in Note 1, have been applied in preparing the financial statements from the year ended
March 31, 2017, the comparative information presented in these financial statements for the year ended March 31, 2016 and
in the preparation of an opening Ind AS balance sheet at April 1, 2015 (the Company’s date of transition). In preparing its
opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared
in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended)
and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous
GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following
tables and notes.
A. Exemptions and exceptions availed
Set below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from
previous GAAP to Ind AS.
A.1 Ind AS optional exemptions
A.1.1 Deemed cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property,
plant and equipment and investment in subsidiaries as recognised in the financial statements as at the date
of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date
of transition. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.
Accordingly, the Company has elected to measure all of its Investments in subsidiaries, property, plant and
equipment and intangible assets at their previous GAAP net carrying value.
A.1.2 Leases
Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease.
In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or
arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances
existing at the date of transition to Ind AS.
The Company has elected to apply this exemption for such contracts/arrangements.
A.1.3 Business Combination

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific
date prior top the transition date. This provides relief from full retrospective application that would require
restatement of all business combination to the transition date.
The Company has elected to apply Ind AS 103 prospectively to business combinations occurring after its
transition date. Business combinations occuring prior to the transition date have not been restated.
A.1.4 Designation of previously recognised financial instruments

Ind AS 101 allows an entity to designate investments in equity instruments other than subsidiaries at FVOCI
on the basis of the facts and circumstances at the date of transition to Ind AS.
Accordingly, the Company has elected to classify fair value gains/losses on such investments in statement
of other comprehensive income.


61. First-time adoption of Ind AS (continued)
A.1.5 Cumulative translation differences

Ind AS 101 permits cumulative translation gains and losses to be reset to zero at the transition date. The
Company elected to reset all cumulative translation gains and losses to zero by transferring it to opening
retained earnings at its transition date.
A.1.6 Prospective application of Ind AS 21 to business combinations

Ind AS 101 allows a first-time adopter not to apply Ind AS 21 Effects of changes in Foreign Exchange Rates
retrospectively for business combinations that occurred before the date of transition to Ind AS. In such
cases, where the entity does not apply Ind AS 21 retrospectrively to fair falue adjustments and goodwill, the
entity treats them as assets and liabilities of the acquirer entity and not as the acquiree.
The Company has elected to apply this exemption.
A.2 Ind AS mandatory exceptions

A.2.1 Estimates
An entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent
with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any
difference in accounting policies), unless there is objective evidence that those estimates were in error.
Ind AS estimates as at April 1, 2015 are consistent with the estimates as at the same date made in conformity
with previous GAAP.
A.2.2 De-recognition of financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively
for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-
time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the
entity’s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial
liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for
those transactions.
The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date
of transition to Ind AS.
A.2.3 Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the
fact and circumstances that exits at the date of transition to Ind AS.

61. First-time adoption of Ind AS (continued)
B. Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The
following tables provide the reconciliations from previous GAAP to Ind AS.
(i) Reconciliation of equity as at date of transition (April 1, 2015)

Foot note Previous
Adjustments Ind AS
reference GAAP *
ASSETS
Non-current assets
Property, plant and equipment 10,679 - 10,679
Capital work-in-progress 645 - 645
Other intangible assets 15 - 15
Non-Current Financial assets
Investments 7 165 8,417 8,582
Loans 1, 2, 10 19,851 (18,900) 951
Other financial assets 440 - 440
Investments in subsidiaries 1, 10 5,338 5,294 10,632
Deferred tax assets 3, 11 873 226 1,099
Advance income tax (net) 2,281 - 2,281
Other non-current assets 3,460 - 3,460
Total non-current assets 43,747 (4,963) 38,784
Current assets
Inventories 3, 9, 11 15,543 1,325 16,868
Current Financial assets
Investments 11 - 11
Trade receivables 3 17,312 (802) 16,510
Cash and cash equivalents 1 1,819 2 1,821
Bank balances other than those included in Cash and cash
355 - 355
equivalents above
Other financial assets 1, 9 6,418 (1,113) 5,305
Other current assets 4,340 - 4,340
Assets classified as held for sale 1 - 1
Total current assets 45,799 (588) 45,211
Total assets 89,546 (5,551) 83,995
EQUITY AND LIABILITIES
Equity
Equity share capital 1,453 - 1,453
Other equity
Reserves and surplus 1, 2, 3, 11,13 17,968 (12,003) 5,965
Other reserves 7 - 8,417 8,417
Total equity 19,421 (3,586) 15,835


61. First-time adoption of Ind AS (continued) All amounts in INR Million
(i) Reconciliation of equity as at date of transition (April 1, 2015) (continued)
Foot note Previous
Adjustments Ind AS
reference GAAP *
LIABILITIES
Borrowings 1 15,094 (4,624) 10,470
Other financial liabilities 251 - 251
Provisions 661 - 661
Total non-current liabilities 16,006 (4,624) 11,382
Current liabilities
Borrowings 36,213 - 36,213
Trade payables 8,716 - 8,716
Other financial liabilities 3,876 - 3,876
Provisions 13 2,120 175 2,295
Current tax liabilities 1 364 2,813 3,177
Other current liabilities 1 2,830 (329) 2,501
Total liabilities 70,125 (1,965) 68,160
Total equity and liabilities 89,546 (5,551) 83,995
* The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the
purposes of this note.
(ii) Reconciliation of equity as at March 31, 2016

Foot note Previous Adjustments Ind AS
reference GAAP *
ASSETS
Non-current assets
Capital work-in-progress 2,449 - 2,449
Other intangible assets 12 9 4 13
Investments 7 14 68 82
Loans 2, 10 17,218 (16,315) 903
Investments in subsidiaries 8, 10 3,855 5,976 9,831
Deferred tax assets 3, 11 1,260 279 1,539
Total non-current assets 40,916 (9,988) 30,928

(ii) Reconciliation of equity as at March 31, 2016 (continued)

Note Previous Adjustments Ind AS
reference GAAP *
Current assets
Inventories 3, 9, 11 17,339 1,660 18,999
Investments 11 - 11
Trade receivables 3 24,294 (1,154) 23,140
Cash and cash equivalents 48 - 48
Bank balances other than those included in Cash and cash
79 - 79
equivalents above
Other financial assets 9 3,985 (750) 3,235
Other current assets 5,419 - 5,419
Total current assets 51,176 (179) 50,997
Total assets 92,092 (10,167) 81,925
Equity
Other equity
Reserves and surplus 2, 3, 11, 13 26,620 (11,001) 15,619
Other reserves 7 - 68 68
Total equity 28,073 (10,933) 17,140
LIABILITIES
Borrowings 7,057 - 7,057
Total non-current liabilities 7,824 - 7,824
Current liabilities
Borrowings 29,941 - 29,941
Other financial liabilities 9 6,949 578 7,527
Provisions 13 2,171 188 2,359
Current tax liabilities 3,477 - 3,477
Other current liabilities 3,638 - 3,638
Total current liabilities 56,195 766 56,961
Total liabilities 64,019 766 64,785
Total equity and liabilities 92,092 (10,167) 81,925
* The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the
purposes of this note.


(iii) Reconciliation of total comprehensive income for the year ended March 31, 2016
Foot note Previous Adjustments Ind AS
reference GAAP *
Revenue
Revenue from operations (Gross) 3, 5, 9 223,015 11,427 234,442
Less : Excise duty 4 132,242 (132,242) -
Revenue from operations (net) 90,773 143,669 234,442
Other operating income - - -
Other income 1,057 - 1,057
Total income 91,830 143,669 235,499
Expenses
Cost of materials consumed 3, 9 37,797 10,612 48,409
Purchases of stock-in-trade 9 16,785 (14,829) 1,956
Changes in inventories of work-in-progress,
stock-in-trade and finished goods 3, 9 (1,722) (237) (1,959)
Excise duty 3, 4, 9 - 151,960 151,960
Employee benefit expense 6 6,592 (165) 6,427
Finance costs 4,469 - 4,469
Depreciation and amortisation expense 12 1,021 (4) 1,017
Other expenses
Advertisement and sales promotion 6,138 - 6,138
Other expenses 5, 9, 13 16,271 (3,624) 12,647
Total expenses 87,351 143,713 231,064
Profit before exceptional items and tax 4,479 (44) 4,435
Exceptional items 7 7,256 (8,536) (1,280)
Profit before tax from continuing operations 11,735 (8,580) 3,155
Income tax expense
- Current tax 1,744 - 1,744
- Tax relating to earlier years 568 - 568
- Deferred tax 3, 6, 11 (362) 13 (349)
- MAT credit availed (27) - (27)
Total tax expense 1,923 13 1,936
Profit for the year 9,812 (8,593) 1,219
Other comprehensive income
Remeasurements of post-employment benefit obligations 6 - (165) (165)
Fair value gain/(loss) on investments in equity 7 - 187 187
Income tax relating to these items 6 - 64 64
Other comprehensive income for the year, net of tax - 86 86
Total comprehensive income for the year 9,812 (8,507) 1,305
* The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of
this note.

(iv) Reconciliation of total equity as at March 31, 2016 and April 1, 2015
Foot note March 31, April 1,
reference 2016 2015
Total equity (shareholder’s funds) as per previous GAAP 28,073 19,421
Adjustments:
On account of allowance created on loan given to USL Holdings BVI 2 (10,274) (10,274)
On account of amalgamation of SW Finance Co. Limited with the Company 1 - (1,160)
Reversal of brand amortisation 12 4 -
Fair valuation of investments 7 68 8,417
Net impact on equity on reversal of revenue 3 (109) (84)
De-recognition of borrowing cost capitalised on inventory 11 (713) (536)
Stamp duty on erstwhile amalgamations 13 (188) (175)
Tax effects of above adjustments 3, 11 279 226
Total adjustments (10,933) (3,586)
Total equity as per Ind AS 17,140 15,835
(v) Impact of Ind AS adoption on the statements of cash flows for the year ended March 31, 2016
Previous Adjustments Ind AS
GAAP
Net cash flow from operating activities 1,953 313 2,266
Net cash flow from investing activities 7,583 (529) 7,054
Net cash flow from financing activities (11,347) 254 (11,093)
Net increase/(decrease) in cash and cash equivalents (1,811) 38 (1,773)
Cash and cash equivalents as at April 1, 2015 1,859 (38) 1,821
Effect of exchange rate changes on cash and cash equivalents - - -
Cash and cash equivalents as at March 31, 2016 48 - 48
Analysis of changes in cash and cash equivalents for the purposes of

statement of cash flows under Ind AS
Cash and cash equivalents as per previous GAAP and for the purpose of
48 - 48
statement of cash flows


C. Foot Notes to first-time adoption:
1. Business combination - SW Finance Co. Limited

As noted in Note 51(a) on August 28, 2015, the Company received an approval to merge with SW Finance Co.
Limited (SWFCL) with an effective date of January 1, 2014, accordingly company had recorded below mentioned
merger entries on August 28, 2015 (being the appointed date) under the previous GAAP. However, as per Ind AS
103, the results of SWFCL have been merged with the company with effect from April 1, 2015 as this is a common
control transaction, and below adjustments were made to opening Balance sheet as at the transition date:
Particulars As at
April 1,
2015
Liabilities - Increase/ (decrease)
Other current liabilities (329)
Reserves and surplus (1,160)
Borrowings (4,624)
Current tax liabilities (net) 2,813
(3,300)
Assets - Increase / (decrease)
Investment in subsidiaries (3,302)
Cash and cash equivalents 2
Loans (29)
Other financial assets 29
(3,300)
2. Cumulative translation differences

The Company elected to reset all cumulative translation reserve to zero by transferring it to opening retained
earnings at its transition date. Consequently, the loan to USL Holdings Limited BVI which was not considered as
doubtful under previous GAAP to the extent of balance in Foreign Currency Translation Reserve, has been fully
provided for as at the transition date amounting to INR 10,274. This resulted in net reduction in Reserves and
Surplus amounting to INR 10,274 and an equivalent reduction in loans.
3. Revenue recognition
Under Ind AS 18, revenue is recognised when significant risk and reward is transferred and company does not retain
either continuing managerial involvement or effective control over the goods sold. Hence, revenue recognised
under previous GAAP relating to certain customers have been reversed. Net impact of reversal of revenue for the
year ended March 31, 2016 is as below:
a. Decrease in Revenue from Operations : INR 352 (net of opening)
b. Increase in Cost of materials consumed: INR 229 (net of opening)
c. Decrease in changes in inventories of work-in-progress, stock-in-trade and finished goods: INR 326 (net of
opening)
d. Decrease in Excise duty: INR 229 (net of opening)
e. Increase in inventories : INR 1,045 (2015 : INR 719)
f. Decrease in trade receivables: INR 1,154 (2015 : INR 802)
g. Corresponding deferred tax asset on aforesaid items amounted to INR 37 (2015: INR 28) has been created with
a corresponding increase in deferred tax income.
h. Reduction in Reserves and Surplus by INR 56 as at April 1, 2015 and INR 72 as at March 31, 2016.

4. Excise duty
Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS,
revenue from sale of goods is presented inclusive of excise duty paid and charged to customers. The excise duty
paid is presented on the face of the statement of profit and loss as part of expenses. This change has resulted in an
increase in total revenue and total expenses for the year ended March 31, 2016 by INR 132,242. There is no impact
on the total equity and profit.
5. Trade discount
Under Indian GAAP, trade and cash discounts of INR 4,111 was recognised as part of other expenses which has been
adjusted against the revenue under Ind AS during the year ended March 31, 2016.
6. Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts
included in the net interest expense on the net defined benefit liability are recognised in other comprehensive
income. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As
a result of this change, the profit for the year ended March 31, 2016 decreased by INR 165 with a corresponding
increase in Other Comprehensive Income. There is no impact on the total equity as at March 31, 2016. Deferred tax
assets of INR 64 reclassified to Other Comprehensive Income on this account.
7. Fair valuation of investments

Under the previous GAAP, investments in equity instruments other than investments in subsidiaries and mutual
funds were classified as long-term investments or current investments based on the intended holding period and
realisability. Long-term investments were carried at cost less provision for other than temporary decline in the
value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these
investments are required to be measured at fair value.
Fair value changes with respect to these items designated as at FVOCI have been recognised in FVOCI- equity
investments reserve as at the date of transition and subsequently in the other comprehensive income for the year
ended March 31, 2016. This resulted in-
- an increase of INR 8,417 in investments and an equivalent increase in other reserves as at the transition date,
which includes gains of INR 70 on equity investments unsold as at March 31, 2016 .
- fair value gain of INR 187 for the year ended March 31, 2016 which is accounted under FVOCI reserves with a
corresponding increase in investment, which includes a loss of INR 2 on equity investments unsold as at March 31,
2016
- Gain of INR 8,536 on sale of investments during the year ended March 31, 2016 which was earlier recognised under
exceptional items in previous GAAP, has been recognised under Ind AS as part of FVOCI reserve as at transition date
of INR 8,347 and in other comprehensive income of INR 189 for the year ended March 31, 2016
- FVOCI equity instruments reserves as at March 31, 2016 has increased by INR 68 (representing gains on transition
amounting to INR 70 and loss of INR 2 during the year ended March 31, 2016) as compared to previous GAAP for
unsold equity investments as at March 31, 2016.
On January 15, 2016, the Company entered into an agreement for the sale of its entire holding in United Spirits
Nepal Private Limited of 67,716 equity shares (constituting 82.46% of the paid up equity share capital of United
Spirits Nepal Private Limited). Accordingly, investments in United Spirits Nepal Private Limited amounting to INR 65
is presented as held for sale. Under previous GAAP, the Company had disclosed this under ‘Long-term investments’.
9. Tie-up manufacturing arrangements
The Company has entered into arrangements with certain distilleries and bottling units (Tie-up units) for
manufacture and marketing of its own brands. The Tie-up units have necessary license and regulatory permits to
manufacture beverage alcohol. Under previous GAAP Company had recognised net surplus (total revenue over
total expense) from operation through these Tie-up units under Revenue from operations. However, under Ind AS
18, Company has aggregated the below mentioned amounts in its Statement of Profit and Loss and balance sheet
with respect to these tie-up units. Consequent to these changes, there is no impact on the total equity and profit.


In the Statement of Profit and Loss
For the year ended
Particulars
March 31, 2016
Increase / (decrease)
Revenue from operations 15,890
Excise duty 19,947
Cost of materials consumed 10,385
Purchases of stock-in-trade (14,829)
Changes in inventories of work-in-progress, finished goods and stock in trade (89)
Other expenses 476
In Balance sheet
As at As at
Particulars
March 31, 2016 April 1, 2015
Inventory 1,328 1,142
Other current financial assets (750) (1,142)
Total 578 -
Other current financial liabilities 578 -
Total 578 -
10. Deemed investments

The Company has granted loans amounting to INR 6,041 during the year ended March 31, 2016 (2015: INR 8,597),
to its subsidiaries. Settlement of these loans is likely to occur only on liquidation of subsidiaries, hence under Ind
AS 109 these are reclassified to investments.
11. De-recognition of borrowing cost capitalised on inventory
Ind AS 23 does not require borrowing costs directly attributable to the inventories to be capitalised. Under previous
GAAP, these cost were capitalised to inventory. Accordingly, inventory as at March 31, 2016 has reduced by INR 713
(2015: INR 536) with a corresponding adjustment to retained earnings. The profit for the year ended March 31,
2016 reduced by INR 178 as a result of additional interest expense with a corresponding decrease in inventory.
Corresponding deferred tax asset amounted to INR 242 (2015: INR 198) has been created. Net reduction in retained
earnings is INR 338 as at April 1, 2015 and INR 472 as at March 31, 2016.
12. Reversal of brand amortisation

Under Indian GAAP, Brand was amortised over a period of 10 years which was recognised as part of Depreciation
and amortisation expense. Based on the assessment performed by the management, it has been determined that
these Brand has an infinite useful life under Ind AS. As a result of this change, the profit for the year ended March
31, 2016 increased by INR 4 as a result of reversal of depreciation and amortisation expense.
13. Stamp duty on erstwhile amalgamations
The Company had omitted recognition of stamp duty payable and penalties payable on various amalgamations
effected through court orders in earlier years. On adoption of Ind AS, at the date of transition the Company has
recorded the stamp duty and penalties payable upto the transition date amounting to INR 188 (2015: INR 175)
through debit to retained earnings. For the year ended March 31, 2016, the Company has recognised charge of INR
13 in the statement of profit and loss.

62. Details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December 30,
2016:
Amount in INR
Particulars Specified Bank Other Total
Notes Denomination
Notes
Closing cash in hand as at November 8, 2016 1,169,500 429,225 1,598,725
(+) Receipts not permitted* 145,500 - 145,500
(+) Permitted receipts - 1,379,054 1,379,054
(-) Permitted payments 94,500 902,581 997,081
(-) Amount deposited in banks 1,220,500 552,110 1,772,610
Closing cash in hand as at December 30, 2016 - 353,588 353,588
*includes INR 17,500 which were returned by employees from imprest balances.

Date : May 30, 2017 Date : May 30, 2017

INDEPENDENT AUDITORS’ REPORT

To the Members of United Spirits Limited accounting records, relevant to the preparation and
presentation of the financial statements that give a true
Report on the Consolidated Indian Accounting Standards
and fair view and are free from material misstatement,
(Ind AS) Financial Statements
whether due to fraud or error, which has been used for
1. We have audited the accompanying consolidated Ind AS the purpose of preparation of the consolidated Ind AS
financial statements of United Spirits Limited (“hereinafter financial statements by the Directors of the Holding
referred to as the Holding Company”) and its subsidiaries Company, as aforesaid.
(the Holding Company and its subsidiaries together
Auditors’ Responsibility
referred to as (“the Group”), and associate company;
(refer Note 50(a) to the attached consolidated financial 3. Our responsibility is to express an opinion on these
statements), comprising of the consolidated Balance consolidated Ind AS financial statements based on our
Sheet as at March 31, 2017, the consolidated Statement of audit. While conducting the audit, we have taken into
Profit and Loss (including Other Comprehensive Income), account the provisions of the Act and the Rules made
the consolidated Cash Flow Statement for the year then thereunder including the accounting standards and
ended and the Statement of Changes in Equity for the matters which are required to be included in the audit
year then ended, and a summary of significant accounting report.
policies and other explanatory information prepared
4. We conducted our audit of the consolidated Ind AS
based on the relevant records (hereinafter referred to as
financial statements in accordance with the Standards on
“the Consolidated Ind AS Financial Statements”).
Auditing specified under Section 143(10) of the Act and
Management’s Responsibility for the Consolidated Ind AS other applicable authoritative pronouncements issued
Financial Statements by the Institute of Chartered Accountants of India. Those
Standards and pronouncements require that we comply
2. The Holding Company’s Board of Directors is responsible
with ethical requirements and plan and perform the
for the preparation of these consolidated Ind AS financial
audit to obtain reasonable assurance about whether the
statements in terms of the requirements of the Companies
consolidated Ind AS financial statements are free from
Act, 2013 (hereinafter referred to as “the Act”) that give a
material misstatement.
true and fair view of the consolidated financial position,
consolidated financial performance, consolidated cash 5. An audit involves performing procedures to obtain audit
flows and changes in equity of the Group including evidence about the amounts and disclosures in the
its associate in accordance with accounting principles consolidated Ind AS financial statements. The procedures
generally accepted in India including the Indian selected depend on the auditors’ judgement, including
Accounting Standards specified in the Companies (Indian the assessment of the risks of material misstatement of
Accounting Standards) Rules, 2015 (as amended) under the consolidated Ind AS financial statements, whether
Section 133 of the Act. The Holding Company’s Board due to fraud or error. In making those risk assessments,
of Directors is also responsible for ensuring accuracy the auditor considers internal financial control relevant to
of records including financial information considered the Holding Company’s preparation of the consolidated
necessary for the preparation of consolidated Ind AS Ind AS financial statements that give a true and fair view,
financial statements. The respective Board of Directors of in order to design audit procedures that are appropriate
the companies included in the Group and of its associate in the circumstances. An audit also includes evaluating
are responsible for maintenance of adequate accounting the appropriateness of the accounting policies used and
records in accordance with the provisions of the Act for the reasonableness of the accounting estimates made
safeguarding the assets of the Group and its associate by the Holding Company’s Board of Directors, as well as
respectively and for preventing and detecting frauds evaluating the overall presentation of the consolidated
and other irregularities; the selection and application of Ind AS financial statements.
appropriate accounting policies; making judgements
6. We believe that the audit evidence obtained by us and
and estimates that are reasonable and prudent; and the
the audit evidence obtained by the other auditors in
design, implementation and maintenance of adequate
terms of their reports referred to in paragraphs 9 and 11
internal financial controls, that were operating effectively
under the section titled “Other Matters” below, other than
for ensuring the accuracy and completeness of the

the unaudited financial information as certified by the revealed actual or potential fund diversions arising
management of the Holding Company and referred to from improper transactions aggregating to INR 9,135
in paragraph 10 under the section titled “Other Matters” million and other potentially improper transactions
below, is sufficient and appropriate to provide a basis for aggregating to INR 3,118 million involving the
our audit opinion on the consolidated Ind AS financial erstwhile non-executive Chairman of the Holding
statements. Company and entities that appear to be affiliated or
associated with the said non-executive Chairman.
Opinion
The amounts identified in the Additional Inquiry have
7. In our opinion and to the best of our information been fully provided for or expensed by the Holding
and according to the explanations given to us, the Company or its subsidiaries in earlier periods except
aforesaid consolidated Ind AS financial statements give for INR 217 million which has been accounted for as
the information required by the Act in the manner so exceptional item during the year (Refer Note 28 to
required and give a true and fair view in conformity with the Consolidated Ind AS financial statements). The
the accounting principles generally accepted in India Management of the Holding Company is currently
of the consolidated state of affairs of the Group and its unable to estimate the financial impact on the Group,
associate as at March 31, 2017, and their consolidated if any, arising from potential non-compliances with
total comprehensive income (comprising of consolidated applicable laws in respect of the above.
profit and consolidated other comprehensive income),
c) As explained in Note 46 to the Consolidated Ind AS
their consolidated cash flows and consolidated changes
financial statements, the Holding Company is in
in equity for the year ended on that date.
litigation with a bank (‘the Bank’) that continues to
Emphasis of Matter retain the pledge of certain assets of the Holding
8. We draw attention to the following matters: Company and of the Holding Company’s shares held
by USL Benefit Trust (of which the Holding Company
a) As explained in Note 44 to the Consolidated Ind AS is sole beneficiary) despite the Holding Company
financial statements, the Managerial remuneration prepaying the term loan to that bank along with
for the year ended March 31, 2015 included amounts the prepayment penalty and further depositing an
paid to managerial personnel of the Holding additional sum of INR 459 million demanded by the
Company in excess of the limits prescribed under the Bank and as directed by the Honourable High Court
provisions of Schedule V to the Act by INR 51 million of Karnataka (the ‘Court’). The Court has directed
to the Managing Director and Chief Executive Officer the Bank not to deal with the pledged assets of the
(MD & CEO) and by INR 134 million to the former Holding Company (including the shares held by USL
Executive Director and Chief Financial Officer (ED & Benefit Trust) as mentioned above till the disposal
CFO). With regard to excess remuneration paid to MD of the original writ petition filed by the Holding
& CEO the Holding Company has made the necessary Company in the Court.
application, along with the required clarifications, for
Central Government approval, response to which is d) Note 48 to the Consolidated Ind AS financial
awaited. Further, in respect of excess remuneration statements which describes the uncertainty related to
paid to the former ED & CFO the Holding Company the outcome of Special Leave Petition (the “SLP”) filed
has initiated steps, including by way of filing a suit for by the Bihar State Government with the Honourable
recovery before the jurisdictional court, to recover Supreme court, in relation to the ban imposed by the
the excess remuneration. Bihar State Government on trade and consumption
of Indian Made Foreign Liquor and Foreign Liquor in
b) As explained in Note 41 to the Consolidated Ind the State of Bihar with effect from April 5, 2016 which
AS financial statements, upon completion of the was set aside by Honourable High Court of Patna in
Initial Inquiry, which identified references to certain its judgment dated September 30, 2016. Further,
additional parties and certain additional matters, the consequent to the notification dated January 24,
MD & CEO of the Holding Company, pursuant to the 2017 issued by the Bihar State Government, which as
direction of the Board of Directors of the Holding a consequence, criminalises the continued storage of
Company, had carried out an Additional Inquiry that all stock of raw materials and finished goods in the


State of Bihar, the Holding Company is in the process Company’s Management in compliance with
of transferring its stock of raw materials and finished Ind AS.
goods lying in its premises and the ‘billed stocks’ Our opinion is not qualified in respect of the matters
currently in the possession of Bihar State Beverages described above.
Corporation Limited, outside the state of Bihar. The
Other Matters
statutory duties (VAT and Excise duty) paid on such
stocks aggregating to INR 553 million (including 9. We did not audit the financial statements and financial
receivable from tie-up manufacturing units) have information of five subsidiaries and one trust controlled
been considered as good and receivable from the by the Holding Company and incorporated in India, whose
Bihar State Government and is disclosed as Other financial statements reflect total assets of INR 10,853
non-current asset. million and net assets of INR 8,723 million as at March
31, 2017, total revenue of INR 6,945 million, total
e) Note 45 to the Consolidated Ind AS financial
comprehensive income (comprising of loss and other
statements:
comprehensive income) of INR (704) million and net
i. regarding clarifications sought by Securities and cash outflows amounting to INR 508 million for the year
Exchange Board of India on matters covered ended on that date, as considered in the consolidated
by the Holding Company’s Initial Inquiry and Ind AS financial statements. These financial information
Additional Inquiry and certain aspects of the have been audited by other auditors whose reports have
Agreement between the Holding Company and been furnished to us by the Management of the Holding
its erstwhile non-executive chairman to which Company, and our opinion on the consolidated Ind AS
the Holding Company has responded; financial statements insofar as it relates to the amounts
and disclosures included in respect of these subsidiaries
ii. regarding various issues raised and show
and our report in terms of Section 143(3) of the Act insofar
cause notices issued pursuant to an inspection
as it relates to the aforesaid subsidiaries and trust is based
under Section 206(5) of the Companies Act,
solely on the reports of the other auditors.
2013 by Ministry of Corporate Affairs/ Registrar
of Companies, alleging violation of certain 10. The consolidated Ind AS financial statements also
provisions of the Companies Act, 1956 and include the Group’s share of total comprehensive income
Companies Act, 2013, to which the Holding (comprising of loss and other comprehensive income) of
Company has responded; INR Nil for the year ended March 31, 2017 as considered
in the consolidated Ind AS financial statements, in respect
iii. regarding the ongoing investigation by the
of one associate company whose financial information
Enforcement Directorate under the provisions
has not been audited by us. Such financial information
of Foreign Exchange Management Act, 1999 and
is unaudited and has been furnished to us by the
Prevention of Money Laundering Act, 2002 to
Management of Holding Company, and our opinion
which the Holding Company has responded; and
on the consolidated Ind AS financial statements insofar
iv. regarding clarifications sought by Authorised as it relates to the amounts and disclosures included
Dealers in relation to certain queries from in respect of this associate company and our report in
Reserve Bank of India with regard to remittances terms of Section 143(3) of the Act insofar as it relates to
made by the Holding Company in prior years to the aforesaid associate, is based solely on such unaudited
subsidiaries and a branch in the United Kingdom financial information. In our opinion and according to
and past acquisition of the Whyte and Mackay the information and explanations given to us by the
group, to which the Holding Company has Management of the Holding Company, such financial
responded. information is not material to the Group.
f ) Note 57 to the Consolidated Ind AS financial 11. The financial statements of fourteen subsidiaries located
statements which states that the Group has outside India, included in the consolidated Ind AS
adopted Ind AS for the financial year commencing financial statements, which constitute total assets of
from April 1, 2016, and accordingly, the financial INR 1,341 million and net assets of INR 836 million as
statements have been prepared by the Holding at March 31, 2017, total revenue of INR 2,642 million,

total comprehensive income (comprising of loss and and belief were necessary for the purposes of our
other comprehensive income) of INR (110) million and audit of the aforesaid consolidated Ind AS financial
net cash outflows amounting to INR 172 million for the statements.
year then ended have been prepared in accordance
(b) In our opinion, proper books of account as required
with accounting principles generally accepted in their
by law maintained by the Holding Company, its
respective countries and have been audited by other
subsidiaries included in the Group and the associate
auditors under generally accepted auditing standards
company incorporated in India including relevant
applicable in their respective countries. The Holding
records relating to preparation of the aforesaid
Company’s management has converted the financial
consolidated Ind AS financial statements have been
statements of such subsidiaries located outside India
kept so far as it appears from our examination of
from the accounting principles generally accepted
those books and records of the Holding Company
in their respective countries to the accounting
and the reports of the other auditors.
principles generally accepted in India. We have audited
these conversion adjustments made by the Holding (c) The Consolidated Balance Sheet, the Consolidated
Company’s management. Our opinion in so far as it Statement of Profit and Loss (including other
relates to the balances and affairs of such subsidiaries comprehensive income), Consolidated Cash Flow
located outside India is based on the report of other Statement and the Consolidated Statement of
auditors and the conversion adjustments prepared by Changes in Equity dealt with by this Report are
the management of the Holding Company and audited in agreement with the relevant books of account
by us. maintained by the Holding Company, its subsidiaries
Our opinion on the consolidated Ind AS financial included in the Group and the associate company
statements and our report on Other Legal and Regulatory incorporated in India including relevant records
Requirements below, is not qualified in respect of the relating to the preparation of the consolidated Ind AS
matters specified in paragraphs 9, 10 and 11 with respect financial statements.
to our reliance on the work done and the reports of the (d) In our opinion, the aforesaid consolidated Ind
other auditors and the financial statements/ financial AS financial statements comply with the Indian
information certified by the Management. Accounting Standards specified under Section 133 of
12. The comparative financial information of the Group for the Act.
the year ended March 31, 2016 and the transition date (e) The matters described in sub-paragraphs (b), (c),
opening balance sheet as at April 1, 2015 included in (d) and (e) of Paragraph 8 above titled “Emphasis of
these consolidated Ind AS financial statements are based Matter”, in our opinion, may have an adverse effect on
on the previously issued consolidated statutory financial the functioning of the Holding Company.
statements for the years ended March 31, 2016 and March
31, 2015 prepared in accordance with the Companies (f ) On the basis of the written representations received
(Accounting Standards) Rules 2006 (as amended) which from the Directors of the Holding Company as on
were audited by the predecessor auditor who expressed March 31, 2017 and taken on record by the Board of
a modified opinion vide reports dated May 26, 2016 and Directors of the Holding Company and the reports
May 27, 2015 respectively. The adjustments to those of the statutory auditors of its subsidiary companies,
financial statements for the differences in accounting incorporated in India, none of the directors of the
principles adopted by the Group on transition to the Ind Group companies incorporated in India is disqualified
AS have been audited by us. as on March 31, 2017 from being appointed as a
director in terms of Section 164 (2) of the Act.
Our opinion is not qualified in respect of these matters.
(g) With respect to the adequacy of the internal financial
Report on Other Legal and Regulatory Requirements controls over financial reporting of the Holding
13. As required by Section 143(3) of the Act, we report, to the Company, its subsidiary companies and associate
extent applicable, that: company incorporated in India and the operating
effectiveness of such controls, refer to our separate
(a) We have sought and obtained all the information
Report in Annexure A.
and explanations which to the best of our knowledge


(h) With respect to the other matters to be included in as to holdings as well as dealings in Specified
the Auditors’ Report in accordance with Rule 11 of Bank Notes during the period from November
the Companies (Audit and Auditors) Rules, 2014, in 8, 2016 to December 30, 2016. Based on audit
our opinion and to the best of our information and procedures and relying on the management
according to the explanations given to us. representation we report that the disclosures
i. The consolidated Ind AS financial statements are in accordance with books of account
disclose the impact, if any, of pending litigations maintained by the Holding Company, and its
as at March 31, 2017 on the consolidated subsidiary companies and associate company
financial position of the Group and its associate incorporated in India and as produced to us
company – Refer Notes 18, 42, 46, 48, and 54 to by the Management of the Holding Company
the consolidated Ind AS financial statements; – Refer Note 60 to the Consolidated Ind AS
financial statements. However, as stated in
ii. The Group and its associate did not have Note 60 to the consolidated Ind AS financial
any long-term contracts including derivative statements, amounts aggregating to INR 145,500
contracts as at March 31, 2017 for which there as stated by management were received from
were any material foreseeable losses – Refer transactions which were not permitted.
Note 61 to the consolidated Ind AS financial
statements; For Price Waterhouse & Co Chartered Accountants LLP
iii. There has been no delay in transferring amounts, Chartered Accountants
required to be transferred, to the Investor
Education and Protection Fund by the Holding Pradip Kanakia
Company and its subsidiary companies and Partner
associate company incorporated in India during Membership Number: 039985
the year ended March 31, 2017; and
iv. The Group has provided requisite disclosures Stockholm
in the consolidated Ind AS financial statements May 30, 2017

ANNEXURE A TO INDEPENDENT AUDITORS’ REPORT
Referred to in paragraph 13(g) of the Independent whether adequate internal financial controls over financial
Auditors’ Report of even date to the members of United reporting was established and maintained and if such
Spirits Limited on the consolidated Ind-AS financial controls operated effectively in all material respects.
statements for the year ended March 31, 2017
4. Our audit involves performing procedures to obtain audit
Report on the Internal Financial Controls under Section evidence about the adequacy of the internal financial
143(3)(i) of the Act controls system over financial reporting and their
operating effectiveness. Our audit of internal financial
1. In conjunction with our audit of the consolidated Ind AS
controls over financial reporting included obtaining
financial statements of the Company as of and for the
an understanding of internal financial controls over
year ended March 31, 2017, we have audited the internal
financial reporting, assessing the risk that a material
financial controls over financial reporting of United Spirits
weakness exists, and testing and evaluating the design
Limited (hereinafter referred to as “the Holding Company”)
and operating effectiveness of internal control based on
and its subsidiary companies and its associate company,
the assessed risk. The procedures selected depend on
which are companies incorporated in India, as of that date.
the Auditors’ judgement, including the assessment of the
Management’s Responsibility for Internal Financial risks of material misstatement of the financial statements,
Controls whether due to fraud or error.
2. The respective Board of Directors of the Holding company, 5. We believe that the audit evidence we have obtained
its subsidiary companies and its associate company, which and the audit evidence obtained by the other auditors
are companies incorporated in India, are responsible for in terms of their reports referred to in the Other
establishing and maintaining internal financial controls Matter paragraph below, is sufficient and appropriate
based on internal control over financial reporting criteria to provide a basis for our audit opinion on the
established by the Company considering the essential Company’s internal financial controls system over financial
components of internal control stated in the Guidance reporting.
Note on Audit of Internal Financial Controls Over
Meaning of Internal Financial Controls Over Financial
Financial Reporting (the “Guidance Note”) issued by the
Reporting
Institute of Chartered Accountants of India (ICAI). These
responsibilities include the design, implementation and 6. A company’s internal financial control over
maintenance of adequate internal financial controls that financial reporting is a process designed to provide
were operating effectively for ensuring the orderly and reasonable assurance regarding the reliability of
efficient conduct of its business, including adherence financial reporting and the preparation of financial
to the respective company’s policies, the safeguarding statements for external purposes in accordance
of its assets, the prevention and detection of frauds and with generally accepted accounting principles.
errors, the accuracy and completeness of the accounting A company’s internal financial control over financial
records, and the timely preparation of reliable financial reporting includes those policies and procedures that (1)
information, as required under the Act. pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and
Auditors’ Responsibility
dispositions of the assets of the company; (2) provide
3. Our responsibility is to express an opinion on the reasonable assurance that transactions are recorded as
Company’s internal financial controls over financial necessary to permit preparation of financial statements in
reporting based on our audit. We conducted our audit accordance with generally accepted accounting principles,
in accordance with the Guidance Note issued by the ICAI and that receipts and expenditures of the company are
and the Standards on Auditing deemed to be prescribed being made only in accordance with authorisations of
under Section 143(10) of the Act, to the extent applicable management and directors of the company; and (3)
to an audit of internal financial controls, both applicable to provide reasonable assurance regarding prevention or
an audit of internal financial controls and both issued by timely detection of unauthorised acquisition, use, or
the ICAI. Those Standards and the Guidance Note require disposition of the company’s assets that could have a
that we comply with ethical requirements and plan and material effect on the financial statements.
perform the audit to obtain reasonable assurance about

ANNEXURE A TO INDEPENDENT AUDITORS’ REPORT (CONTINUED)

considering the essential components of internal control
Inherent Limitations of Internal Financial Controls Over
stated in the Guidance Note issued by the ICAI.
Financial Reporting
Other Matter
7. Because of the inherent limitations of internal
financial controls over financial reporting, including 9. Our aforesaid report under Section 143(3)(i) of the Act on
the possibility of collusion or improper management the adequacy and operating effectiveness of the internal
override of controls, material misstatements due to financial controls over financial reporting insofar as it relates
error or fraud may occur and not be detected. Also, to five subsidiary companies and an associate company,
projections of any evaluation of the internal financial which are companies incorporated in India, is based on the
corresponding reports of the auditors of such companies
controls over financial reporting to future periods are
incorporated in India. Our opinion is not qualified in respect of
subject to the risk that the internal financial control over
this matter.
financial reporting may become inadequate because
of changes in conditions, or that the degree of compliance
For Price Waterhouse & Co Chartered Accountants LLP
with the policies or procedures may deteriorate.
Opinion Chartered Accountants
8. In our opinion, the Holding Company, its subsidiary
companies and its associate company, which are Pradip Kanakia
companies incorporated in India, have, in all material Partner
respects, an adequate internal financial controls system Membership Number: 039985
over financial reporting and such internal financial controls
over financial reporting were operating effectively as Stockholm
at March 31, 2017, based on the internal control over May 30, 2017
financial reporting criteria established by the Company

CONSOLIDATED BALANCE SHEET

Assets
Non-current assets
Property, plant and equipment 3.1 14,554 13,768 14,452
Capital work-in-progress 1,993 2,821 1,133
Investment properties 3.3 - 672 658
Goodwill 3.2 680 1,125 1,594
Other intangible assets 3.2 3,932 3,975 4,137
Financial assets
Investments 4 - 82 8,582
Loans 5 - - 117
Other financial assets 6 1,311 526 440
Deferred tax assets (net) 7 1,781 1,900 1,576
Advance income tax (net) 8 3,256 2,243 2,495
Other non-current assets 9 3,961 3,302 3,716
Current assets
Inventories 10 19,276 19,519 18,906
Financial assets
Investments 4 1 12 11
Cash and cash equivalents 12.1 785 1,287 2,677
Bank balances other than 12.2 87 81 787
cash and cash equivalents
Other current assets 9 5,522 5,955 4,478
Assets classified as held for sale 13 1,239 303 1
Total current assets 57,491 52,879 47,390
Total assets 88,959 83,293 86,290
Equity and liabilities
Equity
Share capital 14 1,453 1,453 1,453
Other equity
Reserves and surplus 15.1 16,403 14,826 4,804
Other reserves 15.2 - 68 8,417
Equity attributable to the owners of the Group 17,856 16,347 14,674
Non-controlling interests (25) 56 8
Total equity 17,831 16,403 14,682
Borrowings 16 8,697 7,305 11,117
Other financial liabilities 17 - 392 1,010
Provisions 18 442 683 661
Total non-current liabilities 9,139 8,380 12,788

CONSOLIDATED BALANCE SHEET (CONTINUED)

Current liabilities
Borrowings 16 29,069 29,969 36,536
Trade payables 19 12,247 10,189 9,431
Other financial liabilities 17 9,575 8,227 4,748
Provisions 18 2,752 2,383 2,345
Current tax liabilities (net) 8 3,317 3,479 3,177
Other current liabilities 20 4,864 4,135 2,583
Liabilities directly associated with assets classified as held for 13 165 128 -
sale
Total liabilities 71,128 66,890 71,608
Significant accounting policies 1
The above consolidated balance sheet should be read in conjunction with the accompanying notes.



Date : May 30, 2017 Date : May 30, 2017

CONSOLIDATED STATEMENT OF PROFIT AND LOSS
March 31, 2017 March 31, 2016
Revenue
Revenue from operations 21 257,568 239,209
Other income 22 1,053 436
Total Income 258,621 239,645
Expenses
Cost of materials consumed 23 46,755 47,370
Purchase of stock-in-trade 1,974 1,793
Change in inventories of finished goods, work-in-progress and stock-in-trade 24 568 (1,591)
Excise duty 169,393 154,260
Employee benefits expense 25 6,882 6,800
Depreciation, amortisation and impairment expense 3.1,3.2,3.3 1,886 1,572
Others:
Advertisement and sales promotion 6,734 6,154
Other expenses 27 15,370 14,777
Total expenses 253,313 235,709
Profit before exceptional items and taxation 5,308 3,936

Less: Exceptional items (net) 28 (3,681) (274)
Income tax expense:
Current tax 29 571 1,923
Tax relating to earlier years - 568
Deferred tax charge/(credit) 99 (236)
MAT credit utilized/(availed) 27 (27)
Profit for the year 930 1,434
Items that will not be reclassified to profit or loss
Changes in fair value of FVOCI equity instruments 18 187
Remeasurements of post-employment benefit obligations 733 (177)
Income tax relating to these items (254) 65
Items that may be reclassified to profit or loss
Exchange difference on translation of foreign operations (29) 215
Other comprehensive Income for the year, net of tax 468 290
Total comprehensive income for the year 1,398 1,724

CONSOLIDATED STATEMENT OF PROFIT AND LOSS (CONTINUED)

March 31, 2017 March 31, 2016
Profit is attributable to:
Owners 1,001 1,383
Non-controlling interest (71) 51
930 1,434
Other comprehensive income is attributable to:
Owners 468 289
Non-controlling interest (0) 1
468 290
Total comprehensive income is attributable to:
Owners 1,469 1,672
Non controlling Interest (71) 52
1,398 1,724
Basic and diluted earnings per share (INR) 30 7.06 9.75
The above consolidated statement of profit and loss should be read in conjunction with the accompanying notes.



Date : May 30, 2017 Date : May 30, 2017

CONSOLIDATED CASH FLOW STATEMENT
March 31, 2017 March 31, 2016
A. CASH FLOW FROM OPERATING ACTIVITIES
Adjustments for
Depreciation, amortisation and impairment expense 3.1,3.2,3.3 1,886 1,572
Employee share based expense 35 57 -
Loss on disposal of property, plant and equipment 27 - 17
Loss on disposal of subsidiaries 28 - 110
Impairment of Goodwill on consolidation 28 445 128
Write down in the value of plant and equipment 28 217 -
Reversal of provision against claims 28 (28) -
Provision for doubtful debts / advances / deposits 28 (370) (6,209)
written back
Bad and doubtful advances, deposit and trade 28 358 5,666
receivables written off
Provision on advances to associates 28 37 157
Provision for doubtful debts / advances / deposits 27 75 917
Bad debts / advances / deposits written off 27 20 -
Unrealised foreign exchange loss 62 18
Liabilities, provisions or allowances no longer required 22 (514) (349)
written back
Gain on disposal of property, plant and equipment 22 (337) (6)
Dividend income from investments measured at FVPL 22 (1) (2)
Allowance for doubtful receivable towards sale of 28 - 316
property, plant and equipment
Interest Income on financial assets held at amortised 22 (197) (49)
cost
5,461 6,860
Operating profit before working capital changes 7,088 10,522
(Increase) / decrease in trade receivables (6,560) (7,100)
(Increase) / decrease in loans and other financial assets 788 1,226
(Increase) / decrease in non-financial assets (294) (1,146)
(Increase) / decrease in inventories 379 (1,854)
Increase / (decrease) in trade payables 2,169 1,088
Increase / (decrease) in other financial liabilities 3,289 527
Increase / (decrease) in other liabilities 790 1,576
Increase / (decrease) in provisions 819 1,380 (104) (5,787)
Cash generated from operations 8,468 4,735
Income taxes paid (net) (2,000) (1,908)
Net cash generated from operations 6,468 2,827

CONSOLIDATED CASH FLOW STATEMENT (CONTINUED)

March 31, 2017 March 31, 2016
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (2,802) (2,597)
Proceeds from sale of property, plant and equipment 528 17
Proceeds from sale of investments 111 8,687
Payment towards franchise rights (intangible assets) (308) (450)
Proceeds from disposal of subsidiaries - 1,556
Proceeds from sale of manufacturing unit - 250
Interest received 197 49
Dividend received 1 2
Net cash generated from / (used in) investing (2,273) 7,514
activities
C. CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from non-current borrowings 5,000 3,535
Repayment of non-current borrowings (5,096) (3,952)
Proceeds from current borrowings 18,224 9,000
Repayment of current borrowings (19,027) (15,453)
Repayment of deferred sales tax liability (12) (28)
Finance lease payments (86) (45)
Interest paid (3,752) (4,603)
Dividends paid - (3)
Net cash (used in) financing activities (4,749) (11,549)
Cash and cash equivalents of subsidiaries disposed - (129)
Cash and cash equivalents disclosed as held for sale (1) (53)
Net (decrease) in cash and cash equivalents (555) (1,390)
Cash and cash equivalents as at the beginning of the year 1,287 2,677
Opening cash equivalents classified as held for sale 53 -
Cash and cash equivalents as at the end of the year 785 1,287
Total (555) (1,390)
The above consolidated cash flow statement should be read in conjunction with the accompanying notes.



Date : May 30, 2017 Date : May 30, 2017

194
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH 31, 2017
A. Equity share capital (Refer Note 14) All amounts in INR Million
Particulars Amount
As at April 1, 2015 1,453
As at March 31, 2016 1,453

As at March 31, 2017 1,453
B. Other equity (Refer Note 15)

Reserves and surplus Other
reserves
Capital Capital Securities Treasury Central Share Foreign Employee Contin- General Retained Total FV OCI - Total
reserve redemption premium shares subsidy based currency housing gency reserve Earnings Equity
reserve account incentive translation fund reserve Instru-
reserve reserve ments
Balance as at April 1, 2015 5,675 699 45,682 (1,197) 48 - - 1 110 10,408 (56,621) 4,804 8,417 13,221
Profit for the year - - - - - - - - - - 1,383 1,383 - 1,383
Other comprehensive income (OCI) - - - - - - 215 - - - (177) 38 187 225
Tax impact of OCI items - - - - - - - - - - 65 65 - 65
Total comprehensive income - - - - - - 215 - - - 1,271 1,486 187 1,673
Transferred to retained earnings on sale of equity - - - - - - - - - - 8,536 8,536 (8,536) -
investments
Balance as at March 31, 2016 5,675 699 45,682 (1,197) 48 - 215 1 110 10,408 (46,815) 14,826 68 14,893
Profit for the year - - - - - - - - - - 1,001 1,001 - 1,001
Other comprehensive income (OCI) - - - - - - (29) - - - 733 704 18 722
Tax impact of OCI items - - - - - - - - - - (254) (254) - (254)
Total comprehensive income - - - - - - (29) - - - 1,480 1,451 18 1,469
Share based incentives - - - - - 40 - - - - - 40 - 40
Transferred to retained earnings on sale of equity - - - - - - - - - - 86 86 (86) -
investments
Balance as at March 31, 2017 5,675 699 45,682 (1,197) 48 40 186 1 110 10,408 (45,248) 16,403 - 16,403
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Chairman Managing Director & Chief Executive Officer

Partner Executive Director & Chief Financial Officer Company Secretary
Membership number: 039985
Date : May 30, 2017 Date : May 30, 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Background
United Spirits Limited (“USL” or the “Company”) which is headquartered in Bengaluru, Karnataka, India, together with its subsidiaries,
its controlled trust and its associate (collectively referred to as “the Group” here in under) is primarily engaged in the business of
manufacture, purchase and sale of beverage alcohol (spirits and wines). In addition, the Group through its wholly owned subsidiary
holds the perpetual right to the Bangalore Franchise of the Board of Control for Cricket in India – Indian Premier League (BCCI-IPL).
These consolidated financial statements are approved for issue by the Company’s Board of Directors on May 30, 2017.
Note 1 - Significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these consolidated financial statements.
These policies have been consistently applied to all the years presented, unless otherwise stated.
1.1 Basis of preparation of financial statements
(i) Compliance with Ind AS
The consolidated financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified
under Section 133 of the Companies Act, 2013 (the ‘Act’) [Companies (Indian Accounting Standards) Rules, 2015] and
other relevant provisions of the Act.
The financial statements up to year ended March 31, 2016 were prepared in accordance with the accounting standards
notified under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act
(previous GAAP).
These financial statements are the first financial statements of the Group under Ind AS. Refer Note 57 for an explanation
of how the transition from previous GAAP to Ind AS has affected the Group’s financial position as at March 31, 2016 and
April 1, 2015 and financial performance and cash flows for the year ended March 31, 2016.
(ii) Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following:
• certain financial assets and liabilities which are measured at fair value;
• defined benefit plans - plan assets measured at fair value;
• share-based payment obligations; and
• assets held for sale – measured at lower of cost and fair value less costs to sell
All assets and liabilities have been classified as current or non-current as per the Group’s normal operating cycle and
other criteria set out in the Schedule III (Division II) to the Companies Act, 2013. Based on the nature of products and the
time between the acquisition of asset for processing and their realization in cash and cash equivalents, the Group has
ascertained its operating cycle as twelve months for the purpose of current / non- current classification of assets and
liabilities.
1.2 Principles of consolidation and equity accounting
(i) Subsidiaries
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through
its power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from the date on which control
is transferred to the Group. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group except for common
control transactions.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1.2 Principles of consolidation and equity accounting (continued)
The Group combines the financial statements of the parent and its subsidiaries and controlled trust line by line
adding together like items of assets, liabilities, equity, income and expenses. Intercompany transactions, balances and
unrealized gains on transactions between Group companies are eliminated. Unrealized losses are also eliminated unless
the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of
profit and loss, consolidated statement of changes in equity and balance sheet, respectively.
(ii) Associates
Associates are all entities over which the Group has significant influence but not control or joint control. This is generally
the case where the Group holds between 20% and 50% of the voting rights. Investments in associates are accounted for
using the equity method of accounting (see (iii) below), after initially being recognized at cost.
(iii) Equity method
Under the equity method of accounting, the investments are initially recognized at cost and adjusted thereafter to
recognize the Group’s share of the post-acquisition profits or losses of the investee in profit and loss, and the Group’s
share of other comprehensive income of the investee in other comprehensive income. Dividends received or receivable
from associates and joint ventures are recognized as a reduction in the carrying amount of the investment. When the
Group’s share of loss in an equity-accounted investment equals or exceeds its interest in the entity, including any other
unsecured long-term receivables, the Group does not recognize further losses, unless it has incurred obligations or made
payments on behalf of the other shareholder(s).
Unrealized gains on transactions between the Group and its associates and joint ventures are eliminated to the extent
of the Group’s interest in these entities. Unrealized losses are also estimated unless the transaction provides evidence
of an impairment of the asset transferred. Accounting policies of equity accounted investees have been changed where
necessary to ensure consistency with the policies adopted by the Group.
The carrying amount of equity accounted investments are tested for impairment in accordance with the policy described
in note 1.5 below.
(iv) Changes in ownership interests
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with
equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of
the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between
the amount of the adjustment to non-controlling interests and any consideration paid or received is recognized within
equity.
When the Group ceases to consolidate or equity account for an investment because of a loss of control, joint control
or significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying
amount recognized in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequent
accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously
recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly
disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive
income are reclassified to profit or loss.
If the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is retained,
only a proportionate share of the amounts previously recognized in other comprehensive income are reclassified to
profit or loss where appropriate.


1.3 Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the group’s entities are measured using the currency of the primary
economic environment in which the entity operates (`the functional currency’). The consolidated financial statements
are presented in Indian rupee (INR), which is USL’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally
recognized in statement of profit and loss. A monetary item for which settlement is neither planned nor likely to occur in
the foreseeable future is considered as a part of the entity’s net investment in that foreign operation.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement of profit and
loss, within finance costs. All other foreign exchange gains and losses are presented in the statement of profit and loss on
a net basis within other income/ other expense.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the
date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported
as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as
equity instruments held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or
loss and translation differences on non-monetary assets such as equity investments classified as fair value through other
comprehensive income are recognised in other comprehensive income.
(iii) Translation of Group Companies
The results and financial position of foreign operations (none of which has the currency of a hyper inflationary economy)
that have a functional currency different from the presentation currency of the Company are translated into the
presentation currency of the Group as follows:
• assets and liabilities are translated at the closing rate at the date of that balance sheet;
• income and expenses are translated at average exchange rates (unless this is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated
at the dates of the transactions); and
• all resulting exchange differences are recognized in other comprehensive income as ‘Foreign currency translation
reserve’.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of
borrowings are recognized in other comprehensive income as ‘Foreign currency translation reserve’. When a foreign
operation is sold, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities
of the foreign operation and translated at the closing rate.
1.4 Property, plant and equipment, investment properties and intangible assets
Property, plant and equipment
Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at historical cost less
depreciation, and impairment loss, if any. Historical cost includes expenditure that is directly attributable to the acquisition of
the items.

1.4 Property, plant and equipment, investment properties and intangible assets (continued)
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced.
All other repairs and maintenance are charged to Statement of profit and loss during the reporting period in which they are
incurred.
The cost of property, plant and equipment which are not ready for their intended use before such date, are disclosed as
capital work-in-progress.
Depreciation methods, estimated useful lives and residual value
Depreciation is calculated using the straight line method as per the estimated useful lives of assets as below:
Asset category Useful life (in years) Basis of determination of useful lives
Buildings
- Roads 5 Schedule II of the Act
- Buildings 30 - 60 Schedule II of the Act
Plant and equipment
- Wooden casks 7.5 - 15 Management estimate
- Others 7.5 – 15 Schedule II of the Act and management estimate
Helicopter 18 Management estimate
Furniture and Fittings 10 Schedule II of the Act
Office Equipment
- Computers 3 Schedule II of the Act
- Servers 3 Management estimate
- Others 5 Schedule II of the Act
Vehicles 5 Management estimate
Useful lives of asset classes determined by management estimate, which differ from those prescribed under Schedule II of the
Act are supported by internal technical assessment of the useful lives.
In respect of certain items of plant and equipment for which rates are prescribed in Part C of Schedule II of the Act based on
the number of shifts, depreciation is provided for the full year on triple shift basis.
Property, plant and equipment acquired in a business combination are depreciated as per the above policy over the remaining
useful life at the date of acquisition.
Assets taken on finance lease are depreciated over their estimated useful lives as stated above or the lease term, whichever is
shorter, if there is no reasonable certainty that the Group will obtain ownership at the end of the lease term.
Disposals
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in Statement
of profit and loss within Other income/ Other expenses.
Investment properties
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the group,
is classified as investment property. Investment property is measured initially at its cost, including related transaction costs
and where applicable borrowing costs. Subsequent expenditure is capitalised to the asset’s carrying amount only when it
is probable that future economic benefits associated with the expenditure will flow to the group and the cost of the item
can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment
property is replaced, the carrying amount of the replaced part is derecognised.


1.4 Property, plant and equipment, investment properties and intangible assets (continued)
Investment properties are depreciated using the straight-line method over their estimated useful lives. Investment properties
generally have a useful life of 40 years. The useful life has been determined based on technical evaluation performed by the
management’s expert. Investment properties are assessed for impairment, if any, at each reporting date.
Intangible assets
Brands and Licenses
Licenses acquired are carried at cost less accumulated amortisation and impairment losses, if any. Brands are regarded as
having indefinite useful economic lives and are not amortised.
Computer software
Costs associated with maintaining software programs are recognized as an expense as incurred. Development costs that are
directly attributable to the design and testing of customised computer software applications are recognised as intangible
assets when the following criteria are met:
a) it is technically feasible to complete the software so that it will be available for use.
b) there is an ability to use or sell the software.
c) it can be demonstrated how the software will generate probable future economic benefits.
d) adequate technical, financial and other resources to complete the development and to use or sell software are available,
and
e) the expenditure attributable to the software during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the customised computer software applications include employee
costs and other directly attributable costs.
Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is available
for use.
Franchise right
The Group, through one of its wholly owned subsidiary, owns perpetual franchise right of Bangalore team for Indian Premier
League – Royal Challengers Bangalore. Franchise right acquired are carried at cost less accumulated amortisation and
impairment losses, if any.
Research and development costs
Research costs are expensed as incurred. Product development costs are expensed as incurred unless technical and
commercial feasibility of the project is demonstrated, further economic benefits are probable, the Group has an intention
and ability to complete and use or sell the product and the costs can be measured reliably.
Amortisation methods and periods
The Group amortises intangible assets with a finite useful life using the straight-line method over their estimated useful life
as follows:
 Licenses – over the license period
 Computer software – 5 years
 Franchisee rights – 50 years*
* Refer Note 59.
On transition to Ind AS, the Group has elected to continue with the carrying value of all its property, plant and equipment,
investment properties and intangible assets recognized as at April 1, 2015 measured as per previous GAAP and use that
carrying value as deemed cost of the property, plant and equipment and intangible assets.

1.5 Impairment of assets
Goodwill and Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets
including the Group’s interest are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal
and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets
(cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible
reversal of the impairment at the end of each reporting period.
1.6 Leases
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all
the risks and rewards incidental to ownership to the Group is classified as a finance lease. All other lease arrangements are
classified as operating leases.
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the
inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of
a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly
specified in an arrangement.
As a lessee
Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of ownership
are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value of the leased property or,
if lower the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are
included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and
finance cost. The finance cost is charged to the Statement of profit and loss over the lease period so as to produce a constant
periodic rate of interest on the remaining balance of the liability for each period.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are
classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are
charged to Statement of profit and loss on a straight-line basis over the period of the lease unless the payments are structured
to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases.
As a lessor
Lease income from operating leases where the Group is a lessor is recognised in income on a straight-line basis over the lease
term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected
inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.
1.7 Financial Instruments
Classification
The Group classifies its financial assets in the following measurement categories:
 those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss),
and
 those measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the
cash flows.


For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For
investments in debt instruments, this will depend on the business model in which the investment is held. For investments in
equity instruments, this will depend on whether the Group has made an irrevocable election at the time of initial recognition
to account for the equity investment at fair value through other comprehensive income.
The Group reclassifies debt investments when and only when its business model for managing those assets changes.
Financial assets - Initial recognition
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value
through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs
of financial assets carried at fair value through profit or loss are expensed in profit or loss.
Subsequent measurement
Financial assets, other than equity instruments, are subsequently measured at amortised cost, fair value through other
comprehensive income or fair value through profit or loss on the basis of both (a) the entity’s business model for managing
the financial assets and (b) the contractual cash flow characteristics of the financial asset.
Debt instruments measured at amortised cost
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and
interest are measured at amortised cost. A gain or loss on a debt investment that is subsequently measured at amortised cost
and is not part of a hedging relationship is recognised in profit or loss when the asset is derecognised or impaired. Interest
income from these financial assets is included in finance income using the effective interest rate method. Amortised cost is
calculated using the effective interest rate (“EIR”) method by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the EIR.
Measured at fair value through other comprehensive income (FVOCI):
A financial asset is measured at FVOCI, if it is held with an objective to collect contractual cash flows and selling such
financial asset and the contractual cash flows are solely payments of principal and interest on the principal outstanding.
It is subsequently measured at fair value with fair value movements recognised in the Other Comprehensive Income (OCI),
except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are
recognised in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in
OCI is reclassified from equity to profit or loss and recognised in other gains/ (losses). Interest income from these financial
assets is included in other income using the effective interest rate method.
Measured at fair value through profit and loss (FVPL):
Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. Interest
income from these financial assets is included in other income.
Equity instruments
The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected to present
fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of
fair value gains and losses to profit or loss. Dividends from such investments are recognised in profit or loss as other income
when the Group’s right to receive payments is established.
Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately
from other changes in fair value.

Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets that are measured at amortised cost
and at FVOCI. The credit loss is difference between all contractual cash flows that are due to an entity in accordance with the
contract and all the cash flows that the entity expects to receive (i.e. all cash shortfalls), discounted at the original effective
interest rate. This is assessed on an individual or collective basis after considering all reasonable and supportable information
including that which is forward-looking.
For trade receivables, the Group applies the simplified approach permitted by Ind AS 109 Financial Instruments, which
requires expected lifetime losses to be recognised from initial recognition of the receivables.
The losses arising from impairment are recognised in the Statement of profit and loss.
Derecognition of financial assets
A financial asset is derecognised only when:
 The Group has transferred the rights to receive cash flows from the financial asset or
 retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay
the cash flows to one or more recipients.
Where the entity has transferred an asset, the Group evaluates whether it has transferred substantially all risks and rewards
of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the entity has not transferred
substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised.
Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the
financial asset, the financial asset is derecognised if the Group has not retained control of the financial asset.
Derivative financial instruments
The Group uses derivative financial instruments, such as forward foreign exchange contracts, to hedge its foreign currency
risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is
entered into and are subsequently re-measured at fair value, with changes in fair value recognised in Statement of profit and
loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently
enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets
and settle the liabilities simultaneously. The legally enforceable right must not be contingent on future events and must
be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Group or the
counterparty.
Recognition of Income from Investments and other financial assets
Dividend income on investments is recognised and accounted for when the right to receive the payment is established.
Interest income and guarantee commission is accounted for on a time-proportion basis using amortised cost taking into
account the amounts invested and the rate of interest.
1.8 Inventories
Inventories which comprise of raw materials, work-in-progress, finished goods, stock-in-trade, packing materials and stores
and spares are carried at the lower of cost or net realisable value. Cost of inventories comprises all costs of purchase, cost of
conversion and other costs incurred in bringing the inventories to their present location and condition. In determining the
cost, weighted average cost method is used. In case of manufactured finished goods and work-in-progress, fixed production
overheads are allocated on the basis of normal capacity of production facilities. Costs of purchased inventory are determined
after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business,
less the estimated costs of completion and the estimated costs necessary to make the sale. The comparison of cost and net
realisable value is made on an item-by-item basis. Adequate allowance is made for obsolete and slow moving items.


1.9 Trade receivables
Trade receivables are initially recognised at their transaction price (fair value) and subsequently measured at amortised cost
using the effective interest method, less provision for impairment.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand and balances
with banks that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in
value. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
1.11 Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are inclusive
of excise duties and net of returns, trade allowances, rebates and amounts collected on behalf of third parties.
The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic
benefits will flow to the entity and specific criteria have been met for each of the Group’s activities as described below. The
Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the
specifics of each arrangement.
a. Sale of products
Revenue is recognised on dispatch of goods or on delivery to customer, in accordance with the terms of sale.
b. Revenue from tie-up manufacturing arrangements
The Group has entered into arrangements with tie-up manufacturers (TMU), where-in TMUs manufacture and sell on
behalf of the Group. Accordingly, the transactions of the tie-up units under such arrangements have been recorded as
gross revenue, excise duty and expenses as they were transactions of the Group.
c. Income from brand franchise arrangements
Income from brand franchise is recognised in terms of the respective contracts upon sale of the products by the
franchisees. Revenue in respect of fixed value brand franchise arrangements is recognized proportionately in each
period. Income from brand franchise is net of service tax.
d. Revenue from central rights income, prize money, sponsorship, digital income and transfer fees araising from
BCCI-IPL franchise
The Group recognises such revenue from BCCI-IPL franchise when the Group performs the obligations under the
contract.
e. Revenue from sale of tickets and branding income arising from BCCI-IPL franchise
Revenue from sale of tickets and branding income arising from BCCI-IPL franchise is recognised on transfer of significant
risk and reward.
1.12 Employee benefits
(a) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and performance incentives that are expected to
be settled wholly within 12 months after the end of the period in which the employees render the related service are
recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts
expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations
in the balance sheet.

Defined contribution plans
These are plans in which the Group pays pre-defined amounts to publicly administered funds as per local regulations and
does not have any legal 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’ State Insurance and
Employees’ Pension Scheme. The Group’s payments to the defined contribution plans including in foreign subsidiaries
are recognised as employee benefit expenses when they are due.
(b) Other long-term employee benefit obligations
The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 months after the end of the
period in which the employees render the related service. They are therefore measured as the present value of expected
future payments to be made in respect of services provided by employees up to the end of the reporting period using
the projected unit credit method. The benefits are discounted using the market yields of government bonds at the end of
the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result
of experience adjustments and changes in actuarial assumptions are recognised in Statement of profit and loss.
The obligations are presented as current / non-current liabilities in the balance sheet if the entity does not have an
unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the
actual settlement is expected to occur.
(c) Post-employment obligation
The Group’s defined benefit plans comprise of gratuity, pension and provident fund (administered by trusts set up by the
Group, where the Group’s obligation is to provide the agreed benefit to the qualifying employees and the actuarial risk
and investment risk if any, fall in substance, on the Group).
The liability or asset recognised in the balance sheet in respect of defined benefit plans is the present value of the defined
benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is
calculated annually by actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by
reference to market yields at the end of the reporting period on government bonds that have terms approximating to
the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and
the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are
recognised in the period in which they occur, directly in other comprehensive income. They are included in retained
earnings in the statement of changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are
recognised immediately in profit or loss as past service cost.
(d) Share-based payments
Share based compensated benefits are provided to certain grades of employees in the form of United Spirits Limited-
Stock Appreciation Rights Plan, a cash settled scheme, and the Diageo Incentive Plan, an equity settled scheme.
Stock appreciation rights
Liabilities for the Group’s share appreciation rights are recognised as employee benefit expense over the relevant service
period. The liabilities are remeasured to fair value at each reporting date and are presented as provisions in the balance
sheet.


Diageo incentive plan
The fair value of equity settled share options based on shares of Diageo plc. (the ultimate holding company) is initially
measured at grant date and is charged to the Statement of profit and loss over the vesting period, which is the period
over which all of the specified vesting conditions are satisfied, and the credit is included in equity. At the end of each
period, the Group revises its estimates of the number of options that are expected to vest based on the non-market and
service conditions. It recognizes the impact of revision to original estimate, if any, in profit or loss, with a corresponding
adjustment to equity. Once the costs towards share option plan are recharged by Diageo Plc, the same is accounted for
as a reduction from equity.
1.13 Income tax
The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the
applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and
to unused tax losses, if any.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period in countries where Group has taxable income. Management periodically evaluates positions taken in tax
returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions
where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax rates
(and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply
when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities are not recognised for temporary differences between the carrying amount and tax bases of investments
in subsidiaries, branches and associates and interest in joint arrangements where the group is able to control the timing of
the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets are not recognised for temporary differences between the carrying amount and tax bases of investments
in subsidiaries, branches and associates and interest in joint arrangements where it is not probable that the differences will
reverse in the foreseeable future and taxable profit will not be available against which the temporary difference can be
utilised.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to
settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in Statement of profit and loss, except to the extent that it relates to items recognised
in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income
or directly in equity, respectively. Interest and penalties on Income-tax has been disclosed with current tax charge.
Minimum Alternative Tax (‘MAT’) credit is recognised as an asset only when and to the extent there is reasonably certain that
the Group will pay normal income-tax during the specified period. In the year in which the MAT credit becomes eligible to
be recognised as an asset, the said asset is created by way of a credit to the statement of profit and loss. The Group reviews
the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is
no longer reasonable certainty to the effect that Group will pay normal income-tax during the specified period. MAT credit
entitlement is presented as deferred tax asset in the balance sheet.

1.14 Earnings per share (EPS)
Basic EPS is arrived by dividing profit attributable to equity shareholders by the weighted average number of equity shares
outstanding during the year, excluding treasury shares. 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.
1.15 Provisions and contingencies
Provisions are recognised when the Group has a dpresent legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. A
provision is made in respect of onerous contracts, i.e., contracts in which the unavoidable costs of meeting the obligations
under the contract exceed the economic benefits expected to be received under such contracts. Provisions are not recognised
for other future operating losses. The carrying amounts of provisions are reviewed at each balance sheet date and adjusted to
reflect the current best estimate.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined
by considering the class of obligations as a whole.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present
obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that
reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the
provision due to the passage of time is recognised as interest expense.
A disclosure for contingent liabilities is made where there is a possible obligation or a present obligation that may probably
not require an outflow of resources or an obligation for which the future outcome cannot be ascertained with reasonable
certainty. When there is a possible or a present obligation where the likelihood of outflow of resources is remote, no provision
or disclosure is made.
1.16 Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised
in Statement of profit and loss over the period of the borrowings using the effective interest method. Fees paid on the
establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or
all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no
evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment and
amortised over the period of the facility to which it relates.
Borrowings are derecognized from the balance sheet when the obligation specified in the contract is discharged, cancelled
or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to
another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in
Statement of profit and loss as other gains/(losses).
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least
12 months after the reporting period.
1.17 Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended
use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or
sale.
Other borrowing costs are expensed in the period in which they are incurred.

1.18 Exceptional items

When an item of income or expense within Statement of profit and loss from ordinary activity is of such size, nature or
incidence that their disclosure is relevant to explain the performance of the Group for the year, the nature and amount of such
items is disclosed as exceptional items.
1.19 Segmental information
Group is primarily engaged in the business of manufacture, purchase and sale of beverage alcohol (spirits and wines),
including through tie-up manufacturing/brand franchise. The Group has identified its Executive Committee as the Chief
Operating Decision Maker. The Executive Committee assesses performance and allocates resources for ‘Prestige and above’
and ‘Popular’ brand segments. Since both these segments meet the aggregation criteria as per the requirements of Ind AS 108
on ‘Operating segments’, the management considers these business activities as a single reportable segment.
1.20 Equity
Own shares represent shares and share options of the Group that are held in treasury by USL Benefit trust. Pursuant to order
of High Court of Karnataka and Bombay, shares held in aforesaid trust are treated as part of investment in subsidiary.
Dividends - Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
1.21 Assets (or disposal groups) held for sale and discontinued operations
Assets (or disposal groups) are classified as held for sale under current assets if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use and a sale is considered highly probable and is
expected to be sold within one year from the balance sheet date. They are measured at the lower of their carrying amount and
fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits and financial
assets which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less
costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but
not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date
of the sale of the non-current asset (or disposal group) is recognised at the date of de-recognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are
classified as held for sale. Non-current assets classified as held for sale and the assets of a disposal group classified as held for
sale are presented separately from the other assets in the balance sheet under the heading Current assets. The liabilities of a
disposal group classified as held for sale are presented separately from other liabilities in the balance sheet.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that
represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to
dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results
of discontinued operations are presented separately in the statement of profit and loss.
1.22 Financial guarantee contracts
Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability is initially
measured at fair value and subsequently at the higher of the amount determined in accordance with Ind AS 37 and the amount
initially recognised less cumulative amortisation, where appropriate. The fair value of financial guarantees is determined as
the present value of the difference in net cash flows between the contractual payments under the debt instrument and the
payments that would be required without the guarantee, or the estimated amount that would be payable to a third party for
assuming the obligations.

1.23 Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which
are unpaid. The amounts are unsecured and are usually paid as per credit period. Trade and other payables are presented as
current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their
fair value and subsequently measured at amortised cost using the effective interest method.
1.24 Common control transactions
Business combinations involving entities that are controlled by the Group are accounted for using the pooling of interests
method as follows:
• The assets and liabilities of the combining entities are reflected at their carrying amounts.
• No adjustments are made to reflect fair values, or recognise any new assets or liabilities. Adjustments are only made to
harmonise accounting policies.
• The financial information in the financial statements in respect of prior periods is restated as if the business combination
had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of
the combination. However, where the business combination had occurred after that date, the prior period information is
restated only from that date.
• The balance of the retained earnings appearing in the financial statements of the transferor is aggregated with the
corresponding balance appearing in the financial statements of the transferee or is adjusted against general reserve.
• The identity of the reserves are preserved and the reserves of the transferor become the reserves of the transferee.
• The difference, if any, between the amounts recorded as share capital issued plus any additional consideration in the
form of cash or other assets and the amount of share capital of the transferor is transferred to capital reserve and is
presented separately from other capital reserves.
1.25 Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be
received and the Group will comply with all attached conditions.
Government grants relating to income are deferred and recognised in the profit or loss over the period necessary to match
them with the costs that they are intended to compensate.
Government grants relating to the purchase of property, plant and equipment are recognised as deferred income and are
credited to profit or loss on a straight-line basis over the expected lives of the related assets.
1.26 Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest million as per the requirement
of Schedule III to the Companies Act, 2013, unless otherwise stated. The sign ‘0’ in these Ind AS financial statements indicates
that the amounts involved are below INR five lacs and the sign ‘-’ indicates that amounts are nil.
1.27 Recent accounting pronouncements
Standards issued but not yet effective
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules,
2017, notifying amendments to Ind AS 7, ‘Statement of Cash Flows’ and Ind AS 102, ‘Share-based payment’. These amendments
are in accordance with the amendments made by International Accounting Standards Board (IASB) to IAS 7, ‘Statement of
Cash Flows’ and IFRS 2, ‘Share-based payment’, respectively. The amendments are applicable to the Group from April 1, 2017.
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate
changes in liabilities arising from financial activities, including both changes arising from cash flows and non-cash changes,
suggesting inclusion of a reconciliation between the opening and the closing balances in the balance sheet for liabilities
arising from the financing activities, to meet the disclosure requirement.


1.27 Recent accounting pronouncements (continued)
The Group is evaluating the requirements of the amendment and believes that the effect on the financial statements is
The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-
settled awards and awards that include a net settlement feature in respect of withholding taxes.
It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-settled
awards. Market-based performance conditions and non-vesting conditions are reflected in the ‘fair values’, but non-market
performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to
vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are
modified with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for
as such from the date of the modification. Further, the amendment requires the award that includes a net settlement feature
in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is treated
as if it was part of an equity settlement.
The Group is evaluating the requirements of the amendment and believes that the impact on the financial statements is
2. Critical estimates and judgements
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the
actual result. This note provides an overview of the areas that involved a higher degree of judgement or complexity, and
of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than
those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes
together with information about the basis of calculation for each affected line item in the financial statements.
The areas involving critical estimates or judgements are:
• Estimation of defined benefit obligation – Note 39
• Estimation of provisions and contingent liabilities – Notes 18 and 54
• Impairment of goodwill – Note 50(b)
• Useful life of Franchise right – Note 59
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the Group and that are believed to be reasonable under
the circumstances.

3.1 Property, Plant and Equipment All amounts in INR Million

Owned Leased Total
Freehold Buildings Plant and Furniture Office Vehicles Land Office Vehicles
Land [Notes (a) Equipment and Fittings Equipment Equipment
and (b)
below]
Deemed cost as at April 1, 2015 2,660 3,969 7,220 258 104 16 112 100 13 14,452
Translation adjustments 1 (14) 13 10 (1) 1 - (1) 1 10
Additions - 233 898 41 66 3 9 35 - 1,285
Disposals - (11) (13) (3) (3) - - - (3) (33)
Adjustments (refer note (d) below) (10) (461) (79) - (7) - - - - (557)
Assets classified as disposal group (0) (10) (19) (0) (1) (0) - - - (30)
(refer Note 13)
Depreciation charge for the year - 145 1,092 56 64 14 - 42 3 1,416
Translation adjustments - (14) (3) (2) 1 (1) - - - (19)
Disposals - - (3) - (1) - - - - (4)
Adjustments (refer note (d) below) - (13) (18) - (1) - - - - (32)
Assets classified as disposal group - - (2) - - - - - - (2)
(refer Note 13)
Closing accumulated - 118 1,066 54 63 13 - 42 3 1,359
depreciation
Net carrying amount 2,651 3,588 6,954 251 96 7 121 92 8 13,768
as at March 31, 2016
Opening gross carrying amount 2,651 3,706 8,020 306 158 20 121 134 11 15,127
Translation adjustments - 25 (20) - 3 - - - - 8
Additions - 969 1,985 99 90 4 10 107 4 3,268
Assets classified as held for sale (35) (202) (163) (4) (2) - - - - (406)
(refer Note 13)
Disposals [Note (c) below] (21) (84) (352) (15) (16) (6) - - - (494)
Closing gross carrying 2,595 4,414 9,470 386 233 18 131 241 15 17,503
amount
Opening accumulated - 119 1,066 54 63 13 - 42 3 1,361
depreciation
Translation adjustments - 9 26 - - - - - - 35
Depreciation charge for the year - 207 1,255 69 66 3 44 72 3 1,720
Assets classified as held for sale - (8) (66) (2) (2) - - - - (78)
(refer Note 13)
Disposals - (8) (57) (3) (13) (6) - - - (87)
Closing accumulated - 319 2,224 118 114 10 44 114 6 2,949
depreciation
Net carrying amount 2,595 4,096 7,246 268 119 8 87 127 9 14,554
as at March 31, 2017
Notes:
(a) Buildings include an amount of INR 357 (2016: INR 357, 2015: INR 357) in respect of which title deeds are yet to be registered in the name
of the Company.
(b) Cost of buildings includes the following payments made for the purpose of acquiring the right of occupation:


3.1 Property, Plant and Equipment (continued) All amounts in INR Million
i) 660 equity shares (unquoted) of INR 100 each fully paid in Shree Madhu Industrial Estate Limited INR 0.066 (2016 and 2015: INR
0.066).
ii) 199, 6 % Debentures (unquoted) of INR 1,000 each fully paid in Shree Madhu Industrial Estate Limited INR 0.199 (2016 and 2015: INR
0.199).
iii) Deposit with Shree Madhu Industrial Estate Limited INR 0.132 (2016 : INR 0.132 ; 2015: INR 0.132)
iv) Fully paid shares INR 0.006 (2016 : INR 0.006 ; 2015: INR 0.006 Million) held in a Co-operative Housing Society.
(c) Disposal includes write down of INR 217 in the value of certain plant and equipment disclosed as exceptional items (refer Note 28)
(d) Adjustments represent gross block and accumulated depreciation amounting to INR 557 and INR 32 respectively, pertaining to Bouvet
Ladubay S.A.S and Chapin Landias S.A.S. which was disposed of during the year ended March 31, 2016.
Leased assets
Refer Note 40(a)
Property, plant and equipment pledged as security

Refer note 34 for information on property, plant and equipment pledged as security by the Group.
Contractual obligations
Refer note 53 for disclosure of contractual commitments for the acquisition of property, plant and equipment.
3.2 Intangible assets
Other Intangibles
Brand Licenses Com- Franchisee Total of Goodwill
puter Rights other
software intangible
assets
Deemed cost as at April 1, 2015 134 6 - 3,997 4,137 1,594
Translation adjustments (4) - - - (4) -
Additions - - - - - -
Disposals - - - - - (341)
Closing gross carrying amount 130 6 - 3,997 4,133 1,253
Amortisation charge for the year 62 2 - 93 157 -
Translation adjustments 3 - - - 3 -
Disposals (2) - - - (2) -
Impairment allowance - - - - - 128
Closing accumulated amortisation 63 2 - 93 158 128
Net carrying amount as at March 31, 2016 67 4 - 3,904 3,975 1,125
Opening gross carrying amount 130 6 - 3,997 4,133 1,253
Additions - 32 - - 32 -
Additions- Internal development - - 92 - 92 -
Disposals - - - - - -
Closing gross carrying amount 114 38 92 3,997 4,241 1,253

3.2 Intangible assets (continued) All amounts in INR Million
Other Intangibles
Brand Licenses Com- Franchisee Total of Goodwill
puter Rights other
software intangible
assets
Opening accumulated amortisation 63 2 - 93 158 128
Impairment charge for the year 45 - - - 45 -
Amortisation 21 4 3 93 121 -
Disposals - - - - - -
Impairment allowance - - - - - 445
Closing accumulated amortisation 114 6 3 186 309 573
Net carrying amount as at March 31, 2017 - 32 89 3,811 3,932 680
Refer note 50(b) for subsidiary wise details of movement in Goodwill.
3.3 Investment Properties All amounts in INR Million

As at As at As at
Opening gross carrying amount/ Deemed cost 672 658 867
Translation adjustment (94) 14 (209)
Classified as held for sale [Refer Note 13] (578) - -
Additions - - -
Closing gross carrying amount - 672 658
Accumulated depreciation - - -
Opening accumulated depreciation - - -
Depreciation charge - - -
Closing accumulated depreciation - - -
Net carrying amount - 672 658
Amounts recognised in statement of profit and loss for investment properties

For the For the
March 31, 2017 March 31, 2016
Direct operating expenses for property that did not generate rental income - 5
Loss from investment properties before depreciation - 5
Depreciation - -
Loss from investment properties - 5


3.3 Investment Properties (continued)
Fair Value
As at As at As at
Investment properties - 1,196 1,301
Estimation of fair value

The group obtains independent valuations for its investment property at least annually. The best evidence of fair value is current
prices in an active market for similar properties. Where such information is not available, the Group consider information from
a variety of sources including:
(a) current prices in an active market for properties of different nature or recent prices of similar properties in less active
markets, adjusted to reflect those differences
(b) discounted cash flow projections based on reliable estimates of future cash flows
(c) capitalised income projections based upon a property’s estimated net market income, and a capitalisation rate derived
from an analysis of market evidence
The fair value of investment property has been determined by a valuation expert who holds relevant professional
qualification and experience. The market value of the investment property has been assessed on an open market basis
with the benefit of vacant possession. In the course of valuation, a direct comparison method has been adopted by
making a reference to the relevant market transaction in the building wherein the investment property is located. The
appropriate adjustments have been made in order to account for the differences between the subject property and the
comparable in terms of time, floor level, view, condition, quality and facilities etc. The resulting fair value estimates for
investment property are included in level 3.

4. Investments All amounts in INR Million

As at As at As at
Face Number Amount Number Amount Number Amount
value of shares of shares of shares
Non-current
Investments in equity instruments
carried at FVOCI (fully paid-up)
In others
Quoted
McDowell Holdings Limited INR 10/- - - 50,000 1 50,000 1
United Breweries Limited INR 1/- - - - - 8,500,000 8,503
Mangalore Chemicals & Fertilisers INR 10/- - - 6,150 1 6,150 1
Limited
Housing Development Finance INR 2/- - - 1,200 1 1,200 2
Corporation Limited
ICICI Bank Limited INR 2/- - - 44,580 11 44,580 14
HDFC Bank Limited INR 2/- - - 1,000 1 1,000 1
Vijaya Bank INR 10/- - - 42,100 1 42,100 2
Radico Khaitan Limited INR 2/- - - 537,850 51 537,850 48
Khaitan Chemicals & Fertilisers INR 1/- - - 138,800 1 138,800 1
Limited
68 8,573
In Associate
Un-quoted
Wine Soc. of India Private Limited INR 10/- 324,812 - 324,812 - 324,812 -
Investment in mutual funds at FVPL
Quoted
Unit Trust of India
UTI Balance Fund - Income - Retail - 14 9
(formerly known as Unit Scheme 2002)
Total investment in equity investments - 14 9
Total Non-current investments - 82 8,582

Current
Investments in mutual funds carried at
FVPL
Quoted
HSBC Mutual Fund - 2 2
ICICI Prudential Liquid Fund - 9 9
SBI - Premier Liquid Fund - 0 0
Un-quoted
SBI - Infrastructure 1 1 -
Total current investments 1 12 11
Aggregate amount of quoted investments - 93 8,593
and market value thereof


As at As at As at
5. Loans
Non-current
Unsecured
Loan to UBHL (refer Note 42)
Loans to related parties [refer Note 37(c)]
Considered good - - 117
13,995 14,248 14,337
Less: Allowance for doubtful loans (13,995) (14,248) (14,220)
Total non-current loans - - 117
6. Other financial assets

Non-current
Balances with banks [refer Note (a), (b) and (c) below] 729 268 247
Advances to tie-up manufacturing units
Considered good 377 - -
1,311 654 574
Less: Allowance for doubtful balances - (128) (134)
Total other non-current financials assets 1,311 526 440
(a) Includes deposit of INR 459 (2016 : Nil and 2015 : Nil) with a bank in suspense account (refer Note 46).
(b) Includes deposit of INR 268 (2016 : INR 267 and 2015 : INR 246 ) with a bank kept under escrow pending resolution of
various taxation matters.
(c) Margin money against bank guarantees INR 2 (2016 : INR 1, 2015: INR 1).
Current
Advances to Tie-up manufacturing units
Considered good 504 1,516 1,623
Receivable towards sale of Property, plant and equipment
Loans and advances to employees
Security deposits
Receivables from related parties [refer Note 37(c)] 104 9 -
Other advances
Considered doubtful (refer Note 44) 257 621 2,068
2,413 4,347 8,342
Less: Allowance for doubtful receivables (1,366) (1,657) (4,193)
Total other current financial assets 1,047 2,690 4,149

As at As at As at
2017 2016 2015
7. Deferred tax assets (net)
MAT credit receivable - 27 -
Deferred tax assets
Allowance for doubtful debts / advances / deposits 1,023 980 1,116
Provisions 948 1,108 592
Carried forward tax losses and unabsorbed depreciation 689 586 727
Others 70 18 (17)
2,730 2,692 2,418
Deferred tax liabilities
Depreciation and amortisation 949 819 842
949 819 842
Total-deferred tax assets (net) 1,781 1,900 1,576
Movement in deferred tax assets Allowance for Provisions Carried Depreciation Others Total
doubtful debts forward tax and
/ advances / losses and amortisation
deposits unabsorbed
depreciation
As at April 1, 2015 1,116 592 727 (842) (17) 1,576
(Charged) / Credited :
- to profit and loss (136) 452 (141) 23 35 233
- to other comprehensive income - 64 - - - 64
As at March 31, 2016 980 1,108 586 (819) 18 1,873
(Charged) / Credited :
- to profit and loss 44 (160) 102 (130) 52 (92)
- to other comprehensive income - - - - - -
As at March 31, 2017 1,023 948 689 (949) 70 1,781
As at As at
March 31, March 31,
2017 2016
8. Income tax balances
Current tax liabilities
Add: Current tax payable for the year - 2,463
Less : Reclassification from advance tax (net) (149) (375)
Less : Taxes paid (13) (1,784)
Advance tax (net)
Add : Taxes paid 1,987 123
Less: Current tax payable for the year (825) -
Less : Reclassification to current tax liabilities (149) (375)


As at As at As at
2017 2016 2015
9. Other assets
Non-current
Capital advances 289 400 666
Balances with government authorities
Net surplus in gratuity plan [Refer Note 39(b)] 473 - -
Government grant 186 137 51
5,853 5,202 5,624
Less: Allowance for doubtful balance (1,892) (1,900) (1,908)
Total other non-current assets 3,961 3,302 3,716
Current
Indirect taxes and duties paid in advance 3,201 3,660 2,457
Advances to Suppliers
Government Grants 154 732 369
Other receivables - - 71
6,370 6,893 5,460
Less: Allowance for doubtful advances (848) (938) (982)
Total other current assets 5,522 5,955 4,478
10. Inventories
(Valued at lower of cost and net realisable value)
Raw materials 1,989 1,914 2,670
[including materials in transit INR 279 (2016: INR 145, 2015: INR 250)]
Work-in-progress 9,313 8,995 9,466
[including held by a branch outside India INR 4,024 (2016: INR 4,271,
2015: INR 4,481)]
Finished goods 5,501 5,726 3,939
[including goods in transit INR 283 (2016: INR 1,069, 2015: INR 925)]
Stock-in-trade 510 500 351
[including goods in transit INR 202 (2016: INR 55, 2015: INR Nil)]
Packing materials 1,836 2,298 2,397
[including materials in transit INR 59 (2016: INR 58, 2015: INR Nil)]
Stores and spares 127 86 83
Total inventories 19,276 19,519 18,906
Amounts recognised in profit and loss
Allowance for obsolete inventories (net of write back) for the year amounted to INR 360 (2016: INR 383). The net allowance
is recognised as an expense during the year and included in ‘change in inventories of finished goods, work-in-progress and
stock-in-trade’ in statement of profit and loss. Further an allowance of INR 168 (2016: Nil) has been recognised as an expense
as exceptional item [refer Note 28(a)].
For details of Inventories pledged as security refer Note 34.

As at As at As at
2017 2016 2015
11. Trade receivables
(Unsecured)
Considered good 29,527 23,032 16,295
30,883 24,722 20,214
Less: Allowance for doubtful debts (Refer note 32) (1,356) (1,690) (3,919)
29,527 23,032 16,295
Receivables from related parties [Refer note 37(c)]
Total trade receivables 29,534 23,032 16,383

Balances with banks
In current accounts 393 1,274 2,505
In EEFC accounts - - 8
Cheques on hand 392 11 162
Cash on hand - 2 2
Total cash and cash equivalents 785 1,287 2,677
12.2 Bank balances other than cash and cash equivalents

In unpaid dividend accounts 12 15 17
In unpaid public deposit accounts [refer note (a) below] 18 32 269
Bank deposits due to mature with in 12 months from the reporting date 57 34 501
Total bank balances other than cash and cash equivalents 87 81 787
Note:
(a) includes INR 11 (2016: INR 16; and 2015: INR 215) transferred to a separate non-interest bearing escrow account pertaining
to unclaimed public deposits wherein duly discharged deposit receipts were not received from deposit holders.
13. Assets / Liabilities directly associated with the assets classified as held for sale
Assets classified as held for sale
Disposal Group (Refer Note 49) 333 302 -
Investment property (Refer Note 3.3) 578 - -
Property, plant and equipment (Refer Note 3.1) 328 - 1
Other - 1 -
Total assets classified as held for sale 1,239 303 1
Liabilities directly associated with assets classified as held for sale
Disposal Group (Refer Note 49) 165 128 -
Total Liabilities directly associated with assets classified as held for sale 165 128 -
Description of the facts and circumstances which led to classification as held for sale
The Group has identified certain properties, vehicles etc. as non-core to its operations. The planned assets are readily available
for sale and an active programme to locate the buyer and complete the sale has been initiated by the management. Refer
Note 49 for Disposal Group.


As at As at As at
2017 2016 2015
14. Equity Share capital
Authorised
548,000,000 (2016: 548,000,000 ; 2015: 395,000,000) Equity Shares of INR 10/- each 5,480 5,480 3,950
159,200,000 (2016: 159,200,000; 2015: 159,200,000) Preference Shares of INR 10/- 1,592 1,592 1,592
each
1,200,000 (2016: 1,200,000; 2015: Nil) 7% Non Cumulative Redeemable Preference 120 120 -
Shares of INR 100/- each
7,192 7,192 5,542
Issued, subscribed and paid-up
145,327,743 (2016: 145,327,743; 2015: 145,327,743) Equity Shares of INR 10/- each 1,453 1,453 1,453
fully paid up
1,453 1,453 1,453
(a) Reconciliation of the number of shares outstanding

2017 2016 2015
Balance at the beginning of the year 145,327,743 1,453 145,327,743 1,453 145,327,743 1,453
Add: Equity shares issued during the - - - - - -
year
Balance at the end of the year 145,327,743 1,453 145,327,743 1,453 145,327,743 1,453
(b) Rights, preferences and restrictions attached to equity shares

The Company has one class of equity shares having a face value of INR 10/- per share. Each holder of the equity shares is
entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the share-
holders in the ensuing Annual General Meeting, except in the case of interim dividend. In the event of liquidation, the eq-
uity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts,
if any in proportion to their holdings.
(c) Shares held by holding company and / or their subsidiaries / associates
Out of the equity shares issued by the Company, shares held by the holding company and it’s subsidiaries / associates
are as below:

2017 2016 2015
Relay B V (wholly owned subsidiary 79,612,346 796 79,612,346 796 79,612,346 796
of Diageo Plc) *
79,612,346 796 79,612,346 796 79,612,346 796
* On December 20, 2013, the Honorable Karnataka High Court passed an order in the matter involving United Breweries
(Holdings) Limited (UBHL) and its creditors and the Diageo group setting aside an earlier leave order which permitted UBHL
to sell 10,141,437 equity shares in the Company to Relay B V, pending disposal of the winding up petitions against UBHL. On
the above matter, UBHL and Diageo plc. have approached the Honorable Supreme Court by way of special leave petition(s)
(SLPs) challenging the order of the division bench. Pending, disposal of the above SLPs, the Honorable Supreme Court has
directed that status quo be maintained in respect of the above mentioned transaction of sale of shares to Relay B V.
(d) Company has not issued any shares for consideration other than cash during the period of five years immediately
preceding the reporting date.

14. Equity Share capital (continued)
(e) Details of shareholders holding more than 5% shares in the Company
Relay B V 79,612,346 54.78% 79,612,346 54.78% 79,612,346 54.78%
(f) During the financial year 2005 – 06, the Company had issued 17,502,762 global depository shares (GDSs) representing
8,751,381 equity shares with 2 GDSs representing 1 equity share of face value of INR 10/- each at US$ 7.4274 per GDS,
aggregating to US$ 130 million, listed on the Luxembourg stock exchange. These GDSs did not carry any voting rights.
The Company during the year has terminated the deposit agreement in respect of the GDSs and the same has been
communicated to the Luxembourg Stock Exchange with the objective of delisting these GDSs listed with Luxembourg
stock exchange. There are no GDS outstanding as at March 31, 2017. Notwithstanding this development, the number of
shares outstanding or issued and subscribed in the share capital of the Company remains unchanged and the Company’s
shares continue to be listed with the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE).
(g) There are no shares reserved for issue under options and contracts / commitments for the sale of shares /
disinvestments.
(h) There are no bonus shares issued, bought back during the period of five years immediately preceding the reporting
date.
(i) Details of shares in the Company held by Company, subsidiaries or associates
USL Benefit trust [refer Note (i) below] 3,459,090 2.38% 3,459,090 2.38% 3,459,090 2.38%
Note (i): Investment as a sole beneficiary in USL benefit trust was made as per the terms of composite scheme of arrangement
approved by the Honourable High Courts of Karnataka and Bombay, for amalgamating various companies with the United
Spirits Limited. The trust has been established for the exclusive benefit of the Company and holds 3,459,090 shares of the
Company. As per the terms of the aforesaid scheme of arrangement, the Company has carried this investment at the aggregate
of book value as per the books of the concerned transferor companies. By virtue of the definition of control, the Group has
consolidated this trust. Also refer Notes 34 and 46 for assets pledged.
15.1 Reserves and surplus

As at As at As at
2017 2016 2015
Capital reserve arising from common control transaction 5,675 5,675 5,675
Capital redemption reserve 699 699 699
Securities premium account 45,682 45,682 45,682
Treasury shares (1,197) (1,197) (1,197)
Central subsidy 48 48 48
Contingency reserve 110 110 110
Employee housing fund 1 1 1
General reserve 10,408 10,408 10,408
Foreign currency translation reserve 186 215 -
Share based incentive reserve 40 - -
Retained earnings (45,248) (46,814) (56,621)
16,403 14,827 4,804
15.2 Other reserves

FV OCI - Equity Instruments - 68 8,417
- 68 8,417


16. Borrowings
Maturity date Terms of Coupon/interest As at As at As at
repayment rate March 31, March 31, April 1,
2017 2016 2015
Non-current borrowings
Secured
Term loans
The entire loan has been repaid in Single repayment at the end 10.85% - 5,000 5,000
the current year. of the term
The entire loan has been repaid in Repayable in 21 equal quarterly 13.75% - 110 277
the current year. installments commencing
from March, 2013
This pertains to a subsidiary which Repayable in 15 years with a 5% - - 298
has been sold during the year moratorium of 5 years from
ended March 31, 2016. the date of loan i.e. October
10, 2007.
Finance lease obligations
(Refer Note 40(a) below)
2015 - 2020 Monthly installments 3% - 10% 135 100 109
Unsecured
Term loans from banks
January 5, 2018 Single repayment at the end MCLR + 20bps (presently 3,500 3,500 3,500
of the term of the loan 7.9%)
June 29, 2018 Single repayment at the end MCLR + 20bps (presently 3,500 3,500 -
March 3, 2020 Single repayment at the end MCLR + 20bps (presently 5,000 - -
September 9, 2016 Repayable in 2 equal 11.5% - - 3,791
instalments.
September 9, 2016 This relates to a subsidiary 0.9% - 2.47% - - 20
which has been disposed
during the year ended March
31, 2017
Term loans from others
September 2016 Terms of repayment not Interest free 86 87 82
stipulated
Deferred Sales tax
2024-25 Repayable over a period of Interest free 146 159 183
fourteen years starting from
the end of the tenth year i.e.
2010-11
12,367 12,456 13,260
Less: Current maturities (Refer notes 17)
Secured
Term loan from banks - 5,096 205
Finance lease obligation 66 43 34
Unsecured
Term loan from banks 3,500 - 1,896
Term loan from others 86 - -
Deferred Sales tax liability 18 12 8
Total non current borrowings 8,697 7,305 11,117

16. Borrowings (continued)
Maturity date Terms of Coupon/interest As at As at As at
repayment rate March 31, March 31, April 1,
2017 2016 2015
Current borrowings
Secured
[refer note (b) below]
April 2017 - May 2017 Single repayment at the end 7.9% 4,750 6,650 4,800
of the term of the loan
Working capital loans from Banks
Payable on demand Payable on demand 7.9% 3,099 6,291 15,913
[refer note (b) below]
Payable on demand Payable on demand 9.4% to 12.45% - 28 323
[refer note (c) below]
Unsecured
April 2017 - May 2017 Single repayment at the end 8.25% 200 - -
April 2017 - May 2017 Single repayment at the end 7.9% - 7.95% 3,500 12,250 13,000
April 2017 - May 2017 Single repayment at the end 7.9% - 8% 4,750 4,750 2,500
Working capital loan from Banks
Payable on demand Payable on demand 9.25% 597 - -
Commercial papers issued to
bank and others
May 2017 - November 17 Single repayment at the 6.7% - 7.1% 12,173 - -
end of the term of each
commercial paper
Total current borrowings 29,069 29,969 36,536
Notes: Secured borrowings and assets pledged as security

a) Finance lease obligations are secured by assets underlying the finance lease [refer Note 40(a)]
b) Working capital loans and certain short term loans of USL are secured by hypothecation of inventories (excluding
maturation stock held by third party in UK) and book debts.
c) Certain working capital loans of subsidiaries are secured by hypothecation of current assets and book debts of respective
subsidiaries.
d) The carrying amounts of financial and non-financial assets pledged as security for current and non-current borrowings
are disclosed in note 34.


As at As at As at
2017 2016 2015
17. Other financial liabilities
Non-currernt
Capital creditors - 84 251
Term liability towards franchisee rights (refer note 59) - 308 759
Total other non-current financial liabilities - 392 1,010
Current
Current maturities of
Borrowings (Refer Note 16) 3,586 5,096 2,101
Finance lease obligation (Refer Note 16) 66 43 34
Deferred sales tax liability 18 12 8
Interest accrued but not due 109 113 170
Unpaid / unclaimed dividends* 12 14 17
Unpaid / unclaimed debentures* 0 0 0
Unpaid / unclaimed public fixed deposits (Including accrued interest)** 18 32 261
Others
Liability for customer claim (refer Note 47) 3,280 250 -
Liability towards franchisee rights - 446 446
Due to tie-up manufacturing units 905 578 417
Capital creditors 388 703 426
Employee payables 1,039 755 658
Total other current financial liabilities 9,575 8,227 4,748
* Investor Education and Protection Fund (IEPF) shall be credited when due. As at March 31, 2017 no balances were due to
be transferred to IEPF.
** Includes unclaimed public fixed deposit of INR 11 (2016: INR 16, 2015: INR 215) in case of which the duly discharged fixed
deposit receipts are not surrendered by the deposit holders.
18. Provisions
Non-Current
Employee benefits
Shortfall in provident fund trust [refer Note 39(b)] - 40 97
Gratuity [refer Note 39(b)] 12 - -
Pension liability [refer Note 39(b)] 16 18 19
Share appreciation rights (refer Note 35) 17 - -
Total non current provisions 442 683 661
Current
Employee benefits
Gratuity [refer Note 39(b)] 2 381 602
Pension liability [refer Note 39(b)] 2 - 2
Provision for indirect taxes (Refer Note below) 2,565 1,842 1,570
Provision for onerous contracts (refer Note below) 75 - -
Total current provisions 2,752 2,383 2,345

18. Provisions (continued)

Note :
Movement in Provisions
Indirect taxes 1,842 783 60 2,565
Onerous contract (refer Note 47) - 75 - 75

Indirect taxes 1,570 364 92 1,842
Provision is made for probable cash outflow arising out of pending disputes / litigations with various regulatory authorities.
19. Trade payables

As at As at As at
Trade creditors 11,262 9,824 9,176
Dues to related parties [refer Note 37(c)] 985 365 255
Total trade payables 12,247 10,189 9,431
20. Other current liabilities

Advances from customers 883 139 452
Statutory dues 2,172 2,197 1,240
Liability of excise duty on closing finished goods inventory (net) 1,809 1,798 890
Government grant - 1 1
Total other current liabilities 4,864 4,135 2,583


For the For the
March 31, 2017 March 31, 2016
21. Revenue from operations
Sale of products (including excise duty) 254,685 235,962
Income from brand franchise 528 686
Income from BCCI-IPL franchise 1,614 1,349
Other operating revenue:
Scrap sales 439 340
Income from Government grant* 166 813
Miscellaneous 136 59
Total revenue from operations 257,568 239,209
* Represents Maharashtra Value added tax (MVAT) incentive from Govt of Maharashtra under Industrial promotion subsidy (IPS)
22. Other income

Interest income on financial assets held at amortised cost 197 49
Dividend income from investments measured at FVPL 1 2
Lease rent - 21
Gain on disposal of property, plant and equipment (net) 337 6
Liabilities, provisions or allowances no longer required written back 514 349
Miscellaneous income 4 9
Total other Income 1,053 436
23. Cost of materials consumed

Raw materials 28,561 29,423
Packing materials 18,194 17,946
Total cost of materials consumed 46,755 47,370
24. Changes in inventories of finished goods, work-in-progress and stock-in-trade

Opening inventory:
Finished goods [Includes INR 21 (2016: Nil) for USL Nepal; refer Note 49] 5,747 3,939
Work-in-progress [Includes INR 20 (2016: Nil) for USL Nepal; refer Note 49] 9,015 9,466
Total opening balance 15,262 13,756
Less: Stocks of subsidiaries disposed on sale [refer Note 51(b)]
Finished Goods - 80
Work-in-Progress - 891
Stock-in-trade - -
- 971
Closing inventory:
Finished goods [Includes INR 49 (2016: INR 21) for USL Nepal; refer Note 49] 5,550 5,747
Work-in-progress [Includes INR 22 (2016: INR 20) for USL Nepal; refer Note 49] 9,335 9,015
Total closing balance 15,395 15,262
Increase/ (decrease) in excise duty on finished goods (net) 701 886

Total Changes in inventories of finished goods, work-in-progress and stock-in-trade 568 (1,591)


For the For the
March 31, 2017 March 31, 2016
25. Employee benefits expense
Salaries, wages and bonus 5,939 5,749
Contribution to provident and other funds [refer Note 39(a)] 217 258
Contribution towards interest shortfall in PF trusts [refer Note 39(b)] 160 175
Gratuity [refer Note 39(b)] 185 156
Share based payment expense [refer Note 35] 57 -
Total Employee benefits expense 6,882 6,800
26. Finance costs

Interest and finance charges on financial liabilities at amortised cost (borrowings) 3,751 4,574
Total Finance costs 3,751 4,574
27. Other expenses

Consumption of stores and spares 219 168
Direct expenses on IPL franchise 1,077 1,083
Sub-contracting wages 809 782
Power and fuel 348 360
Rent [refer Note 40(b)] 2,106 1,510
Repairs and maintenance:
Buildings 40 67
Plant and machinery 205 216
Others 327 301
Insurance 114 131
Rates and taxes # 2,314 2,198
Travel and conveyance 484 503
Legal and professional 1,782 1,060
Freight outwards 2,329 2,092
Royalty 80 68
Trade mark license fees 582 576
Loss on disposal of property, plant and equipment (net) - 17
Exchange loss (net) 146 157
Remuneration to non-executive directors:
Sitting fee 7 15
Commission 22 13
Bad debts / advances / deposits written off [net of write back of provision of INR 335 20 -
(2016: Nil)]
Provision for doubtful debts / advances / deposits 75 917
IT and Communication expenses 446 342
Administrative expenses 320 249
Distribution costs 1,331 1,310
Total Other expenses 15,370 14,777
# includes provision for demands in respect of indirect taxes (Refer note 18)


For the For the
March 31, 2017 March 31, 2016
28. Exceptional items (net)
(a) Provision towards matters arising consequent to prohibition in the state of Bihar (refer Note 48) (377) (107)
(b) Write down in the value of plant and equipment (refer Note 3.1 and 41) (217) -
(c) Allowances for doubtful receivable towards sale of property, plant and equipment - (316)
(d) Customer claim (refer Note 47) (2,645) -
(e) Reversal of provision against claims (refer Note 41) 28 -
(f) Allowance for doubtful receivables towards sale of property, plant and equipment (refer Note 41) 370 6,209
(g) Bad and doubtful advances, deposit and trade receivables written off (refer Note 41) (358) (5,666)
(h) Impairment of Goodwill [refer Note 50(b)] (445) (128)
(i) Provision for advance to associate (37) (157)
(j) Loss on disposal of subsidiaries - (110)
Total Exceptional items (net) (3,681) (274)
29. Reconciliation of tax expense and accounting profit

Profits before income tax expense 1,627 3,662
Tax calculated at the domestic rates applicable in the country concerned 921 1,308
Tax effects of amounts which are not deductible / (taxable) in calculating taxable income:
- Deduction for investment allowance u/s 32AC (89) (37)
- Non deductible expenses (Donations,CSR etc) 51 8
- Short term capital gain on vehicles 20 -
- Deferred tax credit on indexation benefit (23) -
- Non taxable income (57) (29)
- Impairment/ provision on investment in subsidiaries and loans and advances (including reversals) 21 485
Movement in unrecognised deferred tax on accumulated tax losses (134) -
- Tax relating to earlier years - 568
- Provision/ write off (including reversals) relating to certain receivables considered (16) (166)
exceptional in nature
- Tax on sale of interest in subsidiary - 105
- Others 3 (14)
Income tax expense as per Statement of Profit and Loss 697 2,228
(a) Tax losses

Unused tax losses for which no deferred tax asset has been recognised (Refer note below) 5,377 4,721
Potential tax benefit at rates applicable in the country concerned 1,861 1,634
Note: The unused tax losses were incurred by subsidiaries which are not likely to generate taxable income in the foreseeable
future.
30. Earnings per share
Nominal value of equity shares (INR per share) 10/- 10/-
(a) Profits attributed to equity holders of the Company 1,001 1,383
(b) Weighted average number of equity shares used as denominator (refer Note below) 141,868,653 141,868,653
(c) Basic and diluted earnings per share (INR per share) 7.06 9.75
There are no dilutive equity shares in the Group.
Note:
In calculating the weighted average number of outstanding equity shares during the year, Group has reduced the own shares
i.e. 3,459,090 shares (2016: 3,459,090 shares) held by USL Benefit Trust (of which Company is the sole beneficiary), as the
investment in the said trust has been accounted under a scheme approved by courts.

31. Fair value measurements: All amounts in INR Million
Financial instruments by category
Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015
Amor- Amor- Amor-
FVOCI tised FVPL FVOCI tised FVPL FVOCI tised FVPL
cost cost cost
Financial assets (net of allowances)
Investments
Equity instruments - (quoted) - - - 68 - - 8,573 - -
Mutual funds - - 1 - - 26 - - 20
Loans - - - - - - - 117 -
Trade receivables - 29,534 - - 23,032 - - 16,383 -
Cash and cash equivalents - 785 - - 1,287 - - 2,677 -
Bank balances other than cash and cash equivalents - 816 - - 349 - - 1,034 -
Other financial assets
Advances to tie-up manufacturing units - 881 - - 1,516 - - 1,623 -
Receivable towards sale of Property, plant and
- 72 - - - - - 871 -
equipment
Loans and advances to employees - 39 - - 27 - - 14 -
Receivable from related parties - 104 - - 9 - - - -
Other advances - 140 - - 883 - - 1,343 -
Total financial assets - 32,764 1 68 27,616 26 8,573 24,553 20
Borrowings - 41,436 - - 42,425 - - 49,796 -
Trade payables - 12,247 - - 10,189 - - 9,431 -
Other financial liabilities
Interest accrued but not due - 109 - - 113 - - 170 -
Unpaid / unclaimed debentures - 0 - - 0 - - 0 -
Unpaid/unclaimed dividends - 12 - - 14 - - 17 -
Unpaid / unclaimed public fixed deposits
- 18 - - 32 - - 261 -
(Including accrued interest)
Liability for customer claim - 3,280 - - 250 - - - -
Due to tie-up manufacturing units - 905 - - 578 - - 417 -
Capital creditors - 388 - - 788 - - 677 -
Liability towards franchisee rights - - - - 754 - - 1,205 -
Employee payables - 1,039 - - 755 - - 658 -
Total financial liabilities - 59,588 - - 56,082 - - 62,842 -
Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that
are recognised and measured at fair value. To provide an indication about the reliability of the inputs used in determining
fair value, the Group has classified its financial instruments into the three levels prescribed under Ind AS 109 and all financial
instruments measured at fair value fall under Level 1.


31. Fair value measurements (continued) All amounts in INR Million
Financial assets measured at fair value - recurring fair value measurements
Notes Level 1
As at As at As at
Listed equity investments FVOCI 4 - 68 8,573
Mutual funds FVPL 4 1 26 20
Total financial assets 1 94 8,593
The carrying amounts of trade receivables, deposits and advances, trade payables, borrowings, capital creditors, dues to
employees and other parties and cash and cash equivalents are same as their fair values, due to their short-term nature.
An explanation of each level follows is provided below:
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments
and mutual funds that have quoted price. The fair value of all equity instruments which are traded on the stock exchanges is
valued using the closing price as at the reporting date. The mutual funds are valued using the closing NAV (Net Asset value).
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the
counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as
little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the
instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in
level 3.
The above amounts exclude assets and liabilities pertaining to United Spirits Nepal Private Limited which have been classified
as “Assets held for sale” and “Liabilities associated with the assets classified as held for sale” respectively.
32. Financial risk management
The Group’s activities expose it to market risk, liquidity risk and credit risk. This note explains the sources of risk which the
entity is exposed to and how the entity manages the risk.
Risk Exposure arising from Measurement Management

Credit risk Cash and cash equivalents, deposits Aging analysis Diversification of bank
with banks and financial institutions, deposits and monitoring
trade receivables, derivative financial credit limits
instruments and financial assets
measured at amortised cost
Liquidity risk Borrowings and other liabilities Rolling cash flow Availability of committed
forecasts credit lines and borrowing
facilities
Market risk — foreign Future commercial transactions, Cash flow forecast- Forward foreign exchange
exchange Financial assets and liabilities not ing Sensitivity anal- contracts
denominated in functional currency of ysis
respective Group companies.
Market risk — interest rate Long-term borrowings at variable rates Sensitivity analysis Diversified portfolio of fixed
of interest rates and variable interest rate
loans
Market risk — security prices Investments in equity securities Sensitivity analysis Continuous monitoring
The Group’s risk management is carried out by a central treasury department under policies approved by the Board of Directors
of the Company. Central treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s other
functions. The Board provides written principles for overall risk management, as well as policies covering specific areas, such
as foreign exchange risk, interest rate risk and credit risk use of derivative financial instruments and non-derivative financial
instruments, and investment of excess liquidity.

(A) Credit risk
Credit risk arises from cash and cash equivalents, financial assets measured at amortised cost and deposits with banks and
financial institutions, as well as credit exposures to trade receivables.
Credit risk management
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financials loss. The maximum
exposure to the credit risk at the reporting date is primarily from trade receivables amounting to INR 29,534 (2016: INR
23,032, and 2015: INR 16,383) respectively.
Trade receivables are typically unsecured and are derived from revenue earned from 2 main classes of trade receivables,
receivable from sales to government corporations and receivables from sales to private third parties.
Receivables from government corporation customers amounted to INR 18,985 (2016: INR 12,059; 2015: INR 9,286) and
private customers amounted to INR 10,549 (2016: INR 10,973; 2015: INR 7,097). Receivable from government corporation
customers amounted to 64% (2016: 52%; 2015: 57%) and receivable from private customers amounted to 36% (2016:
48%; 2015: 43%) of total trade receivables.
Credit risk is managed by the Group through credit approvals, establishing credit limits and continuously monitoring the
credit worthiness of customers to which the Group grants credit terms in the normal course of business. On account of
adoption of Ind AS 109, the Group uses an expected credit loss model to assess the impairment loss or gain. The Group
uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes
into account available external and internal credit risk factors such as regulatory developments which may impact the
customer’s ability to repay, and the Group’s historical experience for each of its customers.
At March 31, 2017, the company was exposed to trade receivables of INR 29,534 (2016: INR 23,032 and 2015: INR 16,383)
against which the Company is carrying an expected credit loss allowance of INR 1,356 as at the year end (2016: INR 1,690
and 2015: INR 3,919).
Reconciliation of loss allowance for trade receivables:

Write offs (514) (2,261)
Balance at the year end (Refer Note 11) 1,356 1,690
The Company’s financial assets also include investments, loans, advances and deposits amounting to INR 3,231 (2016: INR
4,678 and 2015: INR 16,763).
The Group actively monitors the performance of each party to whom loans has been advanced, and based on the
historical performance and future anticipated cash flows, the ability of the entity to generate sufficient cash flows to
service its loan commitments to the Group is assessed. Where the Group believes that the entity will not be able to service
its loan commitments over the next 12 months or over the lifetime of the loan, a suitable provision for impairment of the
loan receivable is created.
Reconciliation of loss allowance measured at life-time expected credit losses for credit impaired financial assets
other than trade receivables
Write of (net off write backs) (1,129) (2,695)
Balance at the year end 15,361 16,033
Significant estimates and judgements in Impairment of financial assets
The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and
expected loss rates. The Group uses judgement in making these assumptions and selecting the inputs to the impairment
calculation, based on the Group’s past history, existing market conditions as well as forward looking estimates at the end
of each reporting period.


(B) Liquidity Risk
Changes in regulations, guidelines and operating models influences liquidity risk. A prudent liquidity risk management
is to ensure maintaining the required cash and / or have access to funds required through committed banking lines from
banks or markets to address such risks, when they arise.
(i) Group has developed three year ‘Capital structure and funding strategy’ with an objective to gauge potential risk,
project and strategically address funding needs, among others and ensure continued operations within acceptable
tolerance limits.
(ii) Treasury team monitors rolling forecasts of the Group’s liquidity position on a periodic basis. Funds are optimally
used through centralised cash management system across the Group and deficit if any are availed from the undrawn
committed borrowing facilities (as below). Internal stake holders are aligned to provide ‘early warning’ surprises
should they occur, so as to enable treasury to pro-actively align the appropriate source and cost of borrowing to
mitigate funding and interest risk (comprising the undrawn borrowing facilities below).
(iii) Management has planned monetisation of certain non-core assets to infuse liquidity and reduce debts, thereby
freeing up the banking lines to access in future, if required.
Financing arrangements
The Group had access to the following undrawn borrowing facilities at end of the reporting period:
As at As at As at
Particulars
Floating rate
Expiring within one year 16,265 11,185 3,405
(cash credit/ working capital demand loans)
The above facilities may be drawn at any time and repayable on demand. The Group has fully utilized fixed rate borrowing
facilities as at the end of each of the reporting periods
Maturities of financial liabilities
The tables below analyse the Group’s financial liabilities into relevant maturity groupings based on their contractual
maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted
cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
March 31, 2017
Contractual maturities Less than 3 3 months to 6 months to Between 1 Between 2 Total

of financial liabilities months 6 months 1 year and 2 years and 5 years
Borrowings 22,292 3,681 8,056 4,161 5,593 43,783
Obligation under finance
18 18 37 46 28 147
lease
Trade payables 12,247 - - - - 12,247
March 31, 2016
Contractual maturities Less than 3 3 months to 6 months to Between 1 Between 2 Total

of financial liabilities months 6 months 1 year and 2 years and 5 years
Borrowings 10,894 14,348 12,000 4,158 3,999 45,399
12 12 24 48 13 109
lease
Trade payables 10,189 - - - - 10,189
Other financial liabilities 3,076 - - 392 - 3,468

April 1, 2015
Contractual maturities of Less than 3 3 months to 6 months to Between 1 Between 2

Total
financial liabilities months 6 months 1 year and 2 years and 5 years
Borrowings 14,059 3,811 25,318 5,836 3,999 53,023
10 10 21 40 43 124
lease
Trade payables 9,431 - - - - 9,431
Other financial liabilities 2,606 - - 617 392 3,615
(C) Cash flow and fair value interest rate risk
Group’s main interest rate risk arises from Long-Term borrowings with variable rates, which expose the Group cash flow
interest rate risk.
Presently interest rates seems to be bottomed out and the Group expects this to be stable in the near term. In view of this,
the Group has kept long term borrowings at variable interest rate, however the Group has an option to exit at the end of
interest reset period which is one month. This allows flexibility and insulates the Group from adverse movements.
Majority of the Group’s short term and long term borrowings are benchmarked to Bank’s MCLR (Marginal Cost of Lending
Rates) and are already fair valued.
The exposure of the Group’s borrowings to interest rate changes at the end of reporting period are as follows:
As at As at As at
Variable rate borrowings 41,069 36,970 40,056
Fixed rate borrowings 135 5,208 9,491
Interest free borrowings 232 246 265
Total borrowings 41,436 42,424 49,812
Sensitivity
Profit or loss is sensitive to higher / lower interest expense from borrowings as a result of changes in interest rates.
Impact on Profit after tax

Interest rates Year ended Year ended
March 31, 2017 March 31, 2016
Increase by 50 bps (131) (102)
Decrease by 50 bps 131 102
(D) Foreign currency risk
The Group is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the
USD, EUR and GBP. Foreign Exchange risk arises from future commercial transactions, assets and liabilities denominated
in a currency that is not the functional currency of the respective Group companies. The risk is measured through a
forecast of highly probable foreign currency cash flows.
Foreign currency risk management
The Group’s risk management policy is to assess the Group’s net exposures which is mainly represented by receivable
towards exports and payable towards imports.
The Group hedges its net exposures with a view on forex outlook. The Group’s overall forex net exposures is not material
and given that INR is stable against USD and strengthening against GBP, we have kept our exposures presently open.
However, the present forex policy is being revised to assess the exposures in a robust and structured manner and align
mitigation plan.


Foreign currency risk exposure:
The Group’s exposure to foreign currency risk at the end of the reporting period expressed in INR is as follows:

Financial assets USD GBP EUR USD GBP EUR USD GBP EUR
Trade receivables 131 - - 405 - - 625 - -
Non-current loans - 123 - - 903 - - 951 -
Balances in EEFC account - - - - - - - 8 -
Derivative assets
Foreign exchange forward contract - - - (41) - - (39) - -
131 123 - 364 903 - 586 959 -
(assets)
Trade payables 106 100 - 257 188 - 38 143 1
106 100 - 257 188 - 38 143 1
(liabilities)
Impact on Profit after Tax
The sensitivity of profit or loss due to changes in exchange rates arises mainly from foreign currency denominated net
trade exposures. There is no material impact on foreign currency loans given to subsidiaries as they are largely provided
for.
Sensitivity - foreign currency
USD GBP EUR USD GBP EUR
Currency increases by 5% 1 1 - 23 (1) -
Currency decreases by 5% (1) (1) - (23) 1 -
The above amounts exclude assets and liabilities pertaining to United Spirits Nepal Private Limited which have been
classified as “Assets held for sale” and “Liabilities associated with the assets classified as held for sale” respectively.
33. Capital management

Risk management
The Group’s objectives when managing capital is to:
a) have a balanced financial profile from short term (1 year) to mid-term (3 years) for sustainable leverage, providing;
• Headroom for future growth / expansion
b) ensure the capital structure is at competitive advantage when compared to peers and other sector players through
optimum debt mix through:
• Diversification of funding sources to manage liquidity and rollover risk
As at As at As at
Net Debt 40,651 41,137 47,135
Total Equity 17,831 16,403 14,682
Net debt to equity ratio 2.28 2.51 3.21
The above amounts exclude assets and liabilities pertaining to United Spirits Nepal Private Limited which have been
classified as “Assets held for sale” and “Liabilities associated with the assets classified as held for sale” respectively.

34. Assets pledged as security All amounts in INR Million
The carrying amounts of assets pledged as security for current and non-current borrowings are as follows:
March 31, March 31, April 1, 2015
2017 2016
Financial assets
Floating charge
Investments 4 - 11 11
Non-financial assets
Floating charge
Inventories 10 14,514 14,862 12,864
Other current assets (excluding taxes paid in advance) 9 3,518 2,062 2,061
Non-current assets
Buildings 3.1 - 458 865
Plant and equipment and capital work-in-progress 3.1 - 6,502 6,792
Total of above 49,859 50,351 46,298
The carrying amounts of assets classified as held for sale not included in the table above, pledged as security in respect of
borrowings for United Spirits Nepal Private Limited are as follows:
March 31, March 31, April 1, 2015
2017 2016
Non-current assets
Land and Buildings 3.1 14 15 15
Plant and equipment and capital work-in-progress 3.1 31 30 33
Total of above 45 45 48
Total borrowings 16 23 - 1
Further the carrying amounts of the following assets (not included in the above tables) have been pledged with a bank with
whom the Company is involved in litigation (Refer note 46)
Non-current Notes As at As at As at
First charge
Freehold land 3.1 1,198 1,198 1,198
Freehold building 3.1 856 658 505
Lease hold land 3.1 40 61 61
Plant and equipment 3.1 779 732 432
Investments as a sole beneficiary in USL Benefit Trust 4.1 1,197 1,197 1,197
Certain brands of the Company - - -
Total Non-current assets pledged as security 4,070 3,846 3,393


35. Share based payments All amounts in INR Million
Diageo Incentive Plan (DIP)
DIP is a one-time long term incentive scheme for select employees who were active on the Company’s payroll on September
1, 2016. A single grant was made in September 2016 with zero pay out for any leaver prior to vesting in September 2019
(vesting period – 3 years). Diageo Plc’s share options (one option equivalent to one share) were granted to such employees
as a percentage of salary. Vesting is subject to conditions such as continuity of employment, Diageo’s productivity and NSV
growth and individual’s net promoter score. As at March 31, 2017 such outstanding share options were 97,904 (2016: Nil) and
the charge recorded for the current year included in employee benefit expense was INR 40 (2016: Nil). The carrying amount of
liability of INR 40 has been included in other equity (Refer note 15).
Share Appreciation Rights (SAR)

The India SAR Plan creates an opportunity to link the employee reward to the Company’s share price performance. Under this
plan, the Company grants stock appreciation rights (based on the Company’s share price) to select employees. The grant is
made in September every year, as a percentage of salary. Cash pay-out equivalent to the value of shares will be made at the
end of three years from the date of grant (the vesting period).
The fair value of the SARs was determined using the Black-Scholes model using the following inputs at the grant date and as
at March 31, 2017:
As at
March 31, 2017
Number of share appreciation rights outstanding 47,445
Share price at measurement date (INR per share) 2,313
Expected volatility (%) 10.83
Dividend yield (%) -
Risk-free interest rate (%) 6.69
Carrying amount of liability - included in non-current provision for employee benefits. (Refer note 18) 17
Expenses recorded for the year under Employee benefits expense 17
There were no SARs granted in prior years and none of the SARs had vested as at March 31, 2017.
36. Segment reporting

Segment Information
The Group is primarily engaged in the business of manufacture, purchase and sale of beverage alcohol (spirits and wines)
including through Tie-up units/brand franchisees. The Group has identified the Executive Committee of the Company as the
Chief Operating Decision Maker. The Executive Committee assesses performance and allocates resources for ‘Prestige and
above’ and ‘Popular’ brand segments. Since both these segments meet the aggregation criteria as per the requirements of Ind
AS 108 on ‘Operating segments’, the management considers these business activities as a single reportable segment.
As the Group operates in a single operating segment, the reporting disclosures as envisaged in Indian Accounting Standards
(Ind AS 108) on ‘Operating Segments’ are not applicable to the Company. However, the geographical information disclosures
as envisaged in Ind AS 108 are disclosed below:
India: The ‘India’ segment is primarily 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 of Beverage Alcohol
(Spirits and Wines) including through Tie-up units / brand franchisees outside India.
The Group does not have revenues from transactions with a single external customer amounting to more than ten percent or
more of the Company’s revenues.
The following information discloses external revenues and non-current assets based on the physical location of the customer
and asset respectively.
Geographic segment March 31, 2017 March 31, 2016
India Outside India Total India Outside India Total
External revenue 254,926 2,642 257,568 235,446 3,763 239,209
Non-current assets 31,359 109 31,468 29,509 905 30,414

37. Related party disclosures
(a) Names of related parties and description of relationship
(i) Parent entities of the Company
• Diageo Plc. (Ultimate Holding company)
• Relay B V (Holding company)
Pursuant to the settlement agreement entered on February 25, 2016 by the Company with Dr. Vijay Mallya, erstwhile
Chairman and non-executive director, the parties mentioned below have not been considered as related parties post
the settlement date. (Refer note 43 and 56)
• United Breweries (Holdings) Limited
• Kingfisher Finvest India Limited
• City Properties Maintenance Company Bangalore Limited
• United Breweries Limited
(ii) Fellow subsidiaries of the Company
• Diageo Scotland Limited
• Diageo India Private Limited
• Diageo Brands BV
• Diageo Vietnam Limited
• Diageo Great Britain Limited
• Diageo Australia Limited
• Diageo North America Inc.
• Diageo Singapore Pte Limited
• Diageo Singapore Supply Pte Limited
• Guinness Nigeria Limited
• UDV Kenya Limited
• Diageo Business Services India Private Limited
(iii) Employees’ Benefit Plans:
• McDowell & Company Limited Staff Gratuity Fund (McD SGF)
• McDowell & Company Limited Officers’ Gratuity Fund (McD OGF)
• Phipson & Company Limited Management Staff Gratuity Fund (PCL SGF)
• Phipson & Company Limited Gratuity Fund (PCL GF)
• Carew & Company Ltd. Gratuity Fund (CCL GF)
• McDowell & Company Limited Provident Fund (McD PF)
• Shaw Wallace & Associated Companies Employees Gratuity Fund (SWCEGF)
• Shaw Wallace & Associated Companies Executive Staff Fund (SWCSGF)
• Shaw Wallace & Co. Associated Companies Provident Fund (SWCPF)
• Pioneer Distilleries Employees Gratuity Trust
• United Spirits Superannuation Fund (with effect from 15 June 2015)
Refer note 39 for information on transactions with post-employment benefit plans mentioned above.
(iv) Key management personnel

Non-executive directors of the Company
• Mahendra Kumar Sharma
• Indu Ranjit Shahani
• Rajiv Gupta
• Sivanandhan Dhanushkodi
• Nicholas Bodo Blazquez (till January 21, 2017)
• Vegulaparanam Viswanathan (w.e.f October 16, 2016)
• John Thomas Kennedy (w.e.f August 17, 2016)
• Randall David Ingber (w.e.f February 2, 2017)
• Vinod Rao (w.e.f May 24, 2016)
• Ravi Rajagopal (till October 13, 2016)
• Vijay Mallya (till February 25, 2016)


Executive directors of the Company

• Anand Kripalu (Managing Director & Chief Executive Officer)
• Sanjeev Churiwala (Chief Financial Officer) (w.e.f. April 1, 2017)
• P A Murali (Chief Financial Officer) (till April 22, 2015)
(b) Summary of the transactions with related parties

ended ended
March 31,2017 March 31,2016
Sale of products (including excise duty)
Fellow subsidiaries
Total - Sale of products 24 -
Purchase of traded goods
Fellow subsidiaries
Diageo Brands BV 1,264 1,255
Diageo Singapore Supply Pte Limited 14 60
Total - Purchase of traded goods 1,278 1,386
Loans advanced to
Associate
Wine Soc. of India Private Limited 38 159
Total – Loans advanced 38 159
Allowance against loans made
Associate
Wine Soc. of India Private Limited 38 276
Total – allowances made [Refer Note 28(i)] 38 276
Purchase of materials
Fellow subsidiaries
Diageo Brands BV 796 202
Total - Purchase of materials 796 202

ended ended
March 31,2017 March 31,2016
Royalty and brand franchise expense
Fellow subsidiaries
Diageo North America Inc. 77 66
Total - Royalty and brand franchise expense 80 68
Trade mark license fees
Reimbursement of expenses paid
Parent
Diageo Plc. - 85
Fellow subsidiaries
Diageo Australia Limited 25 33
Diageo Singapore Pte Limited - 7
Diageo North America Inc. 31 -
Total- reimbursement of expenses paid 58 221
Indemnification settlement receivable from parent
Diageo Plc. 75 -
Reimbursement of expenses received
Parent
Diageo Plc. 32 20
Relay B V - 1
Entities having significant influence over the company
United Breweries Limited - 22
Fellow subsidiaries
Diageo Vietnam Limited - 17
Total - Reimbursement of expenses received 167 96
Income from Agency commission
Fellow subsidiaries
Assignment of receivables in favour of the Company from fellow subsidiary
Diageo India Private Limited 3 62
Guarantee / security commission paid to
Purchase of fixed assets from fellow subsidiary - 61
Diageo India Private Limited
Payment for housekeeping and security services
Entities having significant influence over the company
City Properties Maintenance Company Bangalore Limited - 47


(c) Summary of closing balances with related parties
The following balances are outstanding at the end of the reporting period in relation to transactions with related parties:
As at As at As at

Loans outstanding
Principal amount (Refer Note 5)
Associate
Wine Soc. of India Private Limited 314 276 117
Receivables from related parties
Parent
Diageo Plc 80 2 -
Fellow subsidiaries
Diageo Scotland Limited 24 5 -
Diageo Great Britain Limited - 1 -
Diageo Vietnam Limited - 1 -
Total (Refer note 6) 104 9 -
Fellow subsidiaries
Guinness Nigeria Limited 7 - -
Diageo India Private Limited - - 88
Total (Refer note 11) 7 - 88
Allowance at the year-end for
Loans (Refer Note 5)
Associate
Wine Soc. of India Private Limited 314 276 -
Payable to related parties
Fellow subsidiaries
Diageo Brands BV 937 254 255
Diageo India Private Limited 5 43 -
Diageo Great Britain Limited 5 - -
Diageo Australia Limited 3 29 -
Diageo North America Inc. 20 18 -
Diageo Singapore Supply Pte Limited 15 17 -
Diageo Singapore Pte Limited - 4 -
Total trade payables to related parties (Refer Note 19) 985 365 255
(d) Key management personnel compensation

ended ended
March 31, 2017 March 31, 2016
Remuneration 123 146
Employee share-based payments 5 -
Rent - 1
Total compensation 128 147
Other payments:
Sitting fee 7 15
Commission 22 13
(e) General terms and conditions

Transaction with related parties are carried out in the normal course of business and are generally on normal commercial
terms.

38. Offsetting financial assets and financial liabilities
The following table presents the recognised financial instruments that are offset, as at March 31, 2017, March 31, 2016 and
April 1, 2015:

Gross amounts Set offs effected Net amounts
presented in the
balance sheet
Financial assets
Total 32,680 (1,314) 31,366
Trade payables 12,673 (426) 12,247
Total 23,136 (1,314) 21,822

amounts effected presented in the
balance sheet
Financial assets
Total 29,396 (2,387) 27,009
Trade payables 11,932 (1,743) 10,189
Total 20,803 (2,387) 18,416
April 1, 2015 Effect of offsetting on the balance
Gross Set offseffected Net amounts
amounts presented in the
balance sheet
Financial assets
Total 25,162 (1,953) 23,209
Trade payables 10,949 (1,518) 9,431
Total 16,132 (1,953) 14,179
Nature of offsetting arrangements

(a) The Group provides working capital support to certain tie-up manufacturers (TMUs), who are responsible for
manufacturing and distribution of certain brands on behalf of the Group. The aforesaid working capital is represented
by inventories, trade receivables, other financial assets and other financial liabilities. The Group has reported net working
capital excluding inventory as other financial assets /liability (net) in lieu of working capital exposure to TMUs, as these
amounts are expected to be settled on net basis.
(b) The Group gives volume based rebates to certain customers. As a practice amounts payable by Group are offset against
receivables from such customers and only the net amounts are settled. The relevant amounts have therefore been
presented net in the balance sheet.


39. (a) Defined contribution plans
The Group contributes to defined contribution plans for employee such as Provident Fund (PF), Employees’ Pension
Scheme (EPS), Superannuation Fund (SF), Death benefit plan and Employees’ State Insurance (ESI). PF and EPS cover
substantially all regular employees while the SF covers certain executives and ESI covers eligible employees. Contribution
to SF is made to United Spirits Superannuation Fund (‘USSF’). Other contributions are made to the Government funds
or insurance companies. While both the employees and the Group pay predetermined contributions into the Provident
Fund and the ESI Scheme, contributions into the pension fund, death relief fund and the superannuation fund are made
only by the Group. The contributions are normally based on a certain percentage of the employee’s salary. The Group also
makes contributions towards defined contribution plans in respect of its overseas subsidiaries, as applicable.
During the year, the Group has recognised the following amounts in the Statement of profit and loss, which are included
in contribution to provident and other funds in the employee benefits expense.

March 31, 2017 March 31, 2016
Provident fund and employee’s pension scheme* 113 130
Superannuation fund 77 107
Employees’ state insurance 6 7
Death benefit 11 10
National pension fund 10 4
Total (refer Note 25) 217 258
*Excluding contribution to PF made to trusts which are in the nature of defined benefit plans managed by the Group.
(b) Defined benefit plans

Gratuity:
The Group provides for gratuity, a defined benefit plan (the Gratuity Plan), to its employees. The Gratuity Plan provides
a lump sum payment to vested employees, at retirement or termination of employment, of an amount based on the
respective employee’s last drawn salary and years of employment with the Group. The Group has employees’ gratuity
fund managed by the Group as well as by Insurance Companies.
Pension:
The Group operates a defined benefit pension plan for certain executives and workers of the Group. This plan is final salary
pension plan, which provide benefits to members in the form of a guaranteed level of pension payable for life. The level
of benefits provided depends on their salary in the final year leading up to retirement.
Provident fund:
For certain executives and workers of the Group, contributions are made as per applicable Indian laws towards Provident
Fund to certain Trusts set up and managed by the Group, where the Group’s obligation is 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 if any, in the assured rate of interest notified by the Government,
which the Group is obliged to make good is determined actuarially.

39. (b) Defined contribution plans (continued) All amounts in INR Million
Funded Gratuity and Provident Fund
A. Reconciliation of opening and closing balances of the present value of the defined benefit obligation:
Description Funded plans Unfunded plans
As at March 31, 2017 As at March 31, 2016 As at March 31, 2017 As at March 31, 2016
Provident Provident Pension Pension
Gratuity Gratuity Gratuity Gratuity
fund fund fund fund
Obligation at the beginning of the year 2,202 2,455 2,149 2,291 6 18 4 19
Current service cost 168 161 151 171 2 - 2 -
Interest Cost 155 111 152 106 1 1 - 2
Benefit payments from plan assets (448) (545) (437) (449) - (4) - -
Benefit payments directly by employer (16) - (1) - (4) - 1 1
Participant contributions - 380 - 321 - - - -
Actuarial (Gain) / Loss – Financial (318) 132 - 15 - 3 - (4)
assumption changes
Actuarial (Gain) / Loss – Experience (260) - 188 - 3 - (1) -
Obligation at the end of the year 1,483 2,694 2,202 2,455 8 18 6 18
B. Reconciliation of opening and closing balances of the fair value of plan assets:
Description Funded plans
Plan Assets at the beginning of the year 1,824 2,415 1,551 2,194
Adjustment for opening fair value - - 6 13
Contribution by plan participants - 380 - 320
Contribution by the Group 356 161 553 171
Expected return on plan assets 142 112 151 102
Actuarial gains / (losses) 72 222 (42) 64
Benefits paid (448) (544) (395) (449)
Plan assets at the end of the year 1,946 2,746 1,824 2,415
C. Reconciliation of present value of defined benefit obligation and the fair value of plan assets to the assets and
liabilities recognised in the Balance sheet at the end of the year
Description Funded plans
Provident Provident Provident
fund fund fund
Present value of obligation 1,483 2,694 2,202 2,455 2,149 2,291
Fair value of plan assets 1,946 2,746 1,824 2,415 1,551 2,194
Asset ceiling - (52) - - - -
Liability / (net asset) recognised
(463)* - 378 40 598 97
in Balance sheet
* Comprises net Liability of INR 10 pertaining to a subsidiary and net asset of INR 473 pertaining to USL.
Description Unfunded plans

Pension Pension Pension
fund fund fund
Present value of obligation 8 18 6 18 4 19
Fair value of plan assets NA NA NA NA NA NA
Asset ceiling NA NA NA NA NA NA
Liability recognised in Balance sheet 8 18 6 18 4 19


Liability/ (net assets) disclosed in the financial statements is as follows:
Description Note As at March 31, 2017 As at March 31, 2016 As at April 01, 2015
Pension Prov- Pension Prov- Pension Prov-
Gratuity fund ident Gratuity fund ident Gratuity fund ident
fund fund fund
Non-current provision Note 18 12 16 - - 18 40 - 19 97
Current provision Note 18 2 2 - 381 - - 602 - -
Current assets Note 9 (473) - - - - - - - -
Liabilities directly associated with Note 49 4 - - 3 - - - - -
assets classified as held for sale
Liability / (net asset) (455) 18 - 384 18 40 602 19 97
recognised in Balance sheet
D. Expenses recognised in the Statement of profit and loss:
Description Funded Unfunded plans
For the year ended For the year ended For the year ended For the year ended
March 31, 2017 March 31, 2016 March 31, 2017 March 31, 2016
fund fund fund fund
Current service cost 168 161 151 171 2 - 2 -
a. Interest expense on DBO 155 111 152 106 1 1 - 2
b. Interest (income) on plan - -
(142) (112) (151) (102) - -
assets
Net interest cost 13 (1) 1 4 1 1 - 2
Defined benefit cost included in P&L 181 160 152 175 3 1 2 2
E. Re-measurement Effects Recognized in Other Comprehensive Income (OCI):
Description Funded Unfunded plans
For the year ended For the year ended For the year ended For the year ended
March 31, 2017 March 31, 2016 March 31, 2017 March 31, 2016
fund fund fund fund
a. Actuarial (Gain) / Loss due to (318) - - - - - - -
Financial Assumption changes in DBO
b. Actuarial (Gain) / Loss due to (260) 132 188 15 3 3 (1) (4)
Experience on DBO
c. Return on Plan Assets (Greater) / (72) (221) 42 (64) - - - -
Less than Discount rate
Total Actuarial (Gain)/Loss included (650) (89) 230 (49) 3 3 (1) (4)
in OCI
F. Investment details of plan assets:
Description For the year ended March 31, 2017 For the year ended March 31, 2016
Government securities - 17% - 17%
Securities guaranteed by government - 5% - 5%
Public sector / financial institutional bonds - 68% - 68%
Special deposit scheme - 5% - 5%
Fund balance with insurance companies 99% - 99% -
Others 1% 5% 1% 5%
Total 100% 100% 100% 100%

G. Assumptions:
Description As at March 31, 2017 As at March 31, 2016
Discount rate (per annum) 6.90% 7.10% 7.70% 7.80%
Expected rate of return on plan assets 9.25% 7.70% 9.25% 8.33%
Rate of increase in compensation levels 10.00% NA 15.00% NA
Attrition rate 13.20% 13.20% 13.20% 13.20%
Average past service of employees (years) 13 NA 13 NA
Mortality rates IALM(2006-08) IALM(2006-08) Standard Indian LIC (a) 1996-98
Ultimate table Ultimate table Assured Lives ultimate table,
(2006-08) ultimate standard India
table assured lives 2006-
08 ultimate table
39. (c) Sensitivity analysis:
The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:
Impact on defined benefit obligation
Changes in assumptions Increase in assumption Decrease in assumption
Decrease by Decrease by Increase by Increase by
Discount rate 1% 1%
6.30% 6.68% 3.69% 3.72%
Rate of increase in compen- Increase by Increase by Decrease by Decrease by
1% 1%
sation levels 3.32% 2.92% 6.12% 6.15%
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant.
In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the
defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been
applied as when calculating the defined benefit liability recognised in the balance sheet. The methods and types of
assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
39. (d) Risk exposure:

Through its defined benefit plans, Group is exposed to number of risks, the most significant of which are detailed below:
The plan liabilities are calculated using a discount rate set with reference to bond yields; if
plan assets underperform this yield, this will create a deficit. Most of the plan asset invest-
Asset volatility ments is in government securities and pre-defined insurance plans. These are subject to
interest rate risk and the fund manages interest rate risk through continuous monitoring
to minimise risk to an acceptable level.
A decrease in bond yields will increase plan liabilities, although this will be partially offset
Change in bond yields
by an increase in the value of the plans’ bond holdings.
The Group actively monitors how the duration and the expected yield of the investments are matching the expected
cash outflows arising from the employee benefit obligations. Investments are well diversified, such that the failure of any
single investment would not have a material impact on the overall level of assets. A large portion of assets in 2017 consists
of government and public sector bonds, although the Group also invests in private sector bonds, special deposit schemes
and bank balances. The plan asset mix is in compliance with the requirements of the respective local regulations.
39. (e) Effect of the defined benefit plan on the entity’s future cash flows
Funding levels are monitored on an annual basis and the current agreed contribution rate is 12% of the basic salaries
for PF and 4.7% for Gratuity. The Group considers that the contribution rates set at the last valuation date are sufficient
to eliminate the deficit over the agreed period and that regular contributions, which are based on service costs, will not
increase significantly.


39 (e) Effect of the defined benefit plan on the entity’s future cash flows (continued) All amounts in INR Million
Expected contributions to post-employment benefit plans for the year ending March 31, 2018 is INR 266. The weighted
average duration of the defined benefit obligation is 13 years (2016 – 13 years, 2015 – 13.1 years). The expected maturity
analysis of undiscounted pension, gratuity and other post-employment benefits is as follows:
Gratuity 244 204 549 606 1,603
Provident fund 522 378 976 1,144 3,020
Total 766 582 1,525 1,750 4,623
Gratuity 404 269 754 933 2,360
Provident fund 500 522 1,075 1,235 3,332
Total 904 791 1,829 2,168 5,692
April 1, 2015 Less than a year Between 1-2 years Between 2-5 years Over 5 years Total
Gratuity 388 259 724 896 2,267
Provident fund 384 500 1,261 1,355 3,500
Total 772 759 1,985 2,251 5,767
Note: 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.
39. (f) Compensated absences

ended ended
March 31, 2017 March 31, 2016
Expense/ (income) for the year recognised in the Employee benefits expense in
(151) 169
the Statement of Profit and Loss
Payments during the year (129) (100)
Obligation at the end of the year (Refer Note 18) 505 785
Current provision 108 160
Non-current provision 397 625

40. Leases All amounts in INR Million
(a) Finance lease:
The Company has acquired land, office equipment and vehicles on finance leases. The lease agreements for office
equipment and vehicles are generally a primary period of 36 to 60 months. The Company has an option to renew these
leases for a secondary period. Lease arrangements for land is generally for a period of 95-99 years.
The minimum lease payments and their present value for the finance leases, are as follows:
Particulars Present Minimum Present Minimum Present Minimum
value of lease value of lease value of lease
payments payments payments payments payments payments
Not later than one year 67 73 43 48 34 41
Later than one year and
68 74 57 61 75 83
not later than five years
Later than five years - - - - - -
135 147 100 109 109 124
Less: Finance charges - 12 - 9 - 15
Total (Refer Note 16) - 135 - 100 - 109
(b) Operating lease:

The Group’s significant operating leasing arrangements are in respect of premises (residential, office, manufacturing
facilities, etc.) and plant and machineries, which are for a period ranging between 11 months and 3 years and are
cancellable. These arrangements are usually renewable by mutual consent on mutually agreeable terms.
Rental expense relating to operating lease:
ended ended
March 31, 2017 March 31, 2016
Minimum lease payments 1,177 619
Contingent rent 929 891
Total rental expense relating to operating lease (Refer note 27) 2,106 1,510
Contingent rent represents bottling fees paid to tie-up manufacturers under an arrangement which are in nature of
operating lease, where rent is determined based on the output/ volume.
There are no commitments for non-cancellable operating leases during the current and comparable reporting years.
41. As disclosed in the financial statements for the years ended March 31, 2015 and March 31, 2016, the Board of the Company
(the “Board”) initiated an inquiry (“Initial Inquiry”), which was completed in April 2015. The Initial Inquiry revealed (amongst
other things), past instances of improper transactions concerning USL and its subsidiaries in India, including what appeared,
prima facie, to be diversions of funds from USL and its subsidiaries to various UB Group companies including Kingfisher
Airlines Limited (“KFA”). All such diverted amounts were provided for by the Company in the financial statements for the year
ended March 31, 2015. In connection with the funds that were identified by the Initial Inquiry to have been diverted from
the Company and/or its subsidiaries, the Company executed settlement agreements with ten parties as of March 31, 2017.
These settlements resulted in write-off of receivables balance of INR 358 (2016: INR 5,666) outstanding from such parties,
corresponding write back of provisions against such receivables amounting to INR 370 (2016: INR 6,209) and interest claims
from such parties amounting to INR 28 (2016: Nil) all of which have been treated as exceptional items during the year (refer
Note 28). Settlements with four parties have not been reached as yet. Discussions with two of these parties are continuing
and the Company is hopeful of reaching settlements with them. Discussions with the third party have turned adverse and
the matter appears likely to manifest itself into a dispute with claims and counter-claims by both parties. The last remaining
party identified in the Initial Inquiry has ceased to be in business and therefore it is not possible to reach any settlement with
this party. As all the amounts including the likely exposure of counter-claims have been fully provided for, there is no further
material exposure to the Company.


The documents reviewed during the Initial Inquiry contained references to certain additional parties (“Additional Parties”)
and matters (“Additional Matters”) indicating possible existence of other improper transactions. While such references could
not be fully analysed during the Initial Inquiry, the nature of these references raised concerns regarding the propriety of the
underlying transactions. Therefore, after the Initial Inquiry was concluded, and as disclosed in the Company’s financial results
and financial statements from time to time, the Board mandated that USL’s managing director and chief executive officer
(“MD & CEO”) conduct a further inquiry (“Additional Inquiry”) into historical transactions involving the Additional Parties
and Additional Matters, to determine whether transactions with these Additional Parties and/or involving these Additional
Matters also suffered from improprieties. Pending the Additional Inquiry, and as disclosed in the audited financial statements
for the years ended March 31, 2015 and March 31, 2016, certain audit qualifications were made in respect of USL’s financial
statements for those financial years, as the statutory auditors were unable to comment on the nature of those matters,
the provisions established therefore, or any further potential impact on the financial statements. Pursuant to the Board’s
directions, the MD & CEO engaged independent experts with specialised forensic skills to assist with this Additional Inquiry
and provide inputs and expert advice in connection therewith. Notwithstanding the limitations posed by lack of access to
complete documentation despite best efforts, in July 2016 the MD & CEO submitted his report, taking into account the inputs
and expert advice of the independent experts, to the Board. The Board, at its meeting held on July 9, 2016, discussed and
considered in detail the report submitted by the MD & CEO in relation to the Additional Inquiry.
a) The Board noted that while only a court or concerned regulatory authority would be in a position to make final
determinations as to fault or culpability, the Additional Inquiry, prima facie, revealed further instances of actual or
potential fund diversions arising from improper transactions amounting to approximately INR 9,135 using March 31,
2015 exchange rates (approximately INR 9,504 using March 31, 2016 exchange rates) as well as other potentially improper
transactions involving USL and its Indian and overseas subsidiaries amounting to approximately INR 3,118 using March
31, 2015 exchange rates (approximately INR 3,260 using March 31, 2016 exchange rates). These transactions occurred
during the review period covered by the Additional Inquiry, i.e., from October 2010 to July 2014 (“Review Period”, which
was substantially the same as the period covered by the Initial Inquiry), although certain transactions appear to have
been initiated in years prior to the Review Period.
b) The improper transactions identified in the Additional Inquiry involved, in most cases, diversion of funds to overseas
and Indian entities that appear to be affiliated or associated with USL’s former non-executive chairman, Dr. Vijay Mallya.
The overseas beneficiaries or recipients of these funds include entities such as Force India Formula One, Watson Ltd,
Continental Administrative Services, Modall Securities Limited, Ultra Dynamix Limited and Lombard Wall Corporate
Services Inc., in each of which Dr. Mallya appears to have a material, direct or indirect, interest. The Indian beneficiaries
or recipients of the funds identified by the Additional Inquiry included, in most cases, KFA.
c) Most of the amounts identified in the Additional Inquiry have been previously provided for or expensed in the financial
statements of USL or its subsidiaries for prior periods (including by way of provision made in relation to impairment
in the value of or loss on sale of USL’s overseas subsidiaries). With an additional charge of INR 217 in respect of a write
down in the value of certain items of plant and equipment made in the current reporting period and disclosed under
exceptional items (Refer Note 28), there are no other improper transactions identified by the Additional Inquiry, which
have not been expensed or provided. At this stage, it is not possible for the management to estimate the financial
implications, if any, arising out of potential non-compliance with applicable laws on the Company.
d) In connection with the recovery of funds that are prima facie identified by the Additional Inquiry to have been diverted
from the Company and its subsidiaries, pursuant to a detailed review of each case of the fund diversion to assess
the Company’s legal position, the Company has filed some civil suits before the appropriate jurisdictional courts for
recoveries and is in the process of finalising certain others. The Company has taken appropriate action in relation to
employees named in the Additional Inquiry. In respect of on-going relationships with counter-parties involved in the
improper transactions identified by the Additional Inquiry, the Company has undertaken a detailed review of such
relationships and ascertained whether they were entered into on an arms-length basis and with appropriate controls
and has taken appropriate action on the basis of these findings.
e) During the course of the Additional Inquiry, certain other matters pertaining to historical transactions (carried out
during the Review Period of October 2010 to July 2014) were identified, which raised concerns in relation to internal
controls regarding vendor invoices with certain vendors and in relation to certain historical sales promotion schemes.
The amounts involved were charged off in the relevant prior financial years. Management has carried out a further
review which indicates that the said matters did not continue post the Review Period.

42. As disclosed in the financial statements for the years ended March 31, 2015 and March 31, 2016, the Company had pre-
existing loans/ deposits/ advances/accrued interest that were due to the Company and its wholly-owned subsidiaries from
United Breweries (Holdings) Limited (“UBHL”) and its subsidiaries aggregating INR 13,374 and that were consolidated into,
and recorded as, an unsecured loan by way of an agreement entered into between the Company and UBHL on July 3, 2013
(“Loan Agreement”). The Company has already made provision in prior financial years for the entire principal amount due,
of INR 13,374, and for the accrued interest of INR 846 up to March 31, 2014. The Company has also not recognised interest
income on said loan aggregating to INR 3,748 for the period from April 1, 2014 to March 31, 2017. During the year Company
has set-off payable to UBHL under the trademark agreement amounting to INR 291 (2016: INR 248) (cumulatively INR 539)
against the interest receivable from UBHL and consequently corresponding allowance for interest receivable has been
reversed to “Other Income” in the related periods.
The Company is seeking redressal of these disputes and claims through arbitration under the terms of the Loan Agreement
and the arbitration proceedings have commenced. On February 7, 2017, the High Court of Karnataka ordered, inter alia, that
UBHL be wound up, and that the Official Liquidator be appointed as the liquidator of UBHL. The Company has subsequently
secured leave from the Hon’ble High Court of Karnataka to continue the arbitration proceedings.
43. As disclosed in the financial statements for the year ended March 31, 2016 the Company entered into a settlement agreement
with its former non-executive chairman, Dr. Mallya (“Agreement”), pursuant to which he resigned from his positions as a director
and chairman of the Company and its subsidiaries. In connection with the settlement, Dr. Mallya procured or undertook to
procure the termination by the relevant counterparties of certain historical agreements to which the Company was party
and which were not approved by the shareholders of the Company at the extraordinary general meeting (“EGM”) held on
November 28, 2014. Pursuant to the Agreement, the Company entered into mutual release and termination agreements with
all the respective counterparties of these historical agreements, save one. The Company has executed an Agreement with
the said remaining party by paying a sum of INR 75 (“Amount”) during the quarter ended September 30, 2016. The Company
made a claim against Dr. Mallya seeking refund of the Amount in terms of the Agreement. Since the refund of the Amount
was not forthcoming from Dr. Mallya, the Company has sought indemnification and made a claim against Diageo Plc., for the
refund amount which has been recorded as ‘Receivable from related parties’ under Other current financial assets as at March
31, 2017 and has been realized post the balance sheet date. There is therefore no financial impact on the Statement of profit
and loss of the Company. As previously disclosed by the Company, the Company and Dr. Mallya agreed a mutual release in
relation to civil claims arising out of the Initial Inquiry. The Agreement does not extend to matters covered by the Additional
Inquiry, any claims connected with the UBHL loan, or any recovery proceedings by USL connected with the Additional Inquiry.
As part of the Agreement with Dr Mallya, the Company, inter alia, also entered into certain principles, pursuant to which Dr
Mallya or a party nominated by him would have a limited period option to purchase up to thirteen non-core properties from
the Company. The Company secured independent valuation for these properties and had shared the same with Dr. Mallya.
Though the Company received call notices from a party nominated by Dr. Mallya indicating its intention to purchase four
non-core properties from the Company, the said call notices have since expired due to inaction by the party nominated by
Dr.Mallya. As a result, the period of this option has now expired with Dr Mallya (or his nominee) not purchasing any of the
non-core properties. The Company now intends to dispose off these non-core assets at market value through a transparent
process, under the overall supervision and direction of the concerned Board committee.
The Company had received certain undertakings from Dr. Mallya in relation to termination of the Shreholders’ Agreement.
During the quarter ended September 30, 2016, on seeking a further update on the status of the termination of the
Shareholders’ Agreement by UBHL, the Company was informed by Dr. Mallya that UBHL would not be seeking leave of court
to terminate the Shareholders’ Agreement.
44. The managerial remuneration for the financial year ended March 31, 2015 aggregating INR 63 and INR 153 to the Managing
Director & Chief Executive Officer (“MD & CEO”) and the former Executive Director and Chief Financial Officer (“ED & CFO”),
respectively, was approved by the shareholders at the annual general meeting of the Company held on September 30, 2014.
The aforesaid remuneration includes amounts paid in excess of the limits prescribed under the provisions of Schedule V to
the Companies Act, 2013 (“Act”) by INR 51 to the MD & CEO and INR 134 to the former ED & CFO. Accordingly, the Company
applied for the requisite approval from the Central Government for such excess remuneration. The Central Government, vide
letters dated April 28, 2016 did not approve the Company’s application for the waiver of the excess remuneration. On May 24,
2016 the Company resubmitted the applications, along with detailed explanations, to the Central Government to reconsider


44. (continued)
approving the waiver of the excess remuneration paid. In light of the findings from the Additional Inquiry as set out in Note
41 above, the Company has withdrawn its application for approval of excess remuneration paid to the former ED & CFO of
the Company through a letter dated July 12, 2016. The Company is awaiting response from the Central Government to its
resubmitted application in respect of the MD & CEO. As notified to the Central Government, the Company initiated steps
seeking refund of excess remuneration paid to the former ED & CFO. Since the refund was not forthcoming, the Company has,
on January 5, 2017, filed a suit before the jurisdictional court to recover the excess remuneration paid by the Company to the
former ED & CFO.
45. The Company has received and continues to receive letters and notices from various regulatory authorities and other
government authorities. The Company has responded to the respective letters and notices and is cooperating with the
regulatory authorities. Amongst others, the following letters and notices have been received and/ or responded to by the
Company:
a. From the Securities Exchange Board of India (“SEBI”), in relation to the Initial Inquiry, Additional Inquiry, and matters
arising out of the Agreement entered into by the Company with Dr. Mallya;
b. From the Ministry of Corporate Affairs (“MCA”) in relation to its inspection conducted under section 206(5) of the
Companies Act, 2013 during the year ended March 31, 2016 and subsequent show cause notices alleging violation of
certain provisions of the Companies Act, 1956 and Companies Act, 2013;
c. From the Enforcement Directorate (“ED”) in connection with agreements entered into with Dr. Mallya and investigations
under the Foreign Exchange Management Act, 1999 and Prevention of Money Laundering Act, 2002;
d. From the Company’s authorised dealers in relation to certain queries from Reserve Bank of India (“RBI”) with regard to
remittances made in prior years to subsidiaries of the Company and branch in the United Kingdom and past acquisition
of the Whyte and Mackay group; and
e. From the Central Bureau of Investigation (CBI) relating to the Initial Inquiry and Additional Inquiry.
46. As disclosed in the financial statements for the years ended March 31, 2015 and March 31, 2016, during the year ended
March 31, 2014, the Company decided to prepay a term loan taken in earlier years under a consortium from bank, secured
by assets of the Company and pledge of shares of the Company held by the USL Benefit Trust (of which the Company is the
sole beneficiary) with the security trustee. The Company deposited a sum of INR 6,280, including prepayment penalty of INR
40, with the bank and instructed the bank to debit the amount from its cash credit account towards settlement of the loan
and release the assets and shares pledged by the Company. The bank, however, disputed the prepayment. The Company
has disputed the stand taken by the bank and its writ petition is pending before the Hon’ble High Court of Karnataka. On
completion of the loan tenure on March 31, 2015, the bank demanded an amount of INR 474 towards principal and interest
on the said loan, which the Company contested in the Hon’ble High Court of Karnataka. As per the order of the Hon’ble
High Court of Karnataka directing the parties to consider a negotiated settlement, the Company engaged with the bank
to commence discussions towards settlement. In August 2015, the bank obtained an ex parte injunction in proceedings
between the bank and KFA, before the Debt Recovery Tribunal, Bangalore (“DRT”), restraining the USL Benefit Trust from
disposing of the pledged shares until further orders. The Company and USL Benefit Trust, upon receiving notice of the said
order, filed their objections against such ex parte order passed in proceedings in which neither the Company nor the USL
Benefit Trust are or have been enjoined as parties. In December 2015, the Hon’ble High Court of Karnataka issued a stay order
restraining the bank from dealing with the above mentioned pledged shares until further orders. Thereafter in February 2016,
the Company received a notice from the bank seeking to recall the loan and demanding a sum of INR 459, and the Company
also received a subsequent notice in March 2016 issued under section 13(2) of SARFAESI Act in relation to the same loan.
Pursuant to an application filed by the Company before the Hon’ble High Court of Karnataka, in the writ proceedings, the
Hon’ble High Court directed that if the Company deposited the sum of INR 459 with the bank, the bank should hold the same
in a suspense account and should not deal with any of the secured assets including shares pledged with the Bank till disposal
of the original writ petition filed by the Company before the Hon’ble High Court of Karnataka. During the quarter ended June
30, 2016, the Company accordingly deposited the said sum and replied to the bank’s various notices in light of the above.
The aforesaid amount has been accounted as other non-current financial assets. On January 19, 2017, the DRT dismissed the
application filed by the bank seeking the attachment of USL Benefit Trust shares. The Company on March 13, 2017 issued
a legal notice to the bank asking them to provide the ‘no-objection’ for the release of the pledged shares, withdrawing the
notices under SARFESI and also to pay compensation on account of loss of interest, value of differential share price, loss of
reinvestment opportunity, reputational damage etc to which the bank has responded denying the claim. The Company is in
the process of sending an appropriate rejoinder and is also making efforts to expedite the hearing of its Writ Petition before
the Karnataka High Court.

47. Consequent to a voluntary disclosure made by the Company to a customer regarding prices historically charged by the
Company to said customer being inconsistent with trading terms that apply between the Company and the said customer,
the Company received a claim during the quarter ended September 30, 2016 and thereafter a debit note for the period up
to December 31, 2016, in the quarter ended March 31, 2017. After considering an accrual of INR 250 which was made on
this account in the financial year ended March 31, 2016, an additional liability has been recorded for the balance amount
of INR 3,030 (including potential liability of INR 130 for the period January to March 2017) during the current year of which
INR 460 relate to claims for current year sales which has been recorded as reduction from Revenue from Operations and INR
2,570 pertaining to earlier years which has been disclosed as exceptional item in the Statement of profit and loss. In respect
of some of the specific products the prices demanded by the Customer result in the Company incurring a foreseeable loss
and accordingly a provision for the onerous element in such contracts amounting to INR 75 has been made and included in
exceptional item for the year. The aggregate amount included in exceptional items is therefore INR 2,645 (Refer Note 28).
48. The Bihar State Government by its notification dated April 5, 2016 imposed a ban on trade and consumption of Indian Made
Foreign Liquor and foreign liquor in the state of Bihar with immediate effect. Writ petitions were filed with the Hon’ble High
Court of Patna challenging the said notification and seeking payment for supplies made by the Company and its tie-up
manufacturing units to Bihar State Beverages Corporation Limited (“BSBCL”). By an order dated September 30, 2016, the
Hon’ble High Court of Patna set aside the notification dated April 5, 2016 and Section 19(4) of the Bihar Excise Act, 1915,
as ultra vires the Constitution of India. Subsequently, the Bihar Government re-imposed prohibition by notifying a new
legislation i.e. The Bihar Prohibition and Excise Act, 2016, on October 02, 2016. The Bihar Government also preferred a special
leave petition (“SLP”) before the Hon’ble Supreme Court against the judgment of the Hon’ble High Court of Patna pursuant
to which the Hon’ble Supreme Court has stayed the order of the Hon’ble High Court of Patna. During the quarter ended
December 31, 2016, the Company filed an application seeking compensation from the Government of Bihar towards losses
suffered as a result of arbitrary imposition of prohibition.
On January 24, 2017, the Government of Bihar issued a Notification prohibiting the manufacture of alcoholic beverages in
the State (w.e.f. April 1, 2017) the consequences of which criminalises the continued storage of all stock of raw material and
finished goods in the State of Bihar (including the stock lying at BSBCL). Pursuant to an application by Confederation of Indian
Alcoholic Beverage Companies (CIABC) in the Supreme Court, the Bihar Government extended this timeline to April 30, 2017
and the Hon’ble Supreme Court thereafter extended this to July 31, 2017 to allow additional time for companies to transfer
said materials out of the state of Bihar. In light of the challenges in carrying out this unique and one time exercise, CIABC has
sought an extension of the deadline from the Supreme Court.
The Company has initiated the process of transferring such stocks of raw materials and finished goods outside the state of
Bihar. The ‘billed stocks’ supplied by the Company pursuant to valid orders for sales which are currently in the possession of
BSBCL, are also in the process of being transferred out of the state of Bihar. The Company will take appropriate steps in due
course to persuade the Bihar Government to refund the statutory duties i.e. VAT and Excise duty paid in respect of the said
stocks aggregating to INR 553 which is considered good and receivable and disclosed as other non- current financial assets.
The Company has made a provision of INR 267 (2016: Nil) towards inventory reprocessing charges for the year ended March
31, 2017. Further, a provision of INR 110 (2016: Nil) towards employee retrenchment during the year ended March 31, 2017.
Total amounts of INR 377 (2016: Nil) for the year ended March 31, 2017 has been disclosed as exceptional item under Note 28.
49. Assets held for sale - Disposal group - United Spirits Nepal Private Limited
On January 15, 2016, the Company entered into an agreement for the sale of its entire holding in United Spirits Nepal Private
Limited of 67,716 equity shares (constituting 82.46% of the paid up equity share capital of United Spirits Nepal Private
Limited). The sale is subject to various regulatory approvals (both in India and Nepal) and other conditions precedent which
are normal for such transactions, and which the Company is in the process of seeking. Pending such approvals, no effect has
been given in respect of this transaction in the consolidated financial statements for the year ended March 31, 2017. Pursuant
to this, the associated assets and liabilities were consequently presented as held for sale.


49. Assets held for sale - Disposal group - United Spirits Nepal Private Limited (continued) All amounts in INR Million
The following assets and liabilities were reclassified as held for sale in relation to the disposal group [Refer Note 13]:
Assets held for sale As at March 31, 2017 As at March 31, 2016
Property, plant and equipment 28 28
Inventories – Raw materials, packing materials and stores and
154 53
spares
Inventories – Work in progress 22 20
Inventories – Finished goods 49 21
Trade receivables 28 45
Cash and cash equivalents 1 0
Bank balances other than cash and cash equivalents - 53
Other financial assets 13 -
Other current assets 38 82
333 302
Liabilities held for sale As at March 31, 2017 As at March 31, 2016
Long term provisions 2 -
Short term provisions 18 8
Trade payables 84 83
Other current liabilities 54 35
Other financial liabilities 7 2
165 128
50(a) Definition of the Group
United Spirits Limited (“USL or the Company”) which is headquartered in Bengaluru, Karnataka, India, together with its
subsidiaries, its controlled trust and associate company (collectively “the Group”) is engaged in the business of manufacture,
purchase and sale of beverage alcohol (spirits and wines). In addition, the Group holds the perpetual right to the Bangalore
Franchise of Board of Control for Cricket in India – Indian Premier League (BCCI-IPL).
Subsidiaries
The subsidiaries consolidated in these financial statements are set out below. Unless otherwise stated, they have share
capital consisting solely of equity shares that are held by the Company, and the proportion of ownership interests held
equals the voting rights held by the Company.
Name of the Subsidiary/ Controlled Trust % of ownership interest Country of Place of Principal business
2017 2016 2015 Incorporation business activity
Pioneer Distilleries Limited 75 75 75 India India Manufacture of Spirits
Royal Challengers Sports Private Limited 100 100 100 India India BCCI - IPL franchise
Four Seasons Wines Limited (FSWL) 100 100 100 India India Manufacture of Wines
Tern Distilleries Private Limited (Tern) 100 100 100 India India Manufacture of ENA
Sovereign Distilleries Limited 100 100 100 India India Manufacture of ENA
USL Benefit Trust 100 100 100 India India Investment
United Spirits Nepal Private Limited (USL Nepal) 82.47 82.47 82.47 Nepal Nepal Manufacture and trading of IMFL
United Spirits Singapore Trading Pte Ltd 100 100 100 Singapore Singapore Trading of IMFL
McDowell & Co. (Scotland) Limited (MSL) 100 100 100 Scotland Scotland Dormant
Asian Opportunities and Investments Limited (AOIL) 100 100 100 Mauritius Mauritius Dormant
Palmer Investment Group Limited (PIG) 100 100 100 British Virgin Islands British Virgin Islands Dormant
Shaw Wallace Overseas Limited (SWOL) 100 100 100 U.K. U.K. Dormant

50. (a) Definition of the Group (continued) All amounts in INR Million
Name of the Subsidiary/ Controlled Trust % of ownership interest Country of Place of Principal business
2017 2016 2015 Incorporation business activity
UB Sports Management Overseas Limited 100 100 100 Jersey Islands Jersey Islands Dormant
Montrose International S.A (MI) 100 100 100 Panama Panama Dormant
USL Holdings Limited (UHL) 100 100 100 British Virgin Islands British Virgin Islands Dormant
USL Holdings (UK) Limited (UHUKL) 100 100 100 U.K. U.K. Dormant
United Spirits (Shanghai) Trading Company Limited 100 100 100 China China Dormant
United Spirits (UK) Limited (USUKL) 100 100 100 U.K. U.K. Dormant
United Spirits (Great Britain) Limited (USGBL) 100 100 100 U.K. U.K. Dormant
Liquidity Inc. 51 51 51 USA USA Dormant
Bouvet Ladubay S.A.S. [Refer note 51(b)] - - 100 France France Manufacture and trading of IMFL
Chapin Landias S.A.S. [Refer note 51(b)] - - 100 France France Manufacture and trading of IMFL
Associates
Set out below is the associate of the Company as at March 31, 2017.
% of ownership % of ownership % of ownership Country of Place of
Name of entity
interest 2017 interest 2016 interest 2015 incorporation business
Wine Society of India Private Limited 33% 33% 33% India India
50. (b) Goodwill

The Group tests whether goodwill has suffered any impairment on an annual basis. The Group has performed an assessment
for impairment of goodwill on acquisition of subsidiaries owing to continuing losses incurred by certain subsidiaries and
decline in the value of underlying net assets held by certain subsidiaries, based on which Group has recognised impairment
charge on goodwill on acquisition pertaining to the relevant subsidiaries mentioned in the below table during the year
ended March 31, 2017 and March 31, 2016.
The Group’s cash-generating units (CGU) have been determined as individual subsidiaries. The Group has determined
recoverable values of the CGU, as fair value, less cost of disposal. The Company has used the ‘cost approach’ valuation
technique for determining fair value of its investment in subsidiaries using Level 3 inputs.
The entity wise detail of impairment charge recognised is set out below:
United
McDowell Tern Bouvet Pioneer Sovereign Four Seasons
Spirits Nepal Chapin
Description (Scotland) Distilleries Ladubay Distilleries Distilleries Wines Total
Private Landais
Limited Limited S.A.S. Limited Limited Limited
Limited
Carrying amount as at April 1, 2015 62 13 163 350 284 (9) 867 (136) 1,594
Disposed during the year - - - (350) - 9 - - (341)
Net assets of the subsidiary 175 772 366 - 2,704 - 578 521 5,116
Total 237 785 529 - 2,988 - 1,445 385 6,369
Recoverable amount 179 1,244 459 - 3,342 - 1,592 573 7,389
(Shortfall)/Surplus in recoverable amount
(58) 459 (70) - 354 - 147 188
over carrying value
Impairment allowance for the year
58 - 70 - - - - - 128
ended March 31, 2016 (Refer Note 28)
Carrying amount of goodwill as at
4 13 93 - 284 - 867 (136) 1,125
March 31, 2016


50. (b) Goodwill (continued) All amounts in INR Million
Description United Spirits McDowell Tern Pioneer Sovereign Four Seasons Total
Nepal Private (Scotland) Distilleries Distilleries Distilleries Wines
Limited Limited Limited Limited Limited Limited
Carrying amount of goodwill as at April 1, 2016 4 13 93 284 867 (136) 1,125
Net assets of the subsidiary 169 614 318 2,874 388 477 4,840
Total 173 627 411 3,158 1,255 341 5,965
Recoverable amount 179 1,043 391 2,874 1,114 508 6,109
(Shortfall)/Surplus in recoverable amount over carrying value 6 416 (20) (284) (141) 167
Impairment allowance for the year ended - - (20) (284) (141) - (445)
March 31, 2017 (Refer Note 28)
Carrying amount of goodwill as at March 31, 2017 4 13 73 - 726 (136) 680
Sensitivity analysis
The below table summarises the impact of increases/ decreases in fair values of property, plant and equipment included in
determining the recoverable amounts above:
Impact on impairment decrease / (increase)
Key underlying values
Change in fair value by:
+ 5% 54 61
- 5% (54) (61)
50. (c) Details on Non-controlling Interest (NCI)
Set out below is summarised financial information for all the subsidiaries in which there is a non-controlling interest. The
amounts disclosed for each subsidiary are before inter-company eliminations.
Summarised balance USL Nepal Liquidity Inc. Pioneer Distilleries Limited
sheet line items As of March As of March As of April As of March As of March As of April As of March As of March As of April
31, 2017 31, 2016 1, 2015 31, 2017 31, 2016 1, 2015 31, 2017 31, 2016 1, 2015
Current assets 311 286 243 1 - 3 923 984 821
Current liabilities (253) (213) (223) (121) (131) (84) (2,938) (1,796) (2,173)
Net current assets 58 73 20 (120) (131) (81) (2,015) (812) (1,352)
Non-current assets 29 28 31 - - 15 3,710 2,721 2,977
Non-current liabilities (3) (3) (3) (162) 150 (144) (2,143) (2,056) (1,997)
Net non-current assets 26 25 28 (162) 150 (129) 1,567 665 980
Net assets 84 98 48 (282) 19 (210) (448) (147) (372)
Accumulated NCI 14 17 8 (20) (17) - (19) 56 -
Summarised profit and loss line items USL Nepal Liquidity Inc. Pioneer Distilleries Limited
As of As of As of As of As of As of
Revenue 1,635 1,232 - - 1,131 1,902
Profit for the year 49 72 (7) (34) (303) 224
Other comprehensive income - - - - 1 0
Total comprehensive income 49 72 (7) (34) (302) 224
Dividends paid to NCI 11 4 - - - -
Total Comprehensive income allocated to NCI 9 13 (4) (17) (76) 56
Summarised cash flows USL Nepal Liquidity Inc. Pioneer Distilleries Limited
As of As of As of As of As of As of
Cash flow from operating activities (0) 73 (0) (0) 424 506
Cash flow from investing activities (3) (0) (0) (0) (928) (60)
Cash flow from financing activities (49) (23) (0) (0) 501 (459)
Net increase/ (decrease) in cash and cash equivalents (52) 50 (0) (0) (3) (13)
There were no transactions with non-controlling interests in the year ended March 31, 2016 and March 31, 2017.
50.(d) Interest in associate
March 31, 2017 March 31, 2016
Share of loss from associate - -

254
50.(e) Share of profit and assets of subsidiaries
Net assets, i.e., Total assets minus Share in other comprehensive Share in total comprehensive
Share in profit/(loss)
Total liabilities income income
% of % as of % of % of
Name of the entity consolidated Amount consolidated Amount consolidated Amount consolidated Amount
net assets profit/(loss) profit/(loss) profit/(loss)
Parent Company

United Spirits limited 46.53% 8,297 195.06% 1,814 100.25% 469 163.31% 2,283
Foreign Subsidiaries
Asian Opportunities and Investments Limited (AOIL) 0.16% 29 (3.42)% (32) 0.00% 0 (2.27)% (32)
Liquidity Inc. (1.11)% (198) (0.86)% (7) 0.00% 0 (0.57)% (7)
McDowell & Co. (Scotland) Limited (MSL) 3.44% 613 (8.82)% (83) 0.00% 0 (5.87)% (83)
Montrose International S.A (MI) 0.00% (1) (0.26)% (2) 0.00% 0 (0.18)% (2)
United Spirits Nepal Private Limited 0.95% 169 5.27% 49 0.00% 0 3.51% 49
Palmer Investment Group Limited (PIG) 0.00% (0) (0.22)% (2) 0.00% 0 (0.15)% (2)
UB Sports Management Overseas Limited (Formerly known as 0.01% 1 (0.30)% (3) 0.00% 0 (0.20)% (3)
JIHL Nominees Limited(JIHL)
United Spirits Singapore Trading Pte Ltd 0.23% 41 1.68% 16 0.00% 0 1.11% 16
United Spirits (UK) Limited (USUKL) 0.02% 4 (0.06)% (1) 0.00% 0 (0.04)% (1)
USL Holdings Limited (UHL) 0.02% 3 (0.03)% (0) 0.00% 0 (0.02)% (0)
USL Holdings (UK) Limited (UHUKL) 0.02% 3 (0.08)% (1) 0.00% 0 (0.05)% (1)
United Spirits (Shanghai) Trading Company Limited (USLS) 0.01% 2 (0.13)% (1) 0.00% 0 (0.08)% (1)
United Spirits (Great Britain) Limited (USGBL) 0.91% 163 (4.71)% (44) 0.00% 0 (3.13)% (44)
Shaw Wallace Overseas Limited (SWOL) 0.04% 7 0.10% 1 0.00% 0 0.07% 1
Sub-total 836 (110) 0 (110)
Indian Subsidiaries
Four Seasons Wines Limited (FSWL) 2.68% 477 (19.78)% (184) 0.00% 0 (13.15)% (184)
Pioneer Distilleries Limited 16.12% 2,874 (32.37)% (301) (0.25)% (1) (21.61)% (302)
Royal Challengers Sports Private Limited 25.92% 4,623 3.39% 31 0.00% 0 2.25% 31
Sovereign Distilleries Limited 2.18% 388 (20.75)% (192) 0.00% 0 (13.80)% (192)
Tern Distilleries Private Limited (Tern) 1.79% 318 (6.10)% (57) 0.00% 0 (4.06)% (57)
USL Benefit Trust 0.24% 43
Sub-total 8,723 (703) (1) (704)
Minority interest in subsidiaries
United Spirits Nepal Private Limited 0.08% 14 0.93% 9 0.00% 0 0.62% 9
Liquidity Inc. (0.11)% (20) (0.42)% (4) 0.00% 0 (0.28)% (4)
Pioneer Distilleries Limited (0.11)% (19) (8.12)% (76) 0.00% 0 (5.40)% (76)
Sub-total (25) (71) 0 (71)
Associates
Wine Soc. of India Private Limited 0.00% - 0.00% - 0.00% 0 0.00% -
Total 100% 17,831 100% 930 100% 468 100% 1,398
Note: Net assets given above exclude inter-company balances. Share in profit or loss and total comprehensive income above exclude exchange gain/(loss)
on restatement of inter-company loans.


51.(a) Scheme of Amalgamation of SW Finance Co. Limited with the Company
The Scheme of Amalgamation between the Company and SW Finance Co. Limited, a wholly owned subsidiary of the
Company (“SWFCL”), under Section 391 and 394 read with Sections 100 to 103 of the Companies Act, 1956 (the “Scheme”)
with the appointed date of January 1, 2014 has been sanctioned by the Hon’ble High Court of Karnataka and Hon’ble High
Court of Judicature at Bombay under the orders dated June 12, 2015 and August 28, 2015, respectively. Upon necessary
filings with the respective Registrars of Companies, the Scheme has become effective from September 28, 2015 (the
‘Effective Date’) and effect thereof have been given in these financial statements. Consequently:
(i) the Share capital of SWFCL to the extent held by SWFSL Trust stood cancelled;
(ii) the entire business and undertakings of SWFCL including all assets and liabilities, as a going concern transferred to and
vested in the Company in accordance with the provisions of the Scheme with effect from the appointed date;
(iii) the Authorised capital of the Company increased to INR 7,192 divided into 548,000,000 equity shares of INR 10/- each,
159,200,000 preference shares of INR 10/- each and 1,200,000 preference shares of INR 100/- each; and
(iv) SWFCL ceased to be subsidiary of the Company, and as SWFCL was a wholly owned subsidiary (WOS) of the Company,
no consideration was payable pursuant to amalgamation of SWFCL with the Company. Shaw Wallace Overseas Limited,
a WOS of SWFCL has become a direct subsidiary of the Company.
The Group has given effect to the Scheme in the accounts with effect from April 1, 2015 being the date of transition in
accordance with Ind AS 101 as this is a common control transaction under Ind AS 103 by way of:
(i) Credit to “Capital Reserve” of INR 974 million with a corresponding increase in Goodwill.
(ii) Elimination of investment in SWFCL Benefit Trust of INR 41 million with a corresponding debit to “Capital Reserve”.
51.(b) Sale of subsidiaries
During the year ended March 31, 2016 USL’s wholly owned subsidiary Asian Opportunities & Investments Limited (AOIL),
has sold its entire interest in Bouvet Ladubay S.A. (and its wholly owned subsidiary Chapin Landais S.A.S). Consequent to
the above sale, Bouvet Ladubay S.A. (and its wholly owned subsidiary Chapin Landais S.A.S) ceased to be subsidiaries of the
company with effect from November 18, 2015.
52. Effective December 1, 2016, the provisions of Sick Industrial Companies Act, 1985 have been repealed. As a result, Board of
Industrial Finance and Reconstruction (BIFR) ceases to exist and all proceedings before BIFR stand automatically dropped. The
Company and its four subsidiaries namely, Pioneer Distilleries Limited, Sovereign Distilleries Limited, Tern Distilleries Private
Limited and Four Seasons Wines Limited had been referred to BIFR due to erosion of more than 50/100% of the net worth
of those companies. As a result, the requirement to report erosion of net worth of the Company to the shareholders is not
required.
53. Capital and other commitments
Particulars March 31, 2017 March 31, 2016 April 1, 2015
Capital commitments for property, plant and equipment 715 999 1,732
Other commitment relating to trade mark fee 1,751 2,688 3,617
54. Contingent Liabilities
Particulars As at As at As at
(a) Disputed dues against the Group not acknowledged as debts
(i) State Excise demands for excess primarily for wastages and
1,978 2,186 1,997
distillation losses
(ii) Central Excise matters 2 119 2
(iii) Service tax disputes 585 642 583
(iv) Property, labour and civil litigations 2,692 3,274 1,188
(v) Expenses relating to Historical agreements not recognised - 121 486
(vi) Income tax disputes (including interest) 7,220 2,876 2,646
(vii) Sales tax and entry tax disputes in various states 2,079 2,529 2,094
(b) Bills receivables discounted - - 295
(c) Claims from suppliers not acknowledged as debts 82 79 99
Management is optimistic of succeeding in the above appeals / disputes based on legal opinions / legal precedents.
It is not practicable for the Group to estimate the timing of the cash outflows, if any, in respect of the above, pending resolution
of respective proceedings.

55. Research and development expenses All amounts in INR Million

31, 2017 31, 2016
Salaries and wages 48 45
Contribution to provident fund and other funds 5 5
Rent 4 4
Total Research and development expenses 80 86
56. Disclosure as per Regulation 34 (3) and 53 (f) read with Part A of Schedule V of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 in respect of loans and advances, the amount in the nature of loans
outstanding at year end (continued)
Particulars Value of Loans outstanding Maximum amount of

Investments as at March 31, 2016 loans and advances out-
held standing during the year
(i) Loans and advances in the nature of loans
to firms / companies in which directors are
interested
The aforesaid amount are gross of provisions, if any made based on Management assessment of recoverability.
57. First-time adoption of Ind AS

These are the Group’s first financial statements prepared in accordance with Ind AS.
The accounting policies set out in Note 1, have been applied in preparing the financial statements from the year ended March
31, 2017, the comparative information presented in these financial statements for the year ended March 31, 2016 and in the
preparation of an opening Ind AS balance sheet at April 1, 2015 (the Group’s date of transition). In preparing its opening Ind
AS balance sheet, the Group has adjusted the amounts reported previously in financial statements prepared in accordance
with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other rele-
vant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind
AS has affected the Group’s financial position, financial performance and cash flows is set out in the following tables and
notes.
A. Exemptions and exceptions availed
Set below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from
previous GAAP to Ind AS.
1 Ind AS optional exemptions
1.1 Business combinations

Ind As 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date
prior to the transition date. This provides relief from full retrospective application that would require restatement of
all business combination to the transition date.
The Group elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date.
Business combinations occurring prior to the transition date have not been restated. The Group has applied same
exemption for investment in associates.

1.2 Deemed cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and
equipment and investment property as recognised in the financial statements as at the date of transition to Ind AS,
measured as per the previous GAAP and use that as its deemed cost as at the date of transition. This exemption can
also be used for intangible assets covered by Ind AS 38 Intangible Assets.
Accordingly, the Group has elected to measure all of its Investments property, property, plant and equipment and
intangible assets at their previous GAAP carrying value.
1.3 Leases
Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In
accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement.
Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date
of transition to Ind AS.
The Group has elected to apply this exemption for such contracts/arrangements.
1.4 Designation of previously recognised financial instruments

Ind AS 101 allows an entity to designate investments in equity instruments other than subsidiaries at FVOCI on the
basis of the facts and circumstances at the date of transition to Ind AS.
Accordingly, the Group has elected to classify fair value gains/losses on such investments in statement of other
comprehensive income.
1.5 Cumulative translation differences

Ind AS 101 permits cumulative translation gains and losses to be reset to zero at the transition date. The Group
elected to reset all cumulative translation gains and losses to zero by transferring it to opening retained earnings
at its transition date.
1.6 Prospective application of Ind AS 21 to business combinations

Ind AS 101 allows a first-time adopter not to apply Ind AS 21 Effects of changes in Foreign Exchange Rates
retrospectively for business combinations that occurred before the date of transition to Ind AS. In such cases,
where the entity does not apply Ind AS 21 retrospectively to fair value adjustments and goodwill, the entity treats
them as assets and liabilities of the acquirer entity and not as the acquiree.
The Group has elected to apply this exemption.
1.7 Government loan below market rate of interest

Ind AS 101 requires a first-time adopter to apply the requirements of Ind AS 109, Financial instruments and Ind AS
20, Accounting for Government Grants and Disclosure of Government Assistance, prospectively to government
loans at below market rate of interest obtained after the date of transition to Ind AS. However, Ind AS 101 allows a
first time adopter to apply the requirements of Ind AS retrospectively to any government loan originated before the
date of transition to Ind AS provided that the information needed to do so had been obtained at the time of initially
accounting for that loan. Consequently, if the company did not under its previous GAAP recognise and measure
the government loan at below market rate of interest on a basis consistent with Ind AS requirements, it shall use its
previous GAAP carrying amount of the loan at the date of transition to Ind AS as the carrying amount of the loan in
the opening Ind AS balance sheet. Accordingly the Group has applied the above requirement prospectively.
2. Ind AS mandatory exceptions

2.1 Estimates
An entity’s estimates in accordance with Ind AS’s at the date of transition to Ind AS shall be consistent with estimates
made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting
policies), unless there is objective evidence that those estimates were in error.
Ind AS estimates as at April 1, 2015 are consistent with the estimates as at the same date made in conformity with
previous GAAP.

2.2 De-recognition of financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for
transitions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter
to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity’s choosing,
provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised
as a result of past transactions was obtained at the time of initially accounting for those transactions.
The Group has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition
to Ind AS.
2.3 Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the fact and
circumstances that exits at the date of transition to Ind AS.
B. Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The
following tables represent the reconciliations from previous GAAP to Ind AS.
(i) Reconciliation of equity as at date of transition (April 1, 2015)

Footnote Previous Adjustments Ind AS
reference GAAP *
ASSETS
Non-current assets
Investment properties 658 658
Goodwill 1 620 974 1,594
Other intangible assets 4,137 - 4,137
Investments 6, 16 255 8,327 8,582
Loans 117 - 117
Deferred tax assets 2, 9, 17 878 698 1,576
Current assets
Inventories 2,8,9 17,582 1,324 18,906
Investments 1, 15 1,249 (1,238) 11
Trade receivables 2 17,185 (802) 16,383
Cash and cash equivalents 15 2,628 49 2,677
Bank balances other than cash and cash equivalents 787 787
Loans - -
Other financial assets 8 5,291 (1,142) 4,149
Other current assets 15 4,486 (8) 4,478
Assets classified as held for sale 1 1
Total current assets 49,207 (1,817) 47,391
Total assets 78,108 8,182 86,290


reference GAAP *
Equity
Equity share capital 1,453 1,453
Other equity
Reserves and surplus 1, 2, 9, 11, 12, 5,142 (338) 4,804
15, 16, 17
Other reserves 6 - 8,417 8,417
Equity attributable to owners of
United Spirits Limited 6,595 8,079 14,674
Non-controlling interests 8 - 8
Total equity 6,603 8,079 14,682
LIABILITIES
Borrowings 12 11,174 (57) 11,117
Other financial liabilities 1,010 - 1,010
Government grants - - -
Total non-current liabilities 12,845 (57) 12,788
Current liabilities
Financial liabilities -
Borrowings 36,536 - 36,536
Other financial liabilities 12 4,763 (15) 4,748
Provisions 11 2,170 175 2,345
Current tax liabilities 3,177 - 3,177
* The previous GAAP figures have been reclassified to confirm to Ind AS presentation requirements for the purposes of
this note.

(ii) Reconciliation of equity as at March 31, 2016

reference GAAP *
ASSETS
Non-current assets
Property, plant and equipment 7 13,796 (28) 13,768
Investment properties 672 - 672
Goodwill 1,125 - 1,125
Other intangible assets 10 3,971 4 3,975
Non-current Financial assets - -
Investments 6, 16 111 (29) 82
Loans - - -
Deferred tax assets 2, 9, 17 1,262 638 1,900
Total non-current assets 29,829 585 30,414
Current assets
Inventories 2, 7, 8, 9 17,955 1,564 19,519
Investments 6, 15 1,209 (1,197) 12
Trade receivables 2, 7 24,231 (1,199) 23,032
Cash and cash equivalents 7, 15 1,291 (4) 1,287
Bank balances other than cash and cash equivalents 81 - 81
Loans - - -
Other financial assets 8 3,435 (745) 2,690
Other current assets 6,053 (98) 5,955
Total current assets 54,256 (1,377) 52,879
Total assets 84,085 (792) 83,293
Equity
Other equity -
Reserves and surplus 2, 5, 8, 9, 10, 16,431 (1,605) 14,826
11, 12, 13, 14,
15, 16, 17
Other reserves 6 - 68 68
Equity attributable to owners of
United Spirits Limited 17,879 (1,532) 16,347
Non-controlling interests 13 17 39 56
Total equity 17,896 (1,493) 16,403


reference GAAP *
LIABILITIES
Borrowings 12 7,346 (41) 7,305
Total non-current liabilities 8,421 (41) 8,380
Current liabilities
Borrowings 29,969 - 29,969
Trade payables 7 10,272 (83) 10,189
Other financial liabilities 7,8,12 7,717 510 8,227
Provisions 11 2,196 187 2,383
Current tax liabilities (net) 3,479 - 3,479
Liabilities held for sale 7 - 128 128
Total equity and liabilities 84,085 (792) 83,293
this note.
(iii) Reconciliation of total comprehensive income for the year ended March 31, 2016
reference GAAP *
Revenue
Revenue from operations (Gross) 2, 3, 4, 8 226,793 12,416 239,209
Less : Excise duty 2 134,391 (134,391) -
Revenue from operations (net) 92,402 146,807 239,209
Other operating income 1,392 (1,392) 0
Other income 435 1 436
Total income 94,229 145,416 239,645
Expenses
Cost of materials consumed 2, 3, 8 37,164 10,206 47,370
Purchases of stock-in-trade 8 16,621 (14,828) 1,793
Changes in inventories of work-in-progress,
stock-in-trade and finished goods 3, 8, 11 (1,410) (181) (1,591)
Excise duty 4, 8 - 154,260 154,260
Employee benefit expense 5 6,973 (173) 6,800
Finance costs 12 4,558 16 4,574
Depreciation and amortisation expense 10 1,578 (6) 1,572
Other expenses 4, 9
Advertisement and sales promotion 5,680 474 6,154
Others 19,076 (4,299) 14,777
Total expenses 90,240 145,469 235,709


reference GAAP *
Profit before exceptional items, tax and minority 3,989 (53) 3,936
interest
Exceptional items* 4 7,802 (8,076) (274)
Profit before tax from continuing operations 11,791 (8,129) 3,662
Income tax expense
- Current tax 1,923 - 1,923
- Tax relating to earlier years 568 - 568
- Deferred tax 3, 9, 11, 17 (362) 126 (236)
- MAT credit availed (27) - (27)
Total tax expense 2,101 126 2,228
Profit for the year 9,689 (8,255) 1,434
- Remeasurements of post-employment benefit obligations 5 - (177) (177)
- Fair value gain/(loss) on investments in equity 6 - 187 187
- Income tax relating to these items - 65 65
- Exchange difference on translation of foreign operations - 215 215
Other comprehensive income for the year, net of tax - 290 290
Total comprehensive income for the year 9,689 (7,965) 1,724
Share of non-controlling interest 13 13 39 52
this note.
(iv) Reconciliation of total equity as at March 31, 2016 and April 1, 2015
Footnote March April
reference 31, 2016 1, 2015
Total equity (shareholder’s funds) as per previous GAAP 17,879 6,595
Adjustments:
On account of amalgamation of SW Finance Co Limited with the 1 - 932
Company
Effect of consolidation of controlled trust 15 (1,156) (1,156)
Reversal of brand amortisation 10 4
Fair valuation of investments 6 68 8,417
Net impact on equity on reversal of revenue 2 (109) (82)
De-recognition of borrowing cost capitalized on inventory 9 (713) (536)
Stamp duty on erstwhile amalgamation 11 (188) (175)
Fair valuation of financial liabilities at amortised cost 12 57 73
Recognition of deferred tax 17 370 -
Adjustment for non-controlling interests 13 (38) -
Impairment of investment properties 16 (92) (90)
Tax effects of above adjustments 265 697
Total adjustments (1,532) 8,079
Total equity as per Ind AS 16,347 14,674

(v) Impact of Ind AS adoption on the statements of cash flows for the year ended March 31, 2016
Previous Adjustments Ind AS
GAAP
Net cash flow from operating activities 2,386 (259) 2,645
Net cash flow from investing activities 8,192 678 7,514
Net cash flow from financing activities (11,787) (238) (11,549)
Net increase/(decrease) in cash and cash equivalents (1,209) 181 (1,389)
Cash and cash equivalents as at April 1, 2015 2,629 (48) 2,677
Effect of exchange rate changes on cash and cash equivalents - - -
Cash and cash equivalents disclosed as held for sale - 53 (53)
Cash and cash equivalents of subsidiaries disposed (129) (0) (129)
Analysis of changes in cash and cash equivalents for the purposes of statement of cash flows under Ind AS
Cash and cash equivalents as per previous GAAP and 1,290 3 1,287
for the purpose of statement of cash flows
C Footnotes to first-time adoption:

1. Business combination - SW Finance Co. Limited
As noted in Note 51(a) on August 28, 2015, the Group received an approval to merge with Shaw Wallace Finance
Group Limited (SWFCL) with an effective date of January 1, 2014, accordingly the Group had made the below ad-
justments on August 28, 2015 under the previous GAAP. However, as per Ind AS 103, the results of SWFCL have been
merged with the Group with effect from April 1, 2015. Consequently the following adjustments have been recorded
in the opening Balance Sheet as at the transition date.
(a) Recognition of capital reserve of INR 974 and the corresponding increase in the Goodwill.
(b) Elimination of investment in SWFCL benefit trust of INR 41 with corresponding reduction of ‘Capital Reserve’.
2. Revenue recognition
Under Ind AS 18, revenue is recognised when significant risk and reward is transferred and company does not retain
either continuing managerial involvement or effective control over the goods sold. Hence, revenue recognised
under previous GAAP relating to certain customers have been reversed. Net impact of reversal of revenue for the
year ended March 31, 2016 is as below:
a. Decrease in Revenue from Operations : INR 352 (net of opening)
b. Increase in cost of materials consumed: INR 229 (net of opening)
c. Decrease in change in inventories of work-in-progress, stock-in-trade and finished goods: INR 327 (net of
opening)
d. Decrease in Excise duty: INR 229 (net of opening)
e. Increase in inventories : INR 1,045 (2015 : INR 719)
f. Decrease in trade receivables: INR 1,154 (2015 : INR 802)
g. Corresponding deferred tax asset on aforesaid items amounted to INR 37 (2015: INR 28) has been created with
a corresponding increase in deferred tax income.
h. Reduction in Reserves and Surplus by INR 56 as at April 1, 2015 and INR 72 as at March 31, 2016.
3. Excise duty
Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS,
revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the
statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total
expenses for the year ended March 31, 2016 by INR 134,391. Also, an amount of INR 151 has been reclassified from
other expenses to excise duty. There is no impact on the total equity and profit.

4. Trade discount
Under Indian GAAP, trade and cash discounts of INR 4,164 was recognised as part of other expenses which has been
adjusted against the revenue under Ind AS during the year ended March 31, 2016.
5. Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts
included in the net interest expense on the net defined benefit liability are recognised in other comprehensive
income. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As
a result of this change, the profit for the year ended March 31, 2016 decreased by INR 177 with a corresponding
increase in Other Comprehensive Income. There is no impact on the total equity as at March 31, 2016. Deferred tax
assets of INR 65 reclassified to other comprehensive income on this account.
6. Fair valuation of investments

Under the previous GAAP, investments in equity instruments other than investments in subsidiaries and mutual
funds were classified as long-term investments or current investments based on the intended holding period and
realisability. Long-term investments were carried at cost less provision for other than temporary decline in the
value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these
investments are required to be measured at fair value.
Fair value changes with respect to these items designated as at FVOCI have been recognised in FVOCI- equity
investments reserve as at the date of transition and subsequently in the other comprehensive income for the year
ended March 31, 2016. This resulted in an increase of INR 8,417 in investments and an equivalent increase in other
reserves as at the transition date, which includes gains of INR 70 on equity investments unsold as at March 31, 2016
- Fair value gain of INR 187 for the year ended March 31, 2016 which is accounted under FVOCI reserves with a
corresponding increase in investment, which includes a loss of INR 2 on equity investments unsold as at March 31,
2016
- Gain of INR 8,536 on sale of investments during the year ended March 31, 2016 which was earlier recognised under
exceptional items in previous GAAP, has been recognised under Ind AS as part of FVOCI reserve as at transition date
of INR 8,347 and in other comprehensive income of INR 189 for the year ended March 31, 2016
- FVOCI equity instruments reserves as at March 31, 2016 has increased by INR 68 (representing gains on transition
amounting to INR 70 and loss of INR 2 during the year ended March 31, 2016) as compared to previous GAAP for
unsold equity investments as at March 31, 2016.

On January 15, 2016, the Company entered into an agreement for the sale of its entire holding in United Spirits
Nepal Private Limited of 67,716 equity shares (constituting 82.46% of the paid up equity share capital of United
Spirits Nepal Private Limited). Accordingly, following assets and liabilities were classified as assets / liabilities of
disposal group held for sale.
As at March
31, 2016
Assets classified as held for sale
Property, plant and equipment 28
Inventories 94
Trade receivable 45
Cash and cash equivalents 53
Other current assets 82
Total assets classified as held for sale 302
Liabilities directly associated with assets classified as held for sale
Trade payables 83
Other financial liabilities 45
Total liabilities directly associated with assets classified as held for sale 128

8. Tie-up manufacturing arrangements

The Group has entered into arrangements with certain distilleries and bottling units (Tie-up units) for manufacture
and marketing of its own brands. The Tie-up units have necessary license and regulatory permits to manufacture
beverage alcohol. Under previous GAAP Group had recognised net surplus from operation through other Tie-up
units under Revenue from operations. However, under Ind AS 18, Group has aggregated the below mentioned
amounts in it’s statement of profit or loss and Balance sheet with respect the aforesaid on-behalf manufacturing
activity carried out by Tie-up units. Consequent to these changes, there is no impact on the total equity and profit.
In the statement of Profit or loss
For the year
Particulars ended March
31, 2016
Revenue from operations 15,890
Excise duty 19,947
Cost of materials consumed 10,386
Purchases of stock-in-trade (14,829)
Changes in inventories of work-in-progress, finished goods and stock in trade (89)
Other expenses 476
In Balance sheet
As at March As at April
Particulars
31, 2016 1, 2015
Inventory 1,328 1,142
Other financial assets (750) (1,142)
Total 578 -
Other current financial liabilities 578 -
Total 578 -
9. De-recognition of borrowing cost capitalised on inventory

Ind AS 23 does not require borrowing costs directly attributable to the inventories to be capitalised. Under previous
GAAP, these cost were capitalised to inventory. Accordingly, inventory as at March 31, 2016 has reduced by INR
713 (2015: INR 536) with a corresponding adjustment to retained earnings. The profit for the year ended March
31, 2016 reduced by INR 178 as a result of additional interest expense with a corresponding decrease in inventory.
Corresponding deferred tax asset amounted to INR 242 (2015: INR 198) has been created. Net reduction in retained
earnings is INR 338 as at April 1, 2015 and INR 472 as at March 31, 2016.
10. Reversal of brand amortisation

Under Indian GAAP, Brand was amortised over a period of 10 years which was recognised as part of Depreciation
and amortisation expense. Based on the assessment performed by the management, it has been determined that
these Brand has an infinite useful life under Ind AS. As a result of this change, the profit for the year ended March 31,
2016 increased by INR 4 as a result of reversal of depreciation and amortisation expense.
11. Stamp duty on erstwhile amalgamations

The Company had omitted recognition of stamp duty payable and penalties payable on various amalgamations
effected through court orders in earlier years. On adoption of Ind AS, at the date of transition the Company has
recorded the stamp duty and penalties payable upto the transition date amounting to INR 188 (2015: INR 175)
through debit to retained earnings. For the year ended March 31, 2016, the Company has recognised charge of INR
13 in the statement of profit and loss.

12. Sales tax deferment

Under Ind AS, the benefit of Government loans below the market rate of interest are accounted as Government
grants. The Group is eligible for sales tax deferment on sales effected during the sales tax deferral scheme period
and is repayable after a certain period without any interest. The aforesaid Government grant is measured as the
difference between the fair value of the loan and the actual proceeds received. The fair value of the long-term
loan is measured at the present value of the future cash payments discounted using the prevailing market rate(s)
of interest. Under the previous GAAP, this Government loan is not treated as a grant and carried at book value as
unsecured borrowing. All the conditions attached to the Government grant have been complied with, before the
date of transition. As a result of this change, the amount of sales tax deferment considered in other borrowings and
other financial liabilities have been reduced by INR 57 (2015: INR 73) and INR 16 (2016: INR 16) as at the transition
date with a corresponding increase of INR 73 in retained earnings. The impact on the profit for the year March 31,
2016 is INR 17 due to the notional interest expenditure recognised on the interest free sales tax deferment. The
cumulative reduction in other financial liabilities as at March 31, 2016 was INR 56.
13. Non-controlling interests (NCI)

Ind AS 110 requires that total comprehensive income should be attributed to the owners of the parent and NCI,
even if this results in the NCI having a negative balance. Ind AS 101 requires this to be implemented prospectively
from the date of transition to Ind AS. However, if an entity elects to apply Ind AS 103 retrospectively to past business
combinations, it has to also apply Ind AS 110 from the same date. The Group has elected to apply Ind AS 103 pro-
spectively, from the date of transition to all business combinations. Accordingly, NCI has increased by INR 39 with a
corresponding decrease in reserves as at March 31, 2016.
14. Cumulative translation differences

Ind AS 101 permits cumulative translation gains and losses to be reset to zero at the transition date. The Group
elected to reset all cumulative translation loss of INR 175 (2016: Gain of INR 498) to zero by transferring it to open-
ing retained earnings at its transition date. There is no impact on equity or profit. Consequently for the year ended
March 31, 2016, cumulative translation loss released to statement of profit and loss (as exceptional item) on dis-
posal of Bouvet Ladubay (2016: Gain of INR 498) has been reduced by INR 460.
15. USL Benefit Trust

Based on a control assessment carried out by the Group under Ind AS 110, USL Benefit Trust has been assessed as
a subsidiary of the Group. Accordingly, the assets, liabilities, incomes and expenses of USL Benefit Trust have been
consolidated with the Group on a line by line basis. Impact on the consolidated balance sheet is summarised below:
Particulars As at April
1, 2015
Decrease in Investments (1,197)
Increase in Cash and bank balances 49
Decrease in other current assets (8)
Decrease in Reserves (1,156)
16. Investment property

The Group owns beneficial interest, but not the legal title to Keillour Castle in Scotland. This property was formerly
held in the Balance Sheet as at March 31, 2016 at INR 92 (2015: INR 90). As the Group does not own the legal title,
which is an impediment to the disposal of the property, it was determined by management that a more appropriate
fair value was nil. As this position existed at March 31, 2015 the value of Keillour Castle has been restated to Nil from
INR 92. This resulted in reduction in the value of investment properties by INR 92 as at March 31, 2016 (2015: INR 90).

17. Deferred taxes on accumulated losses

Under previous GAAP, deferred taxes were recognised based on Profit & loss approach i.e. tax impact on difference
between the accounting income and taxable income. Under Ind AS, deferred tax is recognised by following bal-
ance sheet approach i.e. tax impact on temporary difference between the carrying value of asset and liabilities in
the books and their respective tax base. Consequently, deferred tax asset amounted to INR 355 (2015: INR 471) has
been created with a corresponding increase in deferred tax income.
58. Sovereign Distilleries Limited (SDL)

SDL had earlier paid advance of INR 33 (2016: INR 33) and incurred registration charges of INR 1 disclosed as capital advances
for purchase of land. Subsequently, a case has been filed by the land owners against the Company and the erstwhile promoters
for declaration of ownership and vacant possession of the land belonging to them. SDL has filed a written statement along
with a counter claim before the Honourable Senior Civil Judge. Based on the legal opinion, the management is hopeful of
resolving the issues in due course. SDL’s pending litigation comprise proceedings pending with Authority. SDL does not
reasonably expect the outcome of this proceeding to have a material impact on its financial statements.
59. Term liability towards franchise right
The Group through its subsidiary RCSPL holds the perpetual right of the Bangalore Franchise of BCCI-IPL. Although this right
is perpetual, the management believes that it would be prudent to consider this having a ‘finite’ rather than an ‘infinite’ life.
The limited over version of the game which was first introduced in 1970s is continuing even now after 46 years and an even
shorter version (20 over) has recently being introduced and is more popular than the 50 over format. The Management has
held discussion internally 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 50 years is considered
as appropriate and the rights are amortised over 50 years having regard to the following factors:
i. The game of cricket has been in existence for over 100 years and there is no indication of interest in the game and the
commercial prospects waning and the shorter version of the game is increasingly popular.
ii. The commercial exploitation of the shorter version is on an increasing scale and is expected to reach the scale which
other games like soccer have reached, globally.
iii. This industry (cricket) is, therefore, highly stable and the market demand for this game is likely to remain for at least 50
years with its spread to many countries.
iv. IPL and its teams have acquired brand status and teams are not identified with countries or geographies but with brand
names.
v. The franchisees have the intent and ability to provide the necessary financial and other resources required to obtain the
expected future economic benefits from this for at least 50 years.
Franchisee fee payments to be made up to 2017 have been capitalised. From and including 2018 an amount equal to 20%
of the franchise income received in respect to each year is payable as franchise fees. The carrying value of the capitalized
right is assessed for impairment at every Balance Sheet date. The carrying amount of Franchise Right as at March 31, 2017 is
INR 3,811 (2016: INR 3,904) to be amortised over the remaining period of 41 years (2016: 42 years). Term liability towards
franchisee right at the year-end aggregating to INR Nil (2016: INR 754) is payable over a period of 1 year (2016: 2 years), of
which INR Nil (2016: INR 338) is payable within one year.
The governing bodies of this sport in India and globally, over a period of last 7 to 15 years have experienced annualized
growth of 19% to 35% in their media / central rights. The Management believes that given the sheer appeal of this format,
which has surpassed all expectations, an annualised projected growth rate of approximately 6% is reasonable. Based on the
facts above, the Management believes that there is no impairment on the franchise right.

60. Details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December
30, 2016:

Amount in INR
Particulars Specified Bank Other Total
Notes denomination
notes
Closing cash in hand as at November 8, 2016 1,220,000 479,185 1,699,185
(+) Receipts not permitted* 145,500 145,500
(+) Permitted receipts - 1,721,798 1,721,798
(-) Permitted payments 1,04,000 969,580 1,073,580
(-) Amount deposited in banks 1,261,500 781,110 2,042,610
Closing Cash in Hand as at December 30, 2016 - 450,293 450,293
* includes INR 17,500 which were returned by employees from imprest balances.
61. During the year ended March 31, 2017 no material foreseeable loss was incurred for any long-term contracts including
derivative contracts.



Date : May 30, 2017 Date : May 30, 2017

www.diageoindia.com
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United Spirits Limited

Annual Report 2016-17

The company employs

Diageo was formed in 1997,

02 United Spirits Limited

Global giants Regions

North America Asia Pacific

Volume# Scotch Gin

04 United Spirits Limited

We also restructured our organisation to fit

Annual Report 2016-17 05

`85,476m ` 9,826m `196,478m

23% 90m 2.8m

06 United Spirits Limited

As we collaborate with India, for India, we have a deep-rooted responsibility to

Annual Report 2016-17 07

08 United Spirits Limited

Recent Renovations: Recent Innovations:

McDowell’s No. 1 Signature Royal Challenge Captain Morgan

Annual Report 2016-17 09

10 United Spirits Limited

This approach is reflected in our ability to grow share across

Strong market share gains achieved during the year as a result

Our brand portfolio took a major leap with pioneering innovations

Simi Bartender is a chatbot - a conversational interface that helps

Annual Report 2016-17 11

12 United Spirits Limited

Posted strong 43.5% volume share in the categories in which we operate

Deployed a fit-for-purpose model to optimise our Popular brands

We are now fully aligned to Diageo’s commercial capability standards

Partnered with innovative start-up ‘HipBar’, a cloud-based app catering

Annual Report 2016-17 13

28% 850% 23%

14 United Spirits Limited

Annual Report 2016-17 15

16 United Spirits Limited

Annual Report 2016-17 17

18 United Spirits Limited

Road To Safety and attended by the excise commissioner

Empowering communities through of water through rainwater harvesting

Annual Report 2016-17 19

Automation remains our key priority and we invested

We augmented risk management processes

Our effort to efficiently manage capital structure

20 United Spirits Limited

REPORT OF THE DIRECTORS

* Excluding minority interest

ANNUAL REPORT 2016-17 21

4. Change in nature of Business, if any 8. Performance of the Company

22 UNITED SPIRITS LIMITED

REPORT OF THE DIRECTORS (CONTINUED)

10. Prospects/Outlook Mr Ravi Rajagopal, a Non-Executive Director of

Mr V K Viswanathan was appointed as an Independent

B. Re-appointment Mr Sanjeev Churiwala, Chief Financial Officer, was

ANNUAL REPORT 2016-17 23

24 UNITED SPIRITS LIMITED

REPORT OF THE DIRECTORS (CONTINUED)

ANNUAL REPORT 2016-17 25