I N S P I R E D B Y Purpose.

U N I T E D B Y Values.

United Spirits Limited

Annual Report
2023-24
Contents

01
Corporate Overview
01 About Us
02 Board of Directors
03 Chairperson’s Message
04 Managing Director &
CEO’s Message
06 Crafting Moments of Magnificence
11 Celebrating our People and Culture
13 Society 2030: Spirit of Progress

17
Statutory Reports
17 Notice of AGM
40 Board’s Report
48 Management Discussion and Analysis
88 Corporate Governance Report

115
Financial Statements
115 Standalone
209 Consolidated
About Us
United Spirits Limited is one of the leading beverage alcohol GODAWAN 100 IS CROWNED
companies in India and a subsidiary of global leader
Diageo plc. Headquartered in Bengaluru, we manufacture, 'SINGLE MALT WHISKY OF THE YEAR’
sell and distribute an outstanding collection of iconic
global and premium Indian brands. We bring together our
global expertise and local innovation to deliver world-class
products and experiences to consumers.
Sustainability is at the heart of our business strategy and is
outlined in our Society 2030: Spirit of Progress action plan.
Our Society 2030 agenda is focussed on pioneering grain-
to-glass sustainability, championing inclusion and diversity,
and promoting responsible consumption.

Overview
28+ 36 2,598**
Brands Manufacturing Facilities People

Financial performance
Reported Standalone Financials

` 25,389 crore ` 1,312 crore

Revenue from Operations Profit After Tax

16% ` 18.04
EBITDA Margin Earnings Per Share

Non-financial performance
89% 48%*^
Employee Engagement Improvement in Water-Use
Score (‘Your Voice’ – Internal Efficiency in Distilleries
Engagement Survey)

87%*^ Over 6 lakh

Reduction in Greenhouse People Educated
Gas Emissions from our through our Responsible
operations Drinking Programmes

Credit Rating:
Crisil AAA/Stable (Reaffirmed)
*against base year FY20.
**permanent employees and workers.
^ covering Diageo India own operating units.
UNITED SPIRITS LIMITED Annual Report 2023–24

Board of Directors

Mahendra Kumar Sharma Hina Nagarajan V. K. Viswanathan

Chairperson & Independent Director Managing Director and Chief Executive Officer Independent Director

D. Sivanandhan Rajeev Gupta Dr. Indu Shahani

Independent Director Independent Director Independent Director

Dr. Indu Bhushan Mukesh Hari Butani Pradeep Jain

Independent Director Independent Director Executive Director and Chief Financial Officer

Mark Sandys Emily Kathryn (Kate) Gibson Mamta Sundara

Non-Executive Director Non-Executive Director Non-Executive Director

Notes: Committee Membership

• John Thomas Kennedy resigned as Non-Executive Director with effect Audit Committee
from end of day 30th June 2023.
• New appointments effective: Risk Management Committee
• 7th September 2023: Emily Kathryn (Kate) Gibson as Stakeholders’ Relationship and General Committee
Non-Executive Director. Corporate Social Responsibility & Environmental, Social and
• 1st March 2024: Dr. Indu Bhushan and Mukesh Hari Butani as Governance Committee
Independent Directors of the Company.
Nomination and Remuneration Committee

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 STATUTORY REPORTS FINANCIAL STATEMENTS
CORPORATE OVERVIEW

Chairperson’s
Message

Dear Shareholders,
As I reflect on the past year, I’m pleased
with the progress made by your Company
in executing its growth strategy with a
strong focus on delivering value-added
offerings, driving commercial excellence,
empowering its people and supporting the
communities while ensuring doing business
the right way in accordance with Diageo’s
Values and Code of Business Conduct.
These efforts underpin our conviction in Private Limited (owners of Brand LOOKING AHEAD
delivering sustainable long-term value for Pistola), a premium agave brand in line At Diageo India, we are proud of everything
all stakeholders. with its strategy. we do, from the progressive brands we
The operating landscape presented several During the year, your Company sustained build to the culture we foster, to being
challenges, characterised by inflationary its efforts to build an organisation of the responsive to consumer, community and
pressures on consumers and subdued future by investing in its talent, accelerating societal needs. Your Company continues
demand as the year progressed. Against its digital journey, and deriving greater to remain deeply committed to building a
this backdrop, your Company has delivered efficiency and effectiveness from its stronger and future-focussed organisation.
a resilient performance, reaffirming the investments. Your Company introduced Going forward, your Company’s priority
effectiveness and success of its strategy. The various industry leading initiatives to remains to sustain its growth momentum
steadfast focus on continuous improvement support growth and development, and by increasing investment in its brands,
and productivity enhancements further further drive inclusion and diversity capitalising on evolving market trends,
contributed to its achievements. across all levels. exploring new engines of growth and
Your Company has made good progress unlocking efficiency across the value
DELIVERING VALUE in its Society 2030 goals. Initiatives like chain. Despite facing short-term challenges
Your Company continued to build on the the removal of mono cartons, increasing like inflationary pressures and subdued
strong foundation to deliver sustained the use of recycled content in packaging, demand, we are optimistic about the
double-digit growth by focussing on launching a micro-enterprise initiative to mid-to-long-term growth prospects, driven
reshaping its portfolio, building an support women farmers in Nashik and by favourable macros like India’s robust
organisation for the future and accelerating economic growth, rise in premiumisation
training 100 Persons with Disability for
the ESG agenda. and increasing aspiration for new
roles in the hospitality sector underscore
celebratory and socialising experiences.
our commitment to sustainability and
Placing the consumers at the forefront,
championing inclusion and diversity. In closing, I want to express my sincere
your Company continued to introduce
appreciation to my fellow board members
innovations and renovations into the During the year, your Company returned to
for their invaluable guidance. I would
market. McDowell’s & Co Distiller’s Batch dividend distribution after nearly a decade
also like to extend my gratitude to our
Indian Single Malt is a tribute to the enabled by the successful turnaround of
shareholders for their continued confidence
rich legacy of one of India’s most loved the Company to sustained earnings growth
in our Company. With your support, Diageo
brands. Our Company’s Make in India and profitability. I’m happy to share that
India is well-positioned to continue its
offering, Godawan, has received numerous the Board of Directors approved an interim
growth journey.
international awards, a testament to its dividend of `4 per share. Further, the Board
commitment to creating world-class spirits recommended a final dividend of `5 per
that embody luxury and craftsmanship. share subject to Shareholders’ approval Warm Regards,
Your Company introduced its global for the financial year 2023-24. We would
offering Don Julio in India and acquired like to extend our gratitude to our steadfast Mahendra Kumar Sharma
a minority stake in Inspired Hospitality investors for their continued support. Chairperson

03
UNITED SPIRITS LIMITED Annual Report 2023–24

Managing Director
& CEO’s Message

Dear Shareholders,
It is a pleasure to share the key highlights
of our performance for the financial year
2023-24. Before delving into the progress,
let me share a few insights. India is in the
middle of a deep societal change led by
rising affluence, women, youth and boom
towns. This decade is India’s Amrit Kaal led
by Viksit Bharat 2047, Yuva Shakti and Nari
Shakti which together will quantum leap
our country’s developmental efforts.
At Diageo, we are responding to the and Above segment and our brands are a collector’s edition Single Malt, have
structural shifts in consumer choices and performing competitively in their respective won over 45 awards, making it the most
behaviour, pivoted around premiumisation, segments for three years in a row. We have awarded Indian Single Malt in recent
wellbeing and sustainability. This new, nearly doubled the market capitalisation times. This includes Godawan 100
changing, and vibrant India presents a of the Company from FY21 levels. During winning the prestigious title of Single Malt
huge opportunity for us and India stands the year, the Board of Directors approved Whisky of the Year at the 2024 London
as one of the fastest-growing markets for an interim dividend of `4 per share that Spirits Competition, a testament to our
alcoholic beverages worldwide. was paid to the Shareholders in December commitment to crafting sustainable Indian
2023. The Board has also recommended a Luxury for consumers around the globe.
final dividend of `5 per share subject to
FINANCIAL PERFORMANCE Our latest innovation, McDowell’s &
Shareholders’ approval for the financial year
Our growth has been robust and we 2023-24. These milestones demonstrate that Co Distiller’s Batch Indian Single Malt,
have navigated the external headwinds we are on a sustained growth path and give recognises the rapidly growing consumer
strategically. Your Company delivered a us confidence in our strategy. appetite for Indian spirits, hyperlocal
resilient performance against a challenging ingredients, and Indian craftsmanship. With
external environment marked by Let me give you a brief update on the
a rich legacy of 125 years, the brand also
inflationary pressures and relatively muted progress we have made this year.
aims to reinvent drinking experiences by
sequential demand. Our consolidated launching a range of exquisite products
net sales was `11,321 crore, registered a RESHAPING OUR PORTFOLIO under McDowell’s X Series.
growth of 14.2% on a rebased basis while We continue to invest in our brands,
our standalone net sales at `10,692 crore, In our Upper Prestige portfolio, our
focus on P&A segment growth, enhance
increased by 10.5% on a rebased basis. consumer engagement and build long-term whisky brand Antiquity underwent a
brand equity. Your Company’s advantaged comprehensive transformation, resonating
Within the above, the Prestige & Above with contemporary consumers’ desire for
(P&A) segment grew by 11.9% and portfolio blends both volume and value
scale. We have three `1,000 crore, three unique experiences. Meanwhile, Royal
contributed to 87.4% of net sales. This was Challenge American Pride stands as our
largely driven by continued premiumisation `500 crore and seven ‘one-million+ case’
trademarks in our portfolio. fastest-growing innovation, now available in
and choiceful consumption with increased key markets across the country.
brand loyalty. Aligned with our commitment to bringing
the best from around the world to aspiring We have acquired a minority stake
Our standalone profit after tax was
Indian consumers, we launched our in Inspired Hospitality Private Limited
at `1,312 crore, achieving a net profit
global Tequila brand Don Julio in India. (Pistola), one of the emerging premium
margin of 12.3%.
We continued to make significant strides agave craft brands in India. This is aimed
Our continued focus on the future-back, with our bespoke Make in India for the at strengthening our portfolio play and
consumer-led approach has enabled us to World offerings. Godawan, our artisanal is in line with our strategy to explore new
sustain strong double digit CAGR in Prestige single malt whisky, and Godawan 100, growth engines.

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 STATUTORY REPORTS FINANCIAL STATEMENTS
CORPORATE OVERVIEW

BUILDING AN ORGANISATION OF ACCELERATING OUR BUSINESS OUTLOOK

THE FUTURE SUSTAINABILITY JOURNEY Looking ahead, we remain cautiously
We have significantly ramped up our We are progressing well on our optimistic about growth, underpinned
capabilities in areas of distillation, environmental, social, and governance by sustained investments in our brands,
maturation, innovation and consumer (ESG) journey, especially our water confidence in our innovation and
insights. Our marketing investment strategy stewardship initiatives enabling us to renovation pipeline, and the long-term
is focussed on building brands with a overachieve our water replenishment goals potential of the Indian consumer market.
connected omnichannel consumer journey. by 25% and three years ahead of our 2026 While near-term challenges of inflationary
We are achieving this by leveraging data goals. Our Water, Sanitation and Hygiene headwinds and moderated demand persist,
and insights for personalised digital and (WASH) initiatives continue to support the medium-term industry fundamentals
physical experiences, thereby driving schools and communities across Rajasthan, are intact, reinforced by the growing
creativity with precision. We are also UP, Odisha and Maharashtra. trend of premiumisation, coupled with
leveraging digital technologies across consumer inclination towards higher-
functions to derive more productivity and We have eliminated the use of coal fossil quality, experiential drinking occasions. We
efficiency from our investments. Further, the fuel from our operations by switching to also remain focussed on revenue growth
multiyear supply chain agility programme, bio-fuels such as agriculture waste, rice management and value chain productivity
aimed at strengthening our end-to-end husk, etc. In addition, we have removed in our quest for sustained value creation for
manufacturing footprint and building a mono cartons from 95% of our portfolio, all stakeholders. With craft taking centre
future-ready organisation, is also on track. and introduced biodegradable packs and stage, we will continue to innovate and
recyclable PET bottles, aiming for 100% Make in India for the world and invest in
What sets our organisation apart is our recyclable or reusable/compostable India to enhance our capabilities.
people, purpose and culture. We launched packaging by 2030.
our Employee Value Proposition campaign My deepest thanks to the Board for their
‘Celebrating You’, underscoring our Our brand Signature is associated with invaluable guidance and steadfast support.
commitment to nurturing and growing the Mangrove Regeneration project, and I also extend my gratitude to you for your
talent. During the year, we launched two we have partnered with the Alwar District continued investment and trust in Diageo
Employee Resource Groups, the Spirited Forest Department to plant 2,00,000 trees, India, as we execute our strategy and strive
Women’s Network to empower female to enhance our green footprint and reduce to scale new heights.
employees; and Rainbow Network to raise Scope 3 emissions. I would like to conclude by sharing a
awareness about LGBT+ inclusion. moment of great pride with you. Our Royal
In societal contributions, we have initiated
We have made significant progress in a unique industry-first partnership with Challengers Sports Private Limited Women’s
achieving gender balance, with women the Skill Council for Persons with Disability Premier League team Bengaluru won the
comprising 43% of our new hires and (SCPwD), to train and prepare individuals cup this year. This achievement resonates
constituting 50% of our Executive Team. for roles in the hospitality sector. Last with our passion for championing inclusion
Our internal ‘Your Voice’ survey highlights year, we trained 110 individuals, and and diversity and demonstrates Nari Shakti.
our passionate purpose, with an employee it’s heartening to see that they are now Warm Regards,
engagement score of 89%. We have securing good employment opportunities.
52 Persons with Disabilities working across
locations, and our recognition as a gold
This year, we will expand this initiative to Hina Nagarajan
train 300 individuals, to build and support a
employer for LGBT+ inclusion by the India Managing Director & CEO
diverse workforce.
Workplace Equality Index (IWEI) indicates
our ongoing commitment to fostering And last, but not the least, we continued
an inclusive and diverse organisation. to promote responsible consumption and
Our Company was featured on the list champion road safety in India. We have
of LinkedIn Top Companies 2024: The partnered with 31 Regional Transport
10 leading workplaces in Retail and Offices to spread awareness and curb drink
Consumer Goods in India and was ranked driving through the Wrong Side of The Road
16 among Top 20 companies in Equileap’s programme and supported UP, Punjab and
Gender Equality Report & Ranking for Telangana police by providing advanced
Emerging Markets. breath analysers.

Note: All accounts referred to as ‘Rebased’ are Reinstated for the Pioneer Distilleries Limited (PDL) merger as well as adjusted for slump sale and
franchising of the strategically reviewed popular portfolio for a like-for-like comparison.

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UNITED SPIRITS LIMITED Annual Report 2023–24

Crafting Moments of Magnificence

As one of the world’s best brand builders, our diverse portfolio places people and
purpose at its core. From most-loved brands to latest innovations, we offer products,
tastes, and experiences for all celebrations – big or small.

Passion for Innovation

We introduced a slew of new launches and renovations to elevate our brand, provide luxury experiences to our
consumers and redefine repertoire in the alco-bev industry.

Embracing Iconic Legacy Crafting Excellence with the Launch of

with Don Julio McDowell’s Single Malt
Don Julio Tequila’s debut in India marked a significant moment The introduction of McDowell’s Single Malt showcased our
in the country’s spirits landscape. Leveraging its global legacy dedication to pushing boundaries and setting new standards
as the choice of elites in film, fashion, music, and arts, the in the spirits industry. By launching a limited-edition super-
launch festivities exuded glamour and exclusivity. By associating premium whisky, the brand demonstrated its prowess in
with high-profile personalities and hosting vibrant events, we craftsmanship and innovation, catering to the evolving
successfully positioned Don Julio as the epitome of luxury and preferences of connoisseurs. The exclusivity of the release
sophistication, garnering widespread attention and acclaim. further emphasised the brand’s commitment to delivering
unparalleled quality and luxury.

Honouring Legacy, Embracing A Journey of Taste with

Conservation with Godawan 100 New Flavours of Tanqueray
Godawan 100, a bespoke collector’s edition Single Malt Tanqueray’s expansion into flavoured gin offerings represented
celebrates mindful luxury and underscores our commitment to the a bold exploration of new taste profiles and cultural influences.
conservation of Great Indian Bustard. The immersive launch event With Tanqueray Rangpur and Tanqueray Malacca, the brand
was held at a heritage site and was attended by conservation introduced consumers to exotic flavours and aromatic blends
advocates and influencers, highlighting the brand’s dedication to inspired by Indian and Eastern heritage. By combining traditional
social responsibility and environmental stewardship. The single botanicals with innovative ingredients, Tanqueray redefined the gin
Malt also won the prestigious title of ‘Best Single Malt Whisky of landscape, offering consumers an immersive sensory experience
the Year’ at the 2024 London Spirits Competition. that transcends boundaries.

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 STATUTORY REPORTS FINANCIAL STATEMENTS
CORPORATE OVERVIEW

Fostering Connections at Elevating Experience with Introducing an All-New

The Singleton Social House of McDowell’s Experience with Antiquity
The Singleton Social represented a The transformation of McDowell’s No.1 The revitalisation of Antiquity aimed
unique convergence of art, culture, and into House of McDowell’s represented a to capture the essence of modernity
gastronomy, curated to elevate social strategic shift towards premiumisation. while staying true to its heritage. The
interactions, and celebrate the finer With Kartik Aaryan as the face of the brand underwent a comprehensive
moments in life. Through partnerships with brand, the renovation aimed to appeal to transformation, encompassing packaging,
lifestyle brands like Nicobar, we created a more discerning consumer base while branding, and messaging, to resonate with
an experiential platform that transcended retaining the essence of camaraderie and contemporary consumers seeking unique
boundaries and fostered meaningful celebration synonymous with McDowell’s. experiences. The refreshed Antiquity
connections. The tangible expression of The redesigned packaging and enhanced not only embodies elegance but also
The Singleton Social embodied elegance product offerings reflected our commitment symbolises a journey of exploration and
and sophistication, inviting consumers to quality and innovation. discovery, appealing to the sophisticated
to indulge in the art of living well and palate of today’s discerning drinkers.
savouring life’s pleasures.

Brands’ Play in Culture

Our brands celebrate art, diversity and communities to enrich cultural landscapes and foster connections that
transcend borders.

Championing Friendship: House of Celebrating Boldness: Royal Challenge

McDowell’s Soda X Yaaron Waali Baat Packaged Drinking Water X Virat Kohli
The collaboration between House of McDowell’s Soda and Kartik The monumental 3D anamorphic hoarding across three cities
Aaryan celebrated the timeless bonds of friendship through commemorated Virat Kohli’s birthday while symbolising his
storytelling and social engagement. By encouraging influencers to fearless journey to success. Through this initiative, Royal Challenge
share their #YaaronWaaliBaat stories, the initiative resonated with Packaged Drinking Water honoured Kohli’s resilience and
consumers on a personal level, reinforcing the brand’s ethos of determination, inspiring consumers to embrace boldness and
inclusivity and camaraderie. authenticity in their own lives.

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UNITED SPIRITS LIMITED Annual Report 2023–24

Harmony with Nature: Empowering Voices, Inspiring Creating Immersive Brand

Signature Packaged Drinking Change: Walkers & Co. Experiences
Water X Ziro Festival of Music Celebrates the Walk Our leading luxury brands redefined the
As the title sponsor of the Ziro Festival The nationwide campaign spotlighted festival landscape at Lollapalooza 2024
of Music, Signature Packaged Drinking the stories of marginalised communities, with Johnnie Walker’s revolutionary Blonde
Water demonstrated its commitment amplifying messages of inclusion and Bar challenging whisky stereotypes and
to environmental sustainability and diversity. By providing a platform for artists Baileys’ indulgent Soft Serve capturing
community engagement. Through like Aravani Art Project and Pearl D’Souza, the essence of festival culture. Our
initiatives promoting cleanups and we facilitated meaningful conversations brands Antiquity and Smirnoff engaged
nature conservation, the brand fostered and fostered a culture of acceptance with art enthusiasts in a vibrant cultural
a sense of responsibility and stewardship and empowerment. setting at the Kala Ghoda Arts Festival.
among festival attendees, encouraging Through influencer brunches and cultural
them to embrace a lifestyle that collaborations, Tanqueray showcased
harmonises with nature. its versatility and sophistication while
reinforcing its position as a leading
gin brand synonymous with quality
and innovation.

Commitment to Sustainability
Our brands continued to exemplify their commitment to sustainable development and positive social impact.

Restoring Coastal Ecosystems with Mangroves

Replenishment Project: Signature Packaged
Drinking Water
The Mangrove Replenishment Project exemplifies Signature
Packaged Drinking Water’s commitment to environmental
conservation and community development. By restoring
mangrove plantations in Odisha, the initiative aimed to protect
coastal regions from natural disasters and promote climate
resilience, while educating and engaging local communities in
sustainable practices.

08
 STATUTORY REPORTS FINANCIAL STATEMENTS
CORPORATE OVERVIEW

Awards

Johnnie Walker Refreshing Mixer Black & White Ginger Ale McDowell’s No 1 Soda
• Gold award at the Exchange4media • Gold award for Brand Extension - • Three Bronze awards at the E4M IMA
(E4M) Indian Marketing Awards (IMA) Food and Beverages category and for Best Use of PR, Best Use of Omni
for Johnnie Walker ReVibe campaign Silver award for the Best Use of Digital Channel Marketing and Best Use of
and Silver for Brand Rejuvenation for Marketing/Social Media - Social Experiential Marketing
the Walker's & Co. campaign Impact category at the E4M IMA South
• Two Silver awards for Brand Extension
Awards for Black & White’s Inclusivity
• Silver award at the Emvies Awards - Food and Beverages and Talent/
and Diversity campaign
for the Best Media Innovation Digital Influencer Marketing - Food &
Social Media category for Johnnie • Bagged three awards at the Beverages and Bronze Awards for
Walker Drone Campaign E4M MADDIES 2023: Best Use of Integrated Media - Food
and Beverages and Innovative Use of
• Two Bronze awards at the E4M o Gold award for Gender Equity
Technology for the No. 1 Yaari Jam Fest
IMA South Awards for The Walker’s
o Silver award for Maximising Mobile Making ‘Yaari’ the New Cool campaign
and Co. campaign
Advertising / Programmatic and at IMA South Awards
• Bronze award for Community Building Machine Learning category and a
• Silver award for Relationship Building/
for Walker’s & Co. campaign at Bronze award for Best Use of Social
Remarketing at the E4M MADDIES
the E4M The Mobile Marketing Media for the Black & White X
Awards (MADDIES) Bobble campaign • Bagged four prestigious awards at the
Indian Digital Marketing Awards’23:
• Won six distinguished honours • Silver award in the Best Mobile
at the prestigious Indian Digital Marketing Campaign category and o Three Bronze awards for the No.
Marketing Awards’23: a Bronze award in the Best Digital 1 Yaari Jam Fest Making ‘Yaari’
Campaign category at the Dragons of the New Cool campaign for
o Two Gold awards for the Best Use
Asia Awards, 2023 the categories of Best Website/
of Topical Posts in a Campaign and
Microsite, Best Campaign -
Breakthrough Technology as Part of • Gold award for the Best Use of
Online Advertising & Digital
a Campaign categories, two Silvers Technology and Silver award for Best
Direct Response, and Best
for the Best Use of Experiential Tech Use of Sports or E-Sports Marketing
Integrated Media Campaign -
for Digital & Physical Experiences categories at the E4M IMA 2023
Product/Services
and Best Digital OOH Campaign
categories and one Bronze for o Silver award for the Best Integrated
Leveraging Social Media to Boost Media Campaign – Films/TV
Brand ROI & Engagement for the Shows/News Shows/Events award
Spotted a Mysterious Walker in the
Skies of Goa campaign
o Bronze award for Best Digital OOH
Campaign category for outstanding
work with Walker's & Co.

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UNITED SPIRITS LIMITED Annual Report 2023–24

Signature Packaged Drinking Water Godawan & Godawan 100 Antiquity

• Gold Award at the IMA South • Two Gold awards for the second year • Silver award for packaging design at
Awards for the Ziro Music Festival in a row at the prestigious Monde the Graphis Design Annual
Driving Sustainability campaign in Selection Whisky Awards and four
• Best IMFL Super Premium Whisky at
the category of Brand Extension - Golds at the London Spirits and a Silver
Ambrosia INDSPIRIT Awards 2024
Food and Beverages at the Denver International competition
for liquid innovation
• Gold Award for Best Multi Mobile
Channel Campaign category for the • Two Silver awards for Packaging
Signature Green Vibes campaign at Design at the FAB Awards and
the E4M MADDIES Graphis Design Annual
• Two Gold awards for Best Use of Visual
Property and Best Use of Packaging
Design and Bronze award for Best
Strategic and Creative Development of
a New Brand by Transform Awards Asia
• Silver award for Dark Spirits Packaging
Design and Bronze award for
Royal Challenge
Godawan 100 Packaging Design at the
Harpers Design Awards Silver award for Packaging Design at the
Graphis Design Annual
• Two Baby Blue Elephant awards for
Godawan Packaging Design and
Godawan 100 Luxury Packaging
Black Dog Design by Kyoorius Design
• Silver award for Design Effectiveness at
• Two People’s Choice awards for
the Pentawards and two Silver awards
Packaging Design and Brand Design
for Logo Design and Packaging Design
and a Bronze award for Packaging
by Graphis Design Annual
Design by Creativepool Annual
• Silver award for Packaging Design and
• Two Gold awards for Packaging Design
Bronze award for Best Brand Identity at
and Best Brand Identity at afaqs
Marketers’ Excellence Awards by afaqs
Marketers’ Excellence Awards
• Best Packaging Award (unit pack) at
• Bronze award for Brand Design & Royal Challenge American Pride
Ambrosia INDSPIRIT Awards 2024
Packaging Design at the International
Silver award for Packaging Design at the
Spirits Challenge
Graphis Design Annual
• Best Packaging award (graphics) at
Ambrosia INDSPIRIT Awards 2024

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 STATUTORY REPORTS FINANCIAL STATEMENTS
CORPORATE OVERVIEW

Celebrating our People

and Culture
While we take pride in our industry-leading position, our greater pride lies in our
people who enable it. Our Employee Value Proposition, ‘Celebrating You’, commits to
making our organisation the best place for employee growth, where they can bring
their authentic selves to work and shape the future with us.
Inclusion and Diversity
We are dedicated to attracting and with best-in-class capability interventions, INCLUSION &
retaining a diverse talent pool and inspiring stories from across our business, DIVERSITY SNAPSHOT
fostering an inclusive culture. This is
demonstrated through our comprehensive
overview of our aspirational culture
aligned to behaviours of psychological 27%
policies such as gender-neutral family safety and daily cultural practices. Women
leave, wellness policy which includes representation
fertility treatment and gender affirmation Recent initiatives have further underscored
surgery, crèche policy, and guidelines our commitment to inclusion and diversity. 43%
like disability inclusion, pregnancy We launched Spirited Women’s Network Women among
loss, menopause, domestic and family (SWN) Employee Resource Group (ERG) new hires
abuse, and gender identity and gender to engage, inspire and empower female
expression guidelines. employees, while our established Rainbow 50%
Network ERG celebrated Pride Month with Women representation in
The launch of our comprehensive online events raising LGBT+ awareness. INC. the Executive Team
Inclusive Culture hub was a significant step Week, an annual global event, continues
towards nurturing our culture. This one-stop
shop of resources and tools offer support
to promote workplace inclusivity and a
sense of belonging for everyone, witnessed
30%
Women representation in the Senior
to our leaders, managers and employees enthusiastic employee participation. Leadership Team

52
Persons with Disability work in our
manufacturing units

89%
Employee Engagement Score (‘Your
Voice’ – Internal Engagement Survey)
Diageo India was recognised as the
Gold Employer for LGBT+ Inclusion by
the India Workplace Equality Index
(IWEI), India’s only benchmarking
index for LGBT+ inclusion.
The Company was ranked 16 out of
Top 20 in Equileap’s Gender Equality
Report & Ranking for Emerging
Market and was featured on the list of
LinkedIn Top Companies 2024: The
10 leading workplaces in Retail and
Consumer Goods in India.

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UNITED SPIRITS LIMITED Annual Report 2023–24

Employees’ Career, Growth and

Development
We are committed to creating
opportunities for career growth and
building a culture of purpose-driven
performance to become one of the
best performing, most trusted and
respected consumer products companies
in the country. Our new Learning and
Development (L&D) strategy responds
to the evolving needs of employees, the
business and the industry by offering
diverse learning opportunities focussed on:

Leadership & Management Excellence

Empowers managers to boost leadership
and team management skills for
These opportunities are facilitated
superior outcomes. Enhanced Wellness Policy: We
through collaborations with top-tier
significantly enhanced our Medical,
training partners and business schools.
Personal Accident and Term Life
Professional Competence Additionally, our ‘Leaders for Learning’
Insurance coverage, aligned with our
Assists employees in developing the initiative aims to cultivate an internal
focus on supporting the comprehensive
essential skills needed to thrive in their network of leaders who serve as learning
health and well-being of our employees.
professional career. facilitators, thereby promoting knowledge
sharing and mentorship.
Enhanced Crèche Policy: Demonstrating
Our overall capability development our commitment to gender-neutral
Skills of the Future
efforts have led to a very strong internal parental benefits, our crèche policy
Equips employees with the skills and recruitment rate of 53% (open positions was upgraded. The new policy makes
knowledge to navigate industry shifts this year filled by existing employees). childcare support accessible for all
and emerging technologies, aligning with
employees, fostering equal opportunities
future requirements.
Employee Well-Being to manage work and family
We prioritise the physical, mental, responsibilities seamlessly.
Functional Mastery emotional, financial and social well-being
Encourages deepening of domain of our employees, adopting a holistic Employee Assistance Programme:
expertise, skill honing and continuous approach to promote a supportive work Offering free 24/7 online confidential
growth to maximise individual and environment. In line with this commitment, counselling for employees and their
organisational value. several new policies and programmes families, this programme creates
have been implemented. a supportive space for addressing
personal or work-related issues,
enhancing well-being and productivity,
and contributing to a healthier, more
resilient workforce.

Wellness Sessions: Monthly wellness

sessions are conducted to improve
holistic well-being, with topics ranging
from women’s health and cancer
prevention tips to mindful snacking
and building a strong financial
foundation. Providing valuable
insights, these sessions reinforce our
commitment to employee well-being
beyond the workplace and nurturing a
positive culture.

12
 STATUTORY REPORTS FINANCIAL STATEMENTS
CORPORATE OVERVIEW

Society 2030: Spirit of Progress

Society 2030: Spirit of Progress, our Environmental, Social, and Governance (ESG)
action plan is aimed at fostering a more inclusive and sustainable world and is aligned
to our purpose of celebrating life every day, everywhere. The comprehensive blueprint
empowers us to make a positive impact not only within our company but also in our
communities and society at large. The Society 2030 plan is anchored in doing business
the right way and focusses on three priorities: pioneering grain-to-glass sustainability,
championing inclusion and diversity and promoting positive drinking.
Pioneering Grain-to-Glass Sustainability
Climate change, water stress, biodiversity loss and other challenges indicate significant risks to the environment and the prosperity
of communities. Committed to business sustainability, we embrace the responsibility of protecting our planet and creating shared
stakeholder value.

Preserving water for life

Targets
Before
• Use 40% less water than today for every drink
we make by 2030.
• Replenish more water than we use in all our
water-stressed areas by 2026.

Progress in FY24
During the year, we created water replenishment
capacity of over 9,000 Cu.M. and have been able
to replenish more than 1 Million Cu.M. of water in
last three years across our water-stressed sites. As
a result of our sustained efforts, we have exceeded
our total water replenishment target by 25% and
achieved it three years prior to our 2026 goal.
Elevating our focus towards Water, Sanitation, and
Hygiene (WASH), we have been able to transform
individual lives by constructing 264 sanitation After
facilities and have been able to create more than
13,000 litres/hour of clean drinking water capacity
across villages in Maharashtra, Uttar Pradesh,
Odisha and Rajasthan.
We have improved our water-use efficiency by
48%*^ in our distilleries and by 31%*^ in packaging,
against the target of 40% by 2030. In FY23, our
Alwar distillery became the first spirit distillery in Asia
to receive the Alliance for Water Stewardship (AWS)
Certification. Continuing the momentum, we have
been working on implementing catchment-based
water stewardship initiatives through collective
action on water and have continued to meet the
AWS certification requirements.

13
UNITED SPIRITS LIMITED Annual Report 2023–24

Accelerate to a low carbon world

Targets renewable energy status ahead of
• Achieve net-zero carbon emissions our 2030 target.
(Scope 1 & 2) across direct
operations by 2030. Our brand ‘Signature’ is associated with
mangrove plantation in Puri, Odisha,
• Reduce our value chain (Scope 3) where 31,500 mangrove seedlings are
carbon emission by 50%. being planted. These mangroves can
• Sustain 100% use of renewable fuel sequester carbon 2-4 times faster than a
and increase the in-house potential for mature tropical forest.
renewable energy.
Additionally, over 1 lakh trees were
Progress in FY24 planted to offset residual greenhouse
gas emissions. We have also launched
We reduced greenhouse gas emissions
an afforestation drive in Alwar and have
from our operations by 87%*^ and have
planted more than 2 lakh trees under
achieved zero coal status in our distillery
the ‛Trees Outside Forest in Rajasthan’
operations by transitioning to renewable
(TOFR) programme.
energy. Our in-house solar energy
generation capacity has increased to
As part of our efforts to reduce carbon
2.6 MW from 1.3 MW.
emissions throughout our value chain, we
We have achieved 98.6%*^ renewable are closely engaging with our suppliers to
energy use status in operations and facilitate their transition to renewable and
are well positioned to achieve 100% low-carbon fuel alternatives.

Become sustainable by design

Targets Our regenerative agriculture programme,
• Make 100% of our packaging widely in collaboration with The Nature
recyclable by 2030. Conservancy India, is being implemented
across 60 villages in 2 districts namely
• Increase recycled content in all Ambala (Haryana) and Ludhiana
packaging to 60% by 2030. (Punjab). The objective is to implement
Progress in FY24 various techniques of regenerative
agriculture such as direct seeding, crop
Over 99% of our packaging material is
residue management, efficient irrigation,
now widely recyclable, making us well-
improved soil health and agroforestry, to
placed to achieve 100% status before
help transform agricultural practices in
our 2030 target. Additionally, more
the region and move towards adopting
than 50% of our purchased packaging
regenerative agriculture.
material is made from recycled content.
We have removed mono cartons from The Company launched a unique
95% of our portfolio and introduced micro enterprise initiative to empower
recyclable PET containers in line with our 100 smallholder women farmers in Nashik.
2030 goals. The Company continues its The initiative will enable these women
effort under plastic waste management farmers with training, seed funding
Extended Producer Responsibility (EPR) financial support, equipment and last-mile
commitment to collect 100% of plastic connectivity through the food supply chain
waste generated. to tackle crop loss, food waste and ensure
sustainable livelihood.

14
 STATUTORY REPORTS FINANCIAL STATEMENTS
CORPORATE OVERVIEW

Protecting biodiversity
The Great Indian Bustard (GIB) or Key efforts encompass the restoration of six
Godawan is a near-extinct bird exclusive key water bodies, creation of nesting
to the arid and semi-arid grasslands of habitat and generating awareness among
India. Project GIB focusses on habitat local communities on conservation.
creation and in-situ conservation
in Rajasthan to aid the long-term Our implementing partner, Gramodaya
conservation and recovery of this Samajik Sansthan (GSS), is technically
critically endangered species. guided by the Forest Department & Wildlife
Institute of India on the type of activities
and initiatives to be undertaken to support
their ongoing conservation efforts.

Championing Inclusion and Diversity

We champion inclusion and diversity across our business at every level everywhere to help shape an equitable society. To realise this
ambition, we recruit diverse talent, source services from diverse suppliers, portray diversity through our brands and drive inclusive
programmes within the communities.

Our ‘Learning for Life’ programme for Persons with Disability (SCPwD) to bar owners and bartenders, trained over
helps enhance livelihood opportunities mainstream people with Speech & 9,400 individuals.
for individuals from under-represented Hearing impairment in hospitality sector
communities. A total of 2,060 individuals by supporting them with relevant skills We maintain close engagements with
underwent training and successfully and resources. We have been able to our suppliers and agencies to drive
completed the National Skill Development train 110 individuals and will further scale positive, sustainable economic impact in
Council (NSDC) certified programme this initiative to train 300 individuals in the communities from which we source.
focussing on the hospitality sector. Over the coming year. As part of our ESG action plan, we will
50% of the beneficiaries were women. continually measure and enhance the
We initiated a unique programme in The Diageo Bar Academy, our percentage of diverse suppliers across
collaboration with the Skill Council comprehensive learning platform for our value chain.

15
UNITED SPIRITS LIMITED Annual Report 2023–24

Promoting Positive Drinking

We want to change the way people drink – for the better. This is why we promote responsible drinking and invest in education programmes
to discourage the harmful use of alcohol.

Act Smart India driving. Additionally, we collaborated dedicated responsible drinking online
Our Act Smart India programme aims to with 31 Regional Transport Offices platform that advocates moderation and
address the issue of underage drinking by and established tab labs to promote addresses the consequences of harmful
educating young people. 1,91,861 youth awareness. A total of 4,35,164 consumers drinking. We have launched a social
participated in this programme, which participated in this informative session on media campaign during the festive season
employed impactful storytelling to raise anti-drink driving. to educate consumers on responsible
awareness about the hazards associated drinking and promoting moderation.
with underage drinking. We continued our efforts to curb drink
driving and supported the Uttar Pradesh,
Wrong Side of the Road Punjab and Telangana Police Departments
in strengthening their road safety efforts by
‘Wrong Side of the Road,’ our initiative
providing advanced breath analysers.
against drink driving, is a collaborative
effort with the United Nations Institute
for Training and Research (UNITAR). The DRINKiQ website
interactive learning experience uses a Providing information is a vital element
series of real-life scenarios to sensitise in empowering consumers to make
participants on the consequences of drink responsible choices. DRINKiQ is a

KEY HIGHLIGHTS RECOGNITION

Diageo India was awarded
87%*^ 9,000 Cu.M. ‘Excellence in Contribution to ESG’
Reduction in greenhouse gas Water replenishment at the Ambrosia INDSPIRIT Awards
emissions from our operations. capacity created. 2024 and the ‘CSR Company of
the Year’ by Spiritz magazine.

98.6%*^ Over 6 lakh

Use of renewable People educated through our Positive
energy in operations. Drinking Programmes.

48%*^ 2,060
Improvement in water-use Beneficiaries trained in hospitality
efficiency in distilleries. skills under the ‘Learning for Life’
programme.

*against base year FY20.

^ covering Diageo India own operating units.

16
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

UNITED SPIRITS LIMITED

Registered Office: ‘UB Tower’, #24, Vittal Mallya Road, Bengaluru, Karnataka, India - 560 001
Tel: 080-2221 0705; Fax: 080-22245253; Corporate Identity Number: L01551KA1999PLC024991
Website: www.diageoindia.com | e-mail: [email protected]

Notice
Notice is hereby given that the twenty-fifth Annual General Meeting 6. Payment of commission to Independent Directors and
(“AGM”) of the Members of United Spirits Limited (“the Company”/ Non-Executive Directors.
“USL”) will be held on Wednesday, 31st July 2024 at 3.30 pm (IST)
through Video Conferencing (“VC”) / Other Audio-Visual Means To consider and, if thought fit, to pass the following resolution
(“OAVM”) to transact the following businesses: as an ordinary resolution:

ORDINARY BUSINESS “RESOLVED THAT pursuant to the provisions of sections 149(9),

1. To receive, consider and adopt the Audited Standalone 197, 198, Schedule V and any other applicable provisions
Financial Statements of the Company for the financial of the Companies Act, 2013 (‘the Act’) and the Rules
year ended 31st March 2024 and the reports of the Board of made thereunder and Regulation 17 of the Securities and
Directors and Auditors thereon. Exchange Board of India(Listing Obligations and Disclosure
Requirements) Regulations, 2015 (including any statutory
2. To receive, consider and adopt the Audited Consolidated modification(s) or re-enactment thereof for the time being in
Financial Statements of the Company for the financial year force), consent of the Members be and is hereby accorded for
ended 31st March 2024 and the report of the Auditors thereon. payment of remuneration for each financial year to the Non-
3. To appoint a Director in place of Mr. Pradeep Jain (DIN: Executive Directors of the Company appointed from time to
time, in the form of commission, in addition to the sitting fees
02110401) who retires by rotation and being eligible, offers
and reimbursement of expenses for participation in the Board
himself for re-appointment.
and other meetings, as the Board of Directors may from time
4. To declare a final dividend of ` 5/- per equity share for the to time, determine subject to the aggregate remuneration not
financial year ended 31st March 2024. exceeding 1% of the net profits of the Company in any financial
year (computed in the manner provided in section 198 of the
SPECIAL BUSINESS Act) or in aggregate not exceeding ` 4,00,00,000 (Rupees
5. Ratification of remuneration payable to Cost Auditor of the four crore only), whichever is less and that this resolution shall
Company for the Financial Year 2024-25. remain in force for a period not exceeding three financial
years commencing from April 1, 2025 (for the financial years
To consider and, if thought fit, to pass the following resolution 2025-26, 2026-27 and 2027-28).”
as an ordinary resolution:

“RESOLVED THAT pursuant to the provisions of section 148 and 7. Approval of material Related Party Transactions
other applicable provisions, if any, of the Companies Act, 2013
read with the Companies (Audit and Auditors) Rules, 2014 To consider and if thought fit, to pass the following resolution
(including any statutory modification(s) or re-enactment(s) as an ordinary resolution:
thereof for the time being in force) the remuneration payable
to M/s. Rao, Murthy & Associates, Cost Accountants, having “RESOLVED THAT pursuant to section 188 of the Companies
Firm Registration Number 000065, appointed by the Board Act, 2013 (‘the Act’) and other applicable provisions, if any,
of Directors of the Company on the recommendation of the read with Rule 15 of the Companies (Meetings of Board and
Audit Committee as Cost Auditors to conduct the audit of the its Powers) Rules, 2014, to the extent applicable, (including any
cost records maintained by the Company for the financial year other applicable provision(s) or statutory modification(s) or
2024-25 amounting to ` 200,000 (Rupees Two Lakhs only) re-enactment thereof for the time being in force), the
in addition to applicable taxes and out of pocket expenses provisions of Regulation 23(4) of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 (‘Listing
incurred in connection with the audit, be and is hereby ratified.
Regulations’), read with the Company’s ‘Policy on Related
RESOLVED FURTHER THAT any Director or Company Party Transactions’ and as approved by Board of Directors
Secretary of the Company be and is hereby authorised to do on the recommendation of the Audit Committee, approval of
all such acts, deeds, matters and things as may be necessary, the Members of the Company be and is hereby accorded for
expedient and desirable for the purpose of giving effect to this continuing with Material Related Party Transactions/contracts/
resolution.” arrangements/agreements by United Spirits Limited (“USL” or

17
UNITED SPIRITS LIMITED Annual Report 2023–24

Notice (Continued)

“Company”) with Diageo Brands B. V. Netherlands (“DBBV”), “RESOLVED THAT pursuant to the provisions of sections 196, 197,
a Related Party within the meaning of section 2(76) of the 198, read with Schedule V and any other applicable provisions,
Act, and Regulation 2(1)(zb) of the Listing Regulations for the if any, of the Companies Act, 2013 (‘the Act’), and the Rules
financial year 2024-25, individually and/or in aggregate upto framed thereunder (including any statutory modification(s) or
an amount of ` 1266 crore (Rupees one thousand two hundred amendment(s) thereto or re-enactment(s) thereof for the time
sixty six crore only) provided however, that the said contracts/ being in force), Securities and Exchange Board of India (Listing
arrangements/ transactions shall be carried out on an arm’s Obligations and Disclosure Requirements) Regulations,
length basis and in the ordinary course of business of the 2015 including any amendment, modification, variation or
Company in the nature of: reenactment thereof, pursuant to the Articles of Association
of the Company and as approved by the Board of Directors
a) Approval for procuring BIO (Bottled in Origin brands) for on the recommendation of the Nomination and Remuneration
distribution in India Market. Committee, Ms. Hina Nagarajan (DIN: 00048506) be paid
the below mentioned remuneration for the remaining tenure
b) Approval for procuring bulk scotch for (manufacturing/ from 1st July 2024 to 30th June 2026 :
bottling) Diageo Brands in India (Bottled in India or BII
brands) Compensation Plan Amount in `
(Per Annum)
c) Approval for import of bulk scotch for manufacturing
Basic Salary 3,48,53,913
Company’s brands
Basket of Allowances (BOA) 3,27,38,726
d) Availing/rendering of any kind of service(s), or any Total Base (Basic+BOA) 6,75,92,639
other transaction(s) for transfer of resources, services Company’s contribution to Provident Fund 41,82,470
or obligations and other reimbursements or recoveries
Target Annual Incentive Plan (Target AIP) 2,78,83,130
(‘Residual RPTs’).
Target cost to Company (CTC) per annum 9,96,58,239
Collectively (“RPTs”) on such terms and conditions as
detailed in the explanatory statement to this Resolution RESOLVED FURTHER THAT the maximum Annual Incentive
and as may be mutually agreed between the Company Plan (AIP) payable would be 200% of Target AIP depending
and DBBV. on the performance of Ms. Hina Nagarajan as may be
recommended by the Nomination and Remuneration
RESOLVED FURTHER THAT the Board of Directors of the Committee and approved by the Board.
Company (‘the Board’, which term shall be deemed to include
the Audit Committee) be and is hereby authorised to perform RESOLVED FURTHER THAT aforesaid remuneration (subject to
and execute all such acts, deeds, matters and things, including such other revisions, modifications (including inter-se changes
delegation of all or any of the powers conferred herein, as in various components of CTC) and increments, including
may be deemed necessary, proper or expedient to give effect any increments to the Basic and Basket of Allowances (BOA)
to this resolution and for the matters connected therewith and consequential increase to the Company’s contribution to
or incidental thereto, and also to settle any issue, question, Provident Fund, Gratuity, Annual Incentive Plan (AIP) etc., as
difficulty or doubt that may arise in this regard as the Board may be approved by the Board from time to time based on
in its absolute discretion may deem fit or desirable, subject the recommendation of the Nomination and Remuneration
to compliance with the applicable laws and regulations, Committee and as per the rules/policy of the Company) will
without the Board being required to seek any further consent / be within the overall limit of ` 35 crore per annum.
approval of the Members.”
RESOLVED FURTHER THAT Ms. Hina Nagarajan shall also be
8. Approval of remuneration payable to Ms. Hina Nagarajan entitled to group term & group personal accidental insurance
(DIN: 00048506), Managing Director and Chief Executive coverage up to a sum of ` 24 crore and ` 6 crore respectively
Officer of the Company for a period of two years. and that she be entitled to a group medical insurance
coverage for self, spouse and dependants up to a sum of
To consider and, if thought fit, to pass the following resolution ` 5 lakhs per annum and that premium in relation to both the
as an ordinary resolution: aforesaid insurance coverage be either paid/borne by the
Company/reimbursed to her.

18
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Notice (Continued)

RESOLVED FURTHER THAT in absence or inadequacy of 9. Appointment of Ms. Amrita Gangotra (DIN: 08333492) as an
profits in any financial year, the remuneration including the Independent Director of the Company.
perquisites will be paid in accordance with the applicable
provisions of Schedule V of the Act. To consider and, if thought fit, to pass the following resolution
as a special resolution:
RESOLVED FURTHER THAT Ms. Hina Nagarajan shall also
be entitled to gratuity as per the policy of the Company “RESOLVED THAT in accordance with, the provisions of sections
and all other benefits/allowances, travel, telephone, club 149, 150 and 152, Schedule IV and other applicable provisions, if
membership(s), and other reimbursement entitlements as per any, of the Companies Act, 2013 (‘the Act’) and the Rules made
her grade in accordance with the policy of the Company (as thereunder, Regulation 17, 25 and other applicable provisions
may be modified from time to time). of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, (“LODR Regulations”) (including any
RESOLVED FURTHER THAT Ms. Hina Nagarajan shall also be statutory modification or re-enactment thereof for the time
entitled to the annual grant of Diageo Performance Shares being in force) and the Articles of Association of the Company,
Plan (PSP), Diageo Senior Executive Share Option Plan Ms. Amrita Gangotra (DIN: 08333492), who is appointed
by the Board of Directors on the recommendation
(SESOP), Stock Appreciation Rights (SARs) of the Company or
of Nomination and Remuneration Committee as a
other Long Term Incentive plans, as may be approved by the
Non-Executive, Independent Director with effect from
Board of Directors from time to time, in accordance with the
1st September 2024 and who is eligible for appointment
policy of the Company and as per the terms and conditions
as an Independent Director and who meets the criteria
of the respective plan and upon approval of the Nomination
for independence under section 149(6) of the Act and the
and Remuneration Committee, subject to the overall limit on
Rules made thereunder and Regulation 16(1)(b) of the LODR
remuneration specified herein.
Regulations and in respect of whom the Company has
received a notice in writing from a member under section 160
RESOLVED FURTHER THAT all unvested long term instruments
of the Act proposing her candidature for the office of Director of
upon determination of her term as Managing Director and
the Company, be and is hereby appointed as an Independent
Chief Executive Officer shall be dealt with appropriately based
Director of the Company for a period of five years, effective from
on approval of the Board of Directors (upon recommendation
1st September 2024 till 31st August 2029, and whose office
of the Nomination and Remuneration Committee) so long as shall not be liable to retire by rotation.
same does not exceed ` 20 crore.
RESOLVED FURTHER THAT the Board of Directors of the
RESOLVED FURTHER THAT the other terms of appointment Company be and is hereby authorised to do all acts and take
remain the same as approved by the shareholders at their all such steps as may be necessary, proper or expedient to
meeting held on 26th August 2021 and/or as may be approved give effect to this resolution and to delegate all or any of its
by the Board from time to time based on the recommendation powers herein conferred to any Director, Company Secretary
of the Nomination and Remuneration Committee and as per or any other officer(s) of the Company.”
the rules/policy of the Company.
By Order of the Board
RESOLVED FURTHER THAT the Board of Directors of the
Company be and is hereby authorised to do all such acts,
deeds, matters and things as may be necessary for obtaining Mital Sanghvi
Company Secretary
necessary approvals in relation to the above and to execute all
such documents, instruments and writings as may be required
in this connection and to delegate all or any of its powers Place : Mumbai
herein conferred to any Director, Company Secretary or any Date : 24th May 2024
other officer(s) of the Company.”

19
UNITED SPIRITS LIMITED Annual Report 2023–24

Notice (Continued)

Notes: 5. Institutional shareholders/corporate shareholders intending

to authorize their representatives to participate and vote
1. Ministry of Corporate Affairs (MCA) vide General Circular
at the meeting are requested to send a certified copy of
No. 09/2023 dated 25th September 2023 and Securities and
Board resolution/authorization letter to the Scrutinizer
Exchange Board of India (SEBI) vide its Circular No. SEBI/
by email at [email protected] or to the
HO/CFD/CFD-PoD-2/P/CIR/2023/167 dated 7th October
Company at [email protected] or upload on the
2023 (hereinafter collectively referred to as ‘Circulars’)
VC / e-voting portal.
permitted companies to hold Annual General Meeting
(‘AGM’) through video conference (“VC”) or other audio visual 6. Participation of Members through VC/OAVM will be reckoned
means (“OAVM”), without physical presence of Members at a for the purpose of quorum for the AGM as per section 103 of
common venue. Accordingly, the AGM of the Company will be the Act.
held through VC/OAVM. In compliance with the provisions of
the Companies Act, 2013 (“the Act”), SEBI (Listing Obligations 7. Members are required to update their email addresses, if any,
and Disclosure Requirements) Regulations, 2015 (“Listing with the Company’s Registrars and Share Transfer Agents
Regulations”) and Circulars, the 25th AGM of the Company (RTA) viz., Integrated Registry Management Services Private
is scheduled to be held through VC / OAVM on Wednesday, Limited (IRMSPL) at #30, Ramana Residency, 4th Cross,
31st July 2024 at 3:30 P.M. (IST). The deemed venue for the Sampige Road, Bengaluru – 560 003 (Telephone No. 080
AGM will be the registered office of the Company. 23460815-818 Fax No. 08023460819), in case of shares held
in physical form and to the respective Depository Participants
2. In compliance with the aforesaid Circulars, Notice of AGM (‘DP’), in case of shares held in dematerialized/ electronic
along with the Annual Report 2023-24 is being sent through form, so that all notices and other statutory documents which
electronic mode to those Members whose email addresses are required to be sent to the members, as per the provisions
are registered with the Company/Depositories. Members may of the Act or Listing Regulations, can be sent to their email
note that the Notice and Annual Report 2023-24 will also be addresses.
available on the Company’s website www.diageoindia.com,
websites of Stock Exchanges i.e. BSE Limited and the National 8. Members holding shares in physical form, holding in the same
name or same order of names under different ledger folios
Stock Exchange of India Limited at www.bseindia.com and
are requested to apply for consolidation of such folios, to the
www.nseindia.com respectively.
Company’s RTA. Members may address all their documents/
correspondence relating to the equity shares of the Company
3. Explanatory statement, pursuant to section 102 of the Act,
directly to the Company’s RTA.
setting out material facts concerning the Special Business
in the Notice is annexed hereto and forms part of this
9. The Board of Directors of the Company at their meeting held on
Notice. Relevant details, pursuant to Listing Regulations and 24th May 2024 have, inter alia, approved and recommended
Secretarial Standards on General Meetings issued by the payment of final dividend of ` 5 (Rupees five only) per equity
Institute of Company Secretaries of India (“ICSI”) are also share of face value of ` 2 (Rupees two only) each for the
annexed. financial year ended 31st March 2024 (‘final dividend’), subject
to approval of the Members at the ensuing AGM.
4. The Circulars waived the requirement of permitting the
Members to appoint proxies to attend and vote on his/her 10. Final dividend for the financial year ended 31st March 2024,
behalf, as the AGM is being held through VC/OAVM. if approved by the Members at the ensuing AGM, will be
Accordingly, the facility for appointment of proxies by the paid on or after 6th August 2024, to those Members whose
Members will not be available. However, in pursuance of names appear on the Register of Members of the Company or
section 112 and section 113 of the Act, representatives of the Register of Beneficial Owners maintained by the Depositories
Members such as the President of India or the Governor of as on the record date i.e. Friday, 12th July 2024.
a State or body corporate can attend the AGM through
VC/OAVM and cast their votes through e-voting. The Proxy 11. Members holding shares in physical/demat form are hereby
Form, Attendance Slip and route map are not annexed to this informed that the bank particulars registered with RTA or their
Notice. respective DP, as the case may be, will be considered by the
Company for payment of final dividend.

20
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Notice (Continued)

13. As per the Income-tax Act, 1961, dividends paid or distributed Signature, with the Company/Registrar and Transfer
by the Company after 1st April, 2020, shall be taxable at the Agent (RTA), shall not be eligible for any payment
hands of the shareholders and the Company shall be required including Dividend / Interest / Redemption etc., in
to deduct tax at source (“TDS”) at the prescribed rates from the respect of such folios, with effect from 1st April 2024.
dividend to be paid to the shareholders, subject to requisite The dividend will be paid only through electronic mode
approvals. For the prescribed rates for various categories, upon updation of all the aforesaid details. Member may
please refer to the Finance Act, 2020 and the amendments submit duly filled prescribed forms by sending email
thereof. from your registered email ID to bglsta@integratedindia.
in and by sending a physical copy of the duly filled
a. A separate email communication was sent to the and signed prescribed forms by the registered holders
members on wednesday, 19th June 2024, informing the with the Company/RTA at No. 30, Ramana Residency,
relevant procedure to be adopted by them/documents 4th Cross, Sampige Road Malleswaram, Bangalore -
to be submitted for availing the applicable tax rate. 560003. You can find prescribed forms on Company’s
website: https://www.diageoindia.com/en/investors/
b. The resident and non-resident shareholders upload shareholder-centre/downloads
duly filled and signed aforesaid documents, as
applicable, only on the weblink of RTA i.e., https://www. 14. Members are requested to note that dividends, if not encashed
integratedregistry.in/TaxExemptionRegistration.aspx for a period of seven years from the date of transfer to Unpaid
on or before Monday, 15th July 2024, 06.00 PM (IST), Dividend Account of the Company, are liable to be transferred
to enable the Company to determine the appropriate to the Investor Education and Protection Fund (“IEPF”). Further,
TDS/withholding tax rate applicable. Further Members all shares in respect of which dividend has remained unclaimed
may note that tax determination/deduction received for seven consecutive years from the date of transfer to unpaid
post 15th July 2024, 6.00 pm(IST) shall not be considered dividend account shall be transferred to IEPF. In view of this,
for payment of dividend. For any queries Members can Members are requested to claim their dividends from the
write to [email protected]. Company, within the stipulated timeline.

c. Members are requested to note that in case tax on said 15. Members may please note that SEBI vide its Circular No.
Dividend is deducted at a higher rate due to non-receipt SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2022/8 dated
of or satisfactory completeness of the afore-mentioned 25th January 2022 has mandated the listed companies to
details/documents by Monday, 15th July 2024 the issue securities in dematerialized form only while processing
Members may claim an appropriate refund in the return service requests viz., Issue of duplicate securities certificate;
of income filed with their respective tax authorities. claim from unclaimed suspense account; renewal/ exchange
of securities certificate; endorsement; sub-division/splitting of
d. Members are requested to ensure that their PAN, choice securities certificate; consolidation of securities certificates/
of nomination, contact details, including mobile number, folios; transmission and transposition. Accordingly, Members
email ID, bank account details, mobile number, and are requested to make service requests by submitting a duly
residential status of their demat accounts are updated filled and signed Form ISR – 4, the format of which is available
with Depository Participant (“DP”), in order to receive on the Company’s website at https://www.diageoindia.com/
communications from the Company and any benefits en/investors/shareholder-centre/downloads. It may be noted
arising out of corporate action in a timely manner. that any service request can be processed only after the folio
Any change in aforesaid details is required to updated is KYC Compliant.
directly with your DP only.
16. As mentioned above, the Company’s equity shares are
e. Members may note that as per Securities and under compulsory dematerialisation. Accordingly, trading
Exchange Board of India (SEBI), vide its circular dated of these shares through the stock exchanges would be
3rd November 2021 (subsequently amended circulars facilitated if the share certificates are dematerialised.
dated 14th December 2021, 16th March 2023, 17th Members with physical share certificates are advised to
November 2023 and 10th June 2024) had informed that consider opening a demat account with an authorised
shareholders holding securities in physical mode, whose DP and arrange for dematerializing their shareholdings
folio/s are not updated with PAN (or) Contact Details (or) in the Company. Members may please note that effective
Mobile Number (or) Bank Account Details (or) Specimen 1st April 2019 transfer of shares are not permitted through

21
UNITED SPIRITS LIMITED Annual Report 2023–24

Notice (Continued)

physical mode pursuant to SEBI notification dated 23. Members who have cast their vote by remote e-voting prior
8th June 2018. to the meeting may also attend the meeting but shall not be
entitled to cast their vote again.
17. As per the provisions of section 72 of the Act and SEBI Circular,
the facility for making nomination is available for Members in 24. Any person who acquires shares of the Company and becomes
respect of the shares held by them. Members who have not a Member of the Company after sending of the Notice and
yet registered their nomination are requested to register the holding shares as of the cut-off date, may obtain the login ID
same by submitting Form No. SH-13. If a Member desires to and password by sending a request at helpdesk.evoting@
opt out or cancel the earlier nomination and record a fresh cdslindia.com. However, if he/she is already registered with
nomination, he/she may submit the same in Form ISR-3 or CDSL for remote e-voting then he/she can use his/her existing
SH-14 as the case may be. The said forms can be downloaded user ID and password for casting the vote.
from the Company’s website https://www.diageoindia.com/
en/investors/shareholder-centre/downloads. Members are 25. The instructions for shareholders voting electronically are as
requested to submit the said details to their DP in case the under:
shares are held by them in dematerialized form and to RTA in
case the shares are held in physical form. In compliance with the provisions of section 108 of the Act,
read with Rule 20 of the Companies (Management and
18. All Unclaimed Dividend for the period from 1st April 1999 to Administration) Rules, 2014, as amended from time to time,
31st March 2013, required to be transferred to the Investor and Regulation 44 of the Listing Regulations, the Members
Education and Protection Fund (“Fund”) in terms of the are provided with the facility to cast their vote electronically,
provisions of the Companies Act, 1956 and the Companies through the e-voting services provided by CDSL, on all the
Act, 2013, were transferred to the Fund. The Company has not resolutions set forth in this Notice.
declared any dividend from financial year 2013-14 till financial
year 2022-23. The Company has declared interim dividend The remote e-voting period begins on Saturday, 27th July 2024
and the Board has recommended final dividend for financial at 9.00 a.m. (IST) and ends on Tuesday, 30th July 2024 at 5.00
year 2023-24. p.m. (IST). During this period, Members of the Company holding
shares either in physical form or in dematerialized form as on
19. Members may note that the Unclaimed Dividend which are the cut-off date i.e. Wednesday, 24th July 2024, may cast their
transferred to the Fund can be claimed only by submitting an vote electronically. The e-voting module shall be disabled by
application in form IEPF-5 to the Ministry of Corporate Affairs CDSL for voting thereafter. Notice of AGM is also disseminated
(‘MCA’) available on website www.iepf.gov.in. Details of on the website of CDSL at www.evotingindia.com.
unclaimed dividend have been uploaded on the Company’s
website www.diageoindia.com. i. Information and instructions for Remote e-voting by
Individual Shareholders holding shares of the Company
20. The Members are requested to email their grievances for in demat mode:
redressal at [email protected] or investor.india@
diageo.com. In terms of SEBI circular no. SEBI/HO/CFD/CMD/
CIR/P/2020/242 dated December 9, 2020 on e-Voting
21. In compliance with the provisions of section 108 of the Act and facility provided by Listed Companies, Individual
Rule 20 of the Companies (Management and Administrations) shareholders holding securities in demat mode are
Rules, 2014, the Company is pleased to provide to Members allowed to vote through their demat account maintained
with a facility to exercise their right to vote at the 25th AGM by with Depositories and Depository Participants.
electronic means and the votes may be cast through electronic Shareholders are advised to update their mobile number
voting (‘e-voting’) services provided by Central Depository and email Id in their demat accounts in order to access
Services (India) Limited [‘CDSL’]. e-Voting facility.

22. Facility for e-voting shall also be made available during the Pursuant to abovesaid SEBI Circular, Login method
meeting and Members attending the meeting through video for e-Voting and joining virtual meetings for Individual
conference, who have not cast their vote by remote e-voting shareholders holding securities in Demat mode CDSL/
can exercise their vote during the meeting. NSDL is given below:

22
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Notice (Continued)

Type of shareholders Login Method

Individual Shareholders 1. Users who have opted for CDSL Easi / Easiest facility, can login through their existing user
holding securities in id and password. Option will be made available to reach e-Voting page without any further
Demat mode with CDSL authentication. The URL for users to login to Easi / Easiest are https://web.cdslindia.com/
myeasinew/home/login or visit www.cdslindia.com and click on Login icon and select New
System Myeasi.

2. After successful login the Easi / Easiest user will be able to see the e-Voting option for
eligible companies where the evoting is in progress as per the information provided by
company. On clicking the evoting option, the user will be able to see e-Voting page of the
e-Voting service provider for casting your vote during the remote e-Voting period or joining
virtual meeting & voting during the meeting. Additionally, there is also links provided to
access the system of all e-Voting Service Providers i.e. CDSL/NSDL/KARVY/LINKINTIME,
so that the user can visit the e-Voting service providers’ website directly.

3. If the user is not registered for Easi/Easiest, option to register is available at https://web.
cdslindia.com/myeasitoken/Registration/EasiRegistration.

4. Alternatively, the user can directly access e-Voting page by providing Demat Account
Number and PAN No. from a e-Voting link available on www.cdslindia.com home page or
click on https://evoting.cdslindia.com/Evoting/EvotingLogin. The system will authenticate
the user by sending OTP on registered Mobile & Email as recorded in the Demat Account.
After successful authentication, user will be able to see the e-Voting option where the
evoting is in progress and also able to directly access the system of all e-Voting Service
Providers.
Individual Shareholders 1) If you are already registered for NSDL IDeAS facility, please visit the e-Services website of
holding securities in NSDL. Open web browser by typing the following URL: https://eservices.nsdl.com either on
demat mode with NSDL a Personal Computer or on a mobile. Once the home page of e-Services is launched, click
on the “Beneficial Owner” icon under “Login” which is available under ‘IDeAS’ section. A
new screen will open. You will have to enter your User ID and Password. After successful
authentication, you will be able to see e-Voting services. Click on “Access to e-Voting” under
e-Voting services and you will be able to see e-Voting page. Click on company name or
e-Voting service provider name and you will be re-directed to e-Voting service provider
website for casting your vote during the remote e-Voting period or joining virtual meeting &
voting during the meeting.

2) If the user is not registered for IDeAS e-Services, option to register is available at https://
eservices.nsdl.com. Select “Register Online for IDeAS “Portal or click at https://eservices.
nsdl.com/SecureWeb/IdeasDirectReg.jsp

3) Visit the e-Voting website of NSDL. Open web browser by typing the following URL: https://
www.evoting.nsdl.com/ either on a Personal Computer or on a mobile. Once the home
page of e-Voting system is launched, click on the icon “Login” which is available under
‘Shareholder/Member’ section. A new screen will open. You will have to enter your User
ID (i.e. your sixteen digit demat account number hold with NSDL), Password/OTP and
a Verification Code as shown on the screen. After successful authentication, you will be
redirected to NSDL Depository site wherein you can see e-Voting page. Click on company
name or e-Voting service provider name and you will be redirected to e-Voting service
provider website for casting your vote during the remote e-Voting period or joining virtual
meeting & voting during the meeting.

23
UNITED SPIRITS LIMITED Annual Report 2023–24

Notice (Continued)

Type of shareholders Login Method

Individual Shareholders You can also login using the login credentials of your demat account through your Depository
(holding securities in Participant registered with NSDL/CDSL for e-Voting facility. After Successful login, you will be
demat mode) login able to see e-Voting option. Once you click on e-Voting option, you will be redirected to NSDL/
through their Depository CDSL Depository site after successful authentication, wherein you can see e-Voting feature. Click
Participants on company name or e-Voting service provider name and you will be redirected to e-Voting
service provider website for casting your vote during the remote e-Voting period or joining
virtual meeting & voting during the meeting.

Important note: Members who are unable to retrieve User ID/ Password are advised to use Forget User ID and Forget Password
option available at abovementioned website

(ii) Helpdesk for Individual Shareholders holding securities in demat mode for any technical issues related to login through
Depository i.e. CDSL and NSDL

Login type Helpdesk details

Individual Shareholders holding Members facing any technical issue in login can contact CDSL helpdesk by sending a
securities in Demat mode with CDSL request at [email protected] or contact at toll free no. 1800 22 55 33.
Individual Shareholders holding Members facing any technical issue in login can contact NSDL helpdesk by sending
securities in Demat mode with NSDL a request at [email protected] or call at : 022 - 4886 7000 and 022 - 2499 7000

ii. Login method for e-Voting and joining virtual meetings 6. If you are a first-time user follow the steps given
for Physical shareholders and shareholders other than below:
individual holding in Demat form.
For Shareholders holding shares in Demat
1. The shareholders should log on to the e-voting Form and Physical form.
website www.evotingindia.com.
PAN Enter your 10 digit alpha-numeric PAN
issued by Income Tax Department
2. Click on “Shareholders” module.
(Applicable for both demat shareholders
as well as physical shareholders)
3. Now enter your User ID
• Shareholders who have not updated
a. For CDSL: 16 digits beneficiary ID,
their PAN with the Company/
Depository Participant are requested
b. For NSDL: 8 Character DP ID followed by 8
to use the sequence number sent
Digits Client ID,
by Company/RTA or contact
Company/ RTA.
c. Shareholders holding shares in Physical Form
should enter Folio Number registered with Dividend Bank Enter the Dividend Bank Details or Date
the Company. Details OR of Birth (in dd/mm/yyyy format) as
Date of Birth recorded in your demat account or in the
4. Next enter the Image Verification as displayed and (DOB) company records in order to login.
Click on Login.
• If both the details are not recorded
5. If you are holding shares in demat form and had with the depository or Company,
logged on to www.evotingindia.com and voted please enter the member id / folio
on an earlier e-voting of any company, then your number in the Dividend Bank details
existing password is to be used. field.

24
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Notice (Continued)

iii. After entering these details appropriately, click on • Non-Individual shareholders (i.e. other than
“SUBMIT” tab. Individuals, HUF, NRI etc.) and Custodians are
required to log on to www.evotingindia.com and
iv. Shareholders holding shares in physical form will then register themselves in the “Corporates” module.
directly reach the Company selection screen. However,
shareholders holding shares in demat form will now • A scanned copy of the Registration Form bearing
reach ‘Password Creation’ menu wherein they are the stamp and sign of the entity should be emailed
required to mandatorily enter their login password in to [email protected].
the new password field. Kindly note that this password
is to be also used by the demat holders for voting for • After receiving the login details a Compliance
resolutions of any other company on which they are User should be created using the admin login and
eligible to vote, provided that company opts for e-voting password. The Compliance User would be able to
through CDSL platform. It is strongly recommended not link the account(s) for which they wish to vote on.
to share your password with any other person and take
utmost care to keep your password confidential. • The list of accounts linked in the login will be
mapped automatically & can be delink in case of
v. For shareholders holding shares in physical form, the any wrong mapping.
details can be used only for e-voting on the resolutions
contained in this Notice. • It is mandatory that, a scanned copy of the Board
Resolution and Power of Attorney (POA) which
vi. Click on the EVSN for the Company. they have issued in favour of the Custodian, if any,
should be uploaded in PDF format in the system for
vii. (On the voting page, you will see “RESOLUTION the scrutinizer to verify the same.
DESCRIPTION” and against the same the option “YES/
NO” for voting. Select the option YES or NO as desired. • Alternatively Non Individual shareholders are
The option YES implies that you assent to the Resolution mandatorily required to send the relevant
and option NO implies that you dissent to the Resolution. Board Resolution/ Authority letter etc. together
with attested specimen signature of the duly
viii. Click on the “RESOLUTIONS FILE LINK” if you wish to authorized signatory who are authorized to
view the entire Resolution details. vote, to the Scrutinizer and to the Company at
the email address viz; sudhir.compsec@gmail.
ix. After selecting the resolution, you have decided to com or [email protected] respectively
vote on, click on “SUBMIT”. A confirmation box will be (designated email address by company) , if they
displayed. If you wish to confirm your vote, click on have voted from individual tab & not uploaded
“OK”, else to change your vote, click on “CANCEL” and same in the CDSL e-voting system for the scrutinizer
accordingly modify your vote. to verify the same.

x. Once you “CONFIRM” your vote on the resolution, you PROCESS FOR THOSE SHAREHOLDERS WHOSE EMAIL/
will not be allowed to modify your vote. MOBILE NO. ARE NOT REGISTERED WITH THE COMPANY/
DEPOSITORIES.
xi. You can also take a print of the votes cast by clicking on
1. For Physical shareholders - Kindly provide necessary
“Click here to print” option on the Voting page.
details like Folio No., Name of shareholder, scanned
copy of share certificate (front and back), self-attested
xii. If a demat account holder has forgotten the login
copies of PAN and Aadhar by email to Company/RTA
password then Enter the User ID and the image
email ID.
verification code and click on Forgot Password & enter
the details as prompted by the system. 2. For Demat shareholders - kindly update your email ID
& mobile no. with your respective Depository Participant
xiii. There is also an optional provision to upload BR/ (DP).
POA if any uploaded, which will be made available to
scrutinizer for verification. 3. For Individual Demat shareholders – kindly update your
email ID & mobile no. with your respective Depository
xiv. Additional Facility for Non – Individual Shareholders Participant (DP) which is mandatory while e-Voting &
and Custodians –For Remote Voting only. joining virtual meetings through Depository.

25
UNITED SPIRITS LIMITED Annual Report 2023–24

Notice (Continued)

If you have any queries or issues regarding attending 8. Those shareholders who have registered themselves as
AGM & e-Voting from the CDSL e-Voting System, you a speaker will only be allowed to express their views/ask
can write an email to [email protected] questions during the meeting.
or contact at toll free no. 1800 22 55 33.
9. Only those shareholders, who are present in the AGM
All grievances connected with the facility for voting by through VC/OAVM facility and have not casted their
electronic means may be addressed to Mr. Rakesh vote on the Resolutions through remote e-Voting and are
Dalvi, Sr. Manager, (CDSL,) Central Depository Services otherwise not barred from doing so, shall be eligible to
(India) Limited, A Wing, 25th Floor, Marathon Futurex, vote through e-Voting system available during the AGM.
Mafatlal Mill Compounds, N M Joshi Marg, Lower
Parel (East), Mumbai - 400013 or send an email to 10. If any Votes are cast by the shareholders through the
[email protected] or call on 1800 22 55 33. e-voting available during the AGM and if the same
shareholders have not participated in the meeting
INSTRUCTIONS FOR SHAREHOLDERS ATTENDING through VC/OAVM facility, then the votes cast by such
THE AGM THROUGH VC/OAVM & E-VOTING DURING shareholders shall be considered invalid as the facility
MEETING ARE AS UNDER: of e-voting during the meeting is available only to the
shareholders attending the meeting.
1. The procedure for attending meeting & e-Voting on the
day of the AGM is same as the instructions mentioned 11. Mr. Sudhir V. Hulyalkar, Company Secretary in Practice
above for Remote e-Voting. (CP - 6137); Address: 4th Floor, Prabhas Complex
#27/1, S. Kariyappa Road, Basavanagudi, Bengaluru
2. The link for VC/OAVM to attend meeting will be - 560 004 has been appointed as the Scrutinizer to
available where the EVSN of Company will be displayed scrutinize the e-voting process in a fair and transparent
after successful login as per the instructions mentioned manner.
above for e-Voting.
12. The Scrutinizer shall, not later than two working days
3. Shareholders who have voted through Remote e-Voting after the conclusion of the AGM make a consolidated
will be eligible to attend the meeting. However, they will Scrutinizer’s Report of the votes cast in favour or against,
not be eligible to vote at the AGM. if any, to the Chairperson or a person authorized by him
and the Company shall declare the results of the voting
4. Shareholders are encouraged to join the Meeting forthwith.
through Laptops/iPads for better experience.
13. The results declared along with the Scrutinizer’s
5. Further, shareholders will be required to allow camera Report will be placed on the Company’s website
and use Internet with a good speed to avoid any www.diageoindia.com and on stock exchanges’
disturbance during the meeting. website, The National Stock Exchange of India
6. Kindly note that Participants connecting from Mobile Limited at www.nseindia.com and BSE Limited at
Devices or Tablets or through Laptop connecting via www.bseindia.com, immediately after the result is
Mobile Hotspot may experience Audio/Video loss due declared by the Chairperson or any person authorised
to fluctuation in their respective network. It is therefore by the Company and communicated to the concerned
recommended to use Stable Wi-Fi or LAN Connection to stock exchanges.
mitigate any kind of aforesaid glitches. 14. The Register of Directors and Key Managerial Personnel
7. Shareholders who would like to express their views/ask and their shareholding, maintained under section 170 of
questions during the meeting may register themselves the Act, and the Register of Contracts or Arrangements
as a speaker by sending their request in advance atleast in which the directors are interested, maintained under
5 days prior to meeting mentioning their name, demat section 189 of the Act, will be available electronically
account number/folio number, email ID, mobile number for inspection by the Members during the AGM. All
at investor. [email protected]. The shareholders who do documents referred to in the Notice will also be available
not wish to speak during the AGM but have queries may for electronic inspection without any fee by the Members
send their queries in advance 5 days prior to meeting from the date of circulation of this Notice upto the date
mentioning their name, demat account number/ of AGM, i.e. 31st July 2024. Members seeking to inspect
folio number, email ID, mobile number at investor. such documents may send an email to investor.india@
[email protected]. These queries shall be responded diageo.com.
appropriately by the Company in due course.

26
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Notice (Continued)

EXPLANATORY STATEMENT AS REQUIRED BY SECTION trends for a period not exceeding three years with effect from
102 OF THE COMPANIES ACT, 2013 1st April 2025, lower of one percent of the net profits of the Company
or aggregate Rupees four crore, for each financial year, as set
Item No. 5 : Ratification of remuneration payable to Cost Auditor
out in the Resolution. Further, the Members may kindly note that
of the Company for the Financial Year 2024-25.
the Company has not been paying any remuneration to the Non-
The Board of Directors, upon the recommendation of the Audit Independent Non-Executive Directors.
Committee, approved the appointment of M/s. Rao, Murthy &
Associates, Cost Accountants having Firm Registration Number None of the Directors or Key Managerial Personnel and their relatives
000065, as Cost Auditors of the Company for conducting the (except Non-Executive Independent Directors), are concerned or
audit of cost records of the Company, for the Financial Year interested (financially or otherwise) in this Resolution.
2024-25, at a remuneration of ` 2,00,000 (Rupees Two Lakhs only)
in addition to applicable taxes and reimbursement of out of pocket The Board of Directors recommends the resolution as set out in Item
expenses. No. 6 of the Notice for approval of the Members as an ordinary
resolution.
Pursuant to section 148(3) of the Companies Act, 2013 read with
the Companies (Audit and Auditors) Rules, 2014, Members of the Item no. 7 : Approval of material Related Party Transactions
Company are required to ratify the remuneration to be paid to the As per the provisions of section 188 of the Companies Act, 2013
cost auditors of the Company. Accordingly, consent of the Members (‘the Act’), transactions with related parties which are undertaken
is sought for passing an ordinary resolution as set out at Item No. 5 on an arm’s length basis and in the ordinary course of business,
of the Notice. are exempted from the obligation of obtaining prior approval of
shareholders. However, with effect from 1st April 2022, Regulation
None of the Directors, Key Managerial Personnel of the Company 23 of Securities and Exchange Board of India (Listing Obligations and
and their relatives are concerned or interested, financially or Disclosure Requirements) Regulations, 2015 (Listing Regulations),
otherwise in this resolution, except to the extent of their shareholding, mandates prior approval of the shareholders through an ordinary
if any. resolution for all ‘material’ related party transactions. For this
purpose, a transaction with a Related Party shall be considered
The Board of Directors recommends the resolution as set out in Item ‘material’, if such transaction(s) to be entered into individually or
No. 5 of the Notice for approval of the Members as an ordinary taken together with previous transactions during a financial year,
resolution. exceed ` 1000 crore or 10% of the annual consolidated turnover
of the Company as per the last audited financial statements of
Item No. 6 : Payment of commission to Independent Directors the Company, whichever is lower. The Company had sought
and Non-Executive Directors. approval of the shareholders for transactions with Diageo Brands
The Members at their 23rd Annual General Meeting held on B.V. Netherlands (‘DBBV’) for Financial Year (‘FY’) 2023-24 in the
9th August 2022 approved payment of remuneration by way of Annual General Meeting (AGM) 2023 for an aggregate amount
commission to the Non-Executive Directors of the Company, not not exceeding `1500 crore (Rupees one thousand five hundred
exceeding 1% of the net profits of the Company in any financial year crore only). During the FY 2023-24, the aggregate amount of the
(computed in the manner provided in section 198 of the Companies transactions against the aforesaid approval were ` 843.73 crore. For
Act, 2013) or in aggregate not exceeding ` 4,00,00,000 (Rupees the FY 2023-24, the Company had sought shareholders’ approval
four crore only), whichever is less, for a period of three years from for ` 1500 crore in anticipation of robust demand for Bottled in
1st April, 2022 to 31st March, 2025. India (BII) and Bottled in Origin (BIO) brands in India. However,
the Company has optimized the inventory holding level in terms of
The Nomination and Remuneration Committee and the Board BII as well as BIO brands which led to significantly lower level of
of Directors of the Company (‘the Board’) are of the view that procurement of finished goods and bulk scotch from DBBV. In this
Non-Executive Directors devote their valuable time and have process, it bolstered the Company’s efforts in savings of working
experience to give critical advice to the Company. Accordingly, capital. The Company based on the current demand trend has
upon recommendation of the Nomination and Remuneration re-assessed the demand for FY 2024-25. The transactions with
Committee, the Board at its meeting held on 24th May 2024 has DBBV for FY 2024-25 are expected to cross the materiality
recommended for approval of Members, payment of remuneration threshold of ` 1000 crore and hence proposal to seek approval
including profit related commission, by whatever name called, to the from the shareholders for ` 1266 crore is being placed before the
Non-Executive Directors of the Company, in line with the current shareholders.

27
UNITED SPIRITS LIMITED Annual Report 2023–24

Notice (Continued)

Detailed Background: 1. The transaction is covered in the objects clause of the

The Company and DBBV are step-down subsidiaries of Diageo plc, Memorandum of Association (MOA) of the Company.
a global leader in beverage alcohol with an outstanding collection 2. The transaction is in furtherance of the business of the
of brands. Over the last 8 years, the Company’s arrangements with Company.
DBBV have contributed to its premiumisation journey and in the
3. The transaction is normal / routine for the Company’s
process, has improved the overall profitability of the Company.
business.

The following categories of arrangements/transactions with DBBV 4. The transaction is repetitive / frequent.
are being placed before Members for their approval: 5. The Company has historically been undertaking this
transaction with DBBV from 2015 and the shareholder
a. Approval for procuring BIO (Bottled in Origin Brands) for approval is being sought now since the value exceeds
distribution in India Market: ` 1000 Crores (i.e. this is a Material RPT).
Pursuant to approval of shareholders obtained on 9th January
6. The income pursuant to this RPT is considered as business
2015, Company had entered into distribution agreement with
income of the Company in its books of accounts.
various Diageo entities viz. -(1) Diageo Scotland Limited; (2)
Diageo Brands B.V.; (3) Diageo North America Inc.; (4) Justerini 7. Such transactions are common in the industry in which
& Brooks Limited; (5) R & A Bailey & Co.; (6) Diageo Chateau the Company operates.
& Estates Wine Company; and (7) Diageo Ireland. This is for
distribution of Diageo’s Bottled In Origin (BIO) products such b. Approval for procuring Bulk scotch for manufacturing Diageo
as Johnnie Walker, Tanqueray, Baileys, Talisker, Singleton Brands in India – Bottled in India (BII) brands
and other products. These are finished products, majority of Pursuant to approval of shareholders obtained on 9th January
which are distilled, matured and bottled in Scotland. Though 2015, Company has been distributing Diageo’s Bottled In India
agreement was executed with abovementioned seven entities, (BII) brands such as VAT 69, Black & White and other products.
import documentation and invoicing are routed through DBBV As part of this arrangement, DBBV supplies bulk scotch to the
as it acts as a trade service provider to all Diageo entities Company who in turn bottles the same in India at its own/
for intercompany BIO procurements. This is practiced for third party’s manufacturing facility. The arrangement covers
simplification of process and providing one face to the buying both existing and future BII brands. The BII portfolio of Diageo’s
entity. The arrangement covers both existing and future BIO products enjoys immense brand equity worldwide including
brands. Company is also entitled to return/re-export these India with a rich legacy built over decades. The intellectual
property over these products is owned by Diageo group and
BIO products to DBBV in the event of any business exigencies.
Company’s responsibility include bottling and distributing
The BIO portfolio of Diageo’s products enjoys immense brand
these products on an exclusive products.
equity worldwide including India with a rich legacy built over
decades. The intellectual property over these products is
Arm’s length basis
owned by Diageo group and Company has the exclusive right
to distribute the same in India. In accordance with globally applicable transfer pricing
principles, Company earns an arm’s length operating
margin (Earnings Before Interest and Taxes or EBIT) from this
Arm’s length basis
arrangement. A periodic true up mechanism has been put in
In accordance with globally applicable transfer pricing place to ensure adherence to the above pricing principles.
principles, the Company earns an arm’s length operating Hence, this arrangement is on an arm’s length basis.
margin (Earnings Before Interest and Taxes or EBIT) from this
arrangement. A periodic true up mechanism has been put in Ordinary course of business
place to ensure adherence to the above pricing principles.
The following factors were considered in concluding that
Hence, this arrangement is on an arm’s length basis. the above RPT is in the ordinary course of business of the
Company:
Ordinary course of business
The following factors were considered in concluding that 1. The transaction is covered in the objects clause of the
the above RPT is in the ordinary course of business of the MOA of the Company.
Company:
2. The transaction is in furtherance of the business of the
Company.

28
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Notice (Continued)

3. The transaction is normal / routine for the Company’s 4. The transaction is repetitive / frequent.
business.
5. The Company has historically been undertaking this
4. The transaction is repetitive / frequent. transaction with DBBV and the shareholder approval is
being sought now since the value exceeds ` 1000 Crores
5. The Company has historically been undertaking this
(i.e. this is a Material RPT).
transaction with DBBV from 2015 and the shareholder
approval is being sought now since the value exceeds 6. The income pursuant to this RPT is considered as business
` 1000 Crores (i.e. this is a Material RPT). income of the Company in its books of account.
6. The income pursuant to this RPT is considered as business 7. Such transactions are common in the industry in which
income of the Company in its books of account. the Company operates.
7. Such transactions are common in the industry in which
d. Availing/rendering of any kind of service(s), or any other
the Company operates.
transaction(s) for transfer of resources, services or obligations
and other reimbursements (‘Residual RPTs’).
c. Approval for Import of Bulk Scotch for manufacturing USL
brands In addition to the above and as is the common practice within
a multinational group, Company could either avail of services
Company also manufactures and markets its own scotch
from / render services to DBBV (or party to a number of
whisky in India. These brands include Black Dog, a premium
intercompany service transactions).
whisky with a high brand recall in India. As per the industry
convention, a scotch needs to be matured for a minimum The key service transaction categories include:
period of 3 years in Scotland. Accordingly, in 2017, Company
1. reimbursement/recovery of expenses including for the
had approved for procurement of bulk scotch from Diageo
following-
Scotland Limited for using in blends of prestige and above
segment whisky portfolio. Though agreement was executed i. additional clearance cost or delivery/handling
with Diageo Scotland Limited, import documentation and charges in respect of procurement
invoicing are routed through DBBV as it acts as a trade
service provider to all Diageo entities for intercompany bulk ii. demurrage or detention charges of material
procurements. This is practiced for simplification of process iii. additional shipping cost or any other freight
and providing one face to the buying entity. Diageo as a component
global leader in scotch is able to provide supply security to
the Company. The intellectual property over these products is iv. additional cost of rework due to improper stacking,
owned by the Company. packaging or loading
v. pertaining to availing/rendering service from
Arm’s length basis registered global vendors of Diageo group,
In accordance with globally applicable transfer pricing business shared services etc.
principles, DBBV sells the bulk scotch to Company at arm’s
length price. A periodic true up mechanism has been put in vi. other general cost (e.g. travel, award, rent,
place to ensure adherence to the above pricing principles. electricity, other facility cost etc.).
Hence, this arrangement is on an arm’s length basis. 2. information system support services,

Ordinary course of business 3. share scheme cost recharges,

4. international assignee cost recharges,
The following factors were considered in concluding that
the above RPT is in the ordinary course of business of the 5. management or consultancy service
Company: 6. regional functions support and services, global
1. The transaction is covered in the objects clause of the procurement services,
MOA of the Company. 7. other back-office support service
2. The transaction is in furtherance of the business of the
Company. As part of its routine business operations, The Company
may undertake either of these transactions with DBBV. These
3. The transaction is normal / routine for the Company’s transactions are largely initiated based on the business
business. requirements. Such arrangements help to realize economies

29
UNITED SPIRITS LIMITED Annual Report 2023–24

Notice (Continued)

of scale, cost savings, talent development etc. for constituents Given the above factors, the RPTs would benefit the Company
of a multinational group. Aggregate of all transactions in this as a whole and its shareholders (including the minority
category are expected to be within a sum of ` 19 crore. shareholders) and there is no incremental benefit to the
controlling shareholder or any other specific shareholder of
Arm’s length basis the Company.
In accordance with global transfer pricing policy, the service
provider shall bill the service recipient the cost incurred for the Mechanism
service plus an arm’s length mark-up, wherever applicable. The actual export/dispatch of BIO, BII and bulk scotch is
undertaken by Diageo Scotland Limited which acts as a
Ordinary course of business Consignor since the products are manufactured in Scotland.
Rendering of / availing aforesaid services from companies Import documentation and invoicing for the above is done by
forming part of the same group is a common practice followed DBBV which acts as a Seller to the Company (Consignee).
by multinationals. Such transactions are in furtherance of
the business of the Company and are normal/routine for Historical approval of shareholders
the Company’s business. Company has been historically The Shareholders of the Company had approved the
undertaking such transactions with DBBV. Hence, the agreement on 9th January 2015 between the Company and
arrangement is in the ordinary course of business. DBBV for the manufacture and distribution of Bottled in India
(bulk) products under licence from DBBV in India and the
Benefit to the Company from these RPTs distribution agreement with, inter alia, Diageo Brands B.V.,
The quantum of the benefits realised by the Company Diageo North America, Inc. and Diageo Scotland Limited for
from these RPTs is subject to multiple factors including the distribution of bottled in origin products (manufactured
market conditions, demand and supply, structural shifts in by or on behalf of the relevant Diageo brand owner
the Indian alcohol industry, seasonal variations and other company) in India. The Company had sought approval of
external conditions. Distribution by the Company in India the shareholders for transactions with DBBV for FY 2023-24
of such premium brands owned by Diageo has positively for an aggregate amount not exceeding ` 1500 crore
contributed to the premiumisation journey of the Company in (Rupees one thousand five hundred crore only). During the
line with the evolving Indian market’s strategic shift towards FY 2023-24, the aggregate amount of the transactions was
premium products. Such distribution has also contributed to ` 843.73 crore. Approval of the shareholders is now being
absorption of fixed costs incurred by the Company by realising sought since the value of transactions with DBBV are expected
synergies including in areas of manufacturing, marketing, to exceed ` 1000 crore during the financial year 2024-25.
distribution, overheads etc. Further, these arrangements
enable the Company to enhance its overall return on Invested Other related party transactions with Diageo group
Capital (ROIC) and an increase in Earnings Before Interest, In addition to the above RPTs, as a good corporate governance
Depreciation and Amortisation (EBITDA) per case. practice, Members are being informed that the Company
also undertakes other related party transactions with Diageo
In view of the compelling business rationale, Independent group entities. All such arrangements are undertaken on an
directors are of the view that these RPTs are in the best interest arm’s length basis and in the ordinary course of business.
of the Company. Since such transactions are not likely to exceed the relevant
thresholds, no separate approval of Members is being sought.
The pricing arrangements between DBBV and the Company for The aggregate value of such transactions did not exceed ` 90
the related party transactions are governed by internationally crore during financial year 2023-24.
accepted transfer pricing methodology and are subject to
regulatory scrutiny by tax authorities of both entities. The The value of RPTs with DBBV for the period commencing from
transactions have been confirmed as being undertaken at 1st April 2024 till the date of this Notice has not exceeded the
arm’s length by independent professionals and do not yield threshold of ` 1000 crore and the Company will ensure that
any undue benefit to either party. the same does not exceed the said threshold upto the date of
the 25th AGM, i.e. 31st July 2024.
The terms and conditions of the proposed RPTs are not
unfavourable to the Company, when compared to the terms The RPTs carried out with DBBV will be placed before the Audit
and conditions of similar transactions, entered into between Committee on a quarterly basis for noting.
two unrelated parties.

30
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Notice (Continued)

Process for dealing with related party transactions

The Company has in place a structured process for approvals with respect to RPTs. As per the process, necessary details of the
related party transactions (irrespective of the materiality threshold) along with justifications are provided to the Audit Committee
which enables it to arrive at the right decision.

The Audit Committee, after reviewing necessary information provided in the below table, has granted its approval for the above
mentioned RPTs. It has noted that the said RPTs are on an arm’s length basis and have been undertaken in the ordinary course
of business.

The relevant information as required under Rule 15 of Companies (Meetings of Board and its Powers) Rules, 2014, as amended
and SEBI circular vide. . SEBI/HO/CFD/PoD2/CIR/P/2023/120 dated 11th July 2023 is given below:
Sr. Particulars Details
No.
1 Name of the Related Party Diageo Brands B. V., Netherlands (DBBV)
2 Nature of Relationship with the Company, Fellow Subsidiary
including nature of its concern or interest
Diageo Relay B.V. holds 55.88% in the Company and does not hold
(financial or otherwise)
any shares in DBBV. However, Diageo plc is the ultimate holding
company of DBBV and the Company.
3 Name of the director or key managerial Not applicable
personnel who is related, if any
4 Type, material terms and particulars of the I) BIO The Company will import and distribute, inter alia, the BIO
proposed transaction following products within India (not limited to brands listed here)
(a) Johnnie Walker and related variants; (b) J&B (c) Ciroc (d)
Baileys (e) Lagavulin (f) Tanqueray (g) Talisker etc.

The Company will abide by the confidentiality, non-compete and

protection of intellectual property obligations.

All invoices are denominated in Indian Rupees (and hence there

is no foreign exchange exposure risk to the Company) with
payment term of 120 days.

II) BII (for manufacturing Diageo Brands): The Company will

manufacture and distribute the following products within India:
(a) VAT 69; (b) Black & White;

The Company will abide by the confidentiality, non-compete and

protection of intellectual property obligations.

All invoices are denominated in Indian Rupees (and hence there

is no foreign exchange exposure risk to the Company) with
payment term of 120 days.

III) Bulk Scotch (for manufacturing USL brands):

(i) USL shall obtain all necessary licenses or other requisite

documents and shall pay all applicable customs, duties
and taxes to purchase and import the Spirit.

(ii) Risk of damage to or loss of the Spirit shall pass to USL

when such Spirit has been delivered in accordance with the
agreement.

(iii) USL shall pay the full invoice amount as per payment term
of 120 days.

31
UNITED SPIRITS LIMITED Annual Report 2023–24

Notice (Continued)

Sr. Particulars Details

No.
IV) Rendering / Availing services

• reimbursement/recovery of expenses including for the

following-
• additional clearance cost or delivery/handling
charges in respect to procurement
• demurrage or detention charges of material
• additional shipping cost or any other freight
component
• additional cost of rework due to improperstacking,
packaging or loading
• pertaining to availing/rendering service from
registered global vendors of Diageo group, business
shared services,
• other general cost (e.g. travel, award, rent, electricity,
other facility cost etc.)
• information system support services,
• share scheme cost recharges,
• international assignee cost recharges,
• management or consultancy service
• regional functions support and services, global
procurement services,
• other back-office support services.
5 Tenure of the proposed transaction Financial Year 2024-25
6 Value of the proposed Transaction ` 1266 crores
7 Any advance paid or received for the Not applicable
contract or arrangement, if any;
8 Percentage of the Company’s annual 4.86%
consolidated turnover for the immediately
preceding financial year that is represented
by the value of the proposed transaction
(and for a RPT involving a subsidiary, such
percentage calculated on the basis of the
subsidiary’s annual turnover on a standalone
basis shall be additionally provided);
9 Percentage of the counter-party’s annual 3.99% (for the period July 2022 to June 2023)
consolidated turnover that is represented
by the value of the proposed RPTs on a
voluntary basis

32
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Notice (Continued)

Sr. Particulars Details

No.
10 If the transaction relates to any loans, inter- Not applicable
corporate deposits, advances or investments
made or given by the listed entity or its
subsidiary:
i. details of the source of funds in
connection with the proposed
transaction.
ii. where any financial indebtedness
is incurred to make or give loans,
inter-corporate deposits, advances or
investments
• nature of indebtedness;
• cost of funds; and
• tenure; Not Applicable
iii. applicable terms, including covenants,
tenure, interest rate and repayment
schedule, whether secured or
unsecured; if secured, the nature of
security; and
iv. the purpose for which the funds will be
utilized by the ultimate beneficiary of
such funds pursuant to the RPT.
11 Justification as to why the RPT is in the As per rationale provided in para above.
interest of the Company
12 Details about valuation, arm’s length and As explained elsewhere in this Explanatory Statement, the RPTs satisfy
ordinary course of business the arm’s length principle and meet the test of being in the ‘ordinary
course of business.
13 Valuation or other external report, if any, Company has obtained report from Ernst & Young LLP confirming
relied upon by the listed entity in relation to that the above arrangement satisfies the principle of arm’s length and
the proposed transaction ordinary course of business.

This report is available on the website of the Company at

https://media.diageo.com/diageo-corporate-media/media/
joihgga4/report-on-rpt-with-dbbv-2024.pdf
14 Any other information relevant or important None
for the shareholders to take an informed
decision

None of the Directors or Key Managerial Personnel of the Company or their respective relatives, is concerned or interested in the
resolution. Diageo Relay B.V. holds 55.88% in the Company and does not hold any shares in DBBV. However, Diageo plc is the
ultimate holding company of DBBV and the Company.
The said transaction(s) have been recommended by the Audit Committee and Board of Directors of the Company for
consideration and approval by the Members as an ordinary resolution.
It is pertinent to note that no related party of the Company shall vote to approve this resolution whether the entity is a related
party to the particular transaction or not.
The counterparty to this related party transaction is a fellow subsidiary of the Company and not a member who is entitled to vote
and hence, there is no conflict. The Members may note that in terms of the provisions of the SEBI Listing Regulations, the related
parties as defined thereunder (whether such related party(ies) is a party to the aforesaid transactions or not), shall not vote to
approve resolutions under Item No. 7.

33
UNITED SPIRITS LIMITED Annual Report 2023–24

Notice (Continued)

Item no. 8 : Approval of remuneration payable to Ms. Hina and profitability. Furthermore, the Company’s market capitalisation
Nagarajan (DIN: 00048506), Managing Director and has almost doubled from FY21 levels. As at end of FY24, market
Chief Executive Officer of the Company for a period of two capitalisation stood at around ` 82,500 crore.
years. Ms. Nagarajan was recently honoured with several prestigious
Ms. Hina Nagarajan was appointed as Managing Director and Chief awards: the Economic Times Corporate Excellence Award for
Executive Officer of the Company for a period of five years w.e.f. ‘Businesswoman of the Year’ in 2023, ‘50 Most Powerful Women
1st July 2021 to 30th June 2026. This appointment was approved by in Business’ by Fortune India in 2023, ‘Most Powerful Women in
the Members of the Company through a special resolution at their Business 2023’ by Business Today, ‘Most Influential Women 2024’
22nd Annual General Meeting held on 26th August 2021. At the time by Business World, ‘Woman CEO Of The Year 2023’ by ET Prime, the
of her initial appointment, the Company’s profits were inadequate ‘Icons of Excellence Award’ by Forbes India in 2024 and featured in
as per section 198 read with schedule V of the Companies Act, 2013 ‘The She List’ by India Today.
(‘the Act’) due to which the Company had sought approval from the
shareholders for payment of remuneration for initial period of three The remuneration paid to Ms. Nagarajan for last three years i.e.,
years effective 1st July 2021 to 30th June 2024. Accordingly, approval in FY 2022, FY 2023 and FY 2024 is ` 4,91,20,360, ` 11,90,43,225
from the shareholders for the remaining tenure of two years effective and ` 13,89,31,637 respectively. It may be noted that remuneration
1st July 2024 to 30th June 2026. It may be noted that the Company paid to Ms. Nagarajan in FY 2022 was for part of the year, effective
now has adequate profits as per section 198 read with schedule V 1st July 2021.
of the Act.
Further, as approved by the shareholders of the Company in
Ms. Hina Nagarajan is entrusted with substantial powers of their 22nd Annual General Meeting held on 26th August 2021, the
management and responsible for the general conduct and overall limit of remuneration to be paid to Ms. Nagarajan remains
management of the business and affairs of the Company subject unchanged for next two years (1st July 2024 to 30th June 2026) at
to the superintendence, control and supervision of the Board of ` 35 crore per annum. The limit of ` 35 crore has been stated to inter-
Directors of the Company. alia cover an eventuality of her being entitled to a maximum amount
Ms. Nagarajan holds MBA from the Indian Institute of Management, of Annual Incentive Plan (AIP), increase in Stock Appreciation Rights
Ahmedabad, a Commerce Honors degree from Delhi University (SAR) pay out and other Long-Term Incentives (LTIs) pay out of
and a Diploma in Hotel Management from Pusa Institute, Delhi, Diageo group and any subsequent fixed pay increases. The increase
India. She has over 30 years of experience in Consumer-Packaged in her fixed pay will be linked to her performance and to ensure that
Goods business and has held several senior marketing and general her compensation is benchmarked to employees doing similar roles
management positions at Reckitt Benckiser (RB), Nestle India and in the Company’s peer group organizations.
Mary Kay India. Before joining Diageo, she was Managing Director,
It may be noted that SARs and LTIs are granted yearly but are vested
China & Senior Vice President, North Asia with RB. She is known
after three years. As on the date of expiry of her term she will be
for her passion and drive to deliver results, her ability to build
strong teams that deliver outstanding outcomes and her strong holding unvested SARs/LTIs. It is proposed to seek an enabling
commitment to Diageo standards and compliance. approval for up to ` 20 crore towards appropriate payout on
account of the aforesaid instruments subject to the recommendation
Under the leadership of Ms. Nagarajan, the Company has achieved of the Nomination and Remuneration Committee and approval of
significant progress in Environmental, Social, and Governance (ESG) the Board.
initiatives. One of the key initiatives driven by Ms. Nagarajan is the
normalization of the alco-bev category, addressing the evolving The Nomination and Remuneration Committee of Directors and
consumer base and the emergence of women as a new consumer the Board of Directors at their meetings held on 23rd May 2024
cohort. The Company is developing a more inclusive consumption and 24th May 2024 respectively have considered this proposal and
narrative. Additionally, Ms. Nagarajan is championing Inclusion and recommended / approved the remuneration proposed to be paid
Diversity in the workplace. Under her leadership, overall diversity of to Ms. Hina Nagarajan, subject to approval of the Members by way
the Company has increased from 7.5% in 2015 to 27% in 2024. As of an ordinary resolution.
of today, 50% of the Executive Committee and 30% of the senior
leadership team in India are women. Except Ms. Hina Nagarajan, and her relatives to the extent of their
shareholding interest, if any, in the Company, none of the other
The Company’s growth has more than doubled in Financial year(FY) Directors, Key Managerial Personnel (“KMP“) of the Company and
2021 - 2024 compared to FY 2016-2021. The Company is now their relatives are, in any way concerned or interested, financially
a debt free company and has wiped out its accumulated losses. or otherwise, in the Resolution set out at Item No. 8 of the Notice.
It has resumed dividend distribution after a long hiatus, enabled None of the Directors and KMP of the Company are inter-se related
by a successful turnaround resulting in sustained earnings growth to each other.

34
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Notice (Continued)

Item 9 : Appointment of Ms. Amrita Gangotra (DIN: There is no inter-se relationship between Ms. Amrita Gangotra and
08333492) as an Independent Director of the Company. any Directors and Key Managerial Personnel of the Company. The
terms and conditions of appointment of Ms. Amrita Gangotra are
Pursuant to section 149, 152 and other applicable provisions of
available for inspection by the Members at the Registered Office of
the Companies Act, 2013, (‘the Act’) Articles of Association of
the Company during business hours on all working day till the date
the Company, the Board of Directors at their meeting held on
of Annual General Meeting.
24th May 2024, based on recommendation of the Nomination and
Remuneration Committee (‘NRC’) and subject to the approval of Except Ms. Amrita Gangotra being an appointee, none of the
Members, approved appointment of Ms. Amrita Gangotra (DIN: Directors or Key Managerial Personnel or their relatives are
08333492) as Non-executive Independent Director of the Company, concerned or interested, financially or otherwise, in the above
for a term of five years commencing from 1st September 2024 till 31st resolution, except to the extent of her shareholding, if any.
August 2029 (both days inclusive) not liable to retire by rotation.
Brief profile of Ms. Amrita Gangotra:
The Company has received the following statutory disclosures /
declarations: Ms. Gangotra is a commercially focused and award-winning
technology leader with experience gained in India, UK and Europe
i. Form DIR-8 - intimating the Company that she stands free from of using technology to drive business performance and deliver
any disqualification, under section 164(1) and 164(2) of the Act; value in the Telecommunications, IT services and FMCG sectors.
Ms. Gangotra embarked on an entrepreneurial career journey in
ii. Declaration under section 149(7) of the Act and regulation 2019 as Founder and Managing Director of ITyukt Digital Solutions
25(8) of LODR Regulations; which provides consultancy and advisory services in 5G, IoT, AI /
ML based digital transformation for Enterprise. Ms. Gangotra has
iii. Declaration that she is not debarred from holding the office of also served at Vodafone UK as a Head of Enterprise Technology
director by virtue of any SEBI Order or any other such authority and Vodafone Hungary as the Director Technology. Previous to that,
and given her consent to act as Director of the Company; Ms. Gangotra worked with Airtel in multiple senior roles wherein
she led the technology and innovation. She was also the CIO &
iv. Confirmation that she is not aware of any circumstance or GM-ITSM at HCL Comnet and Senior Project Manager at Nestle.
situation which exists or may be reasonably anticipated that Ms. Gangotra started her career as a Research Officer at Allen
could impair or impact her ability to discharge duties as an Bradley and a Sr. System Manager at HCL Ltd. She has been a
Independent Director of the Company; member of the executive management team at Bharti Airtel and
Vodafone Hungary and possesses the experience of mentoring
v. A notice in writing by a Member proposing her candidature start-ups and technology advisory for PE funds.
under section 160(1) of the Act;
She has held key roles in many business-impacting transformation
vi. Confirmation that she is in compliance with Rules 6(1) and initiatives including revenue-share IT outsourcing deal for Bharti
6(2) of the Companies (Appointment and Qualifications of Airtel with IBM, launch of technology platform for Airtel Payment,
Directors) Rules, 2014, with respect to her registration with the creating the IT platform for Global Enterprise business at Vodafone,
data bank of Independent Directors maintained by the Indian introducing the tools and organization to support the Digital Telco
Institute of Corporate Affairs; strategy of Vodafone, CWW and Liberty Global M&A integration,
4G network roll out and preparing for 5G introduction.
vii. Form MBP-1 – disclosing her interests in other company(ies) in
She is also an independent board member of multiple listed and
terms of section 184(1) of the Act.
unlisted companies including Max Healthcare Ltd., Tanla Platforms
Ltd, Triveni Turbine Ltd. and India1 Payment Ltd.
The Board noted that Ms. Amrita Gangotra brings significant
experience in Telecommunications, IT services and FMCG sectors The Board of Directors recommends the resolution as set out in
which would immensely benefit the Company operating in a highly Item No.9 in the Notice for approval of the Members as a Special
regulated industry. resolution.

Accordingly, the Board on recommendation of Nomination and The relevant details, pursuant to regulation 36(3) of the LODR
Remuneration Committee has determined that the appointment of Regulations and Secretarial Standard on General Meetings issued
Ms. Amrita Gangotra would bring significant value and professional by The Institute of Company Secretaries of India, in respect of
expertise to the Company. Directors seeking appointment is annexed.

35
UNITED SPIRITS LIMITED Annual Report 2023–24

Notice (Continued)

Annexure

Disclosure relating to Directors pursuant to Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 and Clause 1.2.5 of the Secretarial Standards on General Meetings:
Agenda Item Item - 3
Name of Director Mr. Pradeep Jain
DIN 02110401
Age 56 years
Date of first appointment on the Board 1st February 2023
Expertise in specific functional areas Finance
Experience 25 years
Brief Resume Mr. Pradeep Jain is an Executive Director and Chief Financial Officer at United Spirits
Limited. He is also a member of Diageo’s Global Finance Leadership and Diageo India’s
Executive Committee. His responsibilities include overseeing Finance, Accounting, Treasury,
Tax, Governance, Compliance, Investor Relations, Secretarial, Business Strategy, and IT
functions. Mr. Pradeep Jain is also leading Diageo India’s digital transformation journey and
productivity initiatives to achieve greater performance across the business value chain.
An experienced Finance professional, Mr. Pradeep Jain has spearheaded several
organisation-wide transformation initiatives from sourcing to consumer fulfilment while
scaling ESG performance. A problem-solver, Mr. Pradeep Jain has leveraged data-driven
insights and a customer-centric approach to steer the organisation through complex business
environments. He is a massive advocate of the people agenda and has worked passionately
to build varied capabilities within the finance team. He has been instrumental in establishing
governance standards within the Company.
Prior to joining Diageo, Mr. Pradeep Jain held leadership positions across well-known
organisations such as Eicher Motors, PepsiCo, and Pidilite Industries. As an agile leader,
with an outstanding track record of over 25 years across sectors, Mr. Pradeep Jain has a
vast experience in general finance and strategic financial planning, treasury, controllership,
optimal capital structuring and allocation, global organisation design and performance
transformation. He has also played a pivotal role in leading and building large finance
teams, and honed their capabilities in pursuance of organisational strategies and future-
proofing the organisation.
Mr. Pradeep Jain is a Chartered Accountant from the Institute of Chartered Accountants of
India and an alumnus of the Shri Ram College of Commerce, Delhi University.
Qualifications a. Member of Institute of Chartered Accountants of India.
b. Bachelor’s degree in commerce from the University of Delhi.
Terms and conditions of appointment / Appointment as Whole-Time Director designated as “Executive Director and Chief Financial
re-appointment Officer” for a period of five years from 1st February 2023 to 31st January 2028.
As per the resolution passed by the shareholders through postal ballot on 20th April 2023,
his office of Directorship was liable for retire by rotation. Accordingly, the resolution is being
placed before the shareholders to seek approval for appointment as Director.
Last Drawn Remuneration Details along Last drawn remuneration is ` 4,14,77,045
with remuneration sought to be paid
Remuneration will be paid from time to time based on the recommendation of the Nomination
and Remuneration Committee and as per the rules/policy of the Company within the overall
limit of ` 10 crore as approved by the shareholders through postal ballot on 20th April 2023.
No. of Board meetings attended Mr. Pradeep Jain attended all 5 Board meetings held in the financial year 2023-24.

36
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Notice (Continued)

Directorship held in other Companies Nil

(excluding foreign Companies)
Memberships / Chairpersonships Member:
of committees of other companies
a. United Spirits Limited
(excluding foreign companies)
i. Risk Management Committee
Chairperson: Nil
Number of Equity Shares held in the Nil
Company (including shareholding as a
beneficial owner)
Inter-se relationship with other Directors Not related to any director of the Company
and Key Managerial Personnel of the
Company

37
UNITED SPIRITS LIMITED Annual Report 2023–24

Notice (Continued)

Agenda Item Item - 9

Name of Director Ms. Amrita Gangotra
DIN 08333492
Age 59 years
Date of first appointment on the Board Effective 1st September 2024
Expertise in specific functional areas Kindly refer the explanatory statement to the resolution.
Experience 30 years
Brief Resume Kindly refer the explanatory statement to the resolution.
Qualifications a. Master of Science, Operational Research, University of Delhi – Gold Medallist
b. Bachelor of Science, Mathematics, University of Delhi
Terms and conditions of appointment/ Appointment as an Independent Director for a period of five years effective 1st September
re-appointment 2024 upto 31st August 2029, not liable to retire by rotation
Last Drawn Remuneration Details along Sitting fees shall be paid for attending Board and Committee meetings, if any, where she
with remuneration sought to be paid is member. Commission as determined by the Board of Directors and approved by the
shareholders within permissible threshold limits as per the Act.
No. of Board meetings attended Not applicable
Directorship held in other Companies Listed Companies
(excluding foreign Companies)
1. Triveni Turbine Limited
2. Max Healthcare Institute Limited
3. Tanla Platforms Limited
4. Sterlite Technologies Limited
Unlisted Companies
1. India1 Payments Limited
2. Valuefirst Digital Media Private Limited
3. Tanla Digital Labs Private Limited
4. Tanla Digital (India) Private Limited
5. Karix Mobile Private Limited
Listed entities from which the Director has Nil
resigned from Directorship in the past
three years

38
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Memberships / Chairpersonships Member:

of committees of other companies
a. Max Healthcare Institute Limited
(excluding foreign companies)
i. Audit Committee
ii. Risk Management Committee
iii. Corporate Social Responsibility Committee
b. Tanla Platforms Limited
i. Audit Committee
ii. Nomination and remuneration Committee
iii. Stakeholders Relationship Committee
c. India1 Payments Limited
i. Audit Committee
ii. Corporate Social Responsibility Committee
d. Karix Mobile Private Limited
i. Nomination and remuneration Committee
ii. Corporate Social Responsibility Committee
e. Tanla Digital Labs Private Limited
i. Nomination and remuneration Committee
ii. Corporate Social Responsibility Committee
f. Valuefirst Digital Media Private Limited
i. Audit Committee
ii. Nomination and Remuneration Committee
iii. Corporate Social Responsibility Committee
Chairperson:
a. Max Healthcare Institute Limited
i. IT Committee
b. Tanla Platforms Limited
i. Risk Management Committee
c. India1 Payments Limited
i. Nomination and remuneration Committee
d. Triveni Turbine Limited
i. Stakeholder’s Relationship Committee
ii. Digitisation Committee
Number of Equity Shares held in the Nil
Company (including shareholding as a
beneficial owner)
Inter-se relationship with other Directors Not related to any director of the Company
and Key Managerial Personnel of the
Company

39
UNITED SPIRITS LIMITED Annual Report 2023–24

Board’s Report
Dear Members,

Your directors are pleased to present the 25th Board’s Report of your Company and the audited financial statements for the year ended
31st March 2024.

` in crore
Particulars Standalone Consolidated

2023-24 2022-23 2023-24 2022-23

The working of your Company for the year under review

Revenue from operations 25,389 27,578 26,018 27,816

Other income 335 74 225 73

Total Income 25,724 27,652 26,243 27,889

Total expenses 24,021 26,534 24,368 26,785

Share of net loss in associate - - (1) (1)

Profit before exceptional items and tax 1,703 1,118 1,874 1,103

Exceptional items, net (17) 171 (17) 176

Profit before tax 1,686 1,289 1,857 1,279

Total tax expenses 374 237 449 153

Profit for the year 1,312 1,052 1,408 1,126

Other comprehensive income:

Exchange differences on translation of foreign operations - - (1) (1)

Remeasurements of post-employment benefit plans (3) (1) (3) (1)

Income tax credit / (charge) relating to these items 1 0 1 0

Total other comprehensive income for the year, net of tax (2) (1) (3) (2)

Total comprehensive income for the year 1,310 1,051 1,405 1,124

Total comprehensive income is attributable to:

Owners 1,405 1,135

Non-controlling interests - (11)

Profit/(loss) available for appropriation 968 (51) 814 (308)

EPS-Basic & diluted (`) 18.04 14.46 19.83 16.01

During the current year revenue from operations decreased by 7.9% on standalone basis and by 6.5% on consolidated basis. Profit after
tax has increased by 24.7% on standalone basis and by 25.0% on consolidated basis. The challenges which United Spirits Limited (‘USL’ /
‘Company’) faced during the year and the environment in which the Company operates have been detailed in the Management Discussion
and Analysis Report which is forming part of this Annual Report (‘Report’).

40
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Board’s Report (Continued)

1. Performance of the Company The Company would pay/distribute dividend after deducting
During the year under review, your Company’s sales volume applicable withholding taxes. The record date for the final
was 61.4 million cases resulting in a drop of 15.2% compared dividend is 12th July 2024 and payment will be made on or
to previous year. This is largely on account of the slump sale of after 6th August 2024.
the business undertaking in the base year associated with 32
brands and franchising of 11 Popular brands to an unrelated In terms of Regulation 43A of the Securities and Exchange Board
party. The transaction was a conclusion of the strategic review of India (Listing Obligations and Disclosures Requirements)
of the select popular segment brands and was approved by Regulations, 2015, (‘Listing Regulations’) the Board of Directors
the Board on 27th May 2022. The slump sale was concluded by of the Company (the ‘Board’) formulated and adopted a new
end of September 2022. dividend Distribution Policy (the ‘Policy’), is made available
on website of the Company at https://media.diageo.com/
Net sales/income from operations (net of excise duties and diageo-corporate-media/media/kychm2c0/dividend-policy.
taxes) of your Company increased by 3.1% in the financial year pdf
ended 31st March 2024 which stood at ` 10,692 crore (previous
year ` 10,374 crore). With continuous focus on premiumization, 5. Transfer to reserve
overall Prestige & Above segment represented 82% of total
volumes (Vs 66% in the previous year) and 87% of total net During the year under review, there was no amount transferred
sales (Vs 80% in the previous year) during the financial year to the reserves of the Company.
ended 31st March 2024. The Prestige and Above segment’s
net sales were up by 11.9% with strong double-digit growth 6. Capital
across the higher value sub-segments. The Popular segment
represented 18% (Vs 34% in the previous year) of total There is no change in the capital during the financial year
volumes and 10% (Vs 18% in the previous year) of total net 2023-24.
sales during the financial year ended 31st March 2024. The
Popular segment’s net sales declined by 39.4% during the 7. Details of subsidiary companies and associate
financial year ended 31st March 2024. The decline this year
companies and their financial position
was largely on account of the slump sale and franchising
transaction mentioned above. The performance of subsidiaries, associate company and
joint venture company and their contribution to the overall
2. Material changes and commitments / events
subsequent to the date of the financial statements performance of the Company is covered as part of the
consolidated financial statement. The salient features of the
There have been no material changes and commitments,
financial statement of the subsidiary and associate company(s)
affecting the financial position of the Company that have
is appended in form AOC-1 to this Report as Annexure–1. Out
occurred between the close of the financial year 2023-24,
of nine subsidiary companies, eight subsidiary companies
to which the Financial Statement relate and the date of this
were non-operative.
Report.

3. Change in nature of business, if any i. Royal Challengers Sports Private Limited (RCSPL), a
wholly owned subsidiary of your Company, reported
The Company did not undergo any change in the nature of
a revenue from operations of ` 635 crore during the
its business during the financial year. The details of the nature
financial year which has grown by 160%, primarily on
of business are provided in the Management Discussion and
Analysis Report and the Report on Risk Management forming account of increase in central rights income from the
part of this Report. Board of Control for Cricket in India (BCCI). During the
financial year, RCSPL reported a profit of ` 222 crore
4. Dividend against the loss of ` (12) crore in the previous financial
year, primarily on account of profit from increase in
The Board declared and paid an interim dividend of ` 4 per
central rights income. RCSPL had declared and paid an
equity share (face value ` 2/- each) during the financial year
interim dividend aggregating to ` 125 crore to USL in
2023-24. The Board of Directors have also recommended a
March 2024.
final dividend of ` 5 per equity share (face value ` 2/- each)
subject to the approval of members at the ensuing Annual
ii. During the previous financial year, your Company
General Meeting.
acquired the interest in Nao Spirits & Beverages Private
Limited (“Nao Spirits”) by investing ` 32 crore by

41
UNITED SPIRITS LIMITED Annual Report 2023–24

Board’s Report (Continued)

subscribing to 8,094 Compulsory Convertible Preference (ii) Appointment of Ms. Emily Kathryn Gibson
Shares and 4,670 equity shares. During the current
financial year, your Company infused additional amount Ms. Emily Kathryn Gibson was appointed as
of ` 15 crore by subscribing to 6,078 compulsorily Non-Executive Non-Independent Director of the
convertible preference shares. Your Company holds Company with effect from 7th September 2023.
30% (FY2023: 22.5%) ownership interest on a fully
diluted basis as at 31st March 2024. The Management (iii) Appointment of Dr. Indu Bhushan
has considered Nao Spirits to be an associate since the Dr. Indu Bhushan was appointed as an
Company has significant influence over its operating Independent Director of the Company with effect
and financing decisions. from 1st March 2024.

iii. The Board of directors at their meeting held on (iv) Appointment of Mr. Mukesh Hari Butani
4th April 2024, approved the investment in the Inspired
Mr. Mukesh Hari Butani was appointed as an
Hospitality Private Limited (“Pistola”) by subscribing
Independent Director of the Company with effect
to 3,494 Compulsory Convertible Preference Shares
from 1st March 2024.
(“CCPS”) and 10 equity shares of Pistola equivalent
to 15.0% of its issued and paid-up share capital on a
(v) Re-appointment of Mr. Pradeep Jain
fully diluted basis for an aggregate consideration of
` 5.65 crore. The aforesaid transaction was completed on As per the provisions of the Act Mr. Pradeep Jain
9th May 2024. The Management has considered Pistola retires by rotation at the ensuing Annual General
to be a joint venture company. Meeting (AGM) and being eligible, offered himself
for re-appointment. Members may please note
During the year, the Company has obtained a certificate that Mr. Pradeep Jain, was appointed as an
from the Statutory Auditors certifying that the Company Executive Director and Chief Financial Officer on
is in compliance with the FEMA Regulations with respect 1st February 2023. He is not debarred from holding
to the downstream investment made in Nao Spirits. the directorship under any statutory regulations.

The Company’s policy for determining material B. Independent Directors

subsidiaries is available at the Company’s website at
Your Company appointed two new Independent Directors
https://media.diageo.com/diageo-corporate-media/
namely Dr. Indu Bhushan and Mr. Mukesh Hari Butani
media/fcap5yuo/policy-on-material-subsidiary.pdf
during the financial year 2023-24. Criteria for selection/
In accordance with the third proviso to section 136(1) of appointment or re-appointment of Independent Directors
the Companies Act, 2013 (‘the Act’), the annual report include skills, expertise, qualifications, experience and
and financial statements of each of the subsidiary domain knowledge of the Director. The required skills
companies have also been placed on the website of of Independent Directors are leadership, managerial
the Company at https://www.diageoindia.com/en/ experience, diversity, risk management and corporate
investors/subsidiaries-financial. governance. All our Independent Directors viz.,
Mr. Mahendra Kumar Sharma, Mr. V K Viswanathan,
8. Prospects/Outlook Mr. D Sivanandhan, Mr. Rajeev Gupta, Dr. Indu Shahani,
Dr. Indu Bhushan and Mr. Mukesh Hari Butani possess
The details about prospects/outlook of your Company are such the aforesaid skills. In the opinion of the Board,
provided under the Management Discussion and Analysis the Independent Directors appointed during the year
Report, forming part of this Report. possess requisite integrity, expertise, experience and
proficiency.
9. Board meetings, Board of Directors, Key Managerial
Personnel & Committees of Directors: The Company at its Board meeting held on 24th May
A. (i) Resignation of Mr. John Kennedy 2024, has also approved appointment of Ms. Amrita
Gangotra as an Independent Director of the Company
Mr. John Kennedy, Director of the Company, with effect from 1st September 2024. The aforesaid
resigned as a Non-Executive Director of the appointment is subject to approval of members at the
Company effective from end of the day 30th June ensuing Annual General Meeting.
2023.

42
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Board’s Report (Continued)

C. Declaration by Independent Directors As stated in the Corporate Governance Report, sitting

All Independent Directors have given a declaration fees is paid to Independent Directors for attending
pursuant to sub-section (6) of section 149 of the Act. In Board/Committee meetings. They are also entitled to
the opinion of the Board, Independent Directors fulfill reimbursement of actual travel expenses, boarding
the conditions specified in Listing Regulations and are and lodging, conveyance and incidental expenses
independent of the management. incurred in attending such meetings. In addition, the
Independent Directors are also eligible for commission
D. Number of meetings of the Board every year as may be recommended by the Nomination
and Remuneration Committee and approved by the
The details of the Board Meetings and other Committee
Board within the overall limit of ` 4 Crore or 1% of the net
Meetings held during the financial year 2023-24 are
profits of the Company calculated in accordance with
stated in the Corporate Governance Report which is
section 198 of the Act, whichever is lower. The approval
forming part of this annual report.
of the members was sought at the 23rd Annual General
Meeting held on 9th August 2022. Criteria for payment
E. Board Committees of remuneration to Independent Directors are as given
The Company has the following Committees of the below:
Board:
i. Membership of Committees
• Audit Committee
ii. Chairpersonship of the Committees/Board
• Risk Management Committee
iii. Board and Committee meeting attendance
• Nomination and Remuneration Committee
iv. Benchmarking with other companies
• Stakeholders Relationship and General Committee
• Corporate Social Responsibility and Environmental, The Board of Directors have approved payment of
Social and Governance Committee commission of ` 2,33,00,000 crore to seven Independent
• Committee of Directors Directors after applying the criteria stated above for the
financial year 2023-24. The Commission to Dr. Indu
The composition of each of the above Committees, their Bhushan and Mr. Mukesh Hari Butani was approved on
respective roles and responsibilities are provided in the pro-rata basis.
Corporate Governance Report which forms part of this
annual report. The criteria for payment of remuneration to executive
directors is determined by the Nomination and
F. Policies Remuneration Committee based on various criteria.
The Company’s policy on Directors’ appointment and
The Company has adopted all policies as required remuneration is available on the Company’s website at
under the provisions of the Act, and Listing Regulations. https://media.diageo.com/diageo-corporate-media/
The same are uploaded on the website of the media/chwfdoi0/nomination-remuneration-policy.pdf.
Company at https://www.diageoindia.com/en/
investors/shareholder-centre/policies
I. Board evaluation criteria

G. Recommendations of the Audit Committee and other Pursuant to the provisions of the Act and regulation
committees 17 of the Listing Regulations, the Board has carried
out an annual performance evaluation, based on
All the recommendations of the Audit Committee and of parameters which, inter alia, include performance of
the other committees were accepted by the Board. the Board on deciding strategy, rating the composition
& mix of board members, discharging of their duties,
H. Details of remuneration to Directors handling critical issues, contribution made at the Board
As required under section 197 of the Act information meeting, attendance, instances of sharing information
relating to remuneration paid to Directors during the on best practices applied in other industries, domain
financial year 2023-24 is provided in the Corporate knowledge, vision, strategy and engagement with senior
Governance Report. management etc.

43
UNITED SPIRITS LIMITED Annual Report 2023–24

Board’s Report (Continued)

The Independent Directors at their separate meetings, making process and that consistent action is undertaken in a
review the performance of non-independent directors timely manner to resolve the identified breaches.
and the Board as a whole. Chairperson of the Company
after taking into account the views of executive directors A structured Breach Management Standard is in place which
and non-executive directors, reviews the quality, is in line with the Global Standard, for timely and conclusive
quantity and timeliness of flow of information between resolution of compliance concerns raised through the whistle
the management and the Board, for the Board to blower mechanism.
effectively and reasonably perform their duties. Based
This vigil mechanism has been established to provide adequate
on the outcome of the performance evaluation exercise,
safeguards against the victimization of employees, who avail
areas have been identified for the Board to engage itself
this mechanism for reporting complaints and grievances in
with and the same would be acted upon.
good faith and without fear of being punished for doing so.
The details of the evaluation process are set out in the Access to the Chairperson of the Audit Committee is provided
Corporate Governance Report which forms part of this as required under the Act and the Listing Regulations.
annual report.
11. Related party transactions
J. Meeting amongst Independent Directors The Company’s policy on dealing with related party
Schedule IV of the Act, Listing Regulations and transactions was adopted by the Board on 15th June 2015 and
Secretarial Standard - 1 on Meetings of the Board of further amended from time to time. This policy is available on
Directors mandates that the Independent Directors the Company’s website at https://media.diageo.com/diageo-
of the Company hold at least one meeting in a year, corporate-media/media/1nbled1w/rpt-policy_april-2022.pdf.
without the attendance of Non-Independent Directors.
The disclosure of particulars of contracts / arrangements
The Independent Directors met amongst themselves entered into by the Company with related parties referred
without the presence of any other persons on 17th May to in sub-section (1) of section 188 of the Act in Form AOC-2
2023, 19th July 2023, 7th November 2023 and 19th January pursuant to section 134(3)(h) of Act read with Rule 8(2) of the
2024. Companies (Accounts) Rules, 2014 is set out in the Annexure-2
to this Report.
10. Vigil Mechanism
All related party transactions that were entered into during
Your Company has established whistle-blower mechanism
the financial year 2023-24, were at arm’s length basis and
known as SpeakUp, which is being independently operated
were in the ordinary course of business. There were no
by an independent agency. We encourage our employees or
material significant related party transactions entered into
representatives acting on behalf of the Company, to raise the
by the Company with promoters, directors, key managerial
concerns through this mechanism, apart from other internal
personnel or other designated persons which may have a
reporting channels viz. Line Manager, HR Business Partner,
conflict of interest with the Company at large. Pursuant to
Legal Business Partner and Business Integrity partner.
Listing Regulations, the resolution for seeking approval of
The SpeakUp channel is available on the Company’s website the members on material related party transaction is being
at https://www.diageoindia.com/en/about-us/corporate- placed at the 25th AGM of the Company.
governance/speak-up with services available in English and
5 other regional languages, and compliance concerns can be 12. Auditors and Audit Reports
raised by any aggrieved person through web page or toll-free i) Financial audit
number. M/s. Price Waterhouse & Co. Chartered Accountants
LLP (FRN 304026E/E-300009) Statutory Auditors of
The quality of investigation reports and remedial actions are
your Company, were re-appointed for a second term
reviewed and monitored by the Global Business Integrity
of five years as Auditors of your Company from the
team and Diageo India Business Integrity team. The decision
conclusion of the 22nd AGM held on 26th August 2021
on sanctions on the reported breaches are determined and
till the conclusion of 27th AGM of the Company required
monitored by a Compliance Committee for significant breaches
under section 139 of the Act read with the Companies
and the Grievance Committee for other breaches, ensuring
(Audit and Auditors) Rules, 2014.
there is a collective, transparent and an unbiased decision-

44
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Board’s Report (Continued)

The statutory auditors have given unqualified opinion 16. Fixed deposits
on the financial statements for the financial year ended
31st March 2024. During the year the Company has not accepted any fixed
deposits, including from public and no amount of principal or
ii) Secretarial Audit interest is outstanding and due to be transferred to Investor
Pursuant to section 204 of the Act and the Companies Education and Protection Fund (IEPF).
(Appointment and Remuneration of Managerial
17. Annual return
Personnel) Rules, 2014, the Secretarial Audit has been
carried out by Mr. Sudhir V Hulyalkar, Practicing In accordance with section 92(3) of the Act read with the
Company Secretary (FCS: 6040 and CP No. 6137) and Companies (Management and Administration) Rules, 2014, a
his report is annexed as Annexure–3. draft annual return in e-form MGT-7 for financial year 2023-24
uploaded on Company’s website https://media.diageo.com/
The secretarial Audit report does not contain any
diageo-corporate-media/media/tnbnohj0/draft-annual-
qualification, reservation or adverse remark or
return-2023-24.pdf.
disclaimer.
In addition, Pursuant to Regulation 24A of the Listing Members may also note that the annual return uploaded
on the website is a draft and the final annual return will be
Regulations, the Secretarial Compliance Report for
uploaded after the same is filed with the Ministry of Corporate
the financial year ended 31st March 2024, in relation
Affairs (‘MCA’).
to compliance of all applicable SEBI Regulations/
circulars/guidelines issued thereunder, is annexed as 18. Transfer to Investor Education and Protection Fund
Annexure–3A. The Secretarial Compliance Report has (IEPF)
been voluntarily disclosed as part of this Report as
good governance practice. The said report has been No unclaimed dividend and shares were required to be
transferred to IEPF during the year ended 31st March 2024 to
submitted to the stock exchanges and is also available
IEPF pursuant to section 124 of the Act.
on the Company’s website at https://www.diageoindia.
com/en/investors/shareholder-centre/notice-board 19. Human resources
(iii) Cost audit Employee relations remained cordial at all the locations of the
The Company is maintaining requisite cost records for Company. Particulars of employees drawing an aggregate
its applicable products. M/s. Rao, Murthy & Associates, remuneration of ` 1,02,00,000/- or above per annum or
Cost Accountants, were appointed as cost auditors for ` 8,50,000/- or above per month, as well as additional
the applicable products of the Company for the financial information on employee remuneration as required under
year 2023-24. They are required to submit the report to the provisions of rule 5(1), 5(2) and 5(3) of the Companies
the Central Government within 180 days of the end of the (Appointment and Remuneration of Managerial Personnel)
financial year. Rules, 2014 is annexed as part of this Report in Annexure–4
hereto.
13. Reporting of fraud by Auditors
20. Employees stock option scheme
During the year under review, neither the statutory auditors nor
the secretarial auditor have reported to the Audit Committee or Your Company has not offered any stock options to its
the Board, under section 143(12) of Act, any instances of fraud employees during the financial year 2023-24 within the
committed against the Company by its officers or employees, meaning of SEBI (Share Based Employee Benefits and Sweat
the details of which would need to be mentioned in this Report. Equity) Regulations, 2021.

14. Corporate governance 21. Particulars of loans, guarantees and investments

A Corporate Governance Report for the year under review is Loans, guarantees and investments covered under section
annexed separately which forms part of this annual report. 186 of the Act are detailed in Notes to the financial statements
Board confirms compliance with the Secretarial Standards. under Note 4 relating to investments and Note 5 relating to
15. Management discussion and analysis report loans given as per the standalone financial statements for the
year ended 31st March 2024.
The Management Discussion and Analysis Report for the year
under review is annexed separately which forms part of this The Board of directors at their meeting held on 4th April 2024,
annual report. approved the investment in Pistola by subscribing to 3,494

45
UNITED SPIRITS LIMITED Annual Report 2023–24

Board’s Report (Continued)

Compulsory Convertible Preference Shares (“CCPS”) and 10 25. Conservation of energy, technology absorption,
equity shares of Pistola equivalent to 15.0% of its issued and foreign exchange earnings and outgo
paid-up share capital on a fully diluted basis for an aggregate
consideration of ` 5.65 crore. The aforesaid transaction was The particulars prescribed under section 134(3)(m) of the Act
completed on 9th May 2024. read with Rule 8 of the Companies (Accounts) Rules, 2014, are
set out in Annexure–7 to this Report.
The Company also further invested by subscribing to 6,078
Compulsory Convertible Preference Shares (“CCPS”) for 26. Details of significant and material orders passed by
an aggregate consideration of ` 15 crore in Nao Spirits the regulators or courts impacting the going concern
& Beverages Private Limited, an associate company. The status and Company’s operations in future pursuant
Company’s shareholding in Nao Spirits & Beverages Private to Rule 8(5)(vii) of Companies (Accounts) Rules, 2014
Limited has increased to 30% of the equity share capital on a
fully diluted basis. The Company has not received any significant or material
order passed by regulators or courts or tribunals impacting the
22. Risk management Company’s going concern status or the Company’s operations
Details on Risk Management is annexed as Annexure–5 to this in future. The details of notices received from regulatory
Report. authorities and related matters have been disclosed as part
of note no. 40 to the audited standalone financial statements
23. Internal financial controls for the year ended 31st March 2024 and as note no. 41 of the
During the year under review, Governance Risks and Controls consolidated financial statements for the year ended 31st
(GRC) team has conducted detailed review of policies as per March 2024.
the direction of the management of the Company, to simplify
the process and ensuring adherence. The GRC team also 27. Disclosure as required under section 22 of Sexual
undertook comprehensive review of existing controls (SOX & Harassment of Women at Workplace (prevention,
non-SOX controls) and added attributes wherever required prohibition and redressal) Act, 2013
to ensure that controls are in alignment with the laid down
policies and practices and meeting the global benchmark. As per requirements of the Sexual Harassment of Women at
It has been shared with the statutory auditors and obtained Workplace (Prevention, Prohibition and Redressal) Act, 2013
their confirmation. The Board after considering the materials (SHWWA), the Company has designed and implemented
placed before it reviewed the confirmation received from a comprehensive policy and framework to promote a safe
external parties and reviewed the effectiveness of the policies and secure work environment, where every person at the
and procedures adopted by the Company for ensuring orderly workplace is treated with dignity and respect. Moreover, the
and efficient conduct of its business, including adherence to Company’s policy is inclusive and gender neutral. Further, the
Company’s policy, safeguarding its assets, prevention and complaint redressal mechanism detailed in the policy ensures
detection of frauds and errors and completeness of accounting complete anonymity and confidentiality to the parties.
records and timely preparation of financial statements. The
Board has satisfied itself that the Company has laid down Internal Committees (IC) have been constituted and each
internal financial controls which are commensurate with the Internal Committee has appointed members who are
size of the Company and that such internal financial controls employees of the Company and an independent external
are broadly adequate and are operating effectively. The member, having extensive experience in the field. The Internal
certification by the statutory auditors on internal financial Committees meet on a half yearly basis to discuss matters on
control forms part of the audit report. A statement to this effect policy awareness, best practices, judicial trends, etc. During
is also appearing in the Directors’ Responsibility Statement. the year, Internal Committees have also been trained on
nuances of the Sexual Harassment of Women at Workplace
24. Corporate social responsibility (Prevention, Prohibition and Redressal) Act, 2013.
Information on the composition of the Corporate Social
Responsibility and Environmental, Social and Governance The Internal Committees’ role is to consider and resolve the
Committee (CSR & ESG) is provided in the Corporate complaints reported on sexual harassment at workplace.
Governance Report that forms part of this annual report. Investigation is conducted and decisions are made by the
Furthermore, as required by section 135 of the Act and the Internal Committees at the respective location, and a senior
rules made thereunder, additional information on the policy woman employee is the presiding officer on every case.
and implementation of CSR activities by your Company during i) Number of complaints filed during the financial year: 2
the year are provided in Annexure–6 to this Report. (Two) complaints received

46
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Board’s Report (Continued)

ii) Number of complaints disposed off during the financial 30. Directors’ responsibility report
year: 3 (Three) [One complaint received in the previous Pursuant to section 134 (5) of the Act in relation to financial
financial year] statements (together with the notes to such financial statements)
iii) Number of complaints pending as on end of the financial for the financial year 2023-24, the Board of Directors report
year: None that:

To build awareness in this area, the Company has been (i) in the preparation of the annual accounts for the financial
publishing newsletters, emailers, posters, conducting online year 2023-24, the applicable accounting standards
training modules and monthly induction training for newly have been followed and there is no material departures;
joined employees. Besides the refresher, virtual training
programs are conducted in the organization on a continuous (ii) the Directors have selected such accounting policies and
basis for employees (including blue collared employees), applied them consistently and made judgments and
consultants, contractual employees and permanent/ estimates that are reasonable and prudent so as to give
contractual workers in regional languages. The Internal a true and fair view of the state of affairs of the Company
Committee has also conducted informal sessions to check the as at 31st March 2024 and of the profit of the Company
pulse at the grassroot levels. for year ended on that date;

28. Business Responsibility and Sustainability Report (iii) the Directors have taken proper and sufficient care
(BRSR) for the maintenance of adequate accounting records
Business Responsibility and Sustainability Report (BRSR) in in accordance with the provisions of the Act for
accordance with the Listing Regulations, the BRSR along safeguarding the assets of the Company and for
with the reasonable assurance report on BRSR Core KPIs for preventing and detecting fraud and other irregularities;
FY 2023-24 is being finalised and the same will be made
(iv) the Directors have prepared the financial statements on
available on the website of the Company at https://media.
a going concern basis;
diageo.com/diageo-corporate-media/media/u15nzkdc/
reasonable-assurance-report-on-brsr-core-kpis-and-business- (v) the Directors have laid down internal financial controls
responsibility-sustainability-report-2023-24.pdf to be followed by the Company commensurate with the
size and nature of its business and the complexity of its
29. Other Disclosures operations and that such internal financial controls are
a. The Company has not issued equity shares with adequate and are operating effectively.
differential rights as to dividend, voting or otherwise.
(vi) Proper systems have been devised to ensure compliance
b. The Company has not issued any sweat equity shares to with the provisions of all applicable laws by implementing
its directors or employees. an automated process having comprehensive
systems and securing reports of statutory compliances
c. No application has been made under the Insolvency and periodically from the functional units and that such
Bankruptcy Code; hence the requirement to disclose the systems are adequate and are operating effectively.
details of application made or any proceeding pending
under the Insolvency and Bankruptcy Code, 2016 (31 of The Board of Directors place on record sincere gratitude and
2016) during the year along with their status as at the appreciation for all the employees at all levels for their hard
end of the financial year is not applicable. work, solidarity, cooperation and dedication during the year.

d. The requirement to disclose the details of difference The Board conveys its appreciation for its customers,
between amount of the valuation done at the time of shareholders, suppliers as well as vendors, bankers, business
onetime settlement and the valuation done while taking associates, regulatory and government authorities for their
loan from the Banks or Financial Institutions along with continued support.
the reasons thereof, is not applicable.
By Order of the Board
e. There are no deposits accepted by Company which are Mahendra Kumar Sharma
not in compliance with the requirements of Chapter V of
the Companies Act, 2013. Place: Mumbai Chairperson
Date: 24th May 2024 DIN: 00327684

47
UNITED SPIRITS LIMITED Annual Report 2023–24

Management Discussion and Analysis

ECONOMIC SCENARIO a robust economic performance in the United States and several
large emerging market and developing economies, along with
Global Economy inflation returning to target levels in advanced economies, suggest a
diminished probability of a severe economic downturn. Furthermore,
The global economy demonstrated remarkable resilience with other positive factors shaping the global economy include the
steady but slow recovery differing by regions. The journey has been fading of prior energy price shocks and a notable resurgence in
eventful, starting with supply-chain disruptions in the aftermath of labour supply in many advanced economies.
the pandemic, a Russian-initiated war on Ukraine that triggered a
global energy and food crisis, and a considerable surge in inflation, Global inflation, a prominent concern over the past three years,
followed by a globally synchronised monetary policy tightening. Yet, continues to decline at a faster pace than initially anticipated.
despite many gloomy predictions, the world avoided a recession, Global headline inflation is expected to decline steadily from 6.8%
the banking system proved largely resilient, and major emerging in 2023 to 5.9% in 2024 and 4.5% in 2025. While headline inflation
market economies did not suffer sudden stops. Moreover, the has sustained a decline from its unprecedented peaks, core inflation
inflation surge – despite its severity and the associated cost-of-living has proven to be sticky and is expected to decline gradually. The
crisis – did not trigger uncontrolled wage-price. Instead, almost as ongoing disinflationary trend has instilled hope for further easing
quickly as global inflation went up, it has been coming down. With of financial conditions and the improvement of monetary policy
inflationary pressures abating more swiftly than expected in many frameworks.
countries, risks to the global outlook are now broadly balanced
compared with last year. Despite the challenges posed by the escalation of geopolitical
conflicts in the Middle East and along the Red Sea route, which
Multilateral co-operation is needed to limit the costs and risks of could potentially heighten the risks of supply disruptions, the global
geoeconomic fragmentation and climate change and speed the economy is expected to sustain its resilience in 2024. Global growth
transition to green energy. is expected to persist at 3.2% for both 2024 and 2025. Advanced
economies (AEs) are projected to witness a modest uptick in growth,
Global growth is estimated at 3.2% for 2023. Several factors primarily driven by a rebound in the euro area following subdued
such as ongoing geopolitical conflicts, higher inflation, a sluggish growth in 2023, while emerging market and developing economies
recovery in China, volatility in energy and food markets, and higher (EMDEs) are anticipated to maintain stable growth in 2024 and
interest rates, have contributed to a moderation in global economic 2025, albeit with regional variations.
growth. Despite these challenges, indications of stable growth,

Global Economic Growth (%)

5.0
4.5 4.3
4.2 4.2
4.0
3.5
3.2 3.2 3.2
3.0
2.5
2.0 1.8
1.6 1.7
1.5
1.0
0.5
0.0
Global Economy Advanced Economy Emerging Markets and
Developing Economies

2023 2024 2025 (Projected)

(Source: IMF World Economic Outlook, April 2024)

48
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Management Discussion and Analysis (Continued)

Indian Economy 24 as against 7.0% in FY 2022-23, supported by buoyant domestic

demand, moderate inflation, a stable interest rate environment,
Amid a volatile global economic landscape, India shines as a and strong foreign exchange reserves. Furthermore, a double-digit
beacon of optimism, retaining its position as the world’s fifth- largest growth rate of 10.7% in the Construction sector and an 8.5% growth
economy. As per the Second Advance Estimates of National rate in the Manufacturing sector have contributed to the GDP growth
Income, India’s GDP growth remained strong at 7.6% in FY 2023- in FY 2023-24.

India’s GDP Growth Rate (%)

12
10 9.5

7.4 8.0 8.3 7.6

8.0
6.8 7.0
6.4 6.5
6.0
Growth rate %

4.0
2.9
2.0

0.0

-2.0

-4.0

-6.0
-5.8
-8.0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

(Source: Ministry of Statistics and Programme Implementation; Tradingeconomics.com)

The growth observed in the Index of Industrial Production (IIP), the Interim Budget 2024-25 lays the foundation for achieving the
Goods & Services Tax (GST) collections, manufacturing Purchasing vision of a developed and self-reliant India by 2047. It outlines
Managers’ Index (PMI), per capita income, and increasing a comprehensive economic management strategy, including
private capital expenditure collectively indicate strong economic infrastructure development, digital public infrastructure, taxation
momentum. The surge in disposable income has led to an upswing reforms, and proactive inflation management.*
in household consumption in urban and rural regions and fuelled
demand across sectors. INDUSTRY OVERVIEW

Despite repetitive food price shocks, retail inflation is on a downward India is one of the fastest growing and most diverse alcoholic
trajectory and eased to 4.85% in March 2024. The RBI keeps the beverages market globally. The alcoholic beverage sector has a
policy repo rate unchanged at 6.50% and remains vigilant to high-growth potential given the favourable demographics and
take effective measures to achieve the target of 4% inflation while increasing social acceptance. The alcoholic beverages (alcobev)
supporting economic growth. industry in India has experienced remarkable growth in recent
years. This growth can be attributed to several factors, such as
India’s economic outlook remains positive, supported by rapid urbanisation, evolving consumer preferences, a youthful
stronger consumer demand, increased capital expenditure, demography, a burgeoning middle-class population with greater
improving prospects of rural consumption due to easing inflation, purchasing power and the growing preference for premium
enhancements in physical and digital infrastructure, increased alcoholic beverages among consumers. Additionally, the increasing
spending in an election year, and proactive government policy variety in the flavours of alcoholic drinks, along with expanding
measures. According to the IMF, the Indian economy is expected product portfolio by manufacturers, is poised to stimulate growth in
to grow steadily at 6.8% in 2024 and 6.5% in 2025. Furthermore, the alcohol market.

*(Source: Ministry of Statistics & Programme Implementation Bureau, The National Statistical Office (NSO), Reserve Bank of India, Ministry of Finance, IMF World
Economic Outlook April 2024)

49
UNITED SPIRITS LIMITED Annual Report 2023–24

Management Discussion and Analysis (Continued)

Alcohol consumption surged across various demographics, as who focus solely on specific segments, USL’s portfolio encompasses
a growing number of individuals, both men and women, entered numerous major brands, which had been under-invested in the
the legal drinking age. The legal drinking age in India varies from years prior to acquisition by Diageo PLC.
18 - 25 years, depending on the state, highlighting the conducive
environment for the alcohol market’s robust growth. These brands combined with Diageo brands, benefit from USL’s
leadership position in sales and distribution (with the largest share of
The consumer landscape in India has traditionally been a classic retail business), extensive manufacturing network (~36 sites across
“pyramid”, with a large number of households with low incomes most Indian states) and proven capability to operate effectively
forming the base, and a small number of households with large in a highly complex and regulated market, serving as a distinct
incomes the pinnacle. With growth being fueled by both the differentiator.
economic development and the demographic dividend, India has
seen this classic pyramid morph into a diamond shape with the The industry did experience a slowdown in FY 2023- 24, in-line
emergence of a rapidly growing “middle class” and the consumer with broader consumption trends and other adjacent consumer
landscape segmenting into three distinct groups – Affluent, Middle focused industries, attributed to higher inflation and consequent
and Aspiring - each with distinct consumption drivers and needs. financial strain on consumers. However, unlike the larger fast
moving consumer goods (FMCG) space, where inflation prompts
Market segmentation: The Indian Alcobev industry is segmented a shift towards lower-priced alternatives and smaller packaging
into IMFL (Indian Made Foreign Liquor), IMIL (Indian Made Indian format, the alcoholic beverage industry has not witnessed significant
Liquor), Wine, Beer and imported alcohol. Whiskey dominates the downtrading. On the contrary, there is a shift towards more selective
Indian spirits industry by a very wide margin. consumption habits, with reduced occasions of consumptions, while
consumers maintaining their preference for specific brands. Notably,
Consumption pattern: The states of Karnataka, Maharashtra, West due to the K-shaped economic growth pattern, where the wallets
Bengal, Odisha, Telangana, Delhi, Haryana, Punjab, etc. are among of middle-income individuals are strained, but affluent consumers
the largest consumers of Alcobev in India. Liquor stores serve as the remain relatively insulated, the trend of premiumisation persists in
predominant sales channel nationwide, especially since Alcobev the industry, with higher-priced segments exhibiting faster growth
consumption primarily occurs outdoors, with supermarkets and compared to lower-priced segments.
malls mainly concentrated in tier I and tier II cities of India.
INDIAN SPIRITS MARKET OVERVIEW
While the average per-adult alcohol consumption in India remains
considerably low compared to countries like the United States, India remains an attractive market with stable macroeconomic
there is a notable prevalence of drinkers among young Indians. environment and favourable demographics. As a promising total
This presents a tremendous opportunity to propel the growth of beverage alcohol (TBA) marketplace, it capitalises on its status as
the Alcobev industry, on the back of the expanding working-age one of the largest whiskey markets by volume. It also ranks among
population. Anticipated shifts in lifestyle and aspiration among the countries with the lowest per capita TBA consumption globally,
Indians are expected to increase per capita consumption in line with indicating substantial potential for expansion.
global trends & huge penetration headroom.
One of the key trends in the Indian Alcobev market is the increasing
The Alcobev industry in India is thriving and is well-positioned consumption of spirits, especially whiskey. The consumption of
for continued growth in the future, driven by the increasing whiskey has been steadily increasing, propelled by the expanding
popularity of alcoholic beverages among consumers and growing urban populace and the influence of Western drinking culture.
urban population. India presents robust growth opportunities Consequently, there has been a proliferation of whiskey distilleries
for the Alcobev industry in the coming years, fuelled by positive and a wide range of whiskey brands in the market. Another trend
demographics, premiumisation, and greater acceptance of is the escalating demand for flavoured alcoholic beverages. These
alcoholic beverages in social circles, a sophisticated retail channel offerings appeal to younger consumers seeking innovative and
and an experimentative consumer base who is ready to explore. enticing flavours. The introduction of new flavours and variants by
both domestic and international brands has significantly augmented
USL has an excellent platform in place to capitalise on this the growth of this segment. Additionally, the emergence of craft
opportunity with its comprehensive end-to-end brand portfolio spirits and microbreweries is expected to drive further growth in the
across all price points. Unlike international and local competitors, industry.

(Source: Statista, CIABC)

50
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Management Discussion and Analysis (Continued)

Evolving consumer preferences, notably among the younger there is a growing presence of on-trade consumption, gifting,
population, are spurring a proliferation of spirit varieties as weddings, festivals and special occasions, along with the burgeoning
experimentation gains momentum. Additionally, the rise of artisanal cocktail culture.
values and local pride are propelling the expansion of the TBA
category, especially among more affluent consumers in India. In REGULATORY SCENARIO IN INDIAN MARKET
recent years, Indian Single Malts have risen to nearly the same
prominence as Scotch Single Malts, which have enjoyed a presence Both central and state governments enforce regulatory oversight,
in India for several decades. imposing numerous restrictions on the production, movement, and
sale of Alcobev products. Alcobev also falls under the purview of
Despite a slowdown in growth compared to the previous two years, Food Safety and Standards Authority of India (FSSAI). Moreover,
which aligns with the larger consumer space, the premiumisation direct advertising of Alcobev products is prohibited in India.
trend persists. There is a continued optimistic outlook for mid to long- Domestic Alcobev players are compelled to establish owned or
term growth, supported by the fact that penetration is only half of contract manufacturing setups in every state due to prohibitively
that seen in the developed markets, and per capita consumption high inter- state duties. Licenses are mandatory for the production,
stands at half to a third of those levels. bottling, storage, distribution, or retailing of all Alcobev products.
Distribution is highly regulated at, both wholesale and retail levels.
Growth drivers: The Indian Alcobev industry offers great potential In states where the government controls pricing, price increases are
for spirits companies. The growing young population in India, subject to government notifications. Moreover, controlled pricing
increasing disposable incomes, favourable demographics, greater presents a substantial challenge in an inflationary environment.
acceptance of alcoholic beverages in social circles, the current low Additionally, in states where retailing is controlled by the state
per capita consumption, increasing number of pubs and bars, and government, each player is allocated a specified quota, limiting the
increasing exposure to imported and premium alcoholic beverages potential for expansion for our products. Furthermore, navigating
are the major factors stimulating the growth of the Indian Alcobev frequent and ad-hoc changes in the route to market presents
market. Moreover, with more women entering the workforce and challenges in the Beverage Alcohol Industry. Recently, alterations
gaining financial independence, there has been a shift in cultural in the route to market have occurred in Punjab and Uttarakhand,
attitudes towards alcohol consumption, leading to increased in addition to regular changes like licence renewals, demanding
consumption among women as well, which is expected to further continual adaptation. These regulations impose significant
drive the market growth. operational constraints on industry players.

The consumption landscape for spirits is evolving, with socialising- Pricing remains an ongoing challenge for the category, as continuous
led consumption witnessing 1.3 times increase in its share of increase in excise duties result in rising end-consumer prices, without
consumption. This indicates a move towards normalisation and an any corresponding benefit to your Company. Although fiscal year
inflection point for growth within the category. The transition from 2024 was one of the good years for the Company in terms of
solitary to shared or social consumption occasions has historically securing pricing in several states across India, it was insufficient to
driven substantial growth for many food and beverage companies, offset the impact of inflation.
a trend that has been notable in the spirits industry over the year.
BUSINESS ANALYSIS COMPANY OVERVIEW
Growing prevalence of premium Alcobev: Rapid urbanisation is
expected to bolster disposable income, which bodes well for industry United Spirits Limited (USL/Your Company) is the largest alco
growth. With more Indians travelling abroad, rising aspirations, beverage company in India and is also among the largest consumer
favourable environment for imported liquor and higher disposable goods companies. Your Company is involved in the manufacture,
income, consumers are upgrading towards premium segments in sale, and distribution of beverage alcohol. It has a comprehensive
the country. The rise in premiumisation is evident in the heightened brand portfolio with over about 63 brands of Scotch whisky, IMFL
focus of major players on semi-premium and premium categories, whisky, brandy, rum, vodka, and gin. 10 of these brands sell more
with increased launches and intensified marketing efforts targeting than a million cases annually. Your Company has brands spanning
these categories. Another emerging trend in the Alcobev sector is across price points operating in all segments of Popular, Prestige,
the increasing popularity of grain-based liquor over the traditionally Premium and Luxury.
popular molasses-based liquor.
Your Company produces and sells around 61 million cases.
There is also growth opportunity in new premium categories, which McDowell’s No.1, Royal Challenge, Royal Challenge American Pride,
are led by Diageo, through Tequila and craft spirits. Additionally, Signature, Antiquity, Black Dog, Director’s Special Black, McDowell’s

51
UNITED SPIRITS LIMITED Annual Report 2023–24

Management Discussion and Analysis (Continued)

Rum & McDowell’s Brandy are some of the marquee brands Your Company has a strong distribution network, and its route to
owned by your Company. In addition, your Company also imports, customer is superior in the industry with more than 80% of sales
manufactures, distributes, and sells various iconic Diageo brands comprise from P&A portfolio out of the total branded spirits sales.
such as Captain Morgan, Johnnie Walker, J&B, Baileys, Lagavulin,
Talisker, VAT 69, Black & White, Smirnoff and Ciroc in India under
different licensing agreements.

Diageo Relay B V (wholly owned subsidiary of Diageo plc.) holds 55.88% shareholding in your Company. Our new mission is to be the
Top Performing CPG Company in India delivering sustained double-digit, profitable top line growth and long-term value creation to all our
Stakeholders. For this, the Company has been working on the following three pillars:

Portfolio Re-shape Be an Organisation of the Future Diageo in Society

•  reakout growth on P&A:

B • Digital Acceleration •  riving ESG from grain-to-
D
Accelerate in Luxury & • T alent & Culture as growth glass
Premium segment, strengthen drivers •  oving India towards ‘Drink
M
play in Upper Prestige, Better, not More’
• Speed & Simplicity
Reshape value proposition in
• L eading in Inclusion &
Lower & Mid Prestige
Diversity
• New growth engines and
•  alue chain efficiency
V
extraction

2598 36 70,000
Your Company has been striving hard with a strong focus on
premiumisation and at the same time also trying to maximise value
from brands in the popular segment.
Employees Facilities Distribution outlets
Strengths
Your Company’s rich heritage ensures long-lasting relationships
Your Company has 7 trademarks which sell more than a million case with most of the raw material suppliers, which enables it to ensure
every year, of which 1 sells more than 30 million cases annually. The uninterrupted procurement at competitive rates. This, in turn, helps
Company’s export business is also growing. the Company to ensure continuous production and supply of its
products through the length and breadth of the country.
Your Company has pan-India manufacturing presence with 36
facilities and robust distribution network of more than 70,000 The in-house Technical Centre and its tie-up with the global giant
outlets, which provide access to vendors, suppliers, and distributors. Diageo PLC enables your Company to undertake research on new
products, analytics and sensory sciences, process R&D, special
With high brand equity and leadership position, your Company spirits, and flavour management. Your Company’s professional
is able to have a significant influence on industry issues through team of expert scientists work constantly with perseverance to
representations made on behalf of the industry. renovate the portfolio. The strong marketing team creates impactful
communication to convey the renewed brand salience.
Your Company has a wide range of portfolio spanning across
categories of Scotch whisky, IMFL whisky, brandy, rum, vodka, and Your Company’s workforce of about 2,598 regular employees are
gin, and in various price points from Luxury, Premium, Prestige to the key strength in achieving the goals laid down by the Company.
Popular. Your company has built internal sufficiency with ~50% of positions

52
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Management Discussion and Analysis (Continued)

being filled with internal talent during the year. Overall gender Brand Signature reinforced its position as the most distinctive
representation is 17%, however, gender representation in the brand within the upper prestige segment, building on the
executive population stands at 27%. Industrial relations during the transformative renovation initiated in FY 2022-23. This year,
year were cordial. the brand was propelled forward by three significant initiatives
that underscored our commitment to sustainability and
BUSINESS PERFORMANCE positive community impact: the launch of ‘One With Nature
My Signature,’ campaign; featuring film actor Ayushmann
Our mission is to be a top-performing consumer packaged goods Khurrana, reinforced our commitment to environmental
company in India, delivering sustained double-digit, profitable consciousness. Alongside, being the title sponsor of the Ziro
topline growth and long-term value to all our stakeholders. During Festival of Music; emerged as a pivotal activation, blending
the year in review, we made strategic investments and implemented sustainability with cultural expression to enhance brand
several initiatives aligned with the three identified pillars of our visibility and engagement. Complementing these was our
mission, keeping us on track to realise our goals. Signature Green Vibes’ platform, which cultivated a community
dedicated to sustainable living and responsible consumption.
1. Portfolio reshape These initiatives, along with other innovative interventions
resulted in the growth that outpaced the category.
We continue to maintain strong emphasis on brand innovation
and renovation, prioritising portfolio premiumisation. Our Antiquity Blue underwent a comprehensive transformation
marketing campaigns have significantly enhanced consumer introducing a fresh brand visual identity. This new brand visual
engagement and contribute to building long- term brand identity was effectively communicated across the brand’s
equity. key markets, with targeted interventions in digital and out-
of-home (OOH) media. Additionally, Antiquity elevated its
Godawan, India’s first artisan single malt, continues to expand communications by being showcased at key art events such as
both across India and globally. Godawan 100 collector the Kala Ghoda Festival in Mumbai and the Jaipur Literature
edition was awarded “Single Malt Whisky of the Year” at the Festival.
prestigious London Spirits Competition 2024. Additionally,
Godawan Single Malt Rich and Rounded and Godawan Royal Challenge American Pride, our American bourbon-
Single Malt Fruit and Spice each received a gold medal at the based IMFL whisky, is one of our most successful innovations
competition, underscoring our commitment to innovative and and among our fastest-growing brands. It is on track to become
sustainable luxury in the Alcobev industry. the quickest brand in our portfolio to reach one million cases.
The brand was scaled up across India with comprehensive
The renovation of Black Dog continued to gain global portfolio of SKUs.
recognition, notably winning gold at the prestigious DBA
Design Effectiveness Award and silver at the Pentawards In the highly competitive mid-prestige segment, we
– a leading global platform and community for packaging accelerated our strategy for Royal Challenge following a
design. significant renovation launch in the previous year. The Naya
Sher campaign was amplified across major platforms,
Furthermore, we scaled-up Johnnie Walker Blonde following including the Cricket World Cup and the brand’s key activation
a successful launch in FY 2022-23. Our enhanced presence, platform, the Indian Premier League (IPL). We also expanded
marked by marquee associations, notably our partnership the brand’s influence by signing the RCB Women’s IPL team,
with Lollapalooza, has significantly bolstered the overall equity diversifying our equity play. Additionally, we strengthened our
of the Johnnie Walker brand. partnership with the RCB Men’s IPL team to boost our cultural
engagement. The brand enhanced consumer loyalty with
Continuing our cultural engagement, we maintained our its largest engagement initiative to date, the Game Nights
commitment to the platform Walkers & Co., which was Platform.
launched in the previous year and featured collaborations
with John Legend and Raja Kumari. This year, we partnered In the lower prestige segment, we rebranded our flagship
with the Aravani Art Project, a cis-trans art collective dedicated whisky, McDowell’s No. 1, to House of McDowell’s, marking
to amplifying the representation of marginalised communities a strategic shift towards premiumisation. This reflects
in popular culture. our response to evolving consumer tastes and desires.
We introduced McDowell’s Distiller’s Batch Single Malt,

53
UNITED SPIRITS LIMITED Annual Report 2023–24

Management Discussion and Analysis (Continued)

demonstrating our commitment to innovation and setting new Owned Platforms: Led by in.thebar.com, our Diageo-owned
industry standards. Our renovation began with McDowell’s digital-first platform serves as a central hub for all related
No.1 Whisky, introducing Premium Smooth, which has been to social celebrations and alcoholic beverages, focussing
scaling up nationwide. Popular film actor Kartik Aaryan was on robust content creation and community engagement.
appointed as the brand ambassador for House of McDowell’s, Over the year, we transformed in.thebar.com into a content-
enhancing our brand equity through strong awareness first platform, significantly increasing monthly visitation and
and recall. The brand’s narrative on friendship evolved to organic traffic tenfold, improving website metrics such as
“Yaaron Waali Baat” from “No. 1 Yaari,” highlighted through bounce rates, and tripling the time spent and engagement
a comprehensive 360 campaign and a major thematic TVC. rates – all the while achieving a 50% reduction in costs.
This was supported by a broad renovation launch across
markets. Throughout the year, we maintained brand salience Consumer Data: This crucial element has become a
with major interventions that emphasised the brand’s ethos of foundational aspect of our marketing strategy, supported
friendship and inclusivity. by advanced marketing technology, facilitating precise
and strategic consumer engagement. During the year, we
2. Be an organisation of future completed the marketing technology setup, with platforms
like CDP and Salesforce Marketing Cloud now enabling
We are building an organisation of the future through direct, one-to-one consumer communication. We have also
significant, structured investments in areas such as Digital, greatly increased our collection of compliant first-party data,
Luxury, and Innovation, aimed at delivering disproportionate achieving a 3.5x increase in data scale, which facilitates
business impact and securing future growth. Over the omnichannel and personalised communication at significantly
past year, our talent initiatives have focussed on targeted lower costs than traditional media buying.
development plans for leaders and successors, and on
enhancing internal recruitment to accelerate organisational 3. Diageo in society
self-sufficiency. We have continued to champion inclusion
and diversity, achieving an 88% Inclusion & Diversity Index We are committed to building a more sustainable,
in ‘Your Voice’, our employee engagement survey, and responsible, and inclusive business and society. Our ten-year
launched two Employee Resource Groups – the Spirited ESG action plan, ‘Society 2030: Spirit of Progress,’ outlines
Women’s Network and the Rainbow Network. To thrive in a strategic priorities focussed on promoting positive drinking,
continuously volatile operating environment, it is essential to championing inclusion and diversity, and pioneering grain-to-
be fast, agile, transformational, and responsive to changing glass sustainability. We aim to drive significant impact across
dynamics. Consequently, we have embarked on a systematic our value chain, affecting communities, suppliers, partners,
culture change effort to embed speed and agility within the customers, and consumers.
organisation.
We are committed to moving India towards the principle of
Significant strides were made in our digital transformation ‘drinking better, not more’ – an approach deeply rooted in
journey, which commenced in FY 2022-23. Our consumer- our social values and consistent with our business model as a
facing digital initiatives were scaled up across three identified producer of premium beverages. We actively shape drinking
key areas – Digital Marketing, Owned Platforms, and attitudes towards moderation and address harmful drinking
Consumer Data. These efforts have effectively kept us on track through multi-year programmatic interventions targeting
with the objectives set at the beginning of FY 2023-24. drunk driving and underage drinking. Our commitment to
championing responsible consumption is further demonstrated
Digital Marketing: We have established the ‘Precision and through our DRINKiQ platform and the ‘Wrong Side of the
Digital Factory’ to refine our digital marketing practices and Road’ programme. Additionally, we uphold responsible brand
introduce best-in-class processes, capabilities, tools, and marketing through self-regulation.
partnerships. These improvements are strategically designed
to enhance Diageo’s position in digital marketing. During the Inclusion and diversity are integral to our values. In India, we
year, we enhanced the effectiveness and efficiency of our are among the industry leaders in promoting gender diversity
digital marketing through expanded always-on social content, and have extended our I&D initiatives to include people with
increased programmatic marketing, more cost-efficient media disabilities and the LGBTQI community. Our partnership with
buying, and sharper, more personalised media targeting the Skill Council for People with Disability has successfully
based on consumer interests, affinities, and first-party data.

54
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Management Discussion and Analysis (Continued)

trained 110 individuals with Speech and Hearing Impairments Your Company has fortified its entire portfolio through a blend of
in F&B skills, securing their employment in premier hotels. innovation, renovation, and rationalisation. Prestige and above
brands accounting for ~87% of net sales remain the primary focus,
We ensure a progressive portrayal in all creative outputs, with an emphasis on renovation to align with evolving consumer
especially for our iconic brands like Johnnie Walker, Black preferences. Your Company’s robust performance in the Prestige
& White, and Black Dog, where women are central to the and Above segment reflects its commitment and the efficacy of
communication narratives. the premiumisation strategy. Your Company has also prioritised
optimising value gains in the Popular segment.
We maintain a strong commitment to making our brands
‘Sustainable by Design’ to minimise emissions throughout • During the year under review, your Company’s sales volume
our value chain. In alignment with this commitment, we was 61.4 million cases resulting in a drop of 15.2% compared
introduced a 25% recycled PET (r-PET bottle) for one of our to the previous year. This is largely on account of the slump
brands, implemented biodegradable packs, and successfully sale of the business undertaking associated with 32 brands
eliminated mono-cartons from 90% of our product portfolio. and franchising of 11 Popular brands to an unrelated party.
Over 99% of the materials used are widely recyclable, The transaction was a conclusion of the strategic review of
positioning us to achieve our goal of 100% by 2030. the select popular segment brands and was approved by the
Additionally, we are dedicated to the responsible collection Board on 27th May 2022.
and recycling of pre- and post-consumer plastic waste; this
year, we collected 24,132 metric tonnes of post-consumer • Net sales/income from operations increased 3.1% y-o-y in
plastic packaging under our Extended Producer Responsibility the financial year ended 31st March 2024, to ` 10,692 crores
(EPR) initiative. Furthermore, our artisanal single malt, as against `10,374 crores in the previous year, driven by
Godawan, focusses on water conservation and biodiversity. continued premiumisation, resilient consumer demand and
competitive performance of our innovation and renovation
Our regenerative agriculture programme involves over 5,000 offerings. Overall, Prestige & Above segment represented 82%
small-holder farmers in Punjab and Haryana. We are also of total volumes (Vs 66% in the previous year) and 87% of total
collaborating with government bodies and local communities net sales (Vs 80% in the previous year) FY24.
to restore natural water resources. Our community
programmes on Water, Sanitation, and Learning for Life have • The Prestige and Above segment’s net sales were up 11.9%
empowered women, with 50% of beneficiaries being female. with strong double-digit growth across the higher value sub-
segments. The Popular segment represented 18% (Vs 34%
Our ESG Risk Rating has improved from 23.0 to 20.6, in the previous year) of total volumes and 10% (Vs 18% in
according to Sustainalytics, and we have maintained an ‘A’ the previous year) of total net sales during the financial year
rating with MSCI for the past two years. Furthermore, our ESG ended 31st March 2024.
score in CSRHUB has improved from 75 in 2022 to 88 in 2024.
With a balanced revenue distribution, your Company maintains
BUSINESS REVIEW an optimal mix across segments, carefully aligning premium and
popular offerings. This strategic diversification mirrors a sophisticated
Your Company continued its journey of premiumisation by grasp of varied consumer demands and an unwavering dedication
improving the mix of P&A net sales salience to 87% in the financial to delivering excellence across different price points. It not only
year 2023-24. Our portfolio is uniquely positioned to seize the fosters stability but also enables your Company to tap into varied
abundant growth opportunities presented by the Indian market. market segments, facilitating broader growth opportunities and
Your Company has been unwavering in its pursuit of achieving market penetration.
double-digit top- line growth and aims for mid-high teen operating
margins. To accomplish this goal, your Company is exerting NET DEBTS
maximum effort to fortify and accelerate the growth of its core
brands, enhance its route-to-consumer strategy, and capitalise Your Company has a healthy balance sheet and is net cash
on economies of scale. Simultaneously, your Company remains surplus as on 31st March 2024. Net cash position of your Company
firmly committed to upholding the highest standards of corporate on a standalone basis stood at ` 1808 crores (including current
citizenship. Its integration with Diageo’s brand portfolio has enabled investments) as of 31st March 2024. This strong position enables your
your Company to establish leadership in both volume and value Company to undertake value-accretive business decisions swiftly.
terms.

55
UNITED SPIRITS LIMITED Annual Report 2023–24

Management Discussion and Analysis (Continued)

Significant improvements in your Company’s financial adaptability, support and guidance of Diageo plc, the Company’s ultimate
corporate governance standards, and compliance framework have holding Company. Diageo continues to reinforce the Company’s
led to an enhancement in its credit ratings. CRISIL has reaffirmed capabilities through various strategic initiatives, including
its ‘AAA/Stable’ rating on United Spirits Limited’s long-term bank organisational and distribution reforms, revamped brand promotion
facilities and reassigned the short-term rating to A1+. These ratings strategies, enhanced supply chain efficiency, portfolio optimisation,
will enhance your Company’s access to more economical debt government engagement, and efforts to foster an inclusive work
sources, thereby reducing interest costs and increasing shareholder environment and drive gender diversity. With these measures in
value. place, your Company is poised to achieve its medium-term goal of
delivering double-digit topline growth and mid-high teens EBITDA
OUTLOOK margins, driven by improved pricing and cost optimisation. Despite
regulatory challenges looming over the Alcobev industry, your
Your Company maintains its position as a leader in India’s Alcobev Company has demonstrated resilience in the face of such hurdles
industry, benefiting from a robust portfolio and the required in the past, positioning it well to navigate through them in the future.

RISKS & CONCERNS, OPPORTUNITIES & THREATS

Risks & Concerns

Due to the regulated nature of Prohibition in certain states poses a The Company continues in its
the industry, your Company is threat to legal sales and fuels inter- endeavours to promote responsible
vulnerable to restrictions imposed state smuggling, hindering industry alcohol consumption and mitigate
by the state governments regarding growth. Furthermore, it may lead the risks associated with drinking
the production, transportation and to a surge in country liquor sales and driving through its ‘Responsible
sale of spirits. due to the absence or restricted Drinking’ initiatives as highlighted
availability of branded products. in the CSR Report included in
Annexure 6 of the Directors’ Report.

Opportunities

The Alcobev industry in India is Concluding the strategic review Renovation and revamping of key
undergoing a transformative shift of selected popular brands is a brands to upgrade them presents
driven by premiumisation trend, strategic move to reshape your opportunities for margin expansion.
as value-based consumption Company’s portfolio. This decision
increased. Your Company’s strong has enabled management to
emphasis on premiumisation, concentrate efforts on Prestige and
combined with rising disposable Above segments, driving forward
income and evolving consumer mission of achieving double digit
lifestyles, creates substantial profitable topline growth.
opportunities for sales growth and
margin expansion.

56
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Management Discussion and Analysis (Continued)

Strong emphasis on achieving the On a macro-economic scale, Low per capita consumption,
restated mission and adherence the global economic slowdown, rapid urbanisation, favourable
to Diageo policies are expected to inflation and vulnerability to the macro economic indicators, higher
bolster your Company’s sales and global supply chain due to geo- disposable incomes and evolving
margins. political tensions threaten the cost, lifestyles bode well for the industry
movement and availability of raw as a whole.
materials. Any adverse scenario
related to geopolitical conflicts
leads to rising commodity prices,
impacting India as a net importer
of energy.

India is home to the world’s The surge in the number of

largest population, with 1.44 billion restaurants, cafes, and pubs in India
population (as of 20th April 2024). presents a significant opportunity
The country boasts the world’s for your company to tap into the
largest young population, with a thriving Alcobev market.
median age of 26.7 years. ~25
million Indians are expected to
enter the drinking age every year
which represents substantial growth
opportunities for the industry.

Threats

The stringent enforcement of Intense competition prevails in the Decrease in consumption due to
distribution strategies by states segment, fuelled by the lucrative inflationary pressures and other
limits the growth prospects of the growth prospects of the industry. macroeconomic factors.
industry.

Stringent pricing control by states The consumption of spurious liquor

poses a threat to margins. poses a risk to the growth trajectory
of brands in the Popular segment
brands.

57
UNITED SPIRITS LIMITED Annual Report 2023–24

Management Discussion and Analysis (Continued)

INTERNAL CONTROL SYSTEMS • Regulatory compliance is ensured by adhering to various laws,

regulations, and prevailing statutes. An extensive programme
The Company maintains an adequate system of internal controls of internal, external audits along with periodic reviews by the
commensurate with the nature, size, and complexity of the management is carried out to ensure adherence to the best
business operations. The Company has ensured that stringent and practices and oversight monitoring by the Board establishes a
comprehensive controls are put in place to ensure. strong control environment. The management has evaluated
that the internal controls over financial reporting are operating
• Effective and productive use of resources effectively by adopting the required procedures.

• Safeguarding of the Company’s assets and interests • The control framework prevailing in the Company was
regularly reviewed and controls were monitored to ensure that
• Transactions are approved, registered, properly reported and corrective measures were taken on time for minimum failures.

• Checks and balances guarantee reliability and consistency of

accounting data

KEY FINANCIAL AND OTHER RATIOS

Key financial ratios arising from the financials as given below for the financial year ended 31st March 2024, and 31st March 2023.

` Crores
Particulars 31-March-24 31-March-23
i) Key financial numbers (Standalone financial statements)
Share Capital 145 145
Reserves & Surplus 6,818 5,799
Total Equity (Net Worth) 6,963 5,944
Gross Debt (excludes accrued interest and lease liability) 0 1
Profit after tax (PAT) 1,312 1,052
Share Price (`) 1,134 756
Other Income 335 74
Revenue from Operations 25,389 27,578
Total Expenses Cost 24,021 26,534
Less: Depreciation 264 271
Less: Finance Cost 76 104
Total Expenses (excluding Depreciation and Finance Cost) 23,681 26,159
EBITDA 1,708 1,419
EBIT 1,779 1,222
Inventory 2,063 2,230
Trade Receivables 3,128 2,383
Trade Payable 1,827 1,738
ii) Debtors’ Turnover Ratio
Average Receivables 2,756 2,343
Revenue from Operations 25,389 27,578
Receivable Turnover 9.2 11.8
Receivable Turnover (in days) 40 31

58
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Management Discussion and Analysis (Continued)

` Crores
Particulars 31-March-24 31-March-23
iii) Payable Turnover Ratio
Average Payables 1,783 1,633
Cost of Goods Sold, Advertisement and Sales Promotion, other Expenses 8,441 8,348
Payable Turnover 4.7 5.1
Payable Turnover (in days) 77 72
iv) Inventory Turnover Ratio
Average Inventory 2,146 2,197
Purchases (COGS & Excise Duty) 20,745 23,276
Inventory Turnover 9.7 10.6
Inventory Turnover (in days) 38 34
v) Invest Coverage Ratio
Interest 76 104
EBITDA 1,708 1,419
Interest Cover 22.5 13.6
Interest 76 104
EBIT 1,779 1,222
Interest Cover 23 12
vi) Return on Capital Employed Ratio
EBIT 1,779 1,222
Capital Employed 7,204 6,127
Return on Capital Employed 24.7% 19.9%
vii) Net Profit Margin Ratio
PAT 1,312 1,052
Net Sales (net of excise) 10,692 10,374
Net Profit Margin 12.3% 10.1%
viii) Operating Margin Ratio
EBIT 1,779 1,222
Net Sales (net of excise) 10,692 10,374
Operating Margin 16.6% 11.8%

SUMMARY OF KEY RATIOS LEVERAGE RATIOS

Particulars F24 F23
Debt-Equity Ratio NA 0.02
Interest Cover 23 14
VALUATION RATIOS
EPS 18.04 14.46
P/E Ratio 62.9x 52.3x
PROFITABILITY RATIOS
Return on Equity 18.8% 17.7%
Return on Capital Employed 24.7% 19.9%
LIQUIDITY RATIOS
Inventory Turnover Ratio (in days) 38 34
Receivable Turnover Ratio (in days) 40 31
Payable Turnover Ratio (in days) 77 72

59
UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure-1
Details of Subsidiaries, Associates and Joint Ventures
Form AOC - 1
(Pursuant to the provisions of section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014 Statement
containing as on 31st March 2024 salient features of the financial statement of subsidiaries/associate companies/joint ventures)

Part A: Subsidiaries
SI. Name of the Date since Currency Closing Average Share Reserves Total Total Investments Turnover Profit/ Provision Profit/ Total Proposed % of Country
No. Subsidiary when exchang exch capital assets liabilities (loss) for (loss) after comprehensive dividend share
subsidiary rate rate before taxation taxation income holding
was taxation
acquired.
1 Asian 26th Dec USD 83.36 82.97 42 (132) 1 (91) - - 0 - 0 0 - 100 Mauritius
Opportunities 2002
& Investments
Limited (AOIL)
2 Palmer Investment 26th Mar USD 83.36 82.97 125 (122) 4 (0) - - (0) - (0) (0) - 100 British
Group Limited 2009 Virgin
(PIG) Islands
3 Shaw Wallace 28th Sept GBP 105.15 104.27 4 (2) 2 (0) - - (0) (0) (0) (0) - 100 U.K.
Overseas Limited 2015
(SWOL)
4 USL Holdings 7th Feb USD 83.36 82.97 6,391 (7,089) 4 (702) 0 - (0) - (0) (0) - 100 British
Limited (UHL) 2007 Virgin
Islands
5 USL Holdings (UK) 26th Feb GBP 105.15 104.27 0 (7,102) 0 (7,102) 0 - 121 - 121 121 - 100 U.K.
Limited (UHUKL) 2007
6 United Spirits (UK) 26th Feb GBP 105.15 104.27 0 (2,767) 0 (2,767) 0 - (0) - (0) (0) - 100 U.K.
Limited (USUKL) 2007
7 United Spirits 26th Feb GBP 105.15 104.27 0 (2,764) 0 (2,764) - - (0) - (0) (0) - 100 U.K.
(Great Britain) 2007
Limited (USGBL)
8 McDowell & Co. 5th Oct GBP 105.15 104.27 17 (3) 14 (0) - - (0) - (0) (0) - 100 Scotland
(Scotland) Limited 2006 U.K
(MSL)
9 Royal Challengers 11th Mar INR - - 0 301 658 (357) - 635 297 75 222 222 - 100 India
Sports Private 2008
Limited

Notes:
1. 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, total comprehensive income, and proposed
dividend. All amounts are in ` crore except percentage of shareholding and exchange rate.
2. All the subsidiaries have 31st March 2024 as their financial year end.
3. Names of subsidiaries which are yet to commence operations: Nil.

60
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Annexure-1 (Continued)

Part B: Associates and Joint Ventures

Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures

Sl No. Name of Associates or Joint Ventures Nao Spirits & Beverages Private Limited
Associate
1 Latest audited Balance Sheet Date 31/03/2023
2 Date on which the Associate or Joint Venture was associated or acquired 29/04/2022
3 Shares of Associate or Joint Ventures held by the company on the year end
Number of Equity shares 4,670
Number of Compulsory Convertible Preference Shares 14,172
Amount of Investment in Associates or Joint Venture (` in crore) 47
Extent of Holding (in percentage) * 11%
4 Description of how there is significant influence Representation on the Board of Directors
5 Reason why the associate/Joint venture is not consolidated. Not Applicable
6 Net worth attributable to shareholding as per latest audited Balance Sheet 2
(` in crores)
7 Profit or Loss for the year
i. Considered in Consolidation ** (` in crore) (1)
ii. Not Considered in Consolidation (` in crore) (10)

Notes:
* 11% Equity ownership interest (30% on a fully diluted basis).
** Represents Group’s share of profit/(loss)
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 Hina Nagarajan

Chairperson Managing Director & Chief Executive Officer
DIN: 00327684 DIN: 00048506

V K Viswanathan Pradeep Jain

Director Executive Director & Chief Financial Officer
DIN: 01782934 DIN : 02110401

Mital Sanghvi
Company Secretary

Date: 24th May 2024

Place: Mumbai

61
UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure-2
Related Party Transactions
FORM AOC - 2
(Pursuant to section 134(3)(h) of the Companies Act, 2013 and rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered by the Company with related parties referred to in section 188(1) of the

Companies Act, 2013 including certain arm’s length transactions under the fourth proviso thereto.

a) Details of Contracts or transactions not at arm’s length basis: There are no contracts or arrangements or transactions that were not at
arm’s length basis for the year ended 31st March 2024.

b) Details of Material Contracts or transactions at arm’s length basis: There are no material contracts or arrangements or transactions at
arm’s length basis and in the ordinary course of business for the year ended 31st March 2024.

By Order of the Board

Mahendra Kumar Sharma
Date: 24th May 2024 Chairperson
Place: Mumbai DIN:00327684

62
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Annexure-3
Form No. MR-3
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2024
[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,
United Spirits Limited
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, 2024, 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, 2024, according to the provisions of:

i. The Companies Act, 2013, (the Act) and the rules made thereunder;

ii. Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;

iii. 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 Act’);

(a) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;

(b) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

(c) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

(d) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (No instances for
compliance requirements during the year);

(e) The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021; (No instances
for compliance requirements during the year);

(f) The Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (No instances for
compliance requirements during the year);

(g) 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;

63
UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure-3 (Continued)

(h) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021, (No instances for compliance
requirements during the year);

(i) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 (No instances for compliance requirements
during the year); and

(j) Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018

vi. Laws specifically applicable to the Company as identified by the Company:

(a) Various State Excise Laws relating to alcohol and related industry;

(b) Food Safety and Standards Act, 2006 and Rules and Regulations made thereunder;

vii. All other Labour, Employee and Industrial or factory and environmental Laws to the extent of necessary permissions, licenses,
compliance and control mechanisms as 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 generally complied with the provisions of the Act, Rules, Regulations, Guidelines,
Standards, 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. Changes in the composition of the Board of Directors that took place during the period under review were carried
out in compliance with 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 with necessary compliance wherever sent at shorter period 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.

All decisions are carried through majority and recorded in the minutes and there were no dissenting views.

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 there were no events / actions took place having major bearing on the Company’s affairs in
pursuance of the above referred laws, rules, regulations, guidelines, standards, etc. referred to above.

SUDHIR VISHNUPANT HULYALKAR

Company Secretary in Practice
FCS No.: 6040 CP No.: 6137
Place: Bengaluru Peer Review Certificate No. 607/2019
Date: 24th May 2024 UDIN: F006040F000440861

64
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Annexure-3 (Continued)

Annexure to Secretarial Audit Report (Auditors Responsibility)

To,
United Spirits Limited
Bengaluru

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion
on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of
the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial
records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

4. Wherever required, we have obtained the Management representation about the compliance of laws, rules and regulations and
happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of
management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with
which the management has conducted the affairs of the Company.

SUDHIR VISHNUPANT HULYALKAR

Company Secretary in Practice
FCS No.: 6040 CP No.: 6137
Place: Bengaluru Peer Review Certificate No. 607/2019
Date: 24th May 2024 UDIN: F006040F000440861

65
UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure-3A
Annexure-3A
SECRETARIAL COMPLIANCE REPORT OF UNITED SPIRITS LIMITED FOR THE YEAR ENDED MARCH 31, 2024.

I, Sudhir V Hulyalkar, Company Secretary in practice have examined:

(a) all the documents and records made available to us and explanation provided by United Spirits Limited (“the listed entity”),

(b) the filings/ submissions made by the listed entity to the stock exchanges,

(c) website of the listed entity,

(d) Relevant Forms and attachments as filed with the Registrar of Companies and other authorities of Ministry of Corporate Affairs for the
year ended March 31, 2024 (“Review Period”) in respect of compliance with the provisions of:

(a) the Securities and Exchange Board of India Act, 1992 (“SEBI Act”) and the Regulations, circulars, guidelines issued thereunder;
and

(b) the Securities Contracts (Regulation) Act, 1956 (“SCRA”), rules made thereunder and the Regulations, circulars, guidelines issued
thereunder by the Securities and Exchange Board of India (“SEBI”);

The specific Regulations, whose provisions and the circulars/ guidelines issued thereunder, have been examined, include:-

(a) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;

(b) Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (No instances for compliance
requirements during the year);

(c) Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

(d) Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 (No instances for compliance requirements during
the year);

(e) Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (No instances for
compliance requirements during the year);

(f) Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (No instances for compliance
requirements during the year);

(g) Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

(h) Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 (No instances for compliance requirements
during the year);

(i) Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 and circulars/ guidelines issued thereunder.
and based on the above examination, I hereby report that, during the Review Period:

66
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Annexure-3A (Continued)

(a) The listed entity has complied with the provisions of the above Regulations and circulars/ guidelines issued thereunder, except in
respect of matters specified below:-

Sr. Compliance Regulation / Deviations Action Type of Action Details of Fine Observations/ Management Remarks
No. Requirement Circular No. Taken Violation Amount Remarks of Response
(Regulations / by the Practicing
Circulars / guidelines Listed entity
Including specific Secretary
clause)
Advisory/
Clarification/ Fine/
Show Cause Notice/
Warning, etc.
N.A.

(b) The listed entity has taken the following actions to comply with the observations made in previous reports:

Sr. Observations/ Remarks Observations made Compliance Requirement Details of violation Remedial actions, if Comments of
No. of the Practicing in the secretarial (Regulations/circulars/ / deviations and any, taken by the listed the PCS on the
Company Secretary in compliance report for guidelines including actions taken / penalty entity actions taken
the previous reports the year ended ….. specific clause) imposed, if any, on the by the listed
(the years are to be listed entity entity
mentioned)
1 Related Party For the year ended Reg 23 (2) of Securities and In certain cases, where The Audit Committee Nil
Transactions: on 31st March 2023 Exchange Board of India prior approval was not has taken note of the
In certain cases, where (Listing Obligations and obtained, the same has same and after its first
prior approval was not Disclosure Requirements) been ratified by the meeting in this financial
obtained, the same has Regulations, 2015 Audit Committee. year there were no such
been ratified by the Audit Penalty imposed: Nil instances.
Committee.
2 Risk Management For the year ended Regulation 21(3C) of the More than 180 days has NA No subsequent
Committee: on 31st March 2023 Securities and Exchange elapsed between two violation
More than 180 days has Board of India (Listing consecutive meetings of observed under
elapsed between two Obligations and Disclosure the Risk Management this Regulation
consecutive meetings of Requirements) Regulations, Committee held during the
the Risk Management 2015 on 16.3.2022 and period ended
Committee. 20.9.2022. March 31, 2024.
Penalty imposed: Nil

(c) I/we hereby report that, during the Review Period the compliance status of the listed entity with the following requirements:

Sr. Particulars Compliance status Observations/ Remarks

No. (Yes/No/NA) by PCS*
1. Secretarial Standards:
The compliances of the listed entity are in accordance with the Yes None
applicable Secretarial Standards (SS) issued by the Institute of
Company Secretaries India (ICSI).
2. Adoption and timely updation of the Policies:
• All applicable policies under SEBI Regulations are adopted with Yes None
the approval of board of directors of the listed entities.
• All the policies are in conformity with SEBI Regulations and has Yes None
been reviewed & timely updated as per the regulations/circulars/
guidelines issued by SEBI.

67
UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure-3A (Continued)

Sr. Particulars Compliance status Observations/ Remarks

No. (Yes/No/NA) by PCS*
3. Maintenance and disclosures on Website:
• The Listed entity is maintaining a functional website Yes None
• Timely dissemination of the documents/ information under a Yes None
separate section on the website
• Web-links provided in annual corporate governance reports under Yes None
Regulation 27(2) are accurate and specific which re - directs to the
relevant document(s)/ section of the website
4. Disqualification of Director:
None of the Director of the Company are disqualified under Section Yes None
164 of Companies Act, 2013
5. Details related to Subsidiaries of listed entities:
(a) Identification of material subsidiary companies N.A. The Listed entity does not
have material subsidiaries.
(b) Requirements with respect to disclosure of material as well as Yes None
other subsidiaries
6. Preservation of Documents:
The listed entity is preserving and maintaining records as prescribed Yes None
under SEBI Regulations and disposal of records as per Policy of
Preservation of Documents and Archival policy prescribed under the
LODR Regulations
7. Performance Evaluation:
The listed entity has conducted performance evaluation of the Board, Yes None
Independent Directors and the Committees at the start of every
financial year as prescribed in SEBI Regulations.
8. Related Party Transactions:
(a) The listed entity has obtained prior approval of Audit Committee Yes Obtained in all cases
for all Related party transactions wherever required.
(b) In case no prior approval obtained, the listed entity shall N.A. None
provide detailed reasons along with confirmation whether the
transactions were subsequently approved/ratified/rejected by
the Audit committee.
9. Disclosure of events or information:
The listed entity has provided all the required disclosure(s) under Yes None
Regulation 30 along with Schedule III of the LODR Regulations within
the time limits prescribed thereunder.
10. Prohibition of Insider Trading:
The listed entity is in compliance with Regulation 3(5) & 3(6) SEBI Yes None
(Prohibition of Insider Trading) Regulations, 2015.

68
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Annexure-3A (Continued)

Sr. Particulars Compliance status Observations/ Remarks

No. (Yes/No/NA) by PCS*
11. Actions taken by SEBI or Stock Exchange(s), if any:
No actions taken against the listed entity/ its promoters/ directors/ No None
subsidiaries either by SEBI or by Stock Exchanges (including under the
Standard Operating Procedures issued by SEBI through various circulars)
under SEBI Regulations and circulars/ guidelines issued thereunder (or)
The actions taken against the listed entity/ its promoters/ directors/ No None
subsidiaries either by SEBI or by Stock Exchanges are specified in the
last column.
12. Resignation of statutory auditors from the listed entity or its material
subsidiaries:
In case of resignation of statutory auditor from the listed entity or any of NA No resignation of Statutory
its material subsidiaries during the financial year, the listed entity and / Auditor during the Review
or its material subsidiary(ies) has / have complied with paragraph 6.1 period
and 6.2 of section V-D of chapter V of the Master Circular on compliance
with the provisions of the LODR Regulations by listed entities.
13. No additional non-compliances observed:
No additional non-compliance observed for any of the SEBI regulation/ Yes None
circular/guidance note etc. except as reported above.

SUDHIR VISHNUPANT HULYALKAR

Company Secretary in Practice
FCS No.: 6040 CP No.: 6137
Place: Bengaluru Peer Review Certificate No. 607/2019
Date: 24th May 2024 UDIN: F006040F000440925

Assumptions & Limitation of scope and Review:

1. Compliance of the applicable laws and ensuring the authenticity of documents and information furnished, are the responsibilities of
the management of the listed entity.

2. Our responsibility is to report based upon our examination of relevant documents and information. This is neither an audit nor an
expression of opinion.

3. We have not verified the correctness and appropriateness of financial Records and Books of Accounts of the listed entity.

4. This Report is solely for the intended purpose of compliance in terms of Regulation 24A(2) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 and is neither an assurance as to the future viability of the listed entity nor of the efficacy
or effectiveness with which the management has conducted the affairs of the listed entity.

SUDHIR VISHNUPANT HULYALKAR

Company Secretary in Practice
FCS No.: 6040 CP No.: 6137
Place: Bengaluru Peer Review Certificate No. 607/2019
Date: 24th May 2024 UDIN: F006040F000440925

69
UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure-4
Employee Details
Details of Ratio of Remuneration of Directors and Key Managerial Personnel (KMP)
[Section 197(12) of the Act read with 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 Directors/KMP Median Increase
remuneration of the employees of
the Company for the financial year;

The percentage increase in Hina Nagrajan Managing Director & Chief Executive Officer 190 17%
remuneration of each director, Chief
Pradeep Jain Executive Director & Chief Financial Officer 57 18%
Financial Officer, Chief Executive
Officer, Company Secretary or Mital Sanghvi Vice-President - Treasury and Company 23 23%
Manager, if any, in the financial Secretary
year; Mahendra Independent Non-Executive Chairperson 8:1 7%*
Kumar Sharma
V K Viswanathan Independent Non-Executive Director 7:1 12%*
D Sivanandhan Independent Non-Executive Director 7:1 11%*
Indu Shahani Independent Non-Executive Director 7:1 10%*
Rajeev Gupta Independent Non-Executive Director 6:1 14%*
Indu Bhushan Independent Non-Executive Director NA** NA**
Mukesh Butani Independent Non-Executive Director NA** NA**
* F or Non-executive Directors, change in percentage denotes change in remuneration (including
commission and sitting fees) and for the period of their Directorship during the year.
** Indu Bhushan and Mukesh Butani were appointed during the year. Accordingly, the percentage
increase/decrease in their remuneration and ratio of remuneration to median remuneration is
not applicable.
(ii) The percentage increase in the The average increase in median remuneration in the financial year 2023-24 compared to the
median remuneration of employees median remuneration of employees in the previous year is 7.14%.
in the financial year;
(iii) 
The number of permanent The Company had a permanent headcount of 2,598 on the rolls as of 31st March 2024.
employees on the rolls of Company;
(iv) 
Average percentile increase The change in the average remuneration of employees other than the key managerial personnel in
already made in the salaries of the current financial year compared to the last financial year was 11.7% while the change in the key
employees other than the and its managerial average remuneration was 17.49%.
comparison with the percentile
increase in the key managerial The increase in the average remuneration of key managerial personnel was primarily
remuneration and justification attributed to earnings from exercised long-term incentives.
thereof and point out if there are
any exceptional circumstances
for increase in the managerial
remuneration;
(v) Affirmation that the remuneration The remuneration paid is as per the remuneration and reward policy of the Company.
is as per the remuneration policy of
the Company.

By Order of the Board

Mahendra Kumar Sharma
Place: Mumbai Chairperson
Date : 24th May 2024 DIN: 00327684

70
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Annexure-4 (Continued)

Information as required under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming
part of the Board’s Report for the financial year 2023-24.

A. Employees employed for full year

Sr. Employee Name Age (as No. of Remuneration Designation & nature of Qualification Experience Date of Particulars of previous
No. on 31st shares paid (in `) duties Commencement employment
March held of employment
2024)
1. Aditya Sharma 44 0 1,05,66,275 Senior General Manager - Bachelor of Arts, 23 09-05-2022 AGM, Marketing - Pernod
Customer Marketing PGDM India
2. Alokesh Biswas 45 0 1,15,12,609 Senior General Manager - B.E, M.Tech 22 01-07-2020 Last 22 years with Diageo
Manufacturing
3. Amitabh Pande 47 0 1,93,54,767 Vice President – Consumer B.A / PGDM 23 09-08-2021 Head, Marketing - IKEA
Planning & Insights India
4. Anchal Kaushal 45 0 1,30,77,654 Vice President - Customer B.com, MBA 21 04-04-2019 Associate Director,
Marketing Marketing - Jagajit
Industries limited
5. Anshu Vazirani 41 0 1,70,71,949 Vice President - Corporate PGDM / M.Tech 16 12-06-2017 Director - GEP (Global
Real Estate Services eProcure)
6. Arnab Bhowmick 48 360 1,18,58,416 Vice President - Sales Marketing 25 23-03-1999 Sales Representative -
Management, Stallion Products Pvt Ltd
PGDM
7. Arvind Bangalore 44 0 1,11,61,648 Senior General Manager B.E, PGD in 22 07-12-2017 Head, Marketing
Sainath - Consumer Planning & Software Analytics - AVA
Insights Enterprise Ecnometric Services
8. AshishParikh 47 0 3,25,82,867 Executive Vice President MBA from 23 12-07-2022 Global Omnichannel and
and Chief Operating SVKM’s Narsee Category Development
Officer - North and West Monjee Institute Director - Reckitt Benckise
of Management
Studies (NMIMS)
9. Ashok Arora 46 50 1,43,48,261 Vice President - Supply CA 23 02-11-2004 Finance manager -
Finance Greenfield online PVT LTD
10. Diwaker Vij 41 0 1,05,80,461 Vice President - CA 17 16-04-2019 Division Finance
Commercial Finance Controller, Thermo Fisher
Scientific
11. Glen A L D Souza 53 0 1,20,47,613 Senior General Manager - LLB 25 02-04-2020 Senior Manager - HRBP
HR Business Partner - GE
12. Gowri Advani 44 0 1,45,13,076 Vice President & Senior LLB, B.S.L 12 08-05-2017 Legal Consultant - Diageo
Counsel India Pvt Ltd
13. Hina Nagarajan 59 0 13,89,31,637 Chief Executive Officer Master’s degree 34 01-04-2021 MD Africa Emerging
in Business Markets (Diageo)
Management
- IIM
14. Jagbir Singh Sidhu 53 0 3,77,86,378 Corporate Relations MBA, Punjab 28 05-07-2017 Pernod Ricard
Director University
15. Jitendra Mahajan 54 0 5,49,62,944 Chief Supply and B.E. Mechanical 29 22-04-2022 COO (Chief operating
Sustainability Officer / MBA officer) Supply Chain -
Marico Limited

71
UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure-4 (Continued)

Sr. Employee Name Age (as No. of Remuneration Designation & nature of Qualification Experience Date of Particulars of previous
No. on 31st shares paid (in `) duties Commencement employment
March held of employment
2024)
16. Jyoti Bhat 47 0 1,12,20,550 Senior General Manager MSC, PGD in 11 11-09-2020 Director, Product
- Product Science & Brand Public health Innovation & Education -
Change Commercialization Herbalife Nutrition
17. Karan Garg 41 0 1,15,35,949 Senior General Manager – MBA 20 31-05-2017 Godrej Consumer
Sales Effectiveness Products Limited
18. Kashinath Jha 55 0 2,06,91,100 Vice President - BE 31 06-09-2016 Reckitt Benckiser
Manufacturing
19. Kuldeep Agrawal 48 0 1,05,94,867 Senior General P.hd in Food 20 16-08-2012 Centre In Charge - Centre
Manager - Research and Technology of Food Technology
Development
20. Mahaveer Chand 44 0 1,01,98,730 Vice President & Head - CA 20 22-08-2022 Head of Governance,
Jain Internal Audit Global Finance Risk
management and
Controls, GSK
21. Mital Sanghvi 45 0 1,71,41,229 Vice President - Treasury B.Com, ACS, 22 09-12-2019 Provenance Land Private
and Company Secretary FCCA, ACA Limited
22. Monish Bhasin 49 0 1,63,35,999 Vice President- Sales MBA / B.E 27 25-09-2006 Senior Brand Manager
- Mahindra and Mahindra
23. Nimish Shah 49 0 2,04,43,673 Executive Vice President CA 26 09-09-2021 APAC Regional Controller
and Financial Controller - The Walt Disney
Company
24. Pankaj 49 0 1,03,03,930 Vice President - Sales B.Com, PGDM 27 21-11-2021 Region Head (AGM) -
Satyanarayan Pernod Ricard
Panchariya
25. Parminder Singh 51 0 1,04,29,365 Senior General Manager B.Com 18 23-02-2015 Pernod Ricard India
Bindra - Sales
26. Pradeep Jain 55 0 4,14,77,045 Executive Director & Chief B.Com, CA 30 04-04-2017 CFO - Pidilite Industries
Financial Officer
27. Prathmesh Mishra 54 0 8,80,41,063 Chief Commercial Officer PGDM, BA 24 18-06-2014 Pernod Ricard
28. Rajesh Vijayan 46 0 1,40,99,172 Head - RCB & Extension B.com, PGDBA 19 11-09-2006 Product manager -
Menon Business Caticura Talcum powder
29. Ruchira Jaitly 51 0 1,83,99,899 Chief Marketing Officer PGDM, 24 01-10-2021 CMO India - HMD Global
Marketing from Pvt Ltd
Indian Institute
of Management
Ahmedabad
30. Sandeep Sharma 40 31 1,07,60,869 Senior General Manager - MBA 17 01-04-2015 Cargill India
Brand Management
31. Sanjeev Vijh 54 0 1,28,79,238 Vice President - Corporate B.com 26 25-04-2019 Head, External Affairs -
Affairs Pernod Ricard
32. Saurabh Kumar 44 0 1,65,59,098 Vice President - Sales B.Tech 21 18-07-2019 COO (Chief operating
officer) - Innovative foods
Ltd -
33. Shashi Kumar 53 0 1,00,83,805 Vice President - Supply B.E. Industrial 23 02-02-2015 General Manager -
Move and Production Innovation (R&D) - 3M
Engineering India Limited

72
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Annexure-4 (Continued)

Sr. Employee Name Age (as No. of Remuneration Designation & nature of Qualification Experience Date of Particulars of previous
No. on 31st shares paid (in `) duties Commencement employment
March held of employment
2024)
34. Shilpa Vaid 47 0 3,09,04,331 Chief HR Officer, Diageo B.A.(H), MBA 24 14-11-2022 BU People Lead, India -
India HR IMI Mondelez International
35. Shobhana Nikam 52 0 2,31,18,511 Executive Vice President ML, International 27 31-10-2022 Senior Vice President &
and General Counsel and Head Legal - Wells Fargo
Constitutional International Solutions
Law Private Limited
36. ShrutiZota 40 0 1,33,44,630 Vice President - Senior BLS LLB 17 10-10-2022 General Counsel
Counsel Legal - GlaxoSmithKline
Pharmaceuticals Ltd
37. Shweta Jain 48 0 2,09,34,065 Chief Business MBA / B.com 19 11-12-2017 Head of Marketing Indian
Development Officer - Subcontinent - William
Luxury Reserve Craft & Grant & Sons
Strategic Accounts
38. Sunil Dwivedi 51 0 1,42,81,840 Vice President - B.E Chemical 21 10-01-2022 Head, Operations -
Manufacturing Engineering, IIT AvanStrate Inc
Bombay
39. Sunny Singh 40 0 1,33,30,406 Vice President – Sales Master of 14 29-11-2021 Head of Commercial
Kataria Business excellence - OLX Group
Administration
(MBA)
40. Vikram Damodaran 48 51 2,77,95,004 Chief Innovation Officer B.E., (Mech) 25 14-10-2019 Chief Product Officer -
GE Healthcare
41. Vikram Jain 49 0 1,39,09,386 VP Sales – CSD & Franchise MBA / B.com 26 19-01-2009 Senior Manage,
Business Marketing - Pernod Ricard

B. Employed for the part of year:

Sr. Employee Name Age (as No. of Remuneration Designation & nature Qualification Experience Date of Particulars Last working
No. on 31st shares paid (in `) of duties Commencement of previous day with the
March held of employment employment Company
2024)
1. Amrut Aiyamma 50 0 25,511,547 Vice President - MSW, 27 02-05-2019 Dover 31-10-2023
Human Resources Mangalore Corporation
University India
2. Anant Swarup 47 0 706,041 Senior General PGDBM, 19 11-07-2016 SALES AND 05-04-2023
Manager - Sales Marketing from DISTRIBUTION
IMT-Gaziabad HEAD - TATA
DOCOMO
3. Aparna Deshmukh 48 0 2,775,761 Vice President – Master in 25 15-01-2024 VP & Head, NA*
Category Head Management Brand Product
Studies - American
Express India
4. Chitra Gupta 43 0 4,012,206 Vice President - B.Com, MA 20 12-02-2024 Head of HR, NA*
Human Resources Supply Chain -
Coca Cola
5. Deepika Warrier 54 0 14,900,184 Chief Marketing PGDM 29 27-07-2020 CEO/MD - 31-07-2023
Officer India Pepsico-Tata
JV (Nourishco
Beverages)

73
UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure-4 (Continued)

Sr. Employee Name Age (as No. of Remuneration Designation & nature Qualification Experience Date of Particulars Last working
No. on 31st shares paid (in `) of duties Commencement of previous day with the
March held of employment employment Company
2024)
6. Himanshu Maloo 45 50 13,239,464 Vice President - Supply PGD Industrial 22 23-11-2023 Chief Supply NA*
Chain Planning Engineering Chain Officer -
DFM Foods
7. Kalyan 42 0 4,350,878 Senior General VJTI - Master 18 06-11-2023 Heineken, NA*
Harishchandra Manager - of Technology Netherlands
Pawar Engineering and - Structural
Maintenance Engineering
8. M N Prasanna 49 228 9,879,619 Senior General MBA / B.E 11 30-09-2016 General 20-01-2024
Venkatesh Manager - Health & Manager
Safety Operations
- Nigeria
Distilleries -
9. Manish Seth 50 0 13,757,665 Chief Operating MBA 27 01-09-2023 Zonal Head NA*
Officer - Commercial North - Pernod
India
10. Manish Shetty 48 0 14,305,618 Vice President - IT BE, MBA 23 01-06-2020 Director IT - 30-11-2023
TATA GLOBAL
BEVERAGES LTD
11. Navin Jain 51 0 14,069,169 Tax Director - Asia & Chartered 23 27-12-2018 Head Taxation - 30-12-2023
India Accountant Vedanta/Cairn
India LTD
12. Nishant Kumar 46 0 7,697,755 General Manager MBA 23 15-03-2007 Key Relationship 07-10-2023
Singh - Innovation Lead Manager - TATA
Recruit AIG Genaral
Insurance
Company
13. Pankaj Umesh 45 0 7,950,703 Vice president MMS 20 04-09-2023 Vice President, NA*
Kapoor – Quality & Digital - TCPL
Transformation
14. Pradeep K 46 50 7,121,551 Vice President - BA LLB, PGDM 21 01-12-2023 HRBP Director - NA*
Human Resources & IR, MSW Madura Coats
15. Sanjeev Khanna 53 152 15,990,304 Senior General B.com, MBA 21 16-07-2007 Client Services 07-10-2023
Manager- Prestige Director - Ogilvty
Core Innovation and Mather
16. Sanjeev Ganesh 47 100 19,955,395 EVP- Procurement B.Tech, MBA 17 01-04-2010 Managing 14-04-2023
Consultant
- Aqua
Management
Consulting Group
17. Siddharth Suri 47 0 10,204,207 Head - Key Accounts MBA 22 01-07-2022 Sales Director 31-01-2024
Duty Free and
SAARC markets
- Moet Hennesey
India
18. Subroto Geed 49 0 32,898,880 EVP & Chief Operating B.Pharm, 23 21-09-2015 GSK Consumer 28-07-2023
Officer - Popular and PGDM Healthcare
Franchise Business

74
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Annexure-4 (Continued)

Sr. Employee Name Age (as No. of Remuneration Designation & nature Qualification Experience Date of Particulars Last working
No. on 31st shares paid (in `) of duties Commencement of previous day with the
March held of employment employment Company
2024)
19. Sunaina Banga 50 0 9,072,012 Vice President - BSc, PGDM HR 27 06-10-2020 National HR 31-07-2023
Human Resources Business Partner
- Carlsberg India
Pvt Ltd
20. Uttara Srinivasan 42 0 4,468,299 Vice President - Supply MBA / B.E 13 03-05-2017 Industry 31-07-2023
Planning principal, Lead
Strategic Projects
- Infosys BPO
21. Varun Koorichh 41 0 15,227,404 Vice President - MBA 15 31-07-2023 Marketing NA*
Category Head Director, Global
Customers -
Pepsico
22. Varun Singla 44 0 12,764,466 Vice President - Sales B.com 19 26-07-2012 Zonal Manager 27-12-2023
- Akzo Noble
India Ltd

*Employees have joined the Company during FY 2023-24 and are continuing in employment hence last working day is not applicable.
Notes:

• The aforementioned employees have / had permanent employment contracts with the Company.

• Employees mentioned above are neither relatives of any directors of the Company, nor hold 2% or more of the paid-up equity share
capital of the Company as per Clause (iii) of sub-rule (2) of Rule 5 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014.

By Order of the Board

Mahendra Kumar Sharma
Place: Mumbai Chairperson
Date : 24th May 2024 DIN: 00327684

75
UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure-5
Risk Management
USL’s ambition is to create the best performing, most trusted and respected consumer Products Company in India. We believe, Risk
management starts with the right conversations to drive better business decisions, protect our assets, supports a growing, resilient and
sustainable business. Our focus is to identify and embed mitigation actions for material risks that could impact our current or future
performance, and/or our reputation. Our approach is holistic and integrated, bringing together risk management, internal controls, and
business integrity, ensuring that our activities across this agenda focus on the risks that could have the greatest impact.

The management of risk is embedded in the corporate strategies of developing a portfolio of world-class businesses that best match
organizational capability with market opportunities and succession planning processes, nurturing specialism, and enhancing organizational
capabilities through timely developmental inputs.

In its journey towards risk intelligence: A robust governance structure has been developed across the organization. The nature of business
is such that it is subject to certain risks at different points of time. Some of these include escalation in the cost of raw materials and other
inputs, increasing competitive intensity from other players, changes in regulation from central and state governments, cyber security, data
management and migration risks, data privacy risk, environmental and climate risk. USL has always had a proactive approach when it
comes to risk management where it periodically reviews the risks and strives to develop appropriate risk mitigation measures for the same.
To enhance this focus, Board of Directors has constituted a Committee of the Board called the Risk Management Committee to frame,
implement and monitor risk management plan.

Focus in the year: The Risk Management Committee and Board considered the entity level principal risks and reviewed our risk appetite,
setting the level of risk tolerance we have for risks that could impact delivery of our strategic objectives. Examples of risks for which we
have zero appetite include risks that could: harm our people and environment; impact product quality; cause us to market irresponsibly or
otherwise act without integrity; and be non-compliant with laws and regulations, including those relating to financial reporting. Our principal
risks remain unchanged and continue to reflect a challenging external environment.

Our risk management objectives are:

Avoid damage
to our reputation

Protect and enhance Risk

value: maximize the Prioritise effectively
benefit from new management between different risks
opportunities, balancing
risk and return objectives

Demonstrate good
corporate governance
by managing our
risks effeceively and
maintaining appropriate
recored

Our approach:
We have identified, assessed, determined expected impact and likelihood of the risk occurring over the next 12-24 months by using
various parameters such as brand management, reputation management, Operations management, our people, workplace & safety and
financial impact on profit.

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 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Annexure-5 (Continued)

• We take a holistic and end-to-end approach in managing risk.

• All aspects of risk such as commercial, operational, financial, strategic, reputational, and compliance risks, whether internal or
external in nature are covered as part of Risk Management Committee meeting.

• The Committee is concerned not only with the risk itself, but root causes and the range of consequences. Insightful, challenging,
discussion is at the heart of our approach and is always directed at achieving positive business outcomes.

• We learn lessons when things go wrong or play out unexpectedly.

• We are agile, identify and respond to risks as they arise in the short term, or over the medium and longer terms.

• We are attuned to an evolving external environment and emerging new risks. Risk at Diageo are defined as “an uncertainty that
could help or hinder achieving our business objectives”. Risk management refers to all the things we do to identify, assess, manage
and report on risks.

• We have an existing framework for Entity Level and Process Level controls. Documented policies, KPIs and Statement of Authority
are in place. It provides the mechanism for assessing and managing the sum of the opportunities and risks, both external and
internal that may impact the business.

All business functions follow a coordinated process that uses common language of risk and work on the process to either mitigate or
reduce the impact of risk. It provides designated owners of the process and risk with a framework for defining the essential tasks of
risk management to facilitate timely management of change and ensure effective management of risks. It is driven, demonstrated in
action and endorsed by senior management team. The Board exercises independent review through Audit Risk Committee.

Key components of risk management framework:

IDENTIFY:
Deep dive to identify our top risks

CONTINUOUS REVIEW:
Review of what is going on around us ASSESS:
and ensuring we have the right plans Understanding the likelihood of the risk
in place occuring and the impact

MONITOR & REPORT: MITIGATE:

Insightful reporting Develop and embed mitigation actions

77
UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure-5 (Continued)

Risk governance structure:

Board Risk Review significant risk exposure and steps taken to monitor, control and
Management mitigate the risk

Committee

Great discussion is at the heart of our risk management pro-

National Risk
cess which is blend of top-down and bottm-up approach
Management Committee

Functional Risk Risks identified through bottom-up approach bring

in insightful discussion considering both internal &
Management Committee
external sources

Risk Categories:
Following are the broad categories of risks considered in our risk management framework:

Strategic Operational Financial Compliance/Regulatory

3. People and Workplace
1. Strategic Business Model 1. Business resilience 1. Financial Management 2. Treasury 1. Compliance Framework
Safety
Organisation structure Multiple areas - hedging,
Business Disruption and Financial reporting and Third party compliance (inc.
(Inc. major change and People - Talent Management banking, dividends, financing,
Business continuity statutory governance KYBP)
transformation) share, schemes, factoring
Mergers and acquisition & Data Privacy (inc. GDPR and
People - Industrial Relations Record to Report Insurance
divestures KYD)
People Workplace Health Code of business conduct/
Equity or JV investments Source to pay
& Safety ACC
4. Cyber & Information
2. External Environment 2. Business Execution Order to cash 3. Tax Anti Money Leundering
Management
Business Planning & Theft/Loss of Information and Corporate Tax (e.g. income Anti Bribery and Corruption
International Tax Environment Data Maintenance
Forecasting DetaManipulation tax) (incl G&E)
Critical Industry Marketing (Brand Protection Indirect Taxes (e.g. customers/
IT Supplier Compromise Segregaton of duties Competition and anti trust
Developments including DMC & Digital Code) excise/GST)
Sustainability & responsibility Supply - vendor third party
Oprational Technology Statement of authorities Transfer Pricing Sanction and trade controls
and climate change management
Supply Raw Materials, Finished
Economic Change Strategy & Service Delivery Human Rights/Dignity at work
Goods and COGS
4. Payroll & Benefits
Political instability, civil unrest, Retention & Disposal of
Supply - Logistics
and terrorism Information
Government regulatory
Supply - Procurement Pension
restriction & indirect tax
Supply - Quality
Payroll
Contamination Counterfeit

78
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Annexure-5 (Continued)

Risk management highlights for the year

During the year, the USL Executive committee and Board focused on principal risks falling into several categories including increasingly
volatile external environment, political changes, risk posed by critical industry development and business disruptions due to cyber-attacks.
Information regarding key risks facing and their mitigation strategies are given here:

1 Performance 2 Reputation 3 Operational 4 Financial 5 Compliance

RISK IMPACT MITIGATION ACTIVITY RISK

DIRECTION
Strategic Risk
Restriction • Impact on profitability • Continuous representation and engagement with external
on Market stakeholders at all levels.
accessibility & • 
Industry level initiatives in addressing structural barriers
risk of pricing to pricing through co-creation of model excise policies,
environment mutually beneficial to the industry and the governments,
with state excise depts.
1 4 • E ngage with the Govt on securing Business through various
Industry Bodies & Business forums.
Operational Risk
Counterfeiting • Harm to consumers • Mobilize ISWAI cooperation and action in relation to
advocacy against Counterfeit.
•  orporate and brand
C • Support in implementing anti-counterfeiting technology
1 2 4
reputation is damaged. for MAP (Most affected Products) - implementation of the
anti-counterfeiting technology on identified products.
• F inancial losses due to
• Brand protection and anti-counterfeit activities focused
supply disruption, product
on high-risk markets and on new technology to assist with
recalls, penalties, and a
product verification.
loss of consumer trust.
• Actively working with e-commerce sites to identify counterfeit
activities and seek to stop those activities promptly.
Cyber Risk • Financial loss • Enterprise-wide cyber risk management processes and
(Information policies.
& Data • Operational disruption • Centralized inventory established for all IT managed
security) applications and infrastructure servers. Centralized
• Reputational damage. inventory established for managing all critical information
2 3 4 assets.
• Use of machine learning and threat intelligence to detect
and block sophisticated threats. All servers, network devices
are patched regularly aligned to IM&S policy.
• Maintain register of privileged accounts, service accounts,
generic accounts, shared accounts for each applications /
asset and govern lifecycle management (JML, ownership,
password).
• Mandatory global e-learning and regular phishing exercises
for all employees.

79
UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure-5 (Continued)

Climate • Impact on raw material Water supply (sites & around water shed)
change and procurement and pricing. • Enhance water circularity to have reuse and recycle.
sustainability
• Improve by use of efficiency across operations.
• Increased sustainability
compliance requirement • Replenish more water than we use around communities
2 3 5 and implement collective actions.
• Restriction on the use of • Improve water efficiency by 40% through improved
certain raw materials for recycling and identifying alternative technologies for water
drinks production. use /reuse.
Raw materials– Barley, Sugarcane and Grapes
• Help farmers to practice sustainable agriculture and
develop alternative sourcing strategies and alternative
ingredients.

• Under discussion with suppliers to enter into contracts with

farmers ensuring continuous supply
Compliance & Regulatory
Anti-Trust •  evere damage to our
S • Continuous awareness, trainings and communications.
Company reputation and/ • Framework for market data collection (standard operating
or significant financial procedure) finalized with Global & agreed with market
2 4
penalty. stakeholders and being followed.
• To analyze and pre-approve market share-based scheme
proposals from time-to-time, basis business request.
• Actively working with Legal working group set up at
industry body to monitor and keep a watch to ensure no
anti-competitive practices are followed.

No change Decrease

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 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Annexure-6
Corporate Social Responsibility (CSR)
THE ANNUAL REPORT ON CSR ACTIVITIES FOR THE YEAR ENDED 31st MARCH 2024
[Pursuant to Section 135 of Act read with Rule 8 of Companies (CSR Policy) Rules, 2014]

1. Brief outline of the CSR Policy of the Company

CSR Strategy of the Company supports our ambition to become the best performing, most trusted, and respected consumer products
company in India. Your Company recognizes that its business activities directly affect 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 for our brands, and the way we develop, produce, and sell them. As one of the world’s leading
alcoholic beverage businesses, 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 the society and our shareholders.

2. Composition of Corporate Social Responsibility and Environmental, Social and Governance (CSR and ESG)
Committee:
Sl. Name of Director Designation / Nature of Directorship Number of meetings Number of meetings
No. of CSR and ESG of CSR and ESG
Committee Committee attended
held during the year during the year
1. Indu Shahani Non-Executive Independent Director 4 4
2. Hina Nagarajan Managing Director and Chief Executive Officer 4 4
3. D Sivanandhan Non-Executive Independent Director 4 4
4. Mark Sandys Non-Executive Director 4 4
5. Ms. Emily Kathryn Gibson* Non-Executive Director 2 2

*Emily Kathryn Gibson appointed as a member with effect from 7th September 2023.

3. Web link where the Composition of the CSR and ESG Committee, CSR Policy, and CSR projects approved by the
Board is disclosed on the website of the Company:
https://www.diageoindia.com/en/investors/corporate-social-responsibility

4. Executive summary along with web-link(s) of Impact Assessment of CSR Projects carried out in pursuance of
sub-rule (3) of rule 8, if applicable.
Projects Covered 6 projects having budget of more than 1 crore each during the financial year 2021-22 were taken
up for impact assessment.
Projects Duration FY 21-22
Impact Assessment Agency Grant Thornton Bharat LLP
Period of Study FY 23-24
Methodology The agency took up studies through a mixed method approach covering quantitative and
qualitative data collection. A statistically significant sample size was covered under each project.

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UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure-6 (Continued)

Projects Impact recorded

Water Replenishment, The project was initiated with the aim to improve access to water and sanitation in Nanded district
Nanded, Maharashtra of Maharashtra. It focused on water replenishment, construction of WASH infrastructure along with
awareness generation on sanitation and water conservation. The key activities under the project
included rainwater harvesting (RWH), surface water recharge, water body de-siltation, construction
of toilets, along with awareness workshops with the community and students. The key impacts
were:
• 49% of the respondents in Balapur and 50% in Ratnali noted an increase in water levels post
de-siltation. Further, distribution of the recovered silt to farmers has led to an increase (by
approximately 25%) in the income of beneficiaries.
• Post Desiltation, increased capacity of the ponds has led to an overall improvement in the
health and wellbeing of the community. There was an Increase in yield noted from 4 to 7
quintals after usage of silt.
• Installation of RO systems: 71% respondents rated the quality of water as Excellent in Aloor,
while 51% and 56% respondents in Sirajkhod and Bellur BK respectively rated it was Excellent.
• The students stated that fever and stomach pain were common ailments before installation
of RO plant. However, with the RO plant, students and community members have access to
clean and safe drinking water at the school.
• Toilet Construction: The intervention has helped improve community’s access to safer sanitation
and encourages the adoption of safer sanitary practices. It has led to better knowledge on the
issues of open defecation and the need to use toilets.
Wrong Side of the Road: The Company is implementing its programme on educating consumers on the impacts of drink
Creating awareness on driving. It is being implemented across various Regional Transport Offices in India through a
Impacts of drink driving: Tab Lab model where new driving license seekers must attend this programme as a part of the
process. In FY 21-22, we started with our presence across 19 RTOs which is now increased to 31
RTOs in FY 23-24. Some of the Key impacts were:
• As per one of the RTO, Alwar: The project implemented by Diageo has resulted in creating a
positive impact on the lives of people.
• As per RTO, Aligarh: Use of such online platforms help develop better understanding among
people. This ensures higher retention of information and practice in real life.
Covid 19 Support: Pune, The Company extended its support to Sub-district Hospital in Manchar District,
Maharashtra Pune with 18 ventilators and 30 fowler beds during COVID 19 second wave. Some of the Key
impacts are as follows:
• The support provided by Diageo boosted the hospital’s operations and helped cater to both
critical patients and non-critical patients of COVID-19.
• The hospital staff stated that with the increase in number of beds and ventilators, residents
in Manchar did not have to travel to other private hospitals seeking treatment. The hospital
operated at a capacity of 288 beds which included 244 oxygen beds and 44 ICU beds.
Covid 19 Support: Uttar The Company extended its support to install Oxygen generation plants across 5 Community
Pradesh Health centres in Uttar Pradesh. Some of the Key impacts are as follows:
• The plants improved accessibility among community members. The number of patients being
treated with additional oxygen also increased.
• The installation of plants helped make the CHCs more independent and improved
preparedness during the pandemic.
• The CHCs faced both critical and non-critical cases. With the additional supply, the CHCs were
able to facilitate the critical cases that required medical oxygen.

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Statutory Reports

Annexure-6 (Continued)

Covid 19 Support: Delhi The Company provided eight container clinics in Delhi with the aim to support basic medical care
for those in need. Mohalla clinics have been set up for curative care on minor ailments. These
are free of cost and within walking distance in the urban slums. Thus, making primary care more
accessible and affordable. The key impacts were:
• Installation of Mohalla clinics have resulted in better accessibility to primary healthcare
facilities for the communities. People living in the vicinity of the clinics have easy access with
low cost of transportation.
• The clinics are designed through discarded shipping containers which minimizes the cost
for installation. Further, these cater to many people in smaller neighbourhood and are fully
equipped with necessary facilities.
• A Doctor at the clinic stated: “The contribution has greatly improved healthcare services. The
number of patients has significantly increased daily. In the past, 50 70 patients visited, but now
100 150 arrive daily.”
Covid 19 Support: Yadgiri, During COVID-19, The Company extended its support to individuals and hospitals through
Karnataka provision of medical care. This included Provision of 30 beds/cots, 4 ventilators and 1 PSA oxygen
plant in CHC Hunasagi, Yadgir, Karnataka. The support ensured:
• Availability of healthcare: It upgraded the CHC’s facilities, ensuring the surrounding community
has better availability of healthcare services.
• Quality of healthcare: The support not only ensures availability of services but also provides
accessibility to quality resources such as medical equipment, beds etc.
• Emergency based relief: It ensured immediate relief and helped communities face challenges
at the most crucial of times. Sustainability of support: Improvement in the CHC’s capacity to
deliver effective health services, positively impacts the well-being of communities in the future.

For detailed reports please visit the web link https://www.diageoindia.com/en/investors/corporate-social-responsibility.

5
Sr. No. Particulars Amounts
(` in Crore)
5(a) Average net profit of the Company as per Section 135(5) of the Companies Act, 2013: 931.83
5(b) Two percent of average net profit of the Company as per Section 135(5) of the Companies Act, 2013: 18.64
5(c) Surplus arising out of CSR projects or programs or projects or activities of the previous financial years: Nil
5(d) Amount required to be set-off for the financial year, if any: Nil
5(e) Total CSR obligation for the financial year [(b)+(c)-(d)]: 18.64
6.

Sr. No. Particulars Amounts

(` in Crore)
6(a) Amount spent on CSR projects (both Ongoing projects and other than Ongoing Project): 19.68
6(b) Amount spent in Administrative Overheads: 0.98
6(c) Amount spent on Impact Assessment, if applicable: 0.29
6(d) Total amount spent for the financial year [(a)+(b)+(c)]): 20.95

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UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure-6 (Continued)

(e ) CSR amount spent or unspent for the financial year:

Total amount spent Amount unspent (in crore)
for the financial year Total amount transferred to unspent Amount transferred to any Fund specified under Schedule
(in crore) CSR account as per Section 135(6) of VII as per the second proviso to Section 135(5) of the
the Companies Act, 2013 Companies Act, 2013
Amount Date of Transfer Name of the Fund (in crore) Date of Transfer
(in crore)
20.95 N.A. N.A. N.A. N.A N.A.

(f) Excess amount for set off, if any*:

S l . Particulars Amount
No. (in ` crore)
(i) Two percent of the average net profit of the Company as per Section 135(5) of the Companies Act, 2013 18.64
(ii) Total amount spent for the financial year 20.95
(iii) Excess amount spent for the financial year [(ii)-(i)] 2.31
(iv) Surplus arising out of the CSR projects or programmes or activities of the previous financial years, if any N.A.
(v) Amount available for set off in succeeding financial years [(iii)-(iv)] 2.31

7. Details of unspent Corporate Social Responsibility amount for the preceding three financial years:
Sl. Preceding Amount transferred Balance Amount Amount spent Amount transferred to Amount Deficie
No. financial to unspent CSR in Unspent CSR in the financial any fund specified under remaining to ncy, if
year(s) Account under Account year Schedule VII as per Section be spent in any
section 135 (6) of (in crore) 135(6) of the Companies succeeding
the Companies under subsection Act, 2013, if any financial
Act, 2013 (6) of section 135 Amount Date of years
(in crore) (in crore) (in crore) Transfer (in crore)
1. FY 22-23 7.88 Nil 7.88 N.A. N.A. N.A.

8. Whether any capital asset have been created or acquired through Corporate Social Responsibility amount spent
in the Financial Year : No
If Yes, enter the number of Capital assets created / acquired:

Furnish the details relating to the asset so created or acquired through Corporate Social Responsibility amount spent in the financial
year:

Sl. Short particulars of the Pincode of the Date of Amount of Details of entity/authority/
No. property of asset(s) property or asset(s) creation CSR amount beneficiary of the registered owner
(including complete spent
address and location of the
property)
(1) (2) (3) (4) (5) (6)
CSR Name Registered
Registration address
number, if
applicable

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Statutory Reports

Annexure-6 (Continued)

(All the fields should be captured as appearing in the revenue record, flat no, house no, Municipal Office/Municipal Corporation/
Gram panchayat are to be specified and also the area of the immovable property as well as boundaries)

9. Specify the reason(s), if the Company has failed to spend two percent of the average net profit as per Section
135(5) of the Companies Act, 2013: Not applicable

Hina Nagarajan Indu Shahani

(Managing Director and Chief Executive Officer) (Chairperson CSR & ESG Committee)
DIN: 00048506 DIN: 00112289

Date: Mumbai
Place: 24th May 2024

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UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure-7
A) (i) Conservation of Energy
As a responsible corporate, your Company has committed to eliminate the use of fossil fuel for all your energy requirement for
distilleries by installing all Boilers which can use Biomass as fuel and with this 100% of energy requirement for all our distilleries
are being met through renewable fuel. Past four years your Company has sustained Zero Coal/fossil fuel status. Your Company
has well progressed to achieve 100% renewable electricity status by generating renewable electricity through steam turbines,
biogas engines, Solar electricity, and International Renewable Electricity Certificates (i-REC).

Your Company has ensured that all distilleries are equipped with steam turbines across Distillery operations to generate
renewable electricity.

Your Company doubled its Solar Potential by installing Solar Power System across our distilleries at Alwar, Goa, Kumbalgodu,
Nasik and Baramati and this should help us in enhancing in-house potential of Renewable Electricity.

Your Company has committed to achieve 100% Renewable energy for own Operations through Society 2030: Spirit of Progress
ambition.

Your Company is well on your way to achieve 100% renewable energy and renewable Electricity status through investing in
enhancing in house capability to generate renewable electricity and conservation of Energy.

(ii) Renewable Energy (Own units):

As an entity, your Company improving consistently in the following areas and making steady progress.

• Committed to Conserve energy and Improve energy efficiency.

• Committed towards achieving 100% renewable energy status and 100 % Renewable Electricity Status.

• Committed to use only Biofuel across boilers at all distilleries for all thermal energy requirements.

• Self-generation of renewable electricity through steam turbines and Solar Panels.

• Procurement of International Renewable Energy Certificates (i-REC) for electricity purchased from grid.

B) Technology Absorption
(i) The efforts made towards technology absorption.
A. Fully integrated high speed packaging line installed at multiple units with built in reliability, enhanced automation with
quality assurance capabilities in compliance with safety standards and guidelines.

B. Artificial Intelligence Based Visual Automatic Inspection Systems for Empty Bottle, Filled Bottle & Labelled Bottle to ensure
Zero Quality issues in final Product – This is to enable quality assurance and to bring in Customer Delight.

C. Biogas produced from distillery waste is utilized in Boiler for reduction of Fuel consumption.

D. Implemented Blend module filtration technology to improve quality of liquid, this is a step towards elimination of paper filter
across brands and support lower replacement frequency.

E. Installation of roof insulation to reduce losses in maturation process, leading to lower footprint impact on water and carbon
to produce more new make spirit, first of its kind for The Company.

F. Installation of LEL and Gas detectors to improve safe working condition in Maturation warehouse and quality LAB
operations, first of its kind for Diageo.

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Statutory Reports

Annexure-7 (Continued)

(ii) The benefits derived like product improvement, cost reduction, product development or import substitution.
The Drive towards automations enables delivery with respect to less dependency on manpower, high outputs, low operating
cost, improved safety & quality.

(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-
(a) The details of technology imported: Bottle Inspection Systems, Corking & Capsuling Machines

(b) The year of import: 2022 and 2023.

(c) Whether the technology been fully absorbed: Yes. Inspection Systems are completely Installed and operating at Nimapada,
Alwar & Kumbalgodu.

(d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof: Not applicable.

(iv) The expenditure incurred on Research and Development:

Around ` 25 crore capital has been spent on Research and Development which includes renovation and Innovation.

C) Foreign Exchange Earnings and Outgo

Foreign Exchange Earning and Outgo- (` in crore)
Foreign Exchange earned in terms of actual inflows during the year 142.86
Foreign Exchange outgo in terms of actual outflows during the year 998.56

By Order of the Board

Mahendra Kumar Sharma
Place: Mumbai Chairperson
Date: 24th May 2024 DIN: 00327684

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UNITED SPIRITS LIMITED Annual Report 2023–24

Corporate Governance Report

1. 
Company’s philosophy on code of corporate 2.5 Your Company has a balanced mix of executive, non-executive
governance and Independent Directors from diverse backgrounds which
enables the Board to discharge its duties and responsibilities
We believe in governance that supports not only the Company
in an effective manner.
but also the value of the shareholders and Company’s
stakeholders. The path we have set out will be holistic and
The Board has set the following yardsticks in the context of its
based on practices which helps achieve the Company’s goals
business and for its effective functioning:
in an ethical, compliant, and professional manner.

2. Board of Directors
2.1 The Board composition is in conformity with applicable Risk
Strategy Performance People Compliance
provisions of the Companies Act, 2013 (‘the Act’) and Securities Management
and Exchange Board of India (‘SEBI’) (Listing Obligations
and Disclosure Requirements) Regulations, 2015 (‘Listing
Regulations’) as amended from time to time. Strategy: Directors help develop proposals on strategy;

2.2 As on the date of this report, Composition of the Board of Risk Management: Ensuring that integrity of financial
Directors of the Company is as follows: information is maintained and that the financial controls and
systems of risk management are robust;
Category Number of
Directors Performance: Directors review and monitor the performance
i) Non-Independent Directors of management in terms of agreed goals and objectives;
Managing Director 1
People: Directors play a prime role in determining appropriate
Executive Director 1 levels of remuneration of Executive Directors, Key Managerial
Non-executive Directors 3 Personnel and senior management and in appointing/
ii) Independent Directors (including the 7 retaining Executive Directors, Key Managerial Personnel and
Chairperson and a woman director) senior management and in succession planning;
Total Strength (i + ii) 12
Compliance: Maintain checks over the governance, and
compliance with the applicable legislation and regulations
2.3 In the opinion of the Board, the Independent Directors
and the conformity of the Company’s practices to accepted
fulfilled the conditions specified in Listing Regulations and are
governance norms.
independent of the management. None of the Directors are
inter-se related to each other. No Independent Director has
The directors strive to achieve the above through insights
resigned before expiry of his/her term during the financial
obtained from a combination of experience and expertise
year.
in their respective areas such as FMCG sector, Investment
Banking sector, Legal, Finance, Administration, Technical
2.4 None of the Directors hold directorship in more than 10 public
Knowledge and Global exposure.
companies or serves as director or independent director
in more than 7 listed companies. Further, none of them is a
2.6 Attendance of each Director at the Board Meetings and at the
member of more than 10 committees or Chairperson of more
last Annual General Meeting (AGM) and details of the number
than 5 committees across all public companies in which he/
of outside directorships and committee positions held by each
she is a director as provided in regulation 26(1) of Listing
of the Directors as on 31st March 2024 are given below:
Regulations.

88
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Corporate Governance Report (Continued)

Name of Director and No. of Board Attendance at No. of directorships No. of committees (other Directorships in other listed companies
Category Meetings last AGM held in other unlisted than the Company) and category of directorship
attended during on 31st July 2023 public and listed
the financial year companies as on Chairperson Member
31st March 2024*

Mr. Mahendra Kumar 4 No 1 1 1 Nil

Sharma (Independent
Non-Executive Director
and Chairperson)
Ms. Hina Nagarajan 5 Yes Nil Nil Nil Nil
(Managing Director and
Chief Executive Officer)

Mr. Pradeep Jain 5 Yes Nil Nil Nil Nil

(Executive Director and
Chief Financial Officer)

Mr. V K Viswanathan 5 Yes 5 3 5 1. HDFC Life Insurance Company

(Independent Non- Limited (Independent Director)
Executive Director) 2. KSB Limited
(Independent Director)
3. ABB India Limited
(Independent Director)

Dr. Indu Shahani 5 Yes 3 1 5 1. Bajaj Electricals Limited

(Independent Non- (Independent Director)
Executive Director) 2. Colgate Palmolive (India)
Limited (Independent Director)
3. Heubach Colorants India
Limited (formerly known as
Clariant Chemicals (India)
Limited
(Independent Director)

Mr. D Sivanandhan 5 Yes 8 1 6 1. Forbes & Company Limited

(Independent Non- (Independent Director)
Executive Director) 2. Kirloskar Industries Limited
(Independent Director)
3. Inditrade Capital Limited
(Independent Director)
4. AGS Transact Technologies
Limited (Independent Director)

Mr. Rajeev Gupta 4 No 4 1 3 1. EIH Limited

(Independent Non- (Independent Director)
Executive Director) 2. Rane Holdings Limited
(Independent Director)
3. TV Today Network Limited
(Independent Director)
4. Vardhman Special Steels
Limited (Independent Director)

Ms. Mamta Sundara 4 Yes Nil Nil Nil Nil

(Non-Executive Director)

Mr. Mark Sandys 4 No Nil Nil Nil Nil

(Non-Executive Director)

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UNITED SPIRITS LIMITED Annual Report 2023–24

Corporate Governance Report (Continued)

Name of Director and No. of Board Attendance at No. of directorships No. of committees (other Directorships in other listed companies
Category Meetings last AGM held in other unlisted than the Company) and category of directorship
attended during on 31st July 2023 public and listed
the financial year companies as on Chairperson Member
31st March 2024*

Ms. Emily Kathryn 2 NA Nil Nil Nil Nil

Gibson$
(Non-Executive Director)

Dr. Indu Bhushan$$ NA NA 5 2 5 1. Godrej Properties Limited

(Independent (Independent Director)
Non- Executive Director) 2. Balrampur Chini Mills
(Independent Director)
3. Colgate- Palmolive (India)
Limited (Independent Director)

Mr. Mukesh Butani$$$ NA NA 3 3 5 1. Dabur India Limited

(Independent (Independent Director)
Non- Executive Director) 2. Hitachi Energy India Limited
(Independent Director)
3. Latent View Analytics Limited
(Independent Director)

Mr. John Thomas 1 NA Nil Nil Nil Nil

Kennedy#
(Non- Executive Director)

$-Ms. Emily Kathryn Gibson was appointed as a Non-Executive Non-Independent Director with effect from 7th September 2023.

$$- Dr. Indu Bhushan was appointed as a Non-Executive Independent Director with effect from 1st March 2024.

$$$- Mr. Mukesh Butani was appointed as a Non-Executive Independent Director with effect from 1st March 2024.

#- Mr. John Thomas Kennedy resigned as a Non-Executive director from end of the day 30th June 2023.

* Excluding Private Limited Companies, Foreign Companies, Section 8 Companies and Alternate Directorships.

*NA – Not Applicable

Note:

 Directorships mentioned above is excluding their directorship in United Spirits Limited

 In the committee details provided, every chairpersonship is also considered as a membership.

 The above details are in respect of their directorships only in Indian companies and committee memberships and chairpersonships
in Audit Committee and Stakeholders Relationship Committee in terms of Regulation 26(1) of the Listing Regulations. The last
column consists of listed Indian companies only in terms of Regulation 17A of the Listing Regulations.

 The Board at its meeting held on 24th May 2024 approved appointment of Ms. Amrita Gangotra as Non-Executive Independent
Director effective 1st September 2024 subject to members’ approval.

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 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Corporate Governance Report (Continued)

2.7 During the financial year under review, Five Board Meetings were held, i.e., on 18th May 2023, 20th July 2023, 6th September 2023,
8th November 2023, 23rd January 2024 and the gap between any two Board Meetings did not exceed 120 days.

1 2 3 4 5 % of

Name of Director and Category 18-May-23 20-Jul-23 6-Sep-23 8-Nov-23 23-Jan-24 Meeting
attended during
the year
Mr. Mahendra Kumar Sharma (Independent ü LOA ü ü ü 80%
Director and Chairperson)
Ms. Hina Nagarajan ü ü ü ü ü 100%
(Managing Director and Chief Executive
Officer)
Mr. Pradeep Jain ü ü ü ü ü 100%
(Executive Director and Chief Financial
Officer)
Mr. V K Viswanathan ü ü ü ü ü 100%
(Independent Director)
Dr. Indu Shahani ü ü ü ü ü 100%
(Independent Director)
Mr. D Sivanandhan ü ü ü ü ü 100%
(Independent Director)
Mr. Rajeev Gupta LOA ü ü ü ü 80%
(Independent Director)
Ms. Mamta Sundara ü ü LOA ü ü 80%
(Non-Executive Director)
Mr. Mark Sandys ü ü ü LOA ü 80%
(Non-Executive Director)
Ms. Emily Kathryn Gibson$ NA NA NA ü ü 100%
(Non-Executive Director)
Dr. Indu Bhushan$$ NA NA NA NA NA --
(Independent Director)
Mr. Mukesh Butani$$$ NA NA NA NA NA --
(Independent Director)
Mr. John Thomas Kennedy# ü NA NA NA NA 100%
(Non-Executive Director)

$-Ms. Emily Kathryn Gibson was appointed as a Non-Executive Non-Independent Director with effect from 7th September 2023.

$$- Dr. Indu Bhushan was appointed as a Non-Executive Independent Director with effect from 1st March 2024.

$$$- Mr. Mukesh Butani was appointed as a Non-Executive Independent Director with effect from 1st March 2024.

#- Mr. John Thomas Kennedy resigned as a Non-Executive Director from end of the day 30th June 2023.

NA - Not Applicable

LOA - Leave of Absence

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UNITED SPIRITS LIMITED Annual Report 2023–24

Corporate Governance Report (Continued)

2.8 Awards and recognition o Appreciation award for Mashing Efficiency and Malt
• Hina Nagarajan, MD & CEO, was awarded the coveted Spirit Quality Improvement at the 5th CII - FACE KAIZEN
Economic Times Corporate Excellence award as Competition on Food Safety and Quality.
‘Businesswoman Of The Year’ in 2023; ‘50 Most Powerful
Women In Business’ by Fortune India in 2023; ‘Most Powerful o Gold award from OHSSAI Global in OHS (Occupational
Women In Business 2023’ by Business Today; ‘Most Influential Health and Safety) category.
Women 2024’ by Business World; ‘Woman CEO Of The Year
• Kumbalgodu plant bagged Best Implementation award at
2023’ by ET Prime, ‘Icons of Excellence Award’ by Forbes India
the 37th CII Karnataka state level Quality Circle Competition
2024 and featured in ‘The She List’ by India Today.
2023 and a Gold award from OHSSAI for OHS (Occupational
Health and Safety) Category.
• The Company received the Gold Employer by Pride Circle
India Workplace Equality Index.
• The Alwar distillery in Rajasthan won two awards at Icons of
Whisky India 2024 - Craft Distillery of the year and Sustainable
• The Company received Distiller of the year recognition at the Distillery of the Year.
2024 Icons of Whisky India awards 2024
• Our brands bagged multiple awards including
• The Company won 2 awards for its ESG initiatives: Excellence
in Contribution to ESG at the Ambrosia INDSPIRIT Awards 2024 • Johnnie Walker Refreshing Mixer:
and CSR Company Of The Year award by Spiritz magazine.
o Gold award at the Exchange4media (E4M) Indian
Marketing Awards (IMA) for Johnnie Walker ReVibe
• Nimpara unit received 2 Gold awards from Quality Circle
campaign and a Silver for Brand Rejuvenation for the
Forum of India (QCFI) for enhancing Overall Equipment
Walker’s & Co campaign.
Efficiency (OEE) in Line No. 3 and improving the Manpower
Productivity (Cases per Man Hour) in Q2F23.
o Silver award in the Best Media Innovation Digital
Social Media category for the Johnnie Walker Drone
• Baramati unit won multiple awards including:
Campaign at the Emvies Awards.

o Two Gold awards from Quality Circle Forum of India

o Two Bronze awards at the E4M IMA South Awards for the
(QCFI) for enhancing Overall Equipment Efficiency (OEE)
Walker’s and Co. campaign.
by June 2023 and improving Water Factor & Multi Effect
Evaporator Plant (MEEP) Condensate Recovery in FY23.
o Bronze award for Community Building for Walker’s &
Co. campaign at the E4M The Mobile Marketing Awards
o Silver award for improving Cases per Man Hour (CPMH)
(MADDIES).
by FY23.
• Six distinguished honours at the prestigious Indian Digital
o International level award for Safety Culture & Practice
Marketing Awards’23 including:
Improvements at site level from British Safety Council.
o Two Gold awards for the Best Use of Topical Posts in a
o Gold award from Occupational Health, Safety &
Campaign and Breakthrough Technology as Part of a
Sustainability Association of India (OHSSAI) Global in
Campaign categories, two Silver awards for the Best Use
EHS (Environment and Occupation Healthy and Safety)
of Experiential Tech for Digital & Physical Experiences
category.
and Best Digital OOH Campaign categories and one
Bronze award for Leveraging Social Media to Boost
• Nashik unit received multiple awards including: Brand ROI & Engagement for the Spotted a Mysterious
Walker in the skies of Goa campaign.
o Gold award for Digitalization for Traceability at the 5th
CII - Food and Agriculture Centre of Excellence (FACE) o Bronze award for Best Digital OOH Campaign category
KAIZEN Competition on Food Safety and Quality. for outstanding work with Walker’s & Co.

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 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Corporate Governance Report (Continued)

Black & White Ginger Ale: • Silver award for the Best Integrated Media
• Gold award in Brand Extension - Food and Beverages Campaign – Films/TV Shows/News Shows/
category and Silver award in the Best Use of Digital Events award.
Marketing/Social Media - Social Impact category for
Black & White’s Inclusivity and Diversity campaign at the • Signature Packaged Drinking Water:
E4M IMA South Awards. o Gold award at the IMA South Awards for the Ziro
Music Festival Driving a Sustainability campaign in the
• Three awards at the E4M MADDIES 2023: category of Brand Extension - Food and Beverages.

o Gold award for Gender Equity o Gold award for the Best Multi Mobile Channel Campaign
for the Signature Green Vibes campaign at the E4M
o Silver award for Maximising Mobile Advertising MADDIES.
/ Programmatic and Machine Learning category
and a Bronze for Best Use of Social Media for the • Black Dog Whisky:
Black & White X Bobble campaign. o Silver award for Design Effectiveness at the Pentawards
and two Silver awards for Logo Design and Packaging
• Silver award in the Best Mobile Marketing Campaign Design by Graphis Design Annual.
category and a Bronze in the Best Digital Campaign
category at the Dragons of Asia Awards, 2023. o Silver award for Packaging Design and bronze award for
Best Brand Identity at Marketers’ Excellence Awards by
• Gold award for the Best use of Technology and Silver afaqs.
award for Best use of Sports or E-Sports Marketing at
the Exchange4media (E4M) Indian Marketing Awards o Best Packaging award (unit pack) at Ambrosia INDSPIRIT
(IMA). Awards 2024

• McDowell’s No 1 Soda: Godawan & G100 artisanal single malt:

o Three Bronze awards at the E4M IMA for Best Use of PR, • Two Silver awards for Packaging Design at the FAB
Best Use of Omni Channel Marketing and Best Use of Awards and Graphis Design Annual.
Experiential Marketing.
• Two Gold awards for the Best use of Visual Property
o Two Silver awards for Brand Extension - Food and and Best use of Packaging Design and bronze for Best
Beverages and Talent/Influencer Marketing - Food and Strategic and Creative Development of a New Brand by
Beverages categories and two Bronze awards for Best Transform Awards Asia.
Use of Integrated Media - Food and Beverages and
Innovative Use of Technology for the No. 1 Yaari Jam Fest • Silver award for Dark Spirits Packaging Design and
Making ‘Yaari’ the New Cool! campaign at IMA South Bronze for Godawan 100 Packaging Design at the
Awards. Harpers Design Awards.

o Silver award for Relationship Building/Remarketing at • Two Baby Blue Elephant awards for Godawan Packaging
the E4M MADDIES. Design and G100 Luxury Packaging Design by Kyoorius
Design.
o Four awards at the prestigious Indian Digital Marketing
Awards’23: • Two People’s Choice awards for Packaging Design and
Brand Design and a Bronze for Packaging Design by
• Three Bronze awards for the No. 1 Yaari Jam Creativepool Annual.
Fest Making ‘Yaari’ the New Cool! campaign for
Best Website/ Microsite, Best Campaign - Online • Two Gold awards for Packaging Design and Best Brand
Advertising & Digital Direct Response, and Best Identity at afaqs Marketers’ Excellence Awards.
Integrated Media Campaign - Product/Services.

93
UNITED SPIRITS LIMITED Annual Report 2023–24

Corporate Governance Report (Continued)

• Bronze awards for Brand Design & Packaging Design at • Royal Challenge whisky won a silver for Packaging
the International Spirits Challenge. Design at the Graphis Design Annual.

• Best Packaging award (Graphics) at Ambrosia INDSPIRIT • Royal Challenge American Pride whisky won a silver for
Awards 2024 Packaging Design at the Graphis Design Annual.

• Two Gold awards for the second year in a row at the 2.9 Web link where details of familiarization programs imparted
prestigious Monde Selection Whisky Awards and four to independent directors is disclosed.
Gold awards at the London Spirits and one Silver award The details of the familiarization programs imparted to the
at the Denver International competition. Independent Directors are disclosed on the Company’s
website at https://media.diageo.com/diageo-corporate-
• Antiquity whisky won a silver award for Packaging media/media/q2zfqzox/directors-familiarisation-program-
Design at the Graphis Design Annual and was awarded details_31mar2024.pdf
Best IMFL Super Premium Whisky at Ambrosia INDSPIRIT
Awards 2024

2.10 Matrix setting out the core Skills /Expertise/ Competence of the Board of Directors
A chart/Matrix setting out the core skills/expertise/competencies identified by the Nomination and Remuneration Committee and the
Board in the context of the Company’s business and sectors as required for it to function effectively and those available with the Board
along with the name of Directors who have such skills/expertise/competence are given below:

Name of Director Skills/Expertise/Competency

Director Leadership Managerial Diversity Risk Corporate
Identification Experience Management Governance
Number (DIN)
Mr. Mahendra Kumar Sharma 00327684 ü ü ü ü ü
Ms. Hina Nagarajan 00048506 ü ü ü ü ü
Mr. Pradeep Jain 02110401 ü ü ü ü ü
Mr. V K Viswanathan 01782934 ü ü ü ü ü
Dr. Indu Shahani 00112289 ü ü ü ü ü
Mr. D Sivanandhan 03607203 ü ü ü ü ü
Mr. Rajeev Gupta 00241501 ü ü ü ü ü
Mr. Mark Dominic Sandys 09543864 ü ü ü ü ü
Ms. Mamta Sundara 05356182 ü ü ü ü ü
Ms. Emily Kathryn Gibson 10294270 ü ü ü ü ü
Dr. Indu Bhushan 09302960 ü ü ü ü ü
Mr. Mukesh Bhutani 01452839 ü ü ü ü ü

2.11 Disclosures regarding appointment and re-appointment of directors

The details of appointment/re-appointment of directors are mentioned in point 9 of the Board’s Report pursuant to Regulation 36(3)
of Listing Regulations. Brief profile of the director who is being re-appointed is mentioned as part of the 25th AGM Notice.

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 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Corporate Governance Report (Continued)

3. Audit Committee i. Matters required to be included in the Director’s

3.1 During the year under review, the composition of the Audit Responsibility Statement to be included in the Board’s
Committee was as under: Report in terms of clause (c) of sub-section (3) of Section
134 of the Act.
Name of the Director Designation
ii. Major accounting entries and decisions based on
Mr. V K Viswanathan Independent Director exercise of judgement by management.
(Chairperson)
iii. Changes if any in Accounting policies and practices and
Mr. Rajeev Gupta Independent Director
reasons for the same.
Mr. Mahendra Kumar Sharma Independent Director
Mr. John Thomas Kennedy* Non-Executive iv. The extent to which the financial statements are affected
Director by any unusual transactions in the year and how they are
disclosed.
*Ceased to be a member from end of day 30th June 2023, due
to resignation as a Director. v. Qualifications/ modified opinion(s) in the draft audit
report.
The Company Secretary acts as the secretary to the Audit
Committee. vi. Significant adjustments arising out of audit.

vii. Critical accounting policies and practices, and any

3.2 Pursuant to Regulation 18(3) and Part C of Schedule II of
changes in them.
Listing Regulations, the detailed terms of reference of the
Audit Committee is available on website of the Company viii. The going concern assumption.
https://media.diageo.com/diageo-corporate-media/media/
khtjtsfb/audit-committee-charter_2022.pdf ix. Compliance with Accounting Standards.

Key Terms of Reference of the committee are: x. Regulatory Compliances including Tax Compliances,
Compliance with listing and other legal requirements
a) Oversight of the Company’s financial reporting process and
concerning financial statements.
the disclosure of its financial information to ensure that the
financial statement is correct, sufficient, and credible. xi. Prior approval or any subsequent modifications of
b) Recommending the appointment, remuneration and terms of transactions of the Company with related parties
appointment and removal of statutory auditors. including omnibus approval of such RPT and disclosure
of any such related party transactions. The term “related
c) Review and monitor the auditor’s independence, qualification, party transactions” (RPT) shall have the same meaning
expertise, resources, objectivity, independence, performance as contained in the the Act and Listing Regulations or
and effectiveness of the auditors and the audit process. such Accounting Standards, issued by The Institute of
Chartered Accountants of India, as may be amended
d) Approval of payment to the Statutory Auditors for non- audit
from time to time.
services rendered by them.
e) Discuss with the external auditors problems and reservations xii. Review disclosure of any related party transactions.
arising from their audits, and any other matter the external xiii. Review and follow up of open matters arisen from Past
auditors may wish to discuss. Meetings.
f) Examination of the financial statement and the auditors’ report k) Monitoring and reviewing, with the management, the
thereon. statement of uses / application of funds raised through an
g) Scrutiny of inter-corporate loans and investments and other issue (public issue, rights issue, preferential issue, etc.), the
loans and investments if any. statement of funds utilized for purposes other than those
stated in the offer document/prospectus/notice and the
h) Valuation of undertakings or assets of the Company. report submitted by the monitoring agency monitoring the
i) Evaluation of internal financial controls and risk management. utilisation of proceeds of a public or rights issue, and making
appropriate recommendations to the Board to take up steps in
j) Reviewing with the management and auditors, the quarterly this matter.
or annual or other periodical financial statements before
submission to the Board for approval, focusing primarily on:

95
UNITED SPIRITS LIMITED Annual Report 2023–24

Corporate Governance Report (Continued)

l) Reviewing with the management, performance of statutory 19th & 20th July 2023, 06th September 2023, 7th & 8th November
and internal auditors and the adequacy of internal control 2023 and 19th & 23rd January 2024, and the gap between any
system, risk management system, control over financial two Audit Committee Meetings did not exceed 120 days. The
reporting, and propose wording relating to these in the annual details of attendance by members of the Audit Committee at
financial statements. such meetings are as stated below:
m) Reviewing the adequacy of internal audit function including Name of Director 1 2 3 4 5
the structure of the internal audit department, staffing and 17th & 19th & 6th 7th & 8th 19th & 23rd
seniority of the official heading the department, reporting 18th May 20th July September November January
structure, areas of coverage and frequency of internal audit 2023 2023 2023 2023 2024
and approval of internal audit charter. Mr. V K ü ü ü ü ü
Viswanathan
n) Reviewing the findings of any internal investigations by the
Mr. Rajeev LOA* ü ü ü ü
internal auditors into matters where there is suspected fraud or
Gupta
irregularity or a failure of internal control systems of a material
Mr. Mahendra ü LOA ü ü ü
nature and reporting the matter to the Board.
Kumar Sharma
o) Discussion with internal auditors any significant findings and Mr. John Thomas ü NA NA NA NA
follow up thereon. Kennedy*
*Ceased to be a member from end of day 30th June 2023, due
p) Discussion with statutory auditors and internal auditors before
to resignation as a Director.
the audit commences about nature and scope of audit as
well as have post-audit discussions to ascertain any area of LOA – Leave of Absence
concern. NA – Not Applicable
q) To look into the reasons for substantial defaults in the payment 4. Nomination and Remuneration Committee
to the depositors, debenture holders, shareholders (in case of
4.1 During the year under review, the composition of
non-payment of declared dividends) and creditors, if any.
Nomination and Remuneration Committee (NRC) was as
r) To review the functioning of the Vigil/Whistle Blower under:
mechanism and extend the applicability to directors also and
ensure adequate safeguard against victimization of directors/ Name of the Director Designation
employees/any other person who avail the mechanism and Dr. Indu Shahani (Chairperson) Independent Director
also provide for direct access to the Chairperson of the Audit Mr. D Sivanandhan Independent Director
Committee in appropriate/ exceptional cases.
Mr. V K Viswanathan Independent Director
s) Approval of appointment of Chief Financial Officer (CFO) Mr. John Thomas Kennedy* Non-Executive Director
i.e., the whole time Finance Director or any other person
heading the finance function or discharging that function *Ceased to be a member from end of day 30th June 2023, due
after assessing the qualifications, experience & background, to resignation as a Director.
etc. of the candidate. The Audit Committee shall consider for
appointment to the position of CFO such candidates who, from 4.2 Pursuant to Regulation 19(4) and Part D of Schedule II of
time to time are nominated in accordance with the Articles of Listing Regulations, the terms of reference of the NRC is
Association of the Company. available on website of Company https://media.diageo.com/
diageo-corporate-media/media/d3zmwssi/nomination-and-
3.3 The Audit Committee, inter alia, has reviewed the financial
remuneration-committee-charter.pdf
statements including Auditors’ Report for the year ended
31st March 2024 and has recommended its adoption. In Key Terms of Reference of the committee are:
addition, the Audit Committee had also reviewed the
unaudited quarterly financial results for the quarter ended i. Assist the Board of Directors of the Company to:
30th June 2023, quarterly and 6 months ended 30th September
and quarterly and nine months ended 31st December 2023 1. Determine, review and propose compensation
(which were subjected to a limited review by the Statutory principles and policy of the Company;
Auditors of the Company).
2. Assess and review compensation plans
3.4 During the financial year under review, five meetings of the recommended by the management;
Audit Committee were held i.e., on 17th & 18th May 2023,

96
 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Corporate Governance Report (Continued)

3. Recommend the compensation packages of the 4.4 Performance Evaluation of Independent Directors
Company’s Executive Directors. Pursuant to the provisions of the Act and Regulation 34(3) read
ii. Identify persons who are qualified to become directors with Schedule V(C) (4)(d) of the Listing Regulations, the NRC has
and who may be appointed in senior management in prescribed performance evaluation criteria for Independent
accordance with the criteria laid down, recommend to Directors as well as for the non-independent directors, the
the Board of Directors their appointment and removal committees, and the entire Board of Directors. Evaluation
and shall carry out evaluation of every director’s was carried out during the financial year for all the Directors
performance. and the Committees viz. Audit Committee, Nomination
and Remuneration Committee, Stakeholders Relationship
iii. Approve and recommend matters relating to and General Committee, Corporate Social Responsibility
compensation by way of salary, perquisites, benefits, & Environmental, Social and Governance Committee and
etc., to the Managing/Whole Time/Executive Directors Risk Management Committee. The Board of Directors and
of the Company. Committee members appreciated the evaluation process
of the Company in terms of involvement, participation,
iv. Formulate the criteria for determining qualifications,
transparency, objectivity, information made available on time,
positive attributes and independence of a director and
qualitative comments on improvements and diversity on the
recommend to the Board of Directors a policy, relating to
Board. The evaluation of Independent Directors is undertaken
the remuneration of the directors including Independent
by the entire Board of directors including (a) performance of
Directors, key managerial personnel and employees.
the directors; and (b) fulfillment of the independence criteria as
v. Carry out any other acts and deeds as may be specified in Listing Regulations and their independence from
delegated by the Board of Directors and deal with such the management. In the above evaluation, the directors
other matters as may be prescribed under the Act, the who are subject to evaluation did not participate. The
Listing Regulations and other statutory enactments. results of evaluation showed high level of commitment and
engagement of Board, its various committees. The results of
vi. To set up policy and procedure for succession planning the evaluation were shared with the Board, the Chairperson
of Key Managerial Personnel and other senior of respective committees and directors. Based on the outcome
management of the Company. of the evaluation, the Board and Committees have agreed
vii. Approve any share incentive or other plans for the on an action plan to further improve the effectiveness and
employees of the Company. functioning of the Board and Committees. The directors
expressed their satisfaction with the evaluation process.
4.3 During the financial year under review, four meetings were During the year under review, the Committee ascertained and
held i.e., on 17th May 2023, 19th July 2023, 6th September reconfirmed that the deployment of “questionnaire” followed
2023 and 19th January 2024. The details of attendance by the by discussion at the Board meeting as a methodology, is
members of NRC at such meetings are as stated below: effective for evaluation of performance of Board, committees
and individual directors.
Name of 1 2 3 4
Director 17th May 19th July 6th 19th 5. Stakeholders’ Relationship and General Committee
2023 2023 September January
2023 2024 5.1 During the year under review, the composition of the
Stakeholders’ Relationship and General Committee (SRGC)
Dr. Indu ü ü ü ü
Shahani was as under:
(Chairperson)
Name of the Director Designation
Mr. V K ü ü ü ü
Viswanathan Mr. D Sivanandhan (Chairperson) Independent Director
Mr. D ü ü ü ü Dr. Indu Shahani Independent Director
Sivanandhan
Ms. Hina Nagarajan Managing Director
Mr. John ü NA NA NA and Chief Executive
Thomas
Officer
Kennedy*
*Ceased to be a member from end of day 30th June 2023, due 5.2 Pursuant to Regulation 20 and Part D of Schedule II of Listing
to resignation as a Director. Regulations, the terms of reference of the SRGC is available

97
UNITED SPIRITS LIMITED Annual Report 2023–24

Corporate Governance Report (Continued)

on website of Company https://media.diageo.com/diageo- k. Power to borrow subject to applicable laws from banks,
corporate-media/media/zt5fcvlw/stakeholders-relationship- financial institutions and other bodies corporate, apart from
and-general-committee-charter_may-27-2020.pdf the money(s) already borrowed till date under any specific
resolutions, such that the borrowings availed by the Company
Key Terms of Reference of the committee are: pursuant to the resolutions of the Stakeholders & General
a. Review the redressal of shareholders’, debenture holders’ Committee of Directors and outstanding at any point of time,
and depositors’ or any other security holders’ grievances/ do not exceed an amount of `500 Crore in aggregate.
complaints like transfer of shares, non-receipt of balance
sheet, non-receipt of declared dividends, non-receipt of l. Power to give loans subject to applicable laws to wholly owned
interest warrants, etc., and ensure cordial relation with the subsidiaries of the Company for the purpose of Working
Stakeholders. Capital, apart from the loans already made to the wholly
owned subsidiaries of the Company till date under any specific
b. Review the adherence to service standards relating to the resolutions for such purpose(s), such that the total amount of
various services rendered by the Company and Company’s loan given pursuant to the resolutions of the Stakeholders
Registrars & Transfer Agents. & General Committee of Directors for such purpose(s) and
outstanding, at any point of time, do not exceed ` 500 Crore
c. Review the status of the litigation(s), complaints/suits filed by in aggregate.
or against the Company relating to the shares/ fixed deposits,
debentures or any other securities of the Company before any 5.3 Mr. Mital Sanghvi, Company Secretary is the Compliance
Courts/other appropriate authorities, and in particular where Officer of the Company.
directors are implicated or could be made liable.
5.4 During the financial year under review four meetings were
d. Review the impact of enactments, amendments made by held i.e., on 17th May 2023, 19th July 2023, 7th November 2023,
the Ministry of Corporate Affairs/Securities and Exchange 19th January 2024 respectively.
Board of India and other regulatory authorities on matters
concerning the Stakeholders in general. 5.5 The details of attendance by members of the SRGC are as
below:
e. Review matters relating to transfer of unclaimed and unpaid
dividend, matured deposits, interest accrued on the matured Name of 1 2 3 4
deposits, debentures etc., to the Investor Education and Director 17th 19th 7th 19th
Protection Fund as specified under the Act. May July September January
2023 2023 2023 2024
f. Review the status of claims received for unclaimed shares and Mr. D ü ü ü ü
dividend on unclaimed shares. Sivanandhan
(Chairperson)
g. Review the initiatives taken to reduce quantum of unclaimed Ms. Hina ü ü ü ü
dividends/unclaimed deposits. Nagarajan
Dr. Indu ü ü ü ü
h. Act on such further terms of reference as may be considered
Shahani
necessary and specified by the Board in writing from time to
time.
5.6 The Company/Company’s Registrar and Transfer Agents
received 16 complaints during the financial year, out of which
i. Review service standards and investor service initiatives
all 16 were resolved to the satisfaction of shareholders/
undertaken by the Company.
investors. As on 31st March 2024, all the investor complaints
were resolved.
j. Issue / revocation / modification of powers of attorney to
represent the Company.

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 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Corporate Governance Report (Continued)

Sl. Complaints relating No. of No. of 6. Risk Management Committee

No. Complaints Complaints 6.1 The composition of the Risk Management Committee (RMC)
Received Resolved was as under:
1. Non-receipt of refund Nil Nil
order/ Name of the Director Designation
allotment letter Mr. Mahendra Kumar Sharma Independent Director
2. Non-receipt of Dividend/ Nil Nil (Chairperson)
Interest on Shares/ Mr. V K Viswanathan Independent Director
Debentures/Fixed Deposits/
Ms. Hina Nagarajan Managing Director and
maturity amount on
Chief Executive Officer
debentures
Mr. Pradeep Jain Executive Director and
3. Non-receipt of share Nil Nil
Chief Financial Officer
certificates
Ms. Mamta Sundara Non-Executive Director
4. Non-receipt of Report/ Nil Nil
Rights forms/ Bonus shares/
interest on delayed refund/ 6.2 Pursuant to Regulation 21 and Part D of Schedule II of Listing
Dividend and Interest Regulations, RMC is available on website of Company at
https://media.diageo.com/diageo-corporate-media/media/
5. Others* 16 17 snsc5ris/amended-rmc-charter_may-2021.pdf
Total 16 17**
Key Terms of Reference of the committee are:
In addition to the above, there are few pending shareholder
litigations where the Company is a party. a. To assess risks periodically for the effective execution of
*Includes shareholders complaints relating to the IEPF, business strategy and review the risks associated with
unclaimed shares and non-receipt of shares pursuant to business strategy.
mergers etc.
**One complaint which was unresolved at the end of the b. To annually review and approve the Risk Management
previous financial year was resolved during the first quarter of Framework of the Company including risk management
the financial year 2023-24. processes and practices of the Company and ensure
that the Company is taking the appropriate measures
to achieve prudent balance between risk and reward in
5.7 Dividend Distribution Policy
both ongoing and new business activities.
In terms of Regulation 43A of the Securities and Exchange
Board of India (Listing Obligations and Disclosures c. Evaluate significant risk exposures of the Company and
Requirements) Regulations, 2015, (‘Listing Regulations’) the assess management’s actions to mitigate the exposures
Board of Directors of the Company (the ‘Board’) formulated in a timely manner so as to ensure the business continuity.
and adopted a new dividend Distribution Policy (the ‘Policy’),
and is available on website of the Company at https://media. d. The committee shall make reports to the Board at least
diageo.com/diageo-corporate-media/media/kychm2c0/ once in a year with respect to risk management and
dividend-policy.pdf. minimization procedures and for inclusion in the Report
and such other disclosures.

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UNITED SPIRITS LIMITED Annual Report 2023–24

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e. Set the procedures for identifying business risks 7.2 During the financial year under review, four meetings were
(including financial risks) and controlling their financial held i.e., on 17th May 2023, 19th July 2023, 07th November 2023
impact on the Company. and, 19th January 2024. The details of attendance by members
of the CSR & ESG Committee are as below:
f. To evaluate and ensure that appropriate processes and
systems are in place to monitor and report cyber security Name of Director 1 2 3 4
risks. 17th 19th 7th 19th
May July November January
g. The Committee shall perform such other functions as 2023 2023 2023 2024
may be required under the relevant provisions of the Dr. Indu Shahani ü ü ü ü
Listing Regulations, any other applicable laws and (Chairperson)
various circulars issued by the regulatory authorities Mr. D ü ü ü ü
thereof, as amended from time to time. Sivanandhan
Ms. Hina ü ü ü ü
6.3 During the financial year under review two meetings were held Nagarajan
i.e., on 31st August 2023 and 16th February 2024 respectively. Mr. Mark Dominic ü ü ü ü
Sandys
6.4 The details of attendance by members of the RMC are as Ms. Emily Kathryn NA NA ü ü
below: Gibson*
*Appointed as a member with effect from 7th September 2023.
Name of the Director 31st 16th
August February NA – Not Applicable
2023 2024 LOA Leave of Absence
Mr. Mahendra Kumar Sharma ü ü
(Chairperson) 7.3 The CSR Report of the Company for the year ended 31st March
Mr. V K Viswanathan ü ü 2024 has been approved by the Board and provided
in Annexure – 6 as part of the Board’s Report. The copy of
Ms. Hina Nagarajan ü ü
your Company’s CSR policy is available on the Company’s
Mr. Pradeep Jain LOA ü
website at https://media.diageo.com/diageo-corporate-
Ms. Mamta Sundara ü ü
media/media/xu4kqzob/corporate-social-responsibility-
LOA- Leave of Absence policy_01april2021.pdf

7. 
Corporate Social Responsibility and Environment, 8. Committee of Directors
Social and Governance Committee
The Board has constituted Committee of Directors (‘COD’)
7.1 During the year under review, the composition of the consisting of Independent Directors. COD was formed
Corporate Social Responsibility and Environment, Social and inter-alia to deal with non-core assets of the Company. As on
Governance Committee (CSR & ESG) was as under: the date of the Report, the composition of COD was as under:

Name of the Director Designation Name of the Director Designation

Dr. Indu Shahani Independent Director Mr. Mahendra Kumar Sharma Independent Director
(Chairperson) (Chairperson)
Mr. D Sivanandhan Independent Director Mr. Rajeev Gupta Independent Director
Ms. Hina Nagarajan Managing Director and Mr. V K Viswanathan Independent Director
Chief Executive Officer
Mr. Mark Dominic Sandys Non-Executive Director During the financial year under review, the Committee met
Ms. Emily Kathryn Gibson* Non-Executive Director once on 8th November 2023 with all the members of the
Committee required being present.
*Appointed as a member with effect from 7th September 2023.

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 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Corporate Governance Report (Continued)

9. Remuneration of Directors
The details of remuneration paid to the directors during the financial year 1st April 2023 to 31st March 2024 are given below:

A. Executive Directors
Remuneration paid to Managing Director, Whole-time Directors and/or Manager:
(Amount in `)
Sl. Particulars of Remuneration Hina Nagarajan, Pradeep Jain,
No. Managing Director and Executive Director and
Chief Executive Officer Chief Financial Officer
1 Gross Salary
(a) Salary as per provisions contained in section 17(1) of 9,14,84,528 3,72,86,028
the Income-tax Act,1961
2 (b) Value of perquisites u/s 17(2) of the Income Taxt Act, 39,83,580 23,76,770
1961
(c) Profits in lieu of salary under section 17(3) of the
Income Taxt Act, 1961
3 Stock Options/other stock (Diageo options) related 4,34,63,529 18,14,247
compensation
4 Sweat Equity
5 Commission – as % of Profit Others – Specify
6 Others
Total 13,89,31,637 4,14,77,045

Notes: B. Independent Directors

i. Sitting Fees have been paid to Independent
i) The gross remuneration shown above does Directors for attending Board / Committee
not include employer’s contribution to various Meetings as specified in the table below for
retirement funds and premium paid for life financial year 2023-24. They are also entitled
insurance and health insurance. to reimbursement of actual travel expenses,
boarding and lodging, conveyance and incidental
ii) Services of Ms. Hina Nagarajan may be terminated
expenses incurred for attending such meetings in
by her, giving six months’ notice and can be
accordance with the Board approved policies for
terminated by the Company with twelve months’
such reimbursements. Other than the sitting fees,
notice (or salary in lieu of such notice). Services of
reimbursement of expenses and as commission as
Mr. Pradeep Jain may be terminated by him, giving
explained below, no other remuneration was paid.
six months’ notice, and can be terminated by the
No securities / convertible instruments were issued
Company with six months’ notice (or salary in lieu
or allotted to any of the non-executive directors
of such notice). There is no separate provision for
during the financial year 2023-24.
payment of severance pay.

iii) Ms. Hina Nagarajan and Mr. Pradeep Jain are ii. Independent Directors are also eligible for
entitled to the Long-Term Incentives (LTI’s) which commission as approved by the Board of
include Stock Appreciation Rights (SARs) as per Directors every year within the limit of one
the Company’s plan and also other LTI’s of Diageo percent of the net profits of the Company or in
PLC. The actual value of SAR’s and other LTI’s case of inadequate profits the commission in
will depend on the respective share price on the aggregate does not exceed `4,00,00,000 as
vesting date. approved by the members of the Company at the
23rd Annual General Meeting held on 9th August
2022. Such commission is determined based on

101
UNITED SPIRITS LIMITED Annual Report 2023–24

Corporate Governance Report (Continued)

the recommendation of the Nomination and Remuneration Committee and as approved by the Board of Directors. The
details of commission are specified in the table below for financial year 2023-24.
iii. Presently, the Company is not paying any remuneration to non-executive directors other than the Independent Directors.
The criteria for making payments to Independent Directors is provided in point 9H of the Board’s Report.
v. There are no pecuniary relationship or transactions of the non-executive directors vis-à-vis the listed entity during the
financial year
vi. Details of sitting fees paid and commission to the Independent Directors approved by the Board of Directors for the
financial year 2023-24 is given below:
(Amount in `)
Name of the Independent Director Sitting fees Commission Total Remuneration
Mr. Mahendra Kumar Sharma 6,75,000 52,00,000 58,75,000
Mr. V K Viswanathan 9,25,000 44,00,000 53,25,000
Mr. D Sivanandhan 8,00,000 44,00,000 52,00,000
Mr. Rajeev Gupta 6,00,000 40,00,000 46,00,000
Dr. Indu Shahani 8,00,000 45,00,000 53,00,000
Dr. (Mr.) Indu Bhushan - 4,00,000 4,00,000
Mr. Mukesh Hari Butani - 4,00,000 4,00,000
Total 38,00,000 2,33,00,000 2,71,00,000

C. Particulars of equity shares of the Company currently held by Directors:

As on the date of this Report, Mr. D Sivanandhan, Independent Director holds 332 equity shares of the Company. No other
director holds equity shares of the Company.

10. Particulars of Senior Management

The particulars of senior management as per Regulation 16(1)(d) of the Listing Regulations including the changes during the fiscal 2024
are as follows:

10.1 As on 31st March 2024, following are the employees who are identified as senior management of the Company
Sl. No. Name of the senior management personnel Designation
1. Ashok Arora VP – Supply Finance
2. Diwakar Vij VP – Commercial Finance
3. Jagbir S Sidhu Corporate Relations Director
4. Jitendra Mahajan Chief Supply and Sustainability Officer
5. Mahaveer Jain VP – Head Internal Audit
6. Mital Sanghvi* VP – Treasury & Company Secretary
7. Nimish Shah EVP and Finance Controller
8. Nipun Mohanka VP- Taxation
9. Prathmesh Mishra Chief Commercial Officer
10. Ruchira Jaitley Chief Marketing Officer
11. Shilpa Vaid Chief HR Officer
12. Shobhana Nikam General Counsel
13. Shweta Arora Senior General Manager – Investor Relations
Note – The list excludes CFO and CEO since they are already a part of the Board
*Mr. Mital Sanghvi being the Company Secretary is also Key Managerial Personnel of the Company

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Statutory Reports

Corporate Governance Report (Continued)

10.2 Changes in the senior management during the financial year

Sl. No. Name of the senior management Designation Effective date of appointment/resignation
personnel
1. Deepika Warrier Chief Marketing Officer Resigned effective 31st July 2023
2. Ruchira Jaitly Chief Marketing Officer Appointed effective 1st August 2023
3. Mr. Manish Shetty VP - IT Resigned effective 30th November 2023
4. Mr. Navin Jain Tax Director - Asia & India Resigned effective 31st December 2023
5. Mr. Nipun Mohanka VP – Taxation Appointed effective 5th March 2024

11. General body meetings:

11.1 The details of the last three AGMs held are furnished below:
Financial year ended Date Time Venue
31 March 2023
st
31 July 2023
st
3.30 p.m. Through Video Conferencing/Other Audio Visual Means
31st March 2022 9th August 2022 3.30 p.m. Through Video Conferencing/Other Audio Visual Means
31 March 2021
st
26 August 2021
th
3.30 p.m. Through Video Conferencing/Other Audio Visual Means

11.2 The Special Resolutions passed by the shareholders at the past three AGMs are summarized below:
AGM held on Subject matter of the Special Resolution
31st July 2023 No Special Resolution was passed
9th August 2022 (i) Payment of Commission to Independent Directors and Non- Executive Directors.
(ii) Approval under Section 180(1)(a) of the Act for: (i) slump sale of the entire business undertaking associated
with 32 brands of the Company in the ‘Popular’ segment to Inbrew Beverages Private Limited (“Inbrew”);
and (ii) grant of franchise in relation to 11 other brands of the Company in the ‘Popular’ segment to Inbrew
for a period of five years, with an option for Inbrew, subject to certain specified conditions, (a) to convert
the fixed term franchise arrangement into a franchise arrangement with perpetual right to use, and / or
(b) to acquire such brands
26th August 2021 (i) Appointment of Ms. Hina Nagarajan as a Managing Director and Chief Executive Officer of the Company
for a period of five years and approval of remuneration payable to her for three years.
(ii) Appointment of Mr. Vegulaparanan Kasi Viswanathan as an Independent Director of the Company for
the second term.
(iii) Continuation of Mr. Mahendra Kumar Sharma as a Director of the Company on completion of 75 years
of age.
(iv) Payment of Commission to Independent Directors and Non-Executive Directors.

All the special resolutions set out in the Notices of AGM in respect of the above subject matter were passed by the shareholders with
requisite majority.

11.3 Postal ballot & Extraordinary General Meeting (EGM)

No EGM was conducted during the financial year. The Company had appointed Mr. Sudhir V Hulyalkar, Company Secretary in
Practice (CP - 6137) to act as the Scrutinizer, for conducting the Postal Ballot process, in a fair and transparent manner.

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Corporate Governance Report (Continued)

The Company has passed following resolutions through Postal Ballots during the financial year:

(i) Sr. No. Type of Resolution Subject Matter Date of passing resolution
1. Ordinary Appointment of Ms. Mamta Sundara (DIN:05356182) as a April 20, 2023
Director (Non-Executive, Non-Independent) of the Company.
2. Ordinary Appointment of Mr. Pradeep Jain (DIN:02110401) as a Director. April 20, 2023
3. Special Appointment of Mr. Pradeep Jain (DIN:02110401) as a Wholetime April 20, 2023
Director designated as “Executive Director and Chief Financial
Officer” of the Company.
The cut-off date was March 17, 2023. The remote e-voting started on March 22, 2023 at 9.00 a.m. (IST) and ended on April 20,
2023 at 5.00 p.m. (IST). Mr. Sudhir V Hulyalkar submitted scrutinizer report on April 21, 2023 and the results were declared on
April 21, 2023. The resolutions were passed with requisite majority. The voting details of special resolution passed is as follows:

Votes in favor Votes against Invalid votes

No. of Members No of Shares % No. of Members No. of Shares % No of Shares
1,153 58,40,37,540 98.83 111 69,11,984 1.17 7,51,103

(ii) Sr. No. Type of Resolution Subject Matter Date of passing resolution
1. Ordinary Appointment of Ms. Emily Kathryn Gibson (DIN: 10294270) as 25th November 2023
a Director (Non-Executive, Non-Independent) of the Company
2. Ordinary Ratification of remuneration payable to Cost Auditor of the 25th November 2023
Company for Financial Year 2023-24
The cut-off date was 20th October 2023. The remote e-voting started on 27th October 2023 at 9.00 a.m. (IST) and ended on
25th November 2023 at 5.00 p.m. (IST). Mr. Sudhir V Hulyalkar submitted scrutinizer report on 27th November 2023 and the results
were declared on 27th November 2023. The resolution was passed with requisite majority.

(iii) Sr. No. Type of Resolution Subject Matter Date of passing resolution
1. Special Appointment of Dr. Indu Bhushan (DIN: 09302960) as an 11th April 2024
Independent Director of the Company*
2. Special Appointment of Mr. Mukesh Hari Butani (DIN: 01452839) as an 11th April 2024
Independent Director of the Company#
The cut-off date was 8th Mach 2024. The remote e-voting started on 13th March 2024 at 9.00 a.m. (IST) and ended on 11th April
2024 at 5.00 p.m. (IST). Mr. Sudhir V Hulyalkar submitted scrutinizer report on 12th April 2024 and the results were declared on
12th April 2024. The resolutions were passed with requisite majority. The voting details of special resolution passed is as follows:

Sr. Votes in favor Votes against Invalid votes

No. No. of Members No of Shares % No. of Members No. of Shares % No. of Shares
1* 1483 60,55,74,641 99.80 92 12,30,724 0.20 550
2# 1415 59,61,67,987 98.25 160 1,06,37,477 1.75 550
Procedure for postal ballot: The postal ballot was carried out as per the provisions of Sections 108 and 110 and other applicable
provisions of the Act, read with the Rules framed thereunder and read with the General Circular nos. 14/2020, 17/2020,
22/2020, 33/2020, 39/2020, 10/2021, 20/2021, 3/2022, 11/2022 and 09/2023 dated 8th April 2020, 13th April 2020, 15th June
2020, 28th September 2020, 31st December 2020, 23rd June 2021, 8th December 2021, 5th May 2022, 28th December 2022 and
25th September 2023 respectively issued by the Ministry of Corporate Affairs.
12. Means of Communication:
a. The quarterly results are sent to all the stock exchanges where the shares of the Company are listed. The results are normally
published in “Business Standard” (English Daily) and “Prajavani” (Kannada Daily). The results are displayed on the Company’s
website at https://www.diageoindia.com/en/investors/financials/results-reports-and-presentations. Press Releases which were
issued are also displayed on the Company’s website. In addition, presentations made to analysts or investors are also made
available on the Company’s website.

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Statutory Reports

Corporate Governance Report (Continued)

b. The required disclosures as per the applicable laws including financial results were also sent to the Stock Exchanges.
c. The Company has designated an exclusive email address, i.e., [email protected] to enable investors to post their
grievances and monitor redressal.
13. General Shareholder Information:
A) Corporate Identification Number L01551KA1999PLC024991
B) AGM Date, Time and Venue 31st July 2024, at 3.30 p.m. through video conference
C) Financial year 1st April to 31st March
Tentative Board Meeting calendar:
First Quarterly Results 23rd July 2024
Second Quarterly Results 23rd October 2024
Third Quarterly Results 23rd January 2025
Audited yearly Financial Results 8th May 2025
In addition, Board may also meet on other dates for transacting other urgent business or
due to any specific requirements.
D) Cut-off date of E-Voting purpose 24th July 2024
E) Dividend payment date On or after 6th August 2024
F) Listing on Stock Exchanges The shares of the Company are listed on the following Stock Exchanges:
(i) BSE Limited - Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001
(ii) National Stock Exchange of India Limited Exchange Plaza, C-1, Block G, Bandra
Kurla Complex, Bandra (East), Mumbai - 400 051.
The applicable listing fees has been paid to the Stock Exchanges before the due date.
G) Stock Code
BSE 532432
NSE SYMBOL - UNITDSPR (Formerly - MCDOWELL-N)
H) ISIN No. INE854D01024
I) Market price data As per Annexure A
J) Stock performance in comparison As per Annexure B
to BSE Sensex and NSE Nifty
K) Registrars and Transfer Agents (RTA) Integrated Registry Management Services Private Limited, 30, Ramana Residency, 4th
Cross, Sampige Road, Malleswaram, Bengaluru – 560 003, Tel. Nos. (080) 2346 0815
to 818, Fax No. (080) 23460819
L) Share Transfer System The power to approve transmission/transposition/consolidation/sub-division, etc.,
is delegated to Stakeholders Relationship and General Committee of Directors. The
requirements under the Listing Regulations, and other statutory regulations in this regard
are being followed. Company’s RTA also keeps records of such transfer/ transmission
of shares.
Mandatory KYC updation by members holding physical securities
SEBI, vide its Circulars dated 16th March 2023, 17th May 2023 and 17th November 2023,
mandates holders of physical securities to furnish PAN and other KYC, Nomination,
Contact, Bank Account details and specimen signature for their corresponding Folio
numbers in order to avail any investor service. Further, effective 1st April 2024, SEBI
also mandates that holders of physical securities and whose folios continue to be not
updated with the above-mentioned details, shall be eligible to get dividend only in
electronic mode.
Therefore, subject to approval at the AGM, payment of final dividend to above-
mentioned members, shall be withheld by the Company and shall be immediately
released on KYC updation.
Accordingly, members are requested to complete their KYC by writing to the
Company’s RTA viz., Integrated Registry Management Services Private
Limited, at [email protected]. Forms for updation are available at
https://www.diageoindia.com/en/investors/shareholder-centre/downloads

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Corporate Governance Report (Continued)

M) Distribution of Shareholding As per Annexure C

N) Dematerialisation of shares Particulars No. of holders Shares % of shares
(as on 31st March 2024) Physical 5,834 31,21,560 0.43%
NSDL 100,619 67,46,57,782 92.76%
CDSL 144,644 4,95,71,511 6.81%
TOTAL 251097 72,73,50,853 100%
O) Outstanding GDRs/ADRs/ NIL
Warrants or any other Convertible
Instruments
P) Commodity price risk or foreign During the year under review, no hedging activities on any commodity were carried
exchange risk and hedging out by the Company. Therefore, there is no disclosure to offer in terms of SEBI circular
activities: no. SEBI/HO/CFD/CMD1/CIR/P/2018/0000000141 dated 15th November 2018 and
master circular no. SEBI/HO/CFD/PoD2/CIR/P/2023/120 dated 11th July 2023
Q) Plant locations – owned 1. Alwar (Rajasthan)
manufacturing units (operational) 2. Asansol (West Bengal)
3. Aurangabad (Maharashtra)
4. Baramati (Maharashtra)
5. Nashik (Maharashtra)
6. Nimapara (Orissa)
7. Hyderabad I (Nacharam, Telangana)
8. Hyderabad II (Malkajgiri, Telangana)
9. Kumbalgodu (Karnataka)
10. Ponda (Goa)
11. Nanded (Maharashtra)
R) Address for correspondence Shareholder correspondence should be addressed to the Company’s Registrars and
Transfer agents:
Integrated Registry Management Services Private Ltd.
30, Ramana Residency, 4th Cross, Sampige Road, Malleswaram,
Bengaluru – 560 003.
Tel. Nos. (080) 2346 0815 to 818, Fax No. (080) 2346 0819,
Email: [email protected]
Investors may also write to [email protected] or contact Company Secretary or
Assistant Company Secretary at the Registered Office of the Company at ‘UB TOWER’ #
24, Vittal Mallya Road, Bangalore, Karnataka, India, 560001. Tel. Nos. +91 8022210705,
Fax No. (080) 3985 6862
S) Credit Ratings CRISIL Ratings has re-affirmed the rating on the long-term bank facilities at “AAA/
Stable” and re-assigned the short-term rating at “A1+” on 15th April 2024.
T) Email for investor grievances In compliance with the provisions of Regulation 46(2)(j) of the Listing Regulations, an
exclusive email address, [email protected] has been designated for registering
Investor complaints, which is also on the Company’s website at www. diageoindia.com

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Statutory Reports

Corporate Governance Report (Continued)

14. Disclosures: Security, Prevention of Sexual Harassment at Workplace,

14.1 There were no material significant related party transactions Dignity at Workplace and Employee Alcohol policy as part of
entered into by the Company with promoters, directors, our commitment to responsible drinking. Regular updates are
subsidiaries, key managerial personnel, relatives or other also provided to the senior leadership team on various aspects
designated persons which may have a conflict of interest with of the compliance programs, to set the tone from the top and
the Company at large. exhibit the management’s commitment towards continuous
improvement in integrating compliance with the business.
14.2 There were no instances of rejection by the Board for any
recommendations by the Board Committees during this Our Code is available at https://www.diageoindia.com/
financial year. en/about-us/corporate-governance. Our standard code
for suppliers “Partnering with Suppliers (PwS)” has been
extended to suppliers and contractors of the Company which
14.3 For the past three financial years viz., from 1st April 2021
is available at https://media.diageo.com/diageo-corporate-
to 31st March 2024 the Company has complied with the
media/media/4qpj0ht0/pws_2024_v3.pdf
statutory requirements comprised in the Listing Regulations/
Guidelines/Rules of the Stock Exchanges/SEBI/ other
statutory authorities and there have been no other instances All new joiners are required to undertake training on the
of material non-compliance by the Company during such requirements of our Code within 30 days of joining the
financial year nor have any penalties, strictures been imposed employment. Further, all employees are required to complete
by Stock Exchanges or SEBI or any other statutory authority mandatory e-Learning training module on our Code as part
on any matter related to capital markets. Please refer to of the annual compliance certification program every year.
Secretarial Audit Report and Secretarial Compliance Report in In addition, during the year virtual trainings on our Code
Annexure–3 and 3A. including prevention of sexual harassment at workplace,
has also been imparted to all employees including off role
employees and all workers (including contractual), in their
14.4 Code of conduct
local languages.
The Code of Conduct reflects the Company’s commitment to
The Company has adopted a Whistle Blower mechanism
principles of integrity, transparency and fairness. The Code
known as SpeakUp. The compliance complaint can be
is a key guiding document governing the compliance and
raised by the employees and anyone acting on behalf of the
ethics framework of the Company. It is intended to embody
Company. The Breach management standard is in place to
the Company’s purpose and values, which sets out the
address the compliance complaints, which are perceived to
Company’s collective as well as individual commitment to
be in violation of our Code. Further, there is an oversight &
conduct business in accordance with those principles, and
review of the investigations by Global Business Integrity team,
with all relevant laws, regulations and industry standards. We
the Compliance Committee and the Grievance Committee.
hold ourselves to the principles of Code of Business Conduct
No personnel have been denied access to Audit Committee.
(our Code), Standards and Policies, which are embedded
through a comprehensive trainings and education program
for all employees. Our Code enables our employees to make In compliance with Listing Regulations, the Company has
the right choices and demonstrate the highest standards of adopted a Code of Business Conduct and Ethics (Code) for its
integrity and ethical behavior. Our Code has also been Board members and Senior Management Personnel, a copy
extended to suppliers, contractors and its subsidiaries. of which is available on the Company’s website at https://
www.diageoindia.com/en/about-us/corporate-governance/
speak-up. All Board members and senior management
Know Your Business Partner (KYBP) process covers all
personnel have affirmed compliance with the code for the
Customers and Business partners as part of onboarding
year ended 31st March 2024 and a declaration to this effect
process.
signed by the MD & CEO forms part of this report.
In addition to our Code, the compliance programs are also
14.5 Details of compliance with mandatory requirements and
anchored by policies and procedures, prescribed as per
adoption of the non-mandatory requirements:
the global standards, covering areas such as Countering
Corruption Policy (including guidelines on gifting &
entertainment), Information Management & Security, Data The Company has complied with all the mandatory
Privacy & Personal Information, Health Safety & Personal requirements of the Listing Regulations relating to Corporate
Governance.

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Corporate Governance Report (Continued)

14.6 Policy on material subsidiaries 14.11 Other corporate governance requirements

In compliance with Regulation 16, the Company has framed Regulation 24 of the Listing Regulations with respect to
policy for determining material subsidiaries is available at the Independent Directors on unlisted material subsidiaries is not
Company’s website at https://media.diageo.com/diageo- applicable since the Company does not have any material
corporate-media/media/fcap5yuo/policy-on-material- subsidiary Companies. The Company has appointed one of
subsidiary.pdf its Independent Directors as an Independent Director in its
operational subsidiary as a good governance practice.
Policy on Related Party Transactions
Regulation 26 of the Listing Regulations with respect to
In compliance with Regulation 23, the Company has framed Directors and Senior Management has been complied with to
policy on Related Party Transactions and the same is uploaded the extent applicable.
on our website at https://media.diageo.com/diageo-
corporate-media/media/1nbled1w/rpt-policy_april-2022.pdf Regulation 27 of the Listing Regulations with respect to
Quarterly Compliance report has been complied with.
14.7 Disclosure on utilization of proceeds of preferential issue Regulation 46(2) of the Listing Regulations pertaining to
and qualified institutional placement (QIP) disseminating information on website has been complied with.
There were no funds raised through preferential allotment or
Requirements stipulated under Regulation 17 to 27 read with
qualified institutional placement as specified under Regulation
Schedule V of the Listing Regulations has been complied with
32 (7A) during the financial year.
by your Company.
14.8 Declaration from the Directors Other requirements of Corporate Governance as per the
All the Directors have submitted a declaration that they are Listing Regulations are disclosed on the Company’s website at
not disqualified under section 164 of the Act. Mr. Sudhir V https://www.diageoindia.com/investors/ and as applicable
Hulyalkar, a Practicing Company Secretary, has submitted a have been disclosed elsewhere in this report and Annexures.
certificate to the effect that none of the directors on the
15. Depository system
Board of the Company have been debarred or disqualified
from being appointed or continuing as a director by the SEBI/ The trading in the equity shares of your Company is under
Ministry of Corporate Affairs. Copy of the Certificate and compulsory dematerialization mode. As on 31st March 2024,
Declaration by the Chief Executive Officer pursuant to Listing equity shares representing 99.57% of the equity share capital
Regulations, 2015 on compliance with the code of conduct by are in dematerialized form. Shares held in the demateralised
the Board of Directors and senior management is enclosed as mode have more liquidity than those held in the physical
part of corporate governance report. mode. The transfer of shares of the Company by physical
means has been barred from 1st April 2019 pursuant to
14.9 Remuneration to Auditors SEBI’s Notification dated 3rd December 2018. Therefore, the
Company urges shareholders who are holding shares in the
Remuneration paid to the statutory auditors and their network
physical form to convert their shareholdings to the demat
of firms/entities in India during the year by the Company
mode. Shareholders who have not registered their email IDs
and its subsidiaries on a consolidated basis was seven crore
are requested to do so for receiving communications from the
rupees.
Company. Shareholders who are holding shares in physical
form can update their email ID by submitting ISR-1 form to the
Further details on fees to statutory auditors are disclosed in the
RTA. The form is available on the Company’s website https://
standalone and consolidated financial statements.
www.diageoindia.com/en/investors/shareholder-centre/
downloads
14.10 Disclosures in relation to the Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal) Act, Shareholders who are holding shares in demat form
2013 can update their email ID by contacting their Depository
The Company is committed to providing and promoting a safe Participant only. Pursuant to Part F of Schedule V of the Listing
and healthy work environment for all its employees. Regulations, the following unclaimed shares were transferred
to the demat account titled United Spirits Limited Unclaimed
The disclosure in relation to Sexual Harassment of Women at Suspense Account after the Company’s Registrars & Transfer
Workplace (Prevention, Prohibition and Redressal) Act, 2013 is Agents sent three reminders to all the shareholders whose
mentioned in point 27 of the Board’s Report. shares remained unclaimed. During the year, your Company

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Statutory Reports

Corporate Governance Report (Continued)

has released shares from the said suspense account upon receipt of requests from the shareholders and after checking veracity of such
shareholder’s claims. Shares on which dividend has not been claimed for a continuous period of seven years have been transferred to
Investor Education Protection Fund (IEPF) as per applicable rules. 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 3,018 16,45,569
Suspense Account lying as on 1st April 2023
Shares added to the Unclaimed Suspense account during this year (Stock split of NIL NIL
Undelivered shares)
Total Shares 3,018 16,45,569
Number of shareholders who approached the Company for transfer of shares from 87 63,534

Unclaimed Suspense Account during the year

Number of shareholders to whom shares were transferred from Unclaimed Suspense 87 63,534

Account during the year

Number of Shareholders and shares transferred to IEPF during the year NIL NIL
Aggregate number of shareholders and the outstanding shares in the Unclaimed 2931 15,82,035
Suspense Account lying as on 31st March 2024

Voting rights on the above unclaimed shares shall remain frozen until the rightful owner claims the shares

16. Discretionary Requirements

Pursuant to Regulation 27(1) and Part E of Schedule II of Listing Regulations, your Company also complied with the following optional
requirement:

Board
Non-Executive Chairperson is entitled to reimbursement of expenses incurred in performing his duties as Chairperson.

Separate posts of Chairperson and the Managing Director or the Chief Executive Officer
The Company has a separate chairperson and Managing Director, CEO (‘MD’). The chairperson is a non-executive director and is not
related to the MD

Audit qualifications
The Statutory Auditor has issued an unmodified audit report for the year ended 31st March 2024.

Reporting of Internal Auditor

The internal auditor reports directly to the Audit Committee.

17. Disclosure of certain types of agreements binding listed entities disclosed under clause 5A of paragraph A of Part
A of Schedule III of these regulations.
Not Applicable

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Corporate Governance Report (Continued)

ANNEXURE A:
Market price data
United Spirits Limited - Market Data BSE United Spirits Limited - Market Data NSE
Month Open High Low Close Volume Month Open High Low Close Volume
Apr-23 763.00 785.10 741.40 777.15 3,64,597 Apr-23 763.00 785.45 741.5 777.15 1,43,83,842
May-23 777.10 885.55 772.05 882.60 6,33,293 May-23 777.05 885.85 771.3 883.5 2,17,48,304
Jun-23 882.00 922.50 861.20 911.60 4,41,878 Jun-23 883.00 922.45 864.50 912.2 1,35,85,264
Jul-23 914.00 1050.00 891.05 1015.75 15,20,959 Jul-23 913.1 1049 905.2 1015.85 3,54,30,235
Aug-23 1006.05 1041.40 976.00 1008.70 5,11,556 Aug-23 1018.00 1041.20 976.05 1007.55 1,62,37,894
Sep-23 1005.00 1073.20 995.05 1007.40 5,43,507 Sep-23 1008.00 1074.95 995.00 1007.25 1,68,51,644
Oct-23 1017.35 1097.40 981.25 1032.60 6,17,103 Oct-23 1004.9 1098 981.35 1032.2 1,71,33,788
Nov-23 1033.80 1123.95 1023.95 1051.45 8,29,944 Nov-23 1034.95 1110.00 1023.95 1048.85 2,19,49,265
Dec-23 1041.95 1121.70 1032.75 1117.50 7,96,180 Dec-23 1049.95 1122.00 1032.75 1117.75 2,22,95,311
Jan-24 1125.00 1148.65 1061.15 1089.60 9,28,874 Jan-24 1124.00 1146.00 1061.30 1089.75 2,04,96,060
Feb-24 1096.85 1179.95 1055.65 1165.95 6,23,285 Feb-24 1090.00 1180.00 1054.70 1165.85 1,88,82,864
Mar-24 1170.00 1182.90 1081.80 1134.30 2,72,532 Mar-24 1174.45 1182.15 1081.50 1134.25 1,16,98,114

Source: websites of respective stock exchanges

Note: High and low are in rupees per traded share

ANNEXURE B:

Stock performance in comparision to BSE Senex and NSE Nifty

a) Company’s monthly closing share price versus with monthly closing of SENSEX during the financial year 2023-24

1200
74,000.00
1150

United Spirits Limited

72,000.00 1100
70,000.00 1050
BSE Sensex

68,000.00 1000
950
66,000.00
900
64,000.00
850
62,000.00 800
60,000.00 750
Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24

Months

BSE Sensex United spirits limited

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 CORPORATE OVERVIEW Financial Statements
Statutory Reports

Corporate Governance Report (Continued)

b) Company’s monthly closing share price versus with monthly closing of NIFTY during the financial year 2023-24

22500 1200
22000 1150
21500 1100

United Spirits Limited

21000
1050
20500
1000
20000
NSE

950
19500
900
19000
18500 850
18000 800
17500 750
Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24

Months
NSE NIFTY United spirits limited
ANNEXURE C:

Distribution of Holdings (As on 31st March 2024) Value-wise

Value-wise
Shareholding of nominal value Shareholders Share amount
` Number % to total ` % to total
Upto - 5,000 2,47,707 98.65 5,84,43,836 4.02
5,001 - 10,000 1,440 0.57 1,05,41,526 0.72
10,001 - 20,000 687 0.27 98,97,738 0.68
20,001 - 30,000 256 0.1 63,57,610 0.44
30,001 - 40,000 141 0.06 50,41,438 0.35
40,001 - 50,000 109 0.04 49,16,076 0.34
50,001 - 1,00,000 222 0.09 1,56,97,056 1.08
100,001 and above 535 0.22 134,38,06,426 92.37
Total 2,51,097 100.00 1,45,47,01,706 100.00

Snapshot of shareholding as on 31st March 2024 Category-wise

Category No. of Shares % of equity Capital
Promoter 41,22,21,410 56.67
Resident Body corporates (including Clearing Members) 1,42,49,048 1.96
Banks/FIS/FII/MF/PF/Trust* / Central /State Government & Insurance Companies 22,84,62,904 31.41
NRI/OCB/FCB/FOREIGN NATIONALS 53,86,858 0.74
Venture Capital 0 0.00
Resident Individuals 6,70,30,633 9.22
Total 72,73,50,853 100.00

*This includes 1,72,95,450 shares (2.38% of equity share capital) held on behalf of USL Benefit Trust, the sole beneficiary of which is United
Spirits Limited.

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UNITED SPIRITS LIMITED Annual Report 2023–24

Corporate Governance Report (Continued)

SHARE CAPITAL HISTORY (SINCE 1999)

 Company Incorporated
Mar 31,
 Shares on Incorporation - 60 Nos.
1999
 Merger with McDowell & Co. Limited  Issued 5,17,19,968 Shares
Jul 09,
 Ratio 1:1  Pre Issue - 60 Nos : Post Issue - 5,17,20,028 Nos.
2001
 GDR Issue
Mar 29,  Pre Issue - 5,17,20,028 Nos; Post Issue - 6,04,71,409 Nos
 Issued 87,51,381 Shares
2006
 BGIL* merged with McDowell and Company Limited (Ratio 20:31)  Issued 3,37,780 Shares
Nov 06,  (*BGIL – Baramati Grape Industries Limited)  PrPre Issue - 6,04,71,409 Nos; Post Issue - 6,08,09,189 Nos
2006
 SWDL* merged with McDowell and Company Limited (Ratio 20:7)  Issued 2,81,12,971 Shares
Nov 06, (*SWDL – Shaw Wallace Distilleries Limited)  Pre Issue - 6,08,09,189 Nos; Post Issue - 8,89,22,160 Nos
2006
 Herberson Limited merged with McDowell and Company Limited  Issued 31,17,209 Shares
Nov 06,
 Ratio 3:2  Pre Issue - 8,89,22,160 Nos; Post Issue - 9,20,39,369 Nos.
2006
 TDVL* merged with McDowell and Company Limited (Ratio 4:83)  Issued 20,75,000 Shares
Nov 06, (*TDVL – Triumph Distilleries & Vintners Limited)  Pre Issue - 9,20,39,369 Nos; Post Issue - 9,41,14,369 Nos.
2006
 UDIL* merged with McDowell and Company Limited (Ratio 100:3)  Issued 3,60,000 Shares
Nov 06, (*UDIL – United Distillers India Limited)  Pre Issue - 9,41,14,369 Nos; Post Issue - 9,44,74,369 Nos.
2006
 Fractional Shares upon merger
Nov 06,  Pre Issue - 9,44,74,369 Nos; Post Issue - 9,44,81,930 Nos
 Issued 7,561 Shares
2006
 FCCB Conversion and Allotment
Jul 07 to  Pre Issue - 9,44,81,930 Nos; Post Issue - 10,01,63,256 Nos.
 Issued 56,81,326 Shares
May 08
 SWCL* merged with United Spirits Limited (Ratio 17:4)  Issued 77,49,121 Shares
Jul 24, (*SWCL - Shaw Wallace & Company Limited)  Pre Issue - 10,01,63,256 Nos; Post Issue - 10,79,12,377 Nos.
2009
 QIP Placement
Oct 23,  Pre Issue - 10,79,12,377 Nos; Post Issue - 12,55,94,329 Nos.
 Issued 1,76,81,952 Shares
2009
 BDL* merged with United Spirits Limited (Ratio 55:2)  Issued 55,00,639 Shares
Jan 14, (*BDL – Balaji Distilleries Limited)  Pre Issue - 12,55,94,329 Nos; Post Issue - 13,07,94,968 Nos.
2011
 Preferential issue to Diageo Relay B V (wholly owned subsidiary of Diageo Plc)
May 27,  Pre Issue - 13,07,94,968 Nos; Post Issue - 14,53,27,743 Nos.
 Issued 1,45,32,775 Shares
2013
 Shares Split
Jul 03,  Pre Issue - 14,53,27,743 Nos; Post Issue - 72,66,38,715 Nos.
2018  Ratio 1:5

 Pioneer Distilleries Ltd merged with United Spirits Ltd.

Jan 13,  Pre issue: 726,638,715 Nos; Post issue: 727,350,853 Nos.
 Ratio 47:10
2023

By Order of the Board

Mahendra Kumar Sharma
Place: Mumbai Chairperson
Date : 24th May 2024 DIN: 00327684

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Statutory Reports

Corporate Governance Report (Continued)

CERTIFICATE ON CORPORATE GOVERNANCE

To,
The Members,
United Spirits Limited, Bangalore

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 2024.

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
FCS No.: 6040, C.P.No. : 6137
Place: Bengaluru Peer Review Certificate No. : 607/2019
Date: 24th May 2024 UDIN: F006040F000440771

CERTIFICATE ON DIRECTORS APPOINTMENT AND CONTINUATION ON THE BOARD OF DIRECTORS OF

UNITED SPIRITS LIMITED (the Company)
(In terms of Regulation 34(3) read with Para C, Sub Para 10 (i) of the Schedule V to the Securities Exchange Board of India (Listing
Obligations and Disclosure Requirement) Regulations, 2015)

I have examined the relevant records of the Company and disclosures made by the directors of the Company, relevant information on
disqualification and proclaimed offenders as declared by Courts and disseminated on the website of Ministry of Corporate affairs, the
Orders and other information available on the website of Securities and Exchange Board of India and the stock exchanges, Reserve Bank
of India and information on wilful defaulters as declared by the banks and made available on the web sites of credit information companies
registered with the Reserve Bank of India and based on such examination, I hereby certify that none of the directors on the Board of
UNITED SPIRITS LIMITED (CIN:L01551KA1999PLC024991)as on 31st March 2024 have been debarred or disqualified from being appointed
or continuing as directors of companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs, Reserve Bank of India
and other statutory authorities.

SUDHIR VISHNUPANT HULYALKAR

Company Secretary in Practice
FCS No.: 6040, C.P.No. : 6137
Peer Review Certificate No. 607/2019
UDIN: F006040F000440727

Place: Bengaluru
Date: 24th May 2024

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UNITED SPIRITS LIMITED Annual Report 2023–24

Corporate Governance Report (Continued)

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 31st March 2024.

Place : Mumbai Hina Nagarajan

Date: 24th May 2024 Managing Director and
Chief Executive Officer

CEO/CFO CERTIFICATE

To
The Board of Directors, United Spirits Limited

A. We have reviewed the standalone and consolidated financial statements for the year ended 31st March 2024 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.

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.

Pradeep Jain Hina Nagarajan

Executive Director and Managing Director and
Chief Financial Officer Chief Executive Officer

Place: Mumbai
Date: 24th May 2024

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 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Independent Auditor’s Report

To the Members of United Spirits Limited and its Indian and overseas subsidiaries to, in most cases,
Report on the Audit of the Standalone Financial Statements Indian and overseas entities that appear to be affiliated
or associated with the Company’s erstwhile non-executive
Opinion Chairman and other potentially improper transactions. Post
1. We have audited the accompanying standalone financial the completion of Additional Inquiry certain regulatory notices
statements of United Spirits Limited (“the Company”), which and communications were received from Securities Exchange
comprise the Standalone Balance Sheet as at March 31, 2024, Board of India, Directorate of Enforcement and Authorised
and the Standalone Statement of Profit and Loss (including Dealer banks (‘AD’) to which the Company has responded.
Other Comprehensive Income), the Standalone Statement Subsequently, the Company commenced the rationalisation
of Changes in Equity and the Standalone Statement of Cash process for divestment/ liquidation/ merger of certain
Flows for the year then ended, and notes to the financial overseas subsidiaries including step down subsidiaries and
statements, including a summary of material accounting policy completion of the above Rationalisation process is subject to
information and other explanatory information “(hereinafter regulatory approvals in India and overseas. The Company
referred to as “the standalone financial statements”). filed suits for recovery of certain amounts against relevant
parties and individuals identified in the Additional Inquiry
2. In our opinion and to the best of our information and according including excess managerial remuneration paid to the former
to the explanations given to us, the aforesaid standalone Executive Director and CFO which have been fully provided
financial statements give the information required by the for or expensed in past periods. The management is currently
Companies Act, 2013 (“the Act”) in the manner so required unable to estimate the financial impact on the Company, if
and give a true and fair view in conformity with the accounting any, arising out of potential non compliances with applicable
principles generally accepted in India, of the state of affairs of laws as above.
the Company as at March 31, 2024, and total comprehensive b) Note 40(d) to the standalone financial statements, which
income (comprising of profit and other comprehensive describes the uncertainty relating to the final outcome of
income), changes in equity and its cash flows for the year then litigations with a bank (“the bank”) that continues to retain the
ended. pledge of certain assets of the Company and of the Company’s
shares held by USL Benefit Trust (of which the Company is the
Basis for Opinion sole beneficiary) despite the Company prepaying the term
3. We conducted our audit in accordance with the Standards loan to that bank along with the prepayment penalty and
on Auditing (SAs) specified under Section 143(10) of the further depositing an additional sum of ` 46 crore demanded
Act. Our responsibilities under those Standards are further by the bank and as directed by the Hon’ble High Court of
described in the “Auditor’s responsibilities for the audit of the Karnataka (the “Court”). Based on management assessment
standalone financial statements” section of our report. We are supported by external legal opinions, the Company has
independent of the Company in accordance with the Code disclosed the aforesaid amount of ` 46 crore under Other
of Ethics issued by the Institute of Chartered Accountants of Non-current financial assets as recoverable from the bank
India together with the ethical requirements that are relevant pending the final outcome of the litigation. In a separate
to our audit of the standalone financial statements under the proceeding before the Debt Recovery Appellate Tribunal,
provisions of the Act and the Rules thereunder, and we have the bank’s appeal against the judgement awarded by Debt
fulfilled our other ethical responsibilities in accordance with Recovery Tribunal in favour of the Company in respect of
these requirements and the Code of Ethics. We believe that the attachment of the aforesaid pledged shares for recovery of
audit evidence we have obtained is sufficient and appropriate the loans advanced by the bank to Kingfisher Airlines Limited
to provide a basis for our opinion. is pending disposal.

Our opinion is not modified in respect of the matters described

Emphasis of Matter: under paragraph 4 above.
4. We draw attention to the following matters:
Key audit matters
a) Note 40(a) to the standalone financial statements which 5. Key audit matters are those matters that, in our professional
explains the uncertainties post completion of the Initial Inquiry, judgement, were of most significance in our audit of the
which identified references to certain Additional Parties and standalone financial statements of the current period. These
certain Additional matters, the then MD & CEO, pursuant matters were addressed in the context of our audit of the
to the direction of the Board of Directors, had carried out standalone financial statements as a whole and in forming our
an Additional Inquiry that revealed transactions indicating opinion thereon, and we do not provide a separate opinion on
actual and potential diversion of funds from the Company these matters.

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UNITED SPIRITS LIMITED Annual Report 2023–24

Independent Auditor’s Report (Continued)

Key audit matter How our audit addressed the key audit matter
Assessment of the appropriateness of provisions recognised and Our audit procedures included the following:
contingent liabilities disclosed in respect of certain tax matters.
• Understood, assessed and tested the design and operating
(Refer Notes 8, 17 and 42(a) and 42 (b) to the standalone financial effectiveness of the Company’s controls in respect of the
statements) identifying potential tax exposures and/ or the accounting
and disclosures thereof.
As at March 31, 2024, the Company has significant tax exposures
and is subject to periodic assessments/ demands by tax authorities • Evaluated the related accounting policy for recognising
provisioning for tax exposures and disclosure of contingent
on transfer pricing, income tax and a range of indirect tax matters.
liabilities with the requirements of the relevant accounting
Consequent to such tax assessments and demands relating to past standards.
several years, the Company has paid certain amounts under protest
• Obtained management’s assessment in respect of tax
at various dates. The Company has also filed appeals with various demands on whether cash outflow is either probable, possible
appellate authorities against such demands. or remote.
Management judgement is involved in assessing the likelihood of • Evaluated management’s assessment with the help of
ultimate outcome of the tax disputes to decide on the accounting/ auditors’ experts, where necessary, as follows:
disclosure requirements. For certain complex matters the probable
− For the samples selected, read the correspondences
amount of the cash outflow determined by the Management
received during the year from the tax authorities/
is supported by opinions obtained from external tax counsels/
orders from the appellate authorities.
assessment performed by internal expert (management tax experts).
− Read and assessed the views provided by the
We considered this a key audit matter as: management/ management tax experts as applicable.
(a) The amounts involved are significant to the standalone − Assessed management’s position on significant tax
financial statements; exposures in accordance with the tax laws and past
precedents of tax judgements.
(b) Change in the management’s judgements and estimates may
− Assessed completeness of litigations by inquiring with
significantly affect the provisions recognised or contingent
the management, and perusal of Board minutes.
liabilities disclosed; and
− Evaluated the objectivity, independence, competence
(c) Matters of disputes are complex in some cases due to the and capabilities of the management tax experts.
nature of the industry in which the Company operates and − Evaluated the adequacy of the disclosures made in the
are subject to interpretations under tax laws. standalone financial statements.

Based on the above procedures, we considered the
management’s assessment in recognising the provisions and
disclosing contingent liabilities in respect of the stated tax
matters, as reasonable.

Other Information of the standalone financial statements, our responsibility is

6. The Company’s Board of Directors is responsible for the other to read the other information identified above and, in doing
information. The other information comprises the Chairman’s so, consider whether the other information is materially
Message, Managing Director and CEO’s Message, inconsistent with the standalone financial statements or our
Director’s Report, Management Discussion and Analysis, knowledge obtained in the audit, or otherwise appears to be
and Corporate Governance report but does not include the materially misstated. If, based on the work we have performed
financial statements and our auditor’s report thereon, which on the other information that we obtained prior to the date
we obtained prior to the date of this auditor’s report. The of this auditor’s report, we conclude that there is a material
Business Responsibility and Sustainability Report (BRSR) and misstatement of this other information, we are required to
assurance report thereon are expected to be made available report that fact. We have nothing to report in this regard.
to us after the date of this auditor’s report. Our opinion on When we read the BRSR and assurance report thereon, if we
the standalone financial statements does not cover the other conclude that there is a material misstatement therein, we are
information and we do not and will not express any form of required to communicate the matter to those charged with
assurance conclusion thereon. In connection with our audit governance.

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Financial Statements

Independent Auditor’s Report (Continued)

Our opinion on the standalone financial statements does not are free from material misstatement, whether due to fraud
cover the other information and we do not express any form of or error, and to issue an auditor’s report that includes our
assurance conclusion thereon. opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance
In connection with our audit of the standalone financial with SAs will always detect a material misstatement when it
statements, our responsibility is to read the other information exists. Misstatements can arise from fraud or error and are
and, in doing so, consider whether the other information is considered material if, individually or in the aggregate, they
materially inconsistent with the standalone financial statements could reasonably be expected to influence the economic
or our knowledge obtained in the audit or otherwise appears decisions of users taken on the basis of these standalone
to be materially misstated. If, based on the work we have financial statements.
performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. 10. As part of an audit in accordance with SAs, we exercise
professional judgement and maintain professional scepticism
We have nothing to report in this regard. throughout the audit. We also:

Responsibilities of management and those charged with governance (a) Identify and assess the risks of material misstatement
for the standalone financial statements of the standalone financial statements, whether due to
7. The Company’s Board of Directors is responsible for the fraud or error, design and perform audit procedures
matters stated in Section 134(5) of the Act with respect to the responsive to those risks, and obtain audit evidence that
preparation of these standalone financial statements that is sufficient and appropriate to provide a basis for our
give a true and fair view of the financial position, financial opinion. The risk of not detecting a material misstatement
performance, changes in equity and cash flows of the Company resulting from fraud is higher than for one resulting from
in accordance with the accounting principles generally error, as fraud may involve collusion, forgery, intentional
accepted in India, including the Accounting Standards omissions, misrepresentations, or the override of internal
specified under Section 133 of the Act. This responsibility also control.
includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding of (b) Obtain an understanding of internal control relevant to
the assets of the Company and for preventing and detecting the audit in order to design audit procedures that are
frauds and other irregularities; selection and application of appropriate in the circumstances. Under Section 143(3)
appropriate accounting policies; making judgments and (i) of the Act, we are also responsible for expressing our
estimates that are reasonable and prudent; and design, opinion on whether the Company has adequate internal
implementation and maintenance of adequate internal financial controls with reference to standalone financial
financial controls, that were operating effectively for ensuring statements in place and the operating effectiveness of
the accuracy and completeness of the accounting records, such controls.
relevant to the preparation and presentation of the standalone
financial statements that give a true and fair view and are free (c) Evaluate the appropriateness of accounting policies
from material misstatement, whether due to fraud or error. used and the reasonableness of accounting estimates
and related disclosures made by management.
8. In preparing the standalone financial statements, management
is responsible for assessing the Company’s ability to continue (d) Conclude on the appropriateness of management’s use
as a going concern, disclosing, as applicable, matters related of the going concern basis of accounting and, based
to going concern and using the going concern basis of on the audit evidence obtained, whether a material
accounting unless management either intends to liquidate the uncertainty exists related to events or conditions that
Company or to cease operations, or has no realistic alternative may cast significant doubt on the Company’s ability
but to do so. Those Board of Directors are also responsible for to continue as a going concern. If we conclude that
overseeing the Company’s financial reporting process. a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures
Auditor’s responsibilities for the audit of the standalone financial in the standalone financial statements or, if such
statements disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained
9. Our objectives are to obtain reasonable assurance about
up to the date of our auditor’s report. However, future
whether the standalone financial statements as a whole

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UNITED SPIRITS LIMITED Annual Report 2023–24

Independent Auditor’s Report (Continued)

events or conditions may cause the Company to cease under Rule 11(g) of the Companies (Audit and Auditors)
to continue as a going concern. Rules, 2014 (as amended).

(e) Evaluate the overall presentation, structure and content (c) The Standalone Balance Sheet, the Standalone
of the standalone financial statements, including the Statement of Profit and Loss including other
disclosures, and whether the standalone financial comprehensive income, the Standalone Statement of
statements represent the underlying transactions and Changes in Equity and the Standalone Statement of
events in a manner that achieves fair presentation. Cash Flows dealt with by this Report are in agreement
with the books of account.
11. We communicate with those charged with governance
regarding, among other matters, the planned scope and (d) In our opinion, the aforesaid standalone financial
timing of the audit and significant audit findings, including statements comply with the Accounting Standards
any significant deficiencies in internal control that we identify specified under Section 133 of the Act.
during our audit.
(e) On the basis of the written representations received from
12. We also provide those charged with governance with a the directors, taken on record by the Board of Directors,
statement that we have complied with relevant ethical none of the directors is disqualified as on March 31,
requirements regarding independence, and to communicate 2024, from being appointed as a director in terms of
with them all relationships and other matters that may Section 164(2) of the Act.
reasonably be thought to bear on our independence, and
where applicable, related safeguards. (f) With respect to the maintenance of accounts and other
matters connected therewith, reference is made to our
13. From the matters communicated with those charged with remarks in paragraph 15(b) above on reporting under
governance, we determine those matters that were of most Section 143(3)(b) and paragraph 15(h)(vi) below on
significance in the audit of the standalone financial statements reporting under Rule 11(g) of the Rules.
of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law (g) With respect to the adequacy of the internal financial
or regulation precludes public disclosure about the matter or controls with reference to standalone financial statements
when, in extremely rare circumstances, we determine that a of the Company and the operating effectiveness of such
matter should not be communicated in our report because controls, refer to our separate Report in “Annexure A”.
the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such (h) With respect to the other matters to be included in
communication. the Auditor’s Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, in our
Report on other legal and regulatory requirements opinion and to the best of our information and according
14. As required by the Companies (Auditor’s Report) Order, 2020 to the explanations given to us:
(“the Order”), issued by the Central Government of India in
terms of sub-section (11) of Section 143 of the Act, we give i. The Company has disclosed the impact of pending
in the “Annexure B” a statement on the matters specified in litigations on its financial position in its standalone
paragraphs 3 and 4 of the Order, to the extent applicable. financial statements. (Refer Notes 8, 17, 40(a),
40(c), 40(d) and 42 to the standalone financial
15. As required by Section 143(3) of the Act, we report that: statements);

(a) We have sought and obtained all the information and ii. The Company was not required to recognise
explanations which to the best of our knowledge and a provision as at March 31, 2024 under the
belief were necessary for the purposes of our audit. applicable law or accounting standards, as it does
not have any material foreseeable losses on long-
(b) In our opinion, proper books of account as required by term contract. The Company did not have any
law have been kept by the Company so far as it appears derivative contracts as at March 31, 2024. (Refer
from our examination of those books except for the Note 39 to the standalone financial statements);
matters stated in paragraph 15(h)(vi) below on reporting

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Financial Statements

Independent Auditor’s Report (Continued)

iii. There were no amounts which were required to be (c) Based on such audit procedures that we
transferred to the Investor Education and Protection considered reasonable and appropriate in
Fund by the Company during the year ended the circumstances, nothing has come to our
March 31, 2024. (Refer Note 16 to the standalone notice that has caused us to believe that the
financial statements); representations under sub-clause (a) and (b)
contain any material misstatement.
iv. (a) The management has represented that,
to the best of its knowledge and belief, no v. The dividend declared and paid during the year
funds have been advanced or loaned or by the Company is in compliance with Section 123
invested (either from borrowed funds or of the Act.
share premium or any other sources or
kind of funds) by the Company to or in vi. Based on our examination, which included test
any other person(s) or entity(ies), including checks, the Company has used an accounting
foreign entities (“Intermediaries”), with software for maintaining its books of account
the understanding, whether recorded in which has a feature of recording audit trail (edit
writing or otherwise, that the Intermediary log) facility and that has operated throughout
shall, whether, directly or indirectly, lend or the year for all relevant transactions recorded
invest in other persons or entities identified in the software, except that the audit trail is not
in any manner whatsoever by or on behalf maintained for any changes made through
of the Company (“Ultimate Beneficiaries”) specific access and direct database changes.
or provide any guarantee, security or the Further, for the accounting software maintained
like on behalf of the Ultimate Beneficiaries by the third-party payroll service provider, in the
(Refer Note 51(vii) to the standalone financial absence of adequate information around the
statements); audit trail feature, we are unable to comment on
it. Other than for the instances mentioned above,
(b) The management has represented that, based on our procedures performed, we did not
to the best of its knowledge and belief, no notice any instance of the audit trail feature being
funds have been received by the Company tampered with.
from any person(s) or entity(ies), including
foreign entities (“Funding Parties”), with the 16. The Company has paid/ provided for managerial
understanding, whether recorded in writing or remuneration in accordance with the requisite approvals
otherwise, that the Company shall, whether, mandated by the provisions of Section 197 read with Schedule
directly or indirectly, lend or invest in other V to the Act.
persons or entities identified in any manner
whatsoever by or on behalf of the Funding For Price Waterhouse & Co Chartered Accountants LLP
Party (“Ultimate Beneficiaries”) or provide any Firm Registration Number: 304026E/ E-300009
guarantee, security or the like on behalf of the
Ultimate Beneficiaries (Refer Note 51(vii) to the
standalone financial statements); and Dibyendu Majumder
Partner
Place: Mumbai Membership Number: 057687
Date: May 24, 2024 UDIN: 24057687BKFTPO5001

119
UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure A to Independent Auditor’s Report

Referred to in paragraph 15(g) of the Independent Auditor’s Report of even date to the members of United Spirits
Limited on the standalone financial statements for the year ended March 31, 2024
Report on the Internal Financial Controls with reference to opinion on the Company’s internal financial controls system
standalone financial statements under clause (i) of sub-section with reference to standalone financial statements.
3 of Section 143 of the Act
1. We have audited the internal financial controls with reference Meaning of Internal Financial Controls with reference to standalone
to standalone financial statements of United Spirits Limited financial statements
(“the Company”) as of March 31, 2024 in conjunction with our 6. A company’s internal financial controls with reference to
audit of the standalone financial statements of the Company standalone financial statements is a process designed to
for the year ended on that date. provide reasonable assurance regarding the reliability of
financial reporting and the preparation of standalone financial
Management’s Responsibility for Internal Financial Controls statements for external purposes in accordance with generally
2. The Company’s management is responsible for establishing accepted accounting principles. A company’s internal financial
and maintaining internal financial controls based on the controls with reference to standalone financial statements
internal controls over financial reporting criteria established includes those policies and procedures that (1) pertain to the
by the Company considering the essential components maintenance of records that, in reasonable detail, accurately
of internal controls stated in the Guidance Note on Audit and fairly reflect the transactions and dispositions of the
of Internal Financial Controls Over Financial Reporting assets of the company; (2) provide reasonable assurance that
(“the Guidance Note”) issued by the Institute of Chartered transactions are recorded as necessary to permit preparation
Accountants of India (“ICAI”). These responsibilities include of standalone financial statements in accordance with
the design, implementation and maintenance of adequate generally accepted accounting principles, and that receipts
internal financial controls that were operating effectively for and expenditures of the company are being made only in
ensuring the orderly and efficient conduct of its business, accordance with authorisations of management and directors
including adherence to company’s policies, the safeguarding of the company; and (3) provide reasonable assurance
of its assets, the prevention and detection of frauds and errors, regarding prevention or timely detection of unauthorised
the accuracy and completeness of the accounting records, acquisition, use, or disposition of the company’s assets that
and the timely preparation of reliable financial information, as could have a material effect on the standalone financial
required under the Act. statements.
Auditor’s Responsibility Inherent Limitations of Internal Financial Controls with reference to
3. Our responsibility is to express an opinion on the Company’s standalone financial statements
internal financial controls with reference to standalone 7. Because of the inherent limitations of internal financial controls
financial statements based on our audit. We conducted with reference to standalone financial statements, including
our audit in accordance with the Guidance Note and the
the possibility of collusion or improper management override
Standards on Auditing deemed to be prescribed under
of controls, material misstatements due to error or fraud may
Section 143(10) of the Act to the extent applicable to an audit
occur and not be detected. Also, projections of any evaluation
of internal financial controls, both applicable to an audit of
of the internal financial controls with reference to standalone
internal financial controls and both issued by the ICAI. Those
Standards and the Guidance Note require that we comply financial statements to future periods are subject to the risk
with ethical requirements and plan and perform the audit that the internal financial controls with reference to standalone
to obtain reasonable assurance about whether adequate financial statements may become inadequate because of
internal financial controls with reference to standalone changes in conditions, or that the degree of compliance with
financial statements was established and maintained and if the policies or procedures may deteriorate.
such controls operated effectively in all material respects.
Opinion
4. Our audit involves performing procedures to obtain audit 8. In our opinion, the Company has, in all material respects, an
evidence about the adequacy of the internal financial controls adequate internal financial controls system with reference to
system with reference to standalone financial statements and standalone financial statements and such internal financial
their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements
controls with reference to standalone financial statements were operating effectively as at March 31, 2024, based on the
included obtaining an understanding of internal financial internal control over financial reporting criteria established by
controls with reference to standalone financial statements, the Company considering the essential components of internal
assessing the risk that a material weakness exists, and testing controls stated in the Guidance Note issued by ICAI.
and evaluating the design and operating effectiveness of
internal control based on the assessed risk. The procedures For Price Waterhouse & Co Chartered Accountants LLP
selected depend on the auditor’s judgement, including Firm Registration Number: 304026E/ E-300009
the assessment of the risks of material misstatement of the
standalone financial statements, whether due to fraud or error. Dibyendu Majumder
Partner
5. We believe that the audit evidence we have obtained is Place: Mumbai Membership Number: 057687
sufficient and appropriate to provide a basis for our audit Date: May 24, 2024 UDIN: 24057687BKFTPO5001

120
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Annexure B to Independent Auditor’s Report

Referred to in paragraph 14 of the Independent Auditors’ Report of even date to the members of United Spirits Limited
on the standalone financial statements as of and for the year ended March 31, 2024
In terms of the information and explanations sought by us and ii. (a) The physical verification of inventory (including
furnished by the Company, and the books of account and records inventories lying with third parties) has been conducted
examined by us during the course of our audit, and to the best of at reasonable intervals by the Management during the
our knowledge and belief, we report that: year and, in our opinion, the coverage and procedure
i. (a) (A) The Company is maintaining proper records of such verification by Management is appropriate.
showing full particulars, including quantitative In respect of inventory lying with third parties, these
details and situation, of property, plant and have also been substantially confirmed by them.
equipment. The discrepancies noticed on physical verification of
inventory as compared to book records were not 10% or
(B) The Company is maintaining proper records more in aggregate for each class of inventory.
showing full particulars of intangible assets.
(b) During the year, the Company has not been sanctioned
(b) The property, plant and equipment are physically verified working capital limits in excess of ` 5 crores, in aggregate
by the Management according to a phased programme from banks and financial institutions on the basis of
designed to cover all the items over a period of three security of current assets and accordingly, the question
years which, in our opinion, is reasonable having regard of our commenting on whether the quarterly returns or
to the size of the Company and the nature of its assets. statements are in agreement with the unaudited books
Pursuant to the programme, a portion of the property, of account of the Company does not arise.
plant and equipment has been physically verified
by the Management during the year and no material iii. (a) The Company has made investments in compulsory
discrepancies have been noticed on such verification. convertible preference shares issued by an associate,
sixteen mutual fund schemes and in government
(c) The title deeds of all the immovable properties (other treasury bills issued by a financial institution, granted an
than properties where the Company is the lessee and unsecured loan to a wholly owned subsidiary and has
the lease agreements are duly executed in favour of the provided loans to employees. The aggregate amount
Company), as disclosed in Notes 3.1, 3.2 and 3.6 to the during the year, and balance outstanding at the balance
standalone financial statements, are held in the name of sheet date with respect to such unsecured loans granted
the Company, except as disclosed in Appendix II. to a wholly owned subsidiary and employees are part of
the table given below:
(d) The Company has chosen cost model for its property,
plant and equipment (including Right of use assets) Description Amount in `
and intangible assets. Consequently, the question of Crores
our commenting on whether the revaluation is based
Aggregate amount granted/ provided during
on the valuation by a Registered Valuer, or specifying
the year:
the amount of change, if the change is 10% or more in
the aggregate of the net carrying value of each class of - Loan to a subsidiary 29
property, plant and equipment (including Right of Use - Loans to employees 1
assets) or intangible assets does not arise. Balance outstanding at March 31, 2024 in
respect of the above:
(e) Based on the information and explanations furnished - Loan to a subsidiary -
to us, no proceedings have been initiated on or are
- Loans to employees 1
pending against the Company for holding benami
property under the Prohibition of Benami Property
Transactions Act, 1988 (as amended in 2016) (formerly Refer notes 5 and 36 to the standalone financial statements.
the Benami Transactions (Prohibition) Act, 1988 (45 of
1988) and Rules made thereunder, and therefore the (b) In respect of the aforesaid investments and loans
question of our commenting on whether the Company granted, the terms and conditions under which such
has appropriately disclosed the details in the financial loans were granted and investments were made are not
statements does not arise. prejudicial to the Company’s interest.

121
UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure B to Independent Auditor’s Report (Continued)

(c) In respect of the loans, as disclosed in Note 5 to parties to settle the existing overdue loans/advances
the standalone financial statements, the schedule in nature of loan. (Also, refer Note 5 to the financial
of repayment of principal and payment of interest statements)
has been stipulated by the Company except for the
following instances set out in the table below. Therefore, (f) The loans and advances in nature of loans granted
in the absence of stipulation of repayment terms, we are during the year, had stipulated the scheduled repayment
unable to comment on the regularity of repayment of of principal and payment of interest and the same were
principal and payment of interest. not repayable on demand. There were no loans granted
during the year to the promoters.
(Amount in ` Crores)
iv. In our opinion, the Company has complied with the provisions
Name of the entity Gross Net outstanding as at of Sections 185 and 186 of the Act in respect of the loans
outstanding March 31, 2024 and investments made. The Company has not provided any
as at March security and guarantees to parties covered under Sections 185
31, 2024 and 186 of the Act.
Asian Opportunities & 59 -
v. The Company has not accepted any deposits or amounts
Investments Limited
which are deemed to be deposits referred in Sections 73, 74,
USL Holdings UK Ltd 15 - 75 and 76 of the Act and the Rules framed there under.

The repayment of principal and payment of interest is not regular with vi. Pursuant to the rules made by the Central Government of
respect to the loans set out in the table below: India, the Company is required to maintain cost records
as specified under Section 148(1) of the Act in respect of its
Name of the Amount Due Date Extent of Remarks products. We have broadly reviewed the same and are of the
entity in ` delay opinion that, prima facie, the prescribed accounts and records
Crores have been made and maintained. We have not, however,
United 1,238 One third of 2 years Refer Notes made a detailed examination of the records with a view to
Breweries the loan was and 9 5 and determine whether they are accurate or complete.
Holding to be repaid months 40(c) to
Limited and a on July 2 to 4 years the vii. (a) In our opinion, the Company is generally regular in depositing
related entity 2019, July 2, and 9 standalone undisputed statutory dues in respect of provident fund, though
2020 and months financial there has been a slight delay in a few cases and is regular
July 2, 2021 statements in depositing undisputed statutory dues including employees’
state insurance, profession tax, income tax, goods and services
(d) In respect of the following loan, the total amount overdue tax, duty of customs, duty of excise, value added tax and other
for more than ninety days as at March 31, 2024 is ` 1,238. material statutory dues. The extent of the arrears of statutory
In such instances, in our opinion, reasonable steps have dues outstanding at March 31, 2024, for a period of more than
been taken by the Company for the recovery of the six months from the date they became payable are as follows:
principal amounts and interest thereon. Refer Notes 5
and 4o(c) to the standalone financial statements. Name of the Nature of Amount Period to Due date Date of
statute dues (` In which the Payment
No. of Principal Interest Total Remarks (if Crores) amount
cases Amount Overdue Overdue any) relates
Overdue The Employees’ Provident 0.1 April 2023 15th of the Not paid
One 1,153 85 1,238 Refer Notes 5 Provident fund – August Subsequent
and 4o (c) to Funds and 2023 month
the standalone Miscellaneous
financial Provisions Act,
statements 1952

(e) There were no loans /advances in nature of loans which Refer note 42(d) to the standalone financial statements
have fallen due during the year and were renewed/ regarding management’s assessment on certain matters
extended. Further, no fresh loans were granted to same relating to provident fund.

122
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Annexure B to Independent Auditor’s Report (Continued)

(b) The particulars of dues of income tax, sales tax, value under clause 3(x)(a) of the Order is not applicable to the
added tax, service tax, goods and services tax, duty of Company.
customs, duty of excise, entry tax, stamp duty, property
tax and other taxes charged by local bodies at March (b) The Company has not made any preferential allotment
31, 2024 which have not been deposited on account or private placement of shares or fully or partially or
of a dispute are disclosed in Appendix I to this report. optionally convertible debentures during the year.
There have been no dues of provident fund, employees’ Accordingly, the reporting under clause 3(x)(b) of the
state insurance and profession tax which have not been Order is not applicable to the Company.
deposited on account of dispute.
(xi) (a) During the course of our examination of the books and
viii. There are no transactions previously unrecorded in the books records of the Company, carried out in accordance
of account that have been surrendered or disclosed as income with the generally accepted auditing practices in India,
during the year in the tax assessments under the Income Tax we have neither come across any instance of material
Act, 1961, that has not been recorded in the books of accounts. fraud by the Company or on the Company, noticed or
reported during the year, nor have we been informed of
ix. (a) The Company has not defaulted in repayment of loans any such case by the Management.
or in the payment of interest to any lender during the
year. (b) During the course of our examination of the books and
records of the Company, carried out in accordance with
(b) On the basis of our audit procedures, we report that the the generally accepted auditing practices in India, a
Company has not been declared Wilful Defaulter by report under Section 143(12) of the Act, in Form ADT-4,
any bank or financial institution or government or any as prescribed under rule 13 of Companies (Audit and
government authority. Auditors) Rules, 2014 was not required to be filed with
the Central Government. Accordingly, the reporting
(c) The Company has not obtained any term loans. under clause 3(xi)(b) of the Order is not applicable to the
Accordingly, reporting under clause 3(ix)(c) of the Order Company.
is not applicable to the Company.
(c) During the course of our examination of the books and
(d) According to the information and explanations given records of the Company carried out in accordance
to us, and the procedures performed by us, and on with the generally accepted auditing practices in India,
an overall examination of the standalone financial the Company has received whistle-blower complaints
statements of the Company, we report that no funds during the year, which have been considered by us
raised on short-term basis have been utilised for long- for any bearing on our audit and reporting under this
term purposes by the Company. clause. As explained by the management, there were
certain complaints in respect of which investigations
(e) On an overall examination of the standalone financial are ongoing as on the date of our report and, hence,
statements of the Company, we report that the Company the impact on our audit in respect of those complaints
has not taken any funds from any entity or person on cannot be determined at this stage.
account of or to meet the obligations of its subsidiaries
or an associate Company. The Company has no joint (xii) As the Company is not a Nidhi Company and the Nidhi Rules,
ventures. 2014 are not applicable to it, the reporting under clause 3(xii)
of the Order is not applicable to the Company.
(f) According to the information and explanations given
to us and procedures performed by us, we report that (xiii) The Company has entered into transactions with related
the Company has not raised loans during the year on parties in compliance with the provisions of Sections 177 and
the pledge of securities held in its subsidiaries, or an 188 of the Act. The details of such related party transactions
associate company. The Company has no joint ventures. have been disclosed in the standalone financial statements as
required under Indian Accounting Standard 24 “Related Party
(x) (a) The Company has not raised any money by way of Disclosures” specified under Section 133 of the Act.
initial public offer or further public offer (including debt
instruments) during the year. Accordingly, the reporting (xiv) (a) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.

123
UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure B to Independent Auditor’s Report (Continued)

(b) The reports of the Internal Auditor for the period under (xix) On the basis of the financial ratios (Also refer note 51(xiv) to the
audit have been considered by us. standalone financial statements), ageing and expected dates
of realisation of financial assets and payment of financial
(xv) In our opinion, the Company has not entered into any non- liabilities, other information accompanying the standalone
cash transactions with its directors or persons connected financial statements, our knowledge of the Board of Directors
with him. Accordingly, the reporting on compliance with the and management plans and based on our examination of
provisions of Section 192 of the Act under clause 3(xv) of the the evidence supporting the assumptions, nothing has come
Order is not applicable to the Company. to our attention, which causes us to believe that any material
uncertainty exists as on the date of the audit report that the
(xvi) (a) The Company is not required to be registered under Company is not capable of meeting its liabilities existing at
Section 45-IA of the Reserve Bank of India Act, 1934. the date of balance sheet as and when they fall due within a
Accordingly, the reporting under clause 3(xvi)(a) of the period of one year from the balance sheet date. We, however,
Order is not applicable to the Company. state that this is not an assurance as to the future viability of
the Company. We further state that our reporting is based on
(b) The Company has not conducted non-banking financial the facts up to the date of the audit report and we neither give
or housing finance activities during the year. Accordingly, any guarantee nor any assurance that all liabilities falling due
the reporting under clause 3(xvi)(b) of the Order is not within a period of one year from the balance sheet date will
applicable to the Company. get discharged by the Company as and when they fall due.

(c) The Company is not a Core Investment Company (CIC) (xx) The Company has during the year spent the amount of
as defined in the regulations made by the Reserve Bank Corporate Social Responsibility as required under subsection
of India. Accordingly, the reporting under clause 3 (xvi) (5) of Section 135 of the Act. Accordingly, reporting under
(c) of the Order is not applicable to the Company. clause 3(xx) of the Order is not applicable to the Company.

(d) Based on the information and explanations provided (xxi) The reporting under clause 3(xxi) of the Order is not applicable
by the management of the Company, the Group (as in respect of audit of standalone financial statements.
defined in the Core Investment Companies (Reserve Accordingly, no comment in respect of the said clause has
Bank) Directions, 2016) does not have any CICs, which been included in this report.
are part of the Group. We have not, however, separately
evaluated whether the information provided by the For Price Waterhouse & Co Chartered
management is accurate and complete. Accordingly, Accountants LLP
the reporting under clause 3(xvi)(d) of the Order is not Firm Registration Number: 304026E/ E-300009
applicable to the Company.
Dibyendu Majumder
(xvii) The Company has not incurred any cash losses in the financial
Partner
year or in the immediately preceding financial year.
Place: Mumbai Membership Number: 057687
Date: May 24, 2024 UDIN: 24057687BKFTPO5001
(xviii) There has been no resignation of the statutory auditors during
the year and accordingly the reporting under clause 3(xviii) of
the Order is not applicable.

124
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Annexure B to Independent Auditor’s Report (Continued)

Appendix I – Particulars of Tax dues not deposited on account of a dispute
Referred to in paragraph vii(b) of Annexure B to the Independent Auditor’s Report to the members of United Spirits
Limited on the standalone financial statements as of and for the year ended March 31, 2024

Sl. Name of Statute Nature of Dues Disputed Amount Unpaid Financial Year to Forum where the
No. Amount Paid Amount which the amount dispute is pending
(` crores) (` crores) (` crores) relates
1 Income Tax Act, 1961 Income Tax 37 35 2 2005-06, 2009-10 Commissioner of
Income Tax
( Appeals)
2 Income Tax Act, 1961 Income Tax 2,796 644 (*) 2,152 1988-89, 1989- Income Tax
90,1991-92 to Appellate
1993-94, 1995- Tribunal
96,2000-01,2005-
09, 2014-15 to
2017-18
3 Income Tax Act, 1961 Income Tax 1,095 241 (*) 854 1985-86 to 2004- High Courts of
05, 2006-07 to various
2008-09 and 2011- states
12 to 2013-14
4 Customs Act, 1962 Custom Duty 0# 0# 0# 1997-98 Commissioner of
Customs
5 Service Tax - Finance Service Tax 196 0# 196 2004-05 to 2015-16 Commissioner of
Act, 1994 Service Tax
6 Service Tax - Finance Service Tax 1 0# 1 2016-17 to 2017-18 Commissioner
Act, 1994 (Appeals)
7 Service Tax - Finance Service Tax 28 4 24 2005-2006, 2009- Customs Excise
Act, 1994 10 to 2010-11, 2014- and Service Tax
15 to 2016-17 Appellate Tribunal
8 Service Tax - Finance Service Tax 124 - 124 2000-01, 2007-08 High Court of
Act, 1994 to 2011-12 various states
9 Central Excise Act, Central Excise 39 1 38 1994-95, 2012-13 to Commissioner of
1944 Duty 2017-18 Central Excise
10 Central Excise Act, Central Excise 141 6 135 1997- 98 to 2003- Customs Excise
1944 Duty 04 and Service Tax
Appellate Tribunal
11 West Bengal Sales Sales Tax/ Value 77 - 77 2002-03, 2014-15 Commissioner of
Tax Act, 1994 Added Tax to 2017-18 Commercial Taxes
12 Central and Various Sales Tax/Value 15 0# 15 1993- 94 to 1995- Commercial Tax
State Sales Tax Acts Added Tax 96, 2002-03 to Officer
2007-08, 2021-22
13 Central and Various Sales Tax/Value 17 5 12 1994-95 to 1996- Assistant
State Sales Tax Acts Added Tax 97, 2005-06 to Commissioner of
2006-07, 2009-10 Commercial Taxes
to 2013-14, 2015-16
to 2017-18
14 Central and Various Sales Tax/Value 9 0# 9 2004-05, 2006-07 Additional
State Sales Tax Acts Added Tax to 2011-12, 2013-14, Commissioner of
2015-16 to 2016-17, Commercial Taxes
2018-19 to 2019-20
15 Central and Various Sales Tax/Value 63 14 49 1985-1986, 2007- Deputy
State Sales Tax Acts Added Tax 08 to 2008-09, Commissioner of
2010-11 to 2019-20 Commercial Taxes

125
UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure B to Independent Auditor’s Report (Continued)

Appendix I – Particulars of Tax dues not deposited on account of a dispute (Continued)

Sl. Name of Statute Nature of Dues Disputed Amount Unpaid Financial Year to Forum where the
No. Amount Paid Amount which the amount dispute is pending
(` crores) (` crores) (` crores) relates
16 Central and Various Sales Tax/Value 279 29 250 2000-01 to 2001- Joint
State Sales Tax Acts Added Tax 02, 2003-04 to Commissioner of
2005-06, 2010-11 Commercial Taxes
to 2020-21
17 Central and Various Sales Tax/Value 44 7 37 1990-91, 1992-93 to Commercial Taxes
State Sales Tax Acts Added Tax 1993-94, 1995-96 Appellate Tribunal
to 2000-01, 2004-
05, 2015-16 to
2017-18
18 Central and Various Sales Tax/Value 5 - 5 1993-94, 2003- Commercial Taxes
State Sales Tax Acts Added Tax 04, 2005-06 and Appellate Tribunal
2017-18 and Revisionary
Board
19 Central and Various Sales Tax/Value 53 15 38 1978-79 to 1984-85, High Courts of
State Sales Tax Acts Added Tax 1988-89 to 1989- various states
90, 1992-93 to
1994-95, 1996-97
to 2001-02, 2007-
08, 2009-10 to
2011-12, 2017-18 to
2020-21
20 Various Entry Tax Entry Tax/Local 0# - 0# 1989-1990 and Assessing Officer
Acts, Local Body Tax Body Tax 2017-2018
and Octroi Duty
21 Various Entry Tax Entry Tax/Local 1 0# 1 2014-15 and Assistant
Acts, Local Body Tax Body Tax 2015-16 Commissioner of
and Octroi Duty Commercial Taxes
22 Various Entry Tax Entry Tax/Local 5 1 4 2005-06, 2007-08 Joint
Acts, Local Body Tax Body Tax to 2009-10, 2010-11 Commissioner/
and Octroi Duty to 2015-16 Additional
Commissioner of
Commercial Taxes
23 Various Entry Tax Entry Tax/Local 5 3 2 1987-88, 2000-01, Commercial Taxes
Acts, Local Body Tax Body Tax 2004-05, 2007-08 Appellate Tribunal
and Octroi Duty to 2010-11
24 Various Entry Tax Entry Tax/Local 2 2 1 2007-08 to 2013-14 High Court of
Acts, Local Body Tax Body Tax various states
and Octroi Duty
25 Various Entry Tax Entry Tax/Local 4 1 3 1997-98, 2003-04 Supreme Court
Acts, Local Body Tax Body Tax/Octroi to 2007-08
and Octroi Duty Duty
26 Bengal Excise Act, State Excise 1 - 1 1993-94 Civil Court, West
1909 and Bengal Bengal
Excise (Amendment)
Act, 2012
27 Bengal Excise Act, State Excise 0# - 0# 1994-95 and Collector of State
1909 and Bengal 2014-15 Excise, West Bengal
Excise (Amendment)
Act, 2012

126
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Annexure B to Independent Auditor’s Report (Continued)

Appendix I – Particulars of Tax dues not deposited on account of a dispute (Continued)

Sl. Name of Statute Nature of Dues Disputed Amount Unpaid Financial Year to Forum where the
No. Amount Paid Amount which the amount dispute is pending
(` crores) (` crores) (` crores) relates
28 Various State Excise State Excise 3 - 3 2010-11 to 2017-18 Superintendent of
Acts State Excise
29 Various State Excise State Excise 19 4 15 2019-20 Deputy
Acts Superintendent of
State Excise
30 Various State Excise State Excise 8 3 5 2001-02, 2002-03, Principal Secretary
Acts 2015-16 of Excise
31 Various State Excise State Excise 14 4 10 1963-64 to 1972-73, Commissioner of
Acts 1974-75 to 1991-92, State Excise
1993-94, 1995-96,
1998-99, 2000-01,
2011-12, 2014-15,
2015-
16, 2022-23
32 Various State Excise State Excise 1 - 1 1994-95, 2001-02, State Taxation
Acts 2007-08, 2012-13 tribunals
33 Various State Excise State Excise 27 11 16 1972-73, 1973-74, High Courts of
Acts 1980- various states
81, 1982-83, 1997-
98,
1998-99, 2001-02,
2002-03, 2010-11,
2012-
13 to 2015-16,
2018-19
34 Various State Excise State Excise 150 8 142 1971-72, 1992-93, Supreme Court
Acts 1996-97,
2002-03, 2004-05,
2012-13
35 Central/ States Goods & Services 0# - 0# 2018-19 Assistant
Goods & Services Tax Tax Commissioner
Act, 2017
36 Central/ States Goods & Services 68 4 64 2017-18 to 2021-22 Joint Commissioner
Goods & Services Tax Tax of Commercial
Act, 2017 Taxes /
Commissioner
(Appeals)
37 Central/ States Goods & Services 933 - 933 2017-18 to 2020-21 High Court of
Goods & Services Tax Tax Karnataka
Act, 2017
38 Other Litigations Stamp Duty 1 - 1 1999-2000 High Court
39 Other Litigations Property Tax 0# - 0# 2019-20 High Court

# ‘0’ indicates that the amounts involved are below ` fifty lakhs and the sign ‘-’indicates that the amounts are nil.
* Amount paid includes refunds due to the company which have been adjusted by the assessing officer (AO) towards demands pending for
other financial years. The amount paid in the table above has been restricted to the extent of the disputed amount.

127
UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure B to Independent Auditor’s Report (Continued)

Appendix I I – Title deeds not in the name of the Company
Referred to in paragraph i(c) of Annexure B to the Independent Auditor’s Report to the members of United Spirits
Limited on the standalone financial statements as of and for the year ended March 31, 2024

Description of property Held in the name of Gross carrying Whether promoter, Period held- Reason for not
value director or their indicate range, being held in name
(` crores) relative or employee where appropriate of Company
Building in the state of Refer Note 1 34 No 13 years Refer Note 1 below
Karnataka
Building in the state of Shaw Wallace & 0# No 16 years Refer Note 2 below
Maharashtra Company Limited
Freehold land in Gujarat Herbertsons Limited 0# No 18 years Refer Note 2 below
Freehold land in Herbertsons Limited 27 No 18 years Refer Note 2 below
Maharashtra
Freehold land in McDowell & Company 27 No 23 years Refer Note 5 below
Maharashtra Limited
Freehold land in Maharashtra Distilleries 1 No 18 years Refer Note 2 below
Maharashtra Limited
Freehold land in Odisha Poonam Distillery 1 No 18 years Refer Note 2 below
Limited
Freehold land in Udaipur Distillery Co. 2 No 23 years Refer Note 2 below
Rajasthan Limited
Freehold land in Uttar Carew Phipson Ltd 5 No 28 years Refer Note 2 below
Pradesh
Freehold land in Uttar Ganges Soap Works 0# No 18 years Refer Note 2 below
Pradesh Private Limited
Freehold land in West Bengal Distilleries Co Ltd 0# No 15 years Refer Note 2 below
Bengal
Freehold land in West Serampore Distillery and 1 No 23 years Refer Note 2 below
Bengal Chemical Company
Limited
Freehold land in West Shaw Wallace Distilleries 1 No 18 years Refer Note 2 below
Bengal Limited
Freehold land in West Jointly Held 1 No 18 years Refer Note 7 below
Bengal
Leasehold land in Udaipur Distillery Co. 1 No 23 years Refer Note 2 below
Rajasthan Limited
Freehold land in Pampasar Distillery 9 No 18 years Refer Note 2 and
Karnakata Limited Note 3 below
Freehold land in Shaw Wallace & 63 No 16 years Refer Note 2 and
Telangana Company Limited Note 3 below
Freehold land in Uttar Central Distillery and 5 No 18 years Refer Note 2 and
Pradesh Chemical Works Ltd Note 3 below
Freehold land in West Carew and Company 3 No 23 years Refer Note 2 and
Bengal Limited Note 3 below
Freehold land in West McDowell & Company 6 No 23 years Refer Note 3 and
Bengal Limited Note 5 below

128
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Annexure B to Independent Auditor’s Report (Continued)

Appendix I I – Title deeds not in the name of the Company (Continued)

Description of property Held in the name of Gross carrying Whether promoter, Period held- Reason for not
value director or their indicate range, being held in name
(` crores) relative or employee where appropriate of Company
Freehold land in West Refer Note 6 8 No 23 years Refer Note 3 and
Bengal Note 6 below
Freehold land in West Shaw Wallace & 22 No 16 years Refer Note 2 and
Bengal Company Limited Note 4 below
Freehold land in Goa Jointly Held 3 No 21 years Refer Note 3 and
Note 7 below
Free hold land in Delhi McDowell & Co Ltd 9 No 23 years Refer Note 2 and
Note 3 below
Freehold land in Tamil McDowell & Company 0# No 23 years Refer Note 5 below
Nadu Limited
Freehold land in McDowell & Co Ltd 5 No 23 years Refer Note 2 below
Telangana
Freehold land in McDowell & Company 0# No 23 years Refer Note 5 below
Telangana Limited
Freehold land in Uttar McDowell & Company 0# No 23 years Refer Note 5 below
Pradesh Limited
Leasehold land in Kerala McDowell & Co Ltd 1 No 23 years Refer Note 2 and
Note 3 below
Freehold land in West McDowell & Company 2 No 23 years Refer Note 5 below
Bengal Limited

Notes:
# ‘0’ indicates that the amounts involved are below ` fifty lakhs.
1. The Company has entered into an agreement to sell with the erstwhile owner and is litigating for execution of the sale deed. Refer to
Note 3.1(b) to the standalone financial statements.
2. Held in the name of erstwhile transferor companies which were amalgamated with the Company through approved Court Schemes.
Refer to Notes 3.1(a) and 3.6(a) for the standalone financial statements.
3. These properties are under hypothecation with a bank. Refer to Notes 33(b) and 40(d) for the standalone financial statements.
4. Part of this property is under dispute with a regulator and the matter is pending with the Kolkata High Court.
5. McDowell & Company Limited’s name has been changed to United Spirits Limited w.e.f. October 17, 2006.
6. The Company is not in the possession of the title deeds. Refer to Note 3.1(a) to the standalone financial statements.
7. The property is being jointly held by the Company and a third party. Refer to Note 3.1(a) and 3.6(a) to the standalone financial state-
ments.

129
UNITED SPIRITS LIMITED Annual Report 2023–24

Standalone Balance Sheet

(All amounts in ` crores unless otherwise stated)
Particulars Notes As at As at
March 31, 2024 March 31, 2023
ASSETS
Non-current assets
Property, plant and equipment 3.1 844 978
Right-of-use assets 3.2 227 173
Capital work-in-progress 3.3 37 67
Intangible assets 3.4 35 31
Intangible assets under development 3.5 - 16
Investment property 3.6 139 25
Financial assets
Investments in subsidiaries and associate 4.1 224 206
Trade receivables 11 365 -
Loans 5 - -
Other financial assets 6 112 146
Deferred tax assets (net) 7 177 157
Current tax assets (net) (Non-current) 8 1,348 1,311
Other non-current assets 9 216 239
Total non-current assets 3,724 3,349
Current assets
Inventories 10 2,063 2,230
Financial assets
Investments 4.2 599 256
Trade receivables 11 2,763 2,383
Cash and cash equivalents 12.1 1,021 81
Bank balances other than cash and cash equivalents 12.2 188 768
Loans 5 10 109
Other financial assets 6 40 137
Other current assets 9 334 258
Total current assets 7,018 6,222
Total assets 10,742 9,571
EQUITY AND LIABILITIES
EQUITY
Share capital 13 145 145
Other equity
Reserves and surplus 14 6,818 5,799
Total equity 6,963 5,944

130
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Standalone Balance Sheet (Continued)

(All amounts in ` crores unless otherwise stated)

Particulars Notes As at As at
March 31, 2024 March 31, 2023
LIABILITIES
Non-current liabilities
Financial liabilities
Borrowings 15 - 0
Lease liabilities 3.2 137 80
Provisions 17 15 12
Total non-current liabilities 152 92
Current liabilities
Financial liabilities
Borrowings 15 0 1
Lease liabilities 3.2 103 102
Trade payables 18
(A) total outstanding dues of micro and small enterprises 69 50
(B) total outstanding dues of creditors other than micro and small 1,758 1,688
enterprises
Other financial liabilities 16 204 285
Provisions 17 367 372
Current tax liabilities (net) 8 324 283
Other current liabilities 19 802 754
Total current liabilities 3,627 3,535
Total liabilities 3,779 3,627
Total equity and liabilities 10,742 9,571

The above Balance Sheet should be read in conjunction with the accompanying notes.
As per our report of even date

For Price Waterhouse & Co Chartered Accountants LLP For and on behalf of the Board of Directors
Firm registration number: 304026E/E-300009
Chartered Accountants

Dibyendu Majumder Mahendra Kumar Sharma Hina Nagarajan

Partner Chairman Managing Director and Chief Executive Officer
Membership number: 057687 DIN: 00327684 DIN: 00048506
Place: Mumbai Place: Mumbai

V K Viswanathan Pradeep Jain

Director Executive Director and Chief Financial Officer
DIN: 01782934 DIN: 02110401
Place: Mumbai Place: Mumbai

Mital Sanghvi
Company Secretary
Place: Mumbai
Place: Mumbai
Date: May 24, 2024 Date: May 24, 2024

131
UNITED SPIRITS LIMITED Annual Report 2023–24

Standalone Statement of Profit and Loss

(All amounts in ` crores unless otherwise stated)
Particulars Notes For the year ended For the year ended
March 31, 2024 March 31, 2023
INCOME
Revenue from operations 20 25,389 27,578
Other income 21 335 74
Total income 25,724 27,652
EXPENSES
Cost of materials consumed 22 5,254 5,337
Purchase of stock-in-trade 675 864
Change in inventories of finished goods, work-in-progress and stock-in- 23 119 (129)
trade
Excise duty 14,697 17,204
Employee benefits expense 24 543 607
Depreciation and amortisation expense 25 264 271
Advertisement and sales promotion 1,041 920
Other expenses 26 1,352 1,356
Finance costs 27 76 104
Total expenses 24,021 26,534
Profit before exceptional items and tax 1,703 1,118
Add/ (Less): Exceptional items, net 28 (17) 171
Profit before tax 1,686 1,289
Tax expense: 29
Current tax 403 282
Current tax relating to earlier years (10) (30)
Deferred tax (credit) / charge (19) (15)
Total tax expense 374 237
Profit for the year 1,312 1,052
Other comprehensive Income
A. Items that will be reclassified to profit or loss - -
B. Items that will not be reclassified to profit or loss
(i) Remeasurements of post-employment benefit plans 38(b)E (3) (1)
(ii) Income tax credit / (charge) relating to these items 7 1 0
Other comprehensive income for the year, net of tax (2) (1)
Total comprehensive income for the year 1,310 1,051
Basic and diluted earnings per share (in INR) 30 18.04 14.46
The above statement of profit and loss should be read in conjunction with the accompanying notes.
As per our report of even date

For Price Waterhouse & Co Chartered Accountants LLP For and on behalf of the Board of Directors
Firm registration number: 304026E/E-300009
Chartered Accountants

Dibyendu Majumder Mahendra Kumar Sharma Hina Nagarajan

Partner Chairman Managing Director and Chief Executive Officer
Membership number: 057687 DIN: 00327684 DIN: 00048506
Place: Mumbai Place: Mumbai

V K Viswanathan Pradeep Jain

Director Executive Director and Chief Financial Officer
DIN: 01782934 DIN: 02110401
Place: Mumbai Place: Mumbai

Mital Sanghvi
Company Secretary
Place: Mumbai
Place: Mumbai
Date: May 24, 2024 Date: May 24, 2024

132
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Standalone Statement of Changes in Equity

A. Equity share capital
(All amounts in ` crores unless otherwise stated)
Particulars Note Amount
Equity share capital as at April 1, 2022 13 145
Changes in equity share capital 0
Equity share capital as at March 31, 2023 13 145
Changes in equity share capital -
Equity share capital as at March 31, 2024 13 145

B. Other equity
Reserves and surplus
Particulars Note Capital Capital Securities Central Share Contingency General Retained Total
reserve redemption premium subsidy based reserve reserve earnings
reserve account incentive
reserve
Balance as at April 1, 2022 14 95 72 4,568 0 (0) 11 1,103 (1,102) 4,747
Profit for the year - - - - - - - 1,052 1,052
Other comprehensive income (OCI), net - - - - - - - (1) (1)
of tax
Total comprehensive income 1,051 1,051
Share based payments - - - - 7 - - - 7
Cross charge by a Diageo group company 36(b)(x) - - - - (6) - - - (6)
during the year towards share based
payments
Balance as at March 31, 2023 14 95 72 4,568 0 1 11 1,103 (51) 5,799
Profit for the year - - - - - - - 1,312 1,312
Other comprehensive income (OCI), net - - - - - - - (2) (2)
of tax
Total comprehensive income 1,310 1,310
Share based payments - - - - 4 - - - 4
Cross charge by a Diageo group company 36(b)(x) - - - - (4) - - - (4)
during the year towards share based
payments
Dividend payment (refer note 32b) - - - - - - - (291) (291)
Balance as at March 31, 2024 14 95 72 4,568 0 1 11 1,103 968 6,818
The above statement of changes in equity should be read in conjunction with the accompanying notes.
As per our report of even date

For Price Waterhouse & Co Chartered Accountants LLP For and on behalf of the Board of Directors
Firm registration number: 304026E/E-300009
Chartered Accountants

Dibyendu Majumder Mahendra Kumar Sharma Hina Nagarajan

Partner Chairman Managing Director and Chief Executive Officer
Membership number: 057687 DIN: 00327684 DIN: 00048506
Place: Mumbai Place: Mumbai

V K Viswanathan Pradeep Jain

Director Executive Director and Chief Financial Officer
DIN: 01782934 DIN: 02110401
Place: Mumbai Place: Mumbai

Mital Sanghvi
Company Secretary
Place: Mumbai
Place: Mumbai
Date: May 24, 2024 Date: May 24, 2024

133
UNITED SPIRITS LIMITED Annual Report 2023–24

Standalone Statement of Cash Flows

(All amounts in ` crores unless otherwise stated)
Particulars Notes For the year ended For the year ended
March 31, 2024 March 31, 2023
A. CASH FLOW FROM OPERATING ACTIVITIES
Profit before tax 1,686 1,289
Adjustments for
Depreciation and amortisation expense 25 264 271
Employee share-based payment expense 24 37 23
Loss allowance on trade receivables, other assets and other 26 41 5
financial assets (net)
Profit on redemption of mutual fund units 21 (42) (17)
Increase in fair value of investments 21 (18) (3)
Finance costs 27 76 104
Dividend income 21 (125) -
Gain on disposal of property, plant and equipment (net) 21 (13) (20)
Interest income 21 (39) (34)
Interest on direct and indirect tax refund 21 (87) -
Exceptional item- Profit on sale of business undertaking 28(b) (31) (380)
Exceptional item- Supply restructuring cost 28(c) 48 157
Exceptional item- Others 28(a,d) - 51
Exchange loss on translation of foreign currency monetary assets 4 1
and liabilities
115 158
Operating profit before changes in working capital 1,801 1,447
(Increase) / decrease in trade receivables (804) (296)
(Increase) / decrease in loans and other financials assets 150 (92)
(Increase) / decrease in other assets (50) (116)
(Increase) / decrease in inventories 163 (254)
Increase / (decrease) in trade payables 50 220
Increase / (decrease) in other financial liabilities (116) 10
Increase / (decrease) in other liabilities 79 93
Increase / (decrease) in provisions (48) (576) (139) (574)
Cash generated from operations 1,225 873
Income taxes paid (net of refund) (313) (297)
Net cash generated from operating activities (A) 912 576
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment and intangible assets (98) (140)
Proceeds from sale of property, plant and equipment 20 27
Purchase of current Investments (760) (8,517)
Redemption of current Investments 478 8,502
Purchase of term deposits (400) (1,013)
Redemption of term deposits 980 250
Investment in an associate (15) (32)
Proceeds from sale of a business undertaking - 818
Proceeds from sale of a subsidiary - 32
Loans given to subsidiaries 36(b)(xv) (29) (326)
Repayment of loans by subsidiaries 36(b)(xvi), (xvii) 121 362
Loans given to others - (8)
Repayment of loans given to others 6 3
Interest received 39 20
Dividend received 21 125 -
Net cash inflow/(outflow) from investing activities (B) 467 (22)

134
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Standalone Statement of Cash Flows (Continued)

(All amounts in ` crores unless otherwise stated)

Particulars Notes For the year ended For the year ended
March 31, 2024 March 31, 2023
C. CASH FLOW FROM FINANCING ACTIVITIES
Net proceeds / (repayment) of working capital loans 15 - (339)
Repayment of deferred sales tax liability 15 (1) (1)
Interest paid on borrowings 15 - (20)
Dividend paid 32b (291) -
Principal repayment of lease liabilities 15 (126) (124)
Interest paid on lease liabilities 15 (21) (16)
Net cash outflow from financing activities (C) (439) (500)
Net increase / (decrease) in cash and cash equivalents 940 54
[D = A+B+C]
Cash and cash equivalents as at the beginning of the year (E) 81 27
Effects of exchange rate changes on cash and cash equivalents 0 0
Net increase / (decrease) in cash and cash equivalents 940 54
Cash and cash equivalents as at the end of the year [D+E] 12.1 1,021 81
Note:
Non-cash financing and investing activities
Acquisition of right-of-use assets 3.2 184 86

The above statement of cash flows should be read in conjunction with the accompanying notes.
As per our report of even date

For Price Waterhouse & Co Chartered Accountants LLP For and on behalf of the Board of Directors
Firm registration number: 304026E/E-300009
Chartered Accountants

Dibyendu Majumder Mahendra Kumar Sharma Hina Nagarajan

Partner Chairman Managing Director and Chief Executive Officer
Membership number: 057687 DIN: 00327684 DIN: 00048506
Place: Mumbai Place: Mumbai

V K Viswanathan Pradeep Jain

Director Executive Director and Chief Financial Officer
DIN: 01782934 DIN: 02110401
Place: Mumbai Place: Mumbai
Mital Sanghvi
Company Secretary
Place: Mumbai
Place: Mumbai
Date: May 24, 2024 Date: May 24, 2024

135
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the financial statements

(All amounts in ` crores unless otherwise stated)

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 and other allied spirits, including through tie-up
manufacturing units and through strategic franchising of some of its brands.

These standalone financial statements ((or) financial statements) are approved for issue by the Company’s Board of Directors on May 24, 2024.

Note 1: Basis of preparation of financial statements

(i) Compliance with Ind AS

These 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, as amended] and other relevant provisions
of the Act.

(ii) Historical cost convention

These financial statements have been prepared on a historical cost basis, except for the following:

• defined benefits plans – plan assets are measured at fair value;

• share-based payments are measured at fair value; and

• investment in mutual funds and investment in compulsorily convertible preference shares of associate are measured at fair value.

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 Act. 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.

(iii) New and amended standards adopted

The Ministry of Corporate Affairs had vide notification dated March 31, 2023 notified Companies (Indian Accounting Standards)
Amendment Rules, 2023 (the “Rules’) which amended certain accounting standards, and are effective 1st April 2023.

• Disclosure of accounting policies – amendments to Ind AS 1

• Definition of accounting estimates – amendments to Ind AS 8

• Deferred tax related to assets and liabilities arising from a single transaction – amendments to Ind AS 12. The other amendments
to Ind AS notified by these rules are primarily in the nature of clarifications.

These amendments did not have any material impact on the amounts recognized in prior periods and are not expected to significantly
affect the current or future periods. Specifically, no changes would be necessary as a consequence of amendments made to Ind AS 12
as the Company’s accounting policy already complies with the new mandatory treatment.

The material accounting policy information related to preparation of the Standalone Financial Statements have been disclosed in the respective
notes.

136
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Note 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 and judgements are:

• Estimation of provisions recognized and contingent liabilities disclosed in respect of tax matters– Notes 8, 17, and 42;

• Impairment of trade receivables and other financial assets - Notes 6, 11 and 31A .

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.

137
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

3.1 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 assets.

Depreciation method, 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)

Building
- Roads 5
- Buildings 5 - 60
Plant and Equipment
- Wooden Casks 7 - 15
- Others 7 - 15
Furniture and Fittings 10
Office Equipment
- Computers 3
- Servers 3
- Others 5
Vehicles 5

Useful lives of asset classes determined by management estimate, which are different than those prescribed under Schedule II of the Act are
supported by internal technical assessment of the useful lives. Estimated useful lives based on technical evaluation considers the impact of
additional depreciation for working extra shifts.
Refer note 52.1 for other accounting policy relevant to property, plant & equipment.
(All amounts in ` crores unless otherwise stated)
Freehold Buildings Plant and Furniture Office Vehicles Total
Land [Refer note Equipment and Equipment
Particulars [Refer note (b) below] Fittings
(a) and (c)
below]
Year ended March 31, 2023
Gross carrying amount
Opening 282 480 1,322 44 72 2 2,202
Additions - 23 107 3 3 - 135
Transfer pursuant to sale of business - (21) (222) (1) (3) (0) (246)
undertaking (Refer note 48(a))
Disposals (5) (5) (35) (0) (0) (0) (46)
Transfer to investment property (25) (31) - - - - (57)
Closing gross carrying amount 252 445 1,172 46 72 1 1,988

138
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Freehold Buildings Plant and Furniture Office Vehicles Total

Land [Refer note Equipment and Equipment
Particulars [Refer note (b) below] Fittings
(a) and (c)
below]
Accumulated depreciation and impairment
Opening 16 157 743 33 50 2 1,001
Depreciation charge during the year - 20 100 2 7 - 129
Transfer pursuant to sale of business - (7) (149) (1) (1) (0) (157)
undertaking (Refer note 48(a))
Impairment during the year [refer note (d) 61 44 - 4 - - 109
below]
Disposals - (4) (35) (0) (0) (0) (39)
Transfer to investment property (3) (29) - - - - (32)
Closing accumulated depreciation and 74 181 659 38 56 1 1,010
impairment
Net carrying amount as at March 31, 2023 178 264 513 7 16 - 978
Year ended March 31, 2024
Gross carrying amount
Opening 252 445 1,172 46 72 1 1,988
Additions 3 10 109 1 3 - 126
Disposals - (1) (23) (3) (20) - (47)
Transfer to investment property (113) (85) - - - - (198)
Closing gross carrying amount 142 369 1,258 44 55 1 1,869
Accumulated depreciation and impairment
Opening 74 181 659 38 56 1 1,010
Depreciation charge during the year 0 19 92 3 7 0 121
Impairment during the year [refer note (d) - 10 9 1 - - 20
below]
Assets written off provision during the year - - 1 - - - 1
Disposals - - (19) (3) (19) - (41)
Transfer to investment property (20) (65) - - - - (85)
Closing accumulated depreciation and 54 145 742 39 44 1 1,025
impairment
Net carrying amount as at March 31, 2024 88 224 516 5 11 - 844

Notes:
(a) Land includes:
(i) gross carrying amount of ` 79 crores (2023: ` 203 crores) in respect of which the title deeds are in the name of erstwhile merged
entities;
(ii) gross carrying amount of ` 8 crores (2023: ` 8 crores) in respect of which the Company is not in the possession of title deeds. These
properties were acquired by the Company through amalgamations effected in the prior years and the amalgamation orders are
in possession of the Company;

139
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

(iii) gross carrying amount of ` 3 crores (2023: ` 4 crores) in respect of which title deeds are jointly held in the name of the Company
and third party; and
(iv) gross carrying amount of ` Nil (2023: ` 6 crores) in respect of which the Company is in possession of combination of original and
photocopy of title deeds.
(b) Buildings include gross carrying amount of ` 34 crores (2023: ` 34 crores) in respect of which the Company has initiated litigation for
execution of sale deed in favour of the Company.
(c) The Company holds many properties, both freehold and leasehold. Many of the freehold properties have been acquired during the past
two decades through mergers and amalgamations and as such their title deeds are in the name of the erstwhile transferor companies.
The Company has title documents and other supporting evidences establishing ownership of these properties, makes payment of prop-
erty taxes in relation to these properties, and is in peaceful possession.
(d) The Company has taken an exceptional charge of ` 20 crores (2023: ` 109 crores) towards impairment of property, plant and equipment
covered under Supply Agility Programme by writing down their carrying amounts to their net recoverable amounts. (Refer Note 28(c)).
Property, plant and equipment pledged as security
Refer Note 33 for information on property, plant and equipment pledged as security by the Company.
Contractual obligations
Refer Note 41 for disclosure of contractual commitments for the acquisition of property, plant and equipment.
3.2 Right-of-use assets and lease liabilities
As a lessee
The Company recognises a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the
Company. Contracts may contain both lease and non-lease components. The Company allocates the consideration in the contract to the lease
and non-lease components based on their relative stand-alone prices.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the
following lease payments:
• fi xed payments (including in-substance fixed payments, for example arrangements that require payments based on agreed minimum
production volumes),
• variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date
• amounts expected to be payable by the Company under residual value guarantees
• the exercise price of a purchase option if the Company is reasonably certain to exercise that option, and
• payments of penalties for terminating the lease, if the lease term reflects the Company exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease
payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for
leases in the Company, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow
the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security
and conditions.
To determine the incremental borrowing rate, the Company:
•  here possible, uses recent third-party financing as a starting point, adjusted to reflect changes in financing conditions since third party
w
financing was received; and
• makes adjustments specific to the lease, e.g. term and security.
If a readily observable amortising loan rate is available to the individual lessee (through recent financing or market data) which has a
similar payment profile to the lease, then the Company use that rate as a starting point to determine the incremental borrowing rate.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so

140
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Variable lease payments that depend on sales are recognised in profit or loss in the period in which the condition that triggers those
payments occurs.
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability
• any lease payments made at or before the commencement date less any lease incentives received, and
• restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. If the
Company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful
life.

Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise items of buildings,
office equipment and furniture.
This note provides information for leases where the Company is a lessee. The Company has taken on lease land, offices, warehouses,
plant and equipment and office equipment. Lease contracts are typically entered into for 30 years to 100 years for leasehold land and for
periods of 11 months to 5 years for other categories, and may have extension options as described in Note (c) below. Some of the leasing
arrangements entered into by the Company include non-cancellable lease terms.
(i) Amounts recognised in Balance Sheet

As at As at
March 31, 2024 March 31, 2023
Right-of-use assets
Leasehold land 5 6
Buildings 19 20
Plant and equipment 201 140
Office equipment 2 7
Total 227 173
Movement of right-of-use assets during the year
Opening 173 261
Additions / adjustments 184 86
Depreciation for the year (129) (130)
Termination of leases - (44)
Transfer to investment property (1) (0)
Closing 227 173
Lease liabilities
Current 103 102
Non-current 137 80
Total 240 182

141
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

(ii) Amounts recognised in the Statement of Profit and Loss

Notes For the year ended For the year ended

March 31, 2024 March 31, 2023
(a) Depreciation charge of right-of-use assets 25
Leasehold land 0 0
Buildings 9 10
Plant and equipment 115 115
Office equipment 5 5
Total 129 130
(b) Interest expenses (included in finance cost) 27 21 16
(c) Lease related expenses included in Rent expenses 26
Short term leases 14 9
Leases of low value assets 4 0
Variable lease payments (not included in lease liabilities) 182 222
Total 200 231

(iii) The total cash outflow for leases for the year ended March 31, 2024 was ` 347 crores (2023: ` 371 crores).

Notes:

(a) Additions / adjustments to the right-of-use assets for year ended March 31, 2024 aggregate to ` 184 crores (2023: ` 86 crores).

(b) Variable lease payments

The Company has lease contracts for plant and equipment that contain variable payments. Variable lease payments that depend on
production volumes are recognised in the Statement of Profit and Loss in the period in which the condition that triggers those payments
occurs. Any changes in production under contracts which includes variable lease payments, would have a proportionate impact
on the variable lease payments. Certain agreements contain clauses for minimum production volumes and hence portion of lease
payments in these agreements are ‘in-substance fixed’. “In-substance fixed” lease payments are included in the determination of the
lease liabilities and consequently included in determining the value of right-of-use assets.

(c) Extension and termination options

Extension and termination options are included in a number of property and equipment leases. These are used to maximize operational
flexibility in terms of managing the assets used in the Company’s operations. Management considers contractual terms and conditions,
leasehold improvements undertaken, costs relating to termination of lease, incentives receivable from the Government (if any) and
significance of the underlying asset to the Company’s operations in determining the lease term for the purpose of recognising/
measuring the lease liability.

(d) Leasehold land includes:

(i) gross carrying amount of Nil (2023: ` 2 crores) in respect of which the title deeds are in the name of erstwhile merged entities;

(ii) gross carrying amount of ` 8 crores (2023: ` 8 crores) in respect of which the Company is in possession of photocopies of the title
deeds.

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 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

3.3 Capital work-in-progress

Movement of Capital work-in-progress (CWIP) set-out below:

Particulars As at As at
March 31, 2024 March 31, 2023
Opening 67 88
Additions 96 114
Assets capitalised during the year (126) (135)
Closing 37 67

The ageing schedule for capital work in progress is set-out below:

Particulars As at As at
March 31, 2024 March 31, 2023
Projects in progress
Less than 1 year 24 40
1-2 years 9 19
2-3 years 2 8
More than 3 years 2 0
Total 37 67

Projects under suspension amounted to ` 1 crores (2023 : Nil).

Expected completion timelines of CWIP projects whose completion is overdue or has exceeded its cost compared to its original plan
is set-out below:

Particulars As at As at
March 31, 2024 March 31, 2023
Less than 1 year
Health, safety and environment protection projects 1 6
Brand innovation projects 4 8
Support core growth projects 6 7
Productivity improvement projects 7 14
Others 9 8
Total 27 43
1-2 years
Others 0 -

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UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

3.4 Intangible assets

Brand and licenses

Licenses acquired are carried at cost less accumulated amortisation and impairment losses, if any. Brands are regarded as having
indefinite useful lives and are not amortised, but are assessed for impairment at every reporting date.

Computer software
Computer software acquired or developed are carried at cost less accumulated amortisation and impairment losses, if any. Costs
associated with maintaining software programs are recognised 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 under
development or intangible assets when ready for intended use, 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 that the software will generate probable future economic benefits,

d) adequate technical, financial and other resources to complete the development and to use the 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 software applications include employee costs and other
directly attributable costs are amortised from the point at which the software asset is available for use.

Amortisation method and useful lives

The company amortises intangible assets with finite useful life using the straight-line method over their estimated useful lives as follows:

Asset category Useful life(Years)

Licenses Over the license
period
Computer software 5

Refer note 52.2 for other accounting policy relevant to intangible assets.

Particulars Brands License Computer Total

Software
Year ended March 31, 2023
Gross carrying amount
Opening 1 4 50 55
Additions to internally developed intangible assets - - 19 19
Transfer pursuant to sale of business undertaking (Refer note 48(a)) - (4) - (4)
Closing gross carrying amount 1 0 69 70
Accumulated amortisation and impairment
Opening 1 2 27 30
Amortisation charge for the year - 0 11 11
Transfer pursuant to sale of business undertaking (Refer note 48(a)) - (2) - (2)
Closing accumulated amortisation and impairment 1 0 38 39
Net carrying amount as at March 31, 2023 - 0 31 31

144
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Particulars Brands License Computer Total

Software
Year ended March 31, 2024
Gross carrying amount
Opening 1 0 69 70
Additions to internally developed intangible assets - - 18 18
Disposals - - - -
Closing gross carrying amount 1 0 87 88
Accumulated amortisation and impairment
Opening 1 0 38 39
Amortisation charge for the year - - 14 14
Disposals - - - -
Closing accumulated amortisation and impairment 1 0 52 53
Net carrying amount as at March 31, 2024 - 0 35 35

3.5 Intangible assets under development

Movement of intangible assets under development set-out below:

Particulars As at As at
March 31, 2024 March 31, 2023
Opening 16 8
Additions 2 27
Intangible assets capitalised during the year (18) (19)
Closing - 16

The ageing schedule for intangible assets under development is set-out below:

Projects in progress As at As at
March 31, 2024 March 31, 2023
Less than 1 year - 7
1-2 years - 9
Total - 16

There were no projects under suspension as at March 31, 2024 and March 31, 2023.

145
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Expected completion timeline of intangible assets under development projects whose completion is overdue or has exceeded its cost
compared to its original plan is set-out below:

Projects in progress As at As at
March 31, 2024 March 31, 2023
Less than 1 year
ERP related development project - 2
Business application related development project - 13
Others - 1
Total - 16

There were no projects which are expected to be completed after the expiry of one year.

3.6 Investment property

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Company, 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 Company 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.

Movement of investment property is set-out below:

Particulars As at As at
March 31, 2024 March 31, 2023
Gross carrying amount
Opening 57 -
Transfer from property, plant and equipment 198 57
Transfer from right of use assets 2 0
Disposal (14) -
Closing gross carrying amount 243 57
Accumulated depreciation and impairment
Opening 32 -
Transfer from property, plant and equipment 85 32
Transfer from right of use assets 1 -
Depreciation and impairment on disposal (14) -
Closing accumulated depreciation and impairment 104 32
Net carrying amount 139 25

Estimation of fair value:

The Company obtains independent valuations for its investment property. The best evidence of fair value is current prices in an active
market for similar properties. When such information is not available, the Company considers information from a variety of sources
including :

146
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

(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; and

(c) capitalised income projection 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 land and building where the investment property is located. The appropriate adjustments have been made in order
to account for the differences between the subject property and comparable terms of time, floor level, view, condition, quality and
facilities etc. All resulting fair value estimates for investment properties are included in level 3.

Notes:

(a) Investment Property includes Land of:

(i) gross carrying amount of ` 113 crores (2023: ` 18 crores) in respect of which the title deeds are in the name of erstwhile
merged entities;

(ii) gross carrying amount of ` 1 crore (2023: Nil) in respect of which title deeds are jointly held in the name of the Company
and third party;

(iii) gross carrying amount of ` 1 crore (2023: ` 1 crore) in respect of which the Company is in possession of photocopies of the
title deeds; and

(iv) gross carrying amount of ` 6 crores (2023: ` Nil) in respect of which the Company is in possession of combination of
original and photocopy of title deeds.

(b) Opening and closing cost of buildings includes payments below rounding off norms adopted by the Company towards fully paid
shares held in a co-operative housing society for the purpose of acquiring the right of occupation in respect of which Company
is in possession of photocopy of share certificate in co-operative society.

(c) Fair value of investment property is ` 485 crores (2023: ` 146 crores).

(d) The restrictions on realisability of investment properties are mentioned in note (a) above

(e) There is no contractual obligation to purchase, construct or develop investment property or for repairs, maintenance or
enhancements.

147
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

4.1 Investments in subsidiaries and associate

Particulars Face Number of As at Number of As at

value shares March 31, shares March 31,
(Per 2024 2023
share)
a) Investments in subsidiaries
Investment in equity instruments carried at cost (fully
paid-up)
Unquoted
McDowell & Co (Scotland) Limited GBP 1 15,75,000 13 15,75,000 13
Shaw Wallace Overseas Limited GBP 1 3,57,745 - 3,57,745 -
Asian Opportunities & Investments Limited USD 1 49,98,706 - 49,98,706 -
Palmer Investment Group Limited USD 1 1,50,00,000 - 1,50,00,000 -
USL Holdings Limited USD 1 76,66,40,114 - 76,66,40,114 -
Royal Challengers Sports Private Limited INR 10 14,690 42 14,690 42
Total investments in equity instruments 55 55
b) Investment in associate
Nao Spirits & Beverages Private Limited [Refer note - -
(b) below]
- Equity shares carried at cost INR 10 4,670 12 4,670 12
- Compulsorily convertible preference shares carried INR 10 14,172 37 8,094 20
at fair value through profit and loss
49 32
c) Investment in trust controlled by the Company
Investment as sole beneficiary in USL Benefit Trust 120 120
[Refer Note (a) below]
224 206
Aggregate amount of unquoted investments 224 206

Notes:

(a) Investment as a sole beneficiary in USL Benefit Trust (the ‘Trust’) was recorded as per the terms of composite scheme of
arrangement approved by the Honourable High Courts of Karnataka and Bombay, upon amalgamating various companies
with United Spirits Limited. The Trust has been established for the exclusive benefit of the Company and holds 1,72,95,450 equity
shares of ` 2/- face value (2023: 1,72,95,450 equity shares of ` 2/- face value) of the Company [Refer Note 13(h)]. 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. Also refer Note 33(b) for assets pledged and Note 40(d).

(b) During the prior year, the Company acquired the interest in Nao Spirits & Beverages Private Limited (“Nao Spirits”) by investing
` 32 crores by subscribing to 8,094 Compulsory Convertible Preference Shares and 4,670 equity shares. During the year, the
Company infused additional amount of ` 15 crores by subscribing to 6078 compulsorily convertible preference shares. The
Company holds 30% (2023: 22.5%) ownership interest on a fully diluted basis (11% of equity ownership interest) as at March 31,
2024. Management has considered Nao Spirits to be an associate since the Company has significant influence over its operating
and financing decisions.

148
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

In accordance with the Shareholder’s agreement, the Company has a right to purchase all or any of the shares held by promoters,
existing investors and other shareholders upon occurrence of earlier of the Nao Spirits achieving the specified sales volume
threshold by March 31, 2025. The exercise price of the call option shall be determined in accordance with a formula specified in
the Shareholder’s Agreement. As at March 31, 2024, the fair value of the said call option has been determined to be immaterial.

4.2 Investments - Current

(i) Debt instruments:

On initial recognition, the debt instruments are measured at fair value. Subsequent measurement of debt instruments depends
on the Company’s business model for managing the asset and the cash flow characteristics of the asset.

• 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.

• Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows
represent solely payments of principal and interest, are measured at FVOCI.

• Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss.

(ii) Investment in mutual fund:

On initial recognition, these are measured at fair value, and subsequently, carried at fair value through profit and loss.

Particulars As at As at
March 31, 2024 March 31, 2023
Quoted
Money market funds 499 240
Treasury bills at amortized cost 100 -
Non-convertible debentures - 16
Total current investments 599 256
Aggregate amount of quoted investments 599 256
Aggregate market value of quoted investments 599 256

149
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

5. Loans

As at March 31, 2024 As at March 31, 2023

Current Non-current Current Non-current
Loan to UBHL and a related entities [Refer note 40(c)] - 1,238 - 1,238
Loans to subsidiaries [note 36(c)(iv)] - 74 92 73
Loans to employees 1 - 2 -
Loan to others 9 - 15 -
10 1,312 109 1,311
Less: Loss allowance
Loan to UBHL [Refer note 40(c)] - (1,238) - (1,238)
Loans to subsidiaries [Note 36(c)(v)] - (74) - (73)
- (1,312) - (1,311)
Total loans 10 - 109 -

As at March 31, As at March 31,

2024 2023
Details of securities/ categorisation of credit risk on loans
Loans considered good- secured 9 15
Loans considered good- unsecured 1 94
Loans- credit impaired 1,312 1,311
Total 1,322 1,420
Less: Loss allowance (1,312) (1,311)
Total Loans 10 109

6. Other financial assets

As at March 31, 2024 As at March 31, 2023
Current Non-current Current Non-current
Balances with banks [Refer note below] - 46 63 82
Receivable from related parties [Refer note 36(c)(i)] 4 - 1 -
Receivable from Tie-up manufacturing units 7 25 71 9
Government grant 16 72 26 72
Security deposits 13 17 23 5
Other receivables 1 14 3 13
41 174 187 181
Less: Loss allowance
Receivable from Tie-up manufacturing units - (25) (39) (9)
Government grant - (15) - (13)
Security deposits - (9) (10) -
Other receivables (1) (13) (1) (13)
(1) (62) (50) (35)
Total other financial assets 40 112 137 146

150
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Notes :

Balances with banks comprise of:

(a) Deposit of ` 46 crores (2023: ` 46 crores) with a bank in suspense account (Refer Note 40(d)).

(b) Term deposit of Nil (2023: ` 34 crores) with a bank kept under escrow pending resolution of various taxation matters in connection
with a sale of business undertaking in an earlier year.

(c) Deposit of Nil (2023 : ` 63 crores) with a bank kept under escrow subject to fulfilment of certain conditions (Refer Note 48(a)).

(d) Margin money against bank guarantees ` 0 crore (2023: ` 0 crore).

(e) Represents bank deposits under lien in respect of bank guarantees provided to tax authorities ` 0 crores (2023: ` 2 crores).

Refer Note 31 for information about financial risk management.

7. Deferred tax assets (net)

As at As at
March 31, 2024 March 31, 2023
Deferred tax assets
Allowance for doubtful receivable balances 71 61
Expenses allowed on payment basis 86 77
Indexation benefit on land 11 7
Lease liabilities 60 30
Others 24 24
252 199
Deferred tax liabilities
Difference between carrying amount and tax base of property, plant and equipment, 19 17
investment property and intangible assets
Right-of-use assets 56 25
75 42
Total deferred tax assets (net) 177 157

151
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Movement in deferred tax assets

Doubtful Expenses Difference between Indexation Right-of- Lease Others Total
receivable allowed carrying amount and benefit on use assets liabilities
balances on tax base of property, land
payment plant and equipment
basis and intangible assets
At April 01, 2022 59 83 (31) 7 3 (3) 24 142
(Charged) / Credited:
- to profit and loss 2 (6) 14 - (28) 33 - 15
- to other comprehensive income - 0 - - - - - 0
At March 31, 2023 61 77 (17) 7 (25) 30 24 157
(Charged) / Credited:
- to profit and loss 10 8 (2) 4 (31) 30 - 19
- to other comprehensive income - 1 - - - - - 1
At March 31, 2024 71 86 (19) 11 (56) 60 24 177

8. Income tax balances

As at As at
March 31, 2024 March 31, 2023
Current tax liabilities (net of advance tax) 324 283
Current tax assets (Non-current) (net of provision for current tax) 1,348 1,311

Note :
The above amounts include amounts paid under protest of ` 1,481 crores (2023: ` 1,344 crores) pertaining to various assessment years.

9. Other assets
As at March 31, 2024 As at March 31, 2023
Current Non-current Current Non-current
Capital advances
Considered good (Refer note (b) below) - 6 - 6
Considered doubtful - - - -
Balances with government authorities (Refer note (a) below)
Considered good 120 180 99 201
Considered doubtful 25 18 21 18
Advances to suppliers
Considered good 73 - 48 -
Considered doubtful - 84 7 78
Net surplus in gratuity plan [Refer note 38(b)C] - 30 - 33
Pre-paid expenses 141 - 110 -
359 318 285 336
Less: Loss allowance (25) (102) (27) (97)
Total other assets 334 216 258 239

152
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Notes:
(a) Balance with government authorities includes:
(i) ` 123 crores (2023: ` 132 crores) paid under protest in respect of disputed indirect tax matters; and
(ii) ` 5 crores (2023: ` 2 crores) paid under protest in respect of water charges (refer note 17).
(b) Capital advances considered good includes an amount of ` 2 crores (2023: ` 2 crores) being advance paid towards purchase
of land pursuant to an “agreement to sell” entered by the Company with the owners of the land. This matter is currently litigated
at the High Court of Bombay.

10. Inventories

Raw materials and stores and spares, work in progress, traded and finished goods are stated at the lower of cost and net realisable
value. Cost of raw materials and traded goods comprises cost of purchases. Cost of work-in-progress and finished goods comprises
direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated
on the basis of normal operating capacity.

Cost of inventories also include all other costs incurred in bringing the inventories to their present location and condition. Cost includes
the reclassification from equity of any gains or losses on qualifying cash flow hedges relating to purchases of raw material but excludes
borrowing costs. Excise duty, as applicable, is included in the valuation.

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.

As at As at
March 31, 2024 March 31, 2023
Raw materials 472 447
[including materials in transit ` 82 crores (2023: ` 49 crores)]
Work-in-progress [Refer Note (a) below] 636 602
Finished goods 500 550
[including goods in transit ` 56 crores (2023: ` 27 crores)]
Stock-in-trade 266 390
[including goods in transit ` 64 crores (2023: ` 34 crores)]
Packing materials 172 226
[including materials in transit ` 8 crores (2023: ` 7 crores)]
Stores and spares 17 15
Total inventories 2,063 2,230

Notes:

(a) Allowance for obsolete inventories (net) for the year amounting to ` 67 crores (2023: ` 19 crores) has been recognised as an
expense during the year and is included in cost of materials consumed and change in inventories of finished goods, work-in-
progress and stock-in-trade in the Statement of Profit and Loss.

(b) Inventories include inventory held by tie up manufacturing units amounting to ` 82 crores (2023: ` 175 crores).

(c) For details of Inventories pledged as security refer note 33.

153
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

11. Trade receivables

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business and
reflect the Company’s unconditional right to consideration (that is, payment is due only on the passage of time). Trade receivables are
recognised initially at the transaction price as they do not contain significant financing components. The Company holds the trade
receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost
using the effective interest method, less loss allowance. For trade receivables and contract assets, the Company applies the simplified
approach required by Ind AS 109, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

As at March 31, 2024 As at March 31, 2023

Current Non-current* Current Non-current
From contracts with customers - related parties [Refer note 36(c)(ii)] 2 - 6 -
From contracts with customers - others 2,933 365 2,498 -
2,935 365 2,504 -
Less: Loss allowance (172) - (121) -
Total trade receivables 2,763 365 2,383 -
Details of securities/ categorisation of credit risk of trade
receivables
Trade receivables considered good- unsecured 2,935 365 2,504 -
Total 2,935 365 2,504 -
Less: Loss allowance (172) - (121) -
Total trade receivables 2,763 365 2,383 -

Notes:
(a) Refer note 31 for information about financial risk management
* Refer note 49 for details.

Trade receivables ageing schedule is set-out below:

As at As at
March 31, 2024 March 31, 2023
a. Undisputed-considered good
Unbilled dues - -
Not due 2,307 2,298
Less than 6 months 523 108
6 months -1 year 20 24
1-2 Years 22 19
2-3 years 8 6
More than 3 years 22 25
sub-total 2,902 2,480
b. Disputed - considered good

154
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

As at As at
March 31, 2024 March 31, 2023
Unbilled dues - -
Not due 218 -
Less than 6 months 148 1
6 months -1 year 4 2
1-2 Years 7 3
2-3 years 4 4
More than 3 years 17 14
sub-total 398 24
Less: Loss Allowance (172) (121)
Total 3,128 2,383

12.1 Cash and cash equivalents

Cash and cash equivalents includes cash on hand and balances with banks that are readily convertible to known amounts of cash
and other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value. Highly liquid investments also includes overnight
and liquid mutual funds which the Company has intention to hold for very short period of time to manage day to day cashflow.

As at As at
March 31, 2024 March 31, 2023
Balances with banks
In current account 68 70
Term deposits with original maturity of less than three months 397 -
Other cash equivalents
Overnight and liquid mutual funds 547 -
Cheques on hand 9 11
1,021 81

12.2 Bank balances other than cash and cash equivalents

As at As at
March 31, 2024 March 31, 2023
In unpaid dividend accounts 0 0
In unpaid public deposit accounts [Refer Note (a) below] 0 0
Bank deposits due to mature within 12 months from the reporting date [Refer Note (b) below] 190 768
191 768
Less : Loss Allowance (3) -
Total bank balances other than cash and cash equivalents 188 768

Notes:

a) Includes ` 0 crores (2023: Nil) transferred to a separate non-interest bearing escrow account pertaining to unclaimed public
deposits which had matured in earlier years and for which duly discharged deposit receipts were not received from deposit
holders.
b) Includes ` 7 crores (2023 : ` 5 crores) being term deposit with banks held under lien.

155
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

13 Equity share capital

As at As at
March 31, 2024 March 31, 2023
Authorised
2,82,75,00,000 equity shares of ` 2/- each 565 565
(2023: 2,82,75,00,000 equity shares of ` 2/- each)
17,37,00,000 preference shares of ` 10/- each 174 174
(2023: 17,37,00,000 preference shares of ` 10/- each)
739 739
Issued, subscribed and paid-up
72,73,50,853 equity shares of ` 2/- each 145 145
(2023: 72,73,50,853 equity shares of ` 2/- each) fully paid up
145 145

(a) Reconciliation of the number of shares outstanding

As at March 31, 2024 As at March 31, 2023

No. of Shares Amount No. of Shares Amount
Balance at the beginning of the year 72,73,50,853 145 72,66,38,715 145
Add: equity shares issued during the year - - 7,12,138 0
Balance at the end of the year 72,73,50,853 145 72,73,50,853 145

(b) Rights, preferences and restrictions attached to equity shares

The Company has one class of equity shares having a face value of ` 2/- 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 are as below:
As at March 31, 2024 As at March 31, 2023
No. of Shares Amount No. of Shares Amount
Diageo Relay B V (wholly owned subsidiary of 40,64,47,245 81 40,64,47,245 81
Diageo Plc) [Refer note (i) below]
40,64,47,245 81 40,64,47,245 81

(d) The Company has not issued any shares for consideration other than cash during the period of five years immediately preceding
the reporting date except for 7,12,138 shares allotted to the shareholders of Pioneer Distilleries Limited (PDL) as a result of
amalgamation during the year ended March 31, 2023.

156
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

(e) Details of shareholders holding more than 5% shares in the Company.

As at March 31, 2024 As at March 31, 2023

No. of Shares % of Holding No. of Shares % of Holding
Diageo Relay B V (formerly known as Relay BV) 40,64,47,245 55.88% 40,64,47,245 55.88%
[Refer note (i) below]

(f) There are no shares reserved for issue under options and contracts / commitments for the sale of shares.
(g) There are no bonus shares issued or bought back during the period of five years immediately preceding the reporting date.
(h) Details of shares in the Company held by subsidiaries, associates or controlled trusts.

As at March 31, 2024 As at March 31, 2023

No. of Shares % of Holding No. of Shares % of Holding
USL Benefit Trust (Refer Note (4.1(a)) 1,72,95,450 2.38% 1,72,95,450 2.38%

(i) 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 1,01,41,437
equity shares of ` 10/- each in the Company to Diageo Relay B V (formerly known as Relay BV), 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
Diageo Relay B V (formerly known as Relay BV). Such shares are included in arriving at Diageo Relay BV’s shareholding in the
Company.

(j) Disclosure of shareholding of promoters

Name of promoter As at March 31, 2024 As at March 31, 2023 % Change

No. of Shares % of total No. of Shares % of total during the
Shares Shares year
Diageo Relay B V 40,64,47,245 55.88% 40,64,47,245 55.88% -
United Breweries Holdings Limited 55,55,265 0.76% 55,68,895 0.77% 0.01%
Vijay Mallya 62,550 0.01% 62,550 0.01% -
Vittal Investments Private Limited 1,56,350 0.02% 1,56,350 0.02% -
Total 41,22,21,410 56.67% 41,22,35,040 56.68% 0.01%

157
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

14 Reserves and surplus

As at As at
March 31, 2024 March 31, 2023
Capital reserve 95 95
Capital redemption reserve 72 72
Securities premium account 4,568 4,568
Central subsidy 0 0
Share based incentive reserve 1 1
Contingency reserve 11 11
General reserve 1,103 1,103
Retained earnings 968 (51)
Total reserves and surplus 6,818 5,799

Nature and purpose of reserves:

a) Capital reserve: Created pursuant to a Scheme of Amalgamation between the Company and SW Finance Co. Limited,
sanctioned by the Honourable High Court of Karnataka and Honourable High Court of Bombay under the orders dated June 12,
2015 and August 28, 2015, respectively. The balance also includes capital reserve arising on amalgamation of Pioneer Distilleries
Limited (“PDL”) with the Company wide order of the Honourable National Company Law Tribunal (NCLT) on December 02,
2022.

b) Capital redemption reserve: Capital Redemption Reserve is created for an amount equivalent to the nominal value of shares
redeemed in earlier years by the Company (including the erstwhile Companies that were merged with the Company through
several schemes of amalgamations / mergers).This also included capital redemption reserve upon amalgamation of PDL.

c) Securities premium account: Securities premium account is credited when shares are issued at premium. The balance is utilised
in accordance with the provisions of the Act.

d) Central subsidy: The balance is taken over on amalgamation of Shaw Wallace Distilleries Limited with the Company during the
year ended March 31, 2006 as per the terms of the arrangement approved by the Honorable High Courts of Karnataka and
Bombay.

e) Share based incentive reserve: The share-based incentive reserve is used to recognise grant date fair value of Diageo Plc’s share
options under Diageo Plc’s share-based payment arrangements. Recharges towards under this arrangements are debited to this
reserve.

f) Contingency reserve: The balance is taken over on amalgamation of McDowell Spirits Limited with the Company during the year
ended March 31, 2001 as per the terms of the arrangement approved by the Honorable High Court of Karnataka.

g) General reserve: The General reserve is created by way of transfer of profits from retained earnings for appropriation purposes.
This reserve is utilised in accordance with the provisions of the Act.

h) Retained earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve,
dividends or other distributions paid to shareholders.

158
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

15. Borrowings
Maturity date Terms of repayment Coupon/ As at As at
interest rate March 31, 2024 March 31, 2023
Non-current
Unsecured
Sales tax deferment liability April 21, 2024 Repayable in five 12% p.a. 0 1
equal annual
installments (2019-20
to 2024-25)
0 1
Less: Current maturities of deferred 0 1
sales tax liability
Total non-current borrowings - 0
Current
Current maturities of Deferred 0 1
Sales Tax Liability
Total current borrowings 0 1
Total borrowings 0 1

Notes:
a) Sales tax collected under deferral scheme of State Government of Maharashtra for 11 years (from 1999-00 to 2009-10) and is
repayable in 5 equal annual installments with final installment due in 2024-25.
b) Net debt reconciliation
(i) Net debt summary:

Particulars Note As at As at
March 31, 2024 March 31, 2023
Non-current borrowings 15 - 0
Current borrowings 15 0 1
Lease liabilities 3.2 240 182
Total debt 240 183
Less: Cash and cash equivalents 12.1 1,021 81
Net debt/(cash) (781) 102

159
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

(ii) Movements in net debt:

Particulars Lease Sales tax Working (Less) Cash Net debt

liabilities deferment capital and cash
loans equivalents
Balance as on April 1, 2022 264 2 339 (27) 578
Acquisition- leases (net) 42 - - - 42
Net proceeds from / (Repayment of) working - - (339) - (339)
capital loans
Interest expense (Refer note 27) 16 - 20 - 36
Interest paid (16) - (20) - (36)
Principal lease payments (124) - - - (124)
Cash outflows / (inflows) - (1) - (54) (55)
Net debt as at March 31, 2023 182 1 - (81) 102
Acquisition- leases (net) 184 - - - 184
Interest expense (Refer note 27) 21 - - - 21
Interest paid (21) - - - (21)
Principal lease payments (126) - - - (126)
Cash outflows / (inflows) - (1) - (940) (941)
Net debt as at March 31, 2024 240 0 - (1,021) (781)

16. Other financial liabilities

As at As at
March 31, 2024 March 31, 2023
Current
Unpaid / unclaimed dividends [Refer Note (a) below] 0 0
Others
Due to Tie-up manufacturing units 43 60
Capital creditors 20 20
Employee benefits payable 100 143
Other financial liabilities 41 62
Total other current financial liabilities 204 285

Note:

(a) As at March 31, 2024 no balances are due to be transferred to IEPF (2023: Nil)

160
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

17. Provisions

As at March 31, 2024 As at March 31, 2023

Current Non-current Current Non-current
Employee benefits
Compensated absences 33 - 37 -
Pension liability [Refer note 38(b)(C)] 0 - 0 1
Share appreciation rights (Refer note 34) 29 15 16 11
Provident fund obligation [Refer note 38(b)(C)] - - 6 -
Provision for indirect tax and other legal matters 305 - 310 -
[Refer Note (a) below]
Commitment towards “Raising the Bar” programme 0 - 2 -
[Refer Note (b) below]
Total provisions 367 15 372 12

Notes:

(a) Movement in provisions for indirect taxes and other legal matters

Description As at Additions/ Amounts utilised As at

April 1, 2023 (amounts written March 31, 2024
back)
Indirect taxes and other legal matters 310 (5) 0 305
[refer (i) & (ii) below]

(b) Movement in Commitment towards “Raising the Bar” programme

Description As at Additions/ Amounts utilised As at

April 1, 2023 (amounts written March 31, 2024
back)
Commitment towards “Raising the Bar” 2 - 2 0
programme

Notes :

(i) Provision for indirect tax and other legal matters includes provision for water charges in the State of Maharashtra. The Company
has filed petition before the High Court of Bombay, challenging multiple demands raised by Water Resources Department,
State of Maharashtra, levying additional water charges and an interim relief against any coercive steps has been received .The
Company has received further demands from the said Department levying water charges at a higher rate along with penalties
for the period November 2018 to March 2024. Based on a legal opinion obtained, Management has determined that the
provision recorded in the books represents probable cash outflows on account of additional water charges. Any further cash
outflows in addition to the provision amount on account of this matter are considered remote.

(ii) Provision is made for probable cash outflow arising out of pending or potential indirect tax disputes / litigations. 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. Refer Note 9(a) for payments made under protest in respect of indirect tax and other legal matters.

161
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

18. Trade payables

As at As at
March 31, 2024 March 31, 2023
Dues to Micro and Small enterprises 69 50
Dues to creditors other than Micro and Small enterprises
Dues to related parties [Refer note 36(c)(iii)] 231 280
Others 1,527 1,408
Total trade payables 1,827 1,738

Trade payables ageing schedule is set-out below:

As at As at
March 31, 2024 March 31, 2023
(i) Undisputed dues - Micro and small enterprieses
Unbilled 6 -
Not due 51 38
Less than 1 year 11 11
1-2 years 0 0
2-3 years 0 1
> 3 years 1 0
sub-total 69 50
(ii) Undisputed dues - Others
Unbilled 852 811
Not due 556 629
Less than 1 year 333 203
1-2 years 7 5
2-3 years 2 32
> 3 years 8 8
sub-total 1,758 1,688
Total 1,827 1,738

19. Other current liabilities

As at As at
March 31, 2024 March 31, 2023
Contract liabilities 39 51
Statutory liabilities 408 364
Liability for taxes on closing inventory (net of prepaid taxes) 355 339
Total other current liabilities 802 754

162
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

20. Revenue from operations

Revenue comprises revenue from contracts with customers for sale of goods and income from brand franchisee royalties receivable.
Revenue from sale of goods is inclusive of excise duties, as applicable, and is net of returns, trade allowances, rebates, value added
taxes and such amounts collected on behalf of third parties.

Revenue is recognised as and when performance obligations are satisfied by transferring goods or services to the customer, as below:

a. Revenue from sale of products:

Revenue is recognised on transfer of control, being on dispatch of goods or upon delivery to customer, in accordance with the
terms of sale.

b. Revenue from manufacture and sale of products from Tie-up manufacturing arrangements:

The Company has entered into arrangements with Tie-up Manufacturing Units (TMUs), where-in TMUs manufacture and sell
beverage alcohol on behalf of the Company. Under such arrangements, the Company has exposure to significant risks and
rewards in such arrangements i.e. it has the primary responsibility for providing goods to the customer, has pricing latitude
and is also exposed to inventory and credit risks. The Company is considered to be a principal in such arrangements with
TMUs. Accordingly, the transactions of the TMUs under such arrangements have been recorded as gross revenue, excise duty
and expenses as if they were transactions of the Company. The Company presents inventory held by the TMUs under such
arrangements as its own inventory. The net receivables from/ payable to TMUs are recognised under other financial assets/
other financial liabilities respectively.

c. Income from brand franchise arrangements:

Revenue in respect of fixed income brand franchise arrangements is recognised proportionately in each period. Income from
variable franchise arrangements is recognised based on the terms of the respective contracts upon sale of products by the
franchisees.

For the year ended For the year ended

March 31, 2024 March 31, 2023
Revenue from contracts with customers:
- Sale of products (includes excise duty) 25,251 27,449
- Income from brand franchise arrangements 76 71
25,327 27,520
Other operating revenue:
- Scrap sales 51 45
- Miscellaneous 11 13
62 58
Total revenue from operations 25,389 27,578
Reconciliation between contract price and revenue recognised
Contract price 26,653 28,834
Less: Items offset against revenue from contracts with customers as required (1,326) (1,314)
under Ind AS 115
Revenue from sale of products 25,327 27,520

163
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

For the year ended For the year ended

March 31, 2024 March 31, 2023
Dissaggregation of revenue from contracts with customers
Categories of products
Prestige and above 9,345 8,357
Popular 1,113 1,837
Others 172 122
Add: Excise duty collected from customers 14,697 17,204
Total 25,327 27,520

21. Other income

For the year ended For the year ended

March 31, 2024 March 31, 2023
Interest income on term deposits and investments held at amortised cost 39 28
Interest on direct and indirect tax refunds 87 -
Unwinding of interest on government grant - 2
Interest income from loans to subsidiaries held at amortised cost [Refer Note 36(b)(iv)] 0 4
Dividend income from subsidiary company (carried at cost) [Refer Note 36(b)(xiv)] 125 -
Gain on disposal of property, plant and equipment (net) 13 20
Profit on redemption of mutual fund units 42 17
Fair value gain / (loss) on mutual funds 18 3
Bad debts / advances recovered 4 0
Miscellaneous income 7 0
Total other Income 335 74

22. Cost of materials consumed

For the year ended For the year ended

March 31, 2024 March 31, 2023
Raw materials 3,262 3,497
Packing materials 1,992 1,840
Total cost of materials consumed 5,254 5,337

164
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

23. Changes in inventories of finished goods, work-in-progress and stock-in-trade

For the year ended For the year ended

March 31, 2024 March 31, 2023
Opening inventory:
Finished goods 550 824
Work-in-progress 602 607
Stock-in-trade 390 151
Total opening balance (A) 1,542 1,582
Closing inventory:
Finished goods 501 550
Work-in-progress 636 602
Stock-in-trade 266 390
Total closing balance (B) 1,403 1,542
Increase / (decrease) in excise duty on finished goods, net (C) (20) (169)
Total changes in inventories of finished goods, work-in-progress and stock-in-trade 119 (129)
(A-B+C)

24. Employee benefits expense

For the year ended For the year ended

March 31, 2024 March 31, 2023
Salaries, wages and bonus 435 522
Contribution to provident and other funds [Refer note 38(a)] 23 10
Defined benefits plans cost [Refer note 38(b)D] 10 16
Share based payment expense (Refer note 34) 37 23
Staff welfare expenses 38 36
Total Employee benefits expense 543 607

25. Depreciation and amortisation expense

For the year ended For the year ended

March 31, 2024 March 31, 2023
Depreciation / impairment of property, plant and equipment (Refer note 3.1) 121 130
Depreciation of right-of-use assets (Refer note 3.2) 129 130
Amortisation / impairment of intangible assets (Refer note 3.4) 14 11
Total Depreciation and amortisation expense 264 271

165
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

26. Other expenses

For the year ended For the year ended

March 31, 2024 March 31, 2023
Consumption of stores and spares 16 16
Sub-contracting charges 83 91
Power and fuel 18 16
Rent (Refer note 3.2) 200 231
Repairs and maintenance:
- Buildings 4 5
- Plant and machinery 28 35
- Others 34 30
Insurance 14 17
Rates and taxes 146 136
Travel and conveyance 48 50
Legal and professional 135 133
Auditors' remuneration (Refer note below) 6 6
Freight outwards 243 284
Royalty [Refer note 36(b)(viii)] 11 13
Exchange loss (net) 5 -
Remuneration to non-executive directors:
- Sitting fee 2 1
- Commission 2 2
Allowance for trade receivable and other assets (net) 41 5
Expense towards corporate social responsibility (Refer note 45) 19 19
Information technology and communication expenses 88 83
Sales distribution charges 173 154
Miscellaneous expenses 36 29
Total Other expenses 1,352 1,356
Note:
Auditors’ remuneration*
Statutory audit 2 2
Quarterly reviews 1 1
Certifications 0 0
Other assurance related service 3 3
Total payment to auditors 6 6

* Excluding goods and services tax

166
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

27. Finance costs

For the year ended For the year ended

March 31, 2024 March 31, 2023
Interest expense on lease liabilities 21 16
Interest expense on borrowings at amortised cost - 21
Interest others 55 67
Total finance costs 76 104

28. Exeptional Items (net)

For the year ended For the year ended

March 31, 2024 March 31, 2023
(a) Impairment of investment and loan to a subsidiary - (13)
(b) Gain on sale of a business undertaking (Refer note 48(a)) 31 380
(c) Supply restructuring cost (Refer note 48(b)) (48) (157)
(d) Voluntary separation scheme - (38)
Total exceptional items, net (17) 171

29. Reconciliation of tax expense and accounting profit multiplied by India’s tax rate

For the year ended For the year ended

March 31, 2024 March 31, 2023
Profit before income tax expense 1,686 1,289
Tax at Indian tax rate @ 25.17% (2023: 25.17%) 423 324
Tax effect of amounts which are not deductible / (taxable) in calculating taxable
income:
- Tax deduction for dividend received from subsidiary (31) -
- Unrecognised short term capital losses utilised against profit on redemption (15) (5)
of mutual funds
- Expenses disallowed for tax purpose 8 16
- Profit on sale of business undertaking, which was taxed in the previous year (8) -
- Provision / (reversal) of income tax relating to prior years 1 (21)
- Unrecognised long term capital loss utilised against profit on sale of - (95)
business undertaking
- Impairment provision on land on which deferred tax asset has not been - 15
recognised
- Others (4) 3
Total (49) (87)
Income tax expense as per Statement of Profit and Loss 374 237

Notes:
a) Deferred income tax assets have not been recognized on long term and short term capital losses aggregating to ` 469 crores
(2023: ` 527 crores) as it is not probable that long term and short term capital gains would be available in the foreseable future
to offset such losses.
b) Long term Capital losses amounting to ` 467 crores, accumulated from prior years, will expire during financial years ending
March 31, 2027 to March 31, 2031 and short term capital losses amounting to ` 2 crores will expire in financial year ending March
31, 2027.

167
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

30. Earnings per share

As at As at
March 31, 2024 March 31, 2023
Nominal value of equity shares (in `) 2/- 2/-
(a) Profits attributed to equity holders of the Company 1,312 1,052
(b) Weighted average number of equity shares used as denominator 72,73,50,853 72,73,50,853
(c) Basic and diluted earnings per share (in `) 18.04 14.46

Notes:

(a) There are no dilutive equity shares in the Company.

(b) 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 as investments under a scheme approved by courts [Refer note (a) of note 4.1].

Note 31: Financial risk management

The Company’s activities exposes it to credit risk, liquidity risk and market 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 Ageing analysis and Diversification of bank deposits, review of
with banks, mutual fund, trade review of receivables mutual fund schemes and its underlying
receivables, loans and other financial and other financial exposure, monitoring of credit limits and
assets measured at amortised cost assets assessment of recoverability of loans to
subsidiaries and other counterparties
Liquidity risk Borrowings and other financial Rolling cash flow Investment in highly marketable and liquid
liabilities forecasts investments and availability of committed
credit lines
Market risk — Short-term borrowings at floating Sensitivity analysis of Monitoring of changes in interest rates
interest rate rates, deposits with bank and debt interest rates
mutual funds
Market risk Primarily represented by receivables Forecast of highly Monitoring of changes in foreign exchange
— foreign and payables towards export and probable foreign rates
exchange risk imports respectively currency cash flows
Market risk — Investment in mutual fund, Market available Company reviews its investments at regular
price risk compulsorily convertible preference information, valuation intervals in order to minimize price risk arising
shares (CCPS) of future cash flow from investments in mutual fund. Company
reviews the fair value as at reporting period
for investments in CCPS

The Company’s financial risk management is carried out by treasury department under policies approved by the Board of Directors
(“the Board”). Corporate treasury identifies, evaluates and hedges financial risks in close co-operation with the Company’s other
functions. The Board sets written principles for overall risk management, as well as policies covering specific areas, such as foreign
exchange risk, interest rate risk and credit risk, and investment of excess funds.

168
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

The Company does not have significant exposure to foreign currency fluctuations.

(A) Credit risk

Credit risk management
Trade receivables:

The Company’s credit policy provides guidance to keep the risk of credit sales within an acceptable level. The Company’s
management monitors (at customer group and non-group level) and reviews credit limits, overdue trade receivables, provisioning
and write-off of credit impaired receivables.

Trade receivables are unsecured and are derived from revenues earned from two main classes of customers, receivables from
sales to government corporations / government owned entities and receivables from sales to private third parties.

Receivables from government corporations / government owned entities amounted to ` 1998 crores; 61% (2023: ` 1,230 crores;
49%) and receivables from private customers amounted to ` 1,302 crores; 39% (2023: ` 1,274 crores; 51%) respectively, of total
trade receivables, on the reporting date. (Refer note 49).

The Company determines allowances for expected credit losses separately for different categories of customers using aged
based provision matrix.

Movement in loss allowances for trade receivables is provided below:

Particulars As at As at
March 31, 2024 March 31, 2023
Balance at the beginning of the year 121 119
Loss allowance (net) 67 7
Write offs/ adjustments (16) (5)
Balance at the end of the year (Refer note 11) 172 121

Expected credit loss ageing schedule is given below:

Rate As at As at
Particulars
March 31, 2024 March 31, 2023
Not due 2% 61 44
Less than 3 months 5% 29 4
3 months - 6 months 6% 6 1
6 months -1 year 28% 7 7
1-2 Years 75% 21 16
2-3 years 96% 11 10
More than 3 years 100% 37 39
Total 172 121

Loans and other financial assets:

Other financial assets includes balances with banks, receivable from Tie-up manufacturing units, government grants, security deposits
and other receivables. Loans include loans to subsidiaries, employees and others and interest accrued on such loans.

169
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

The Company recognises allowances using expected credit loss method on other financial assets. Such allowances are measured
considering either 12-month expected credit loss approach or life time credit loss approach, based on management’s assessment of
credit risk. Assets are written-off where there is no reasonable expectation of recovery. Where the loans or receivables are written-off
the Company continues to engage in enforcement activity to attempt to recover the amounts due. Where recoveries are made, these
are recognised in profit or loss.

Movement in loss allowances for financial assets other than for trade receivables during the reporting period is provided below:

Particulars As at As at
March 31, 2024 March 31, 2023
Balance at the beginning of the year 1,395 1,431
Loss allowance recognised:
Included in the Statement of Profit and Loss (28) (19)
Restatement of loss allowance recognised in earlier years in respect of credit 1 4
impaired loans to overseas subsidiaries in foreign currency (*)
Write offs/ adjustments 7 (21)
Balance at the year end (Refer note 5 and 6) 1,375 1,395

(*) Loans denominated in foreign currency to subsidiaries are credit impaired. Exchange differences arising on restatement of such loans at
year-end exchange rates, are offset against an equivalent restatement of loss allowances at year end exchange rates, and hence there is no
impact on the statement of profit and loss, on this account.

The Company has credit risk from loans provided to subsidiaries:

• Loans to overseas subsidiaries- These loans are classified as credit impaired and have been fully provided for as these subsidiaries
are non-operative and do not have the resources to repay the loans.

• Loans to domestic subsidiary- There are no dues from a domestic subsidiary at March 31, 2024.

Management has assessed credit risk for balances with banks, investments in mutual funds and other financial assets as at year ended March
31, 2024. Basis this assessment management has determined that no provision for expected credit loss is required, other than those already
provided in these financial statements.

(B) Liquidity risk

The Company monitors daily and monthly rolling forecasts of the liquidity position and cash and cash equivalents on the basis of expected
cash flows. Generally, any short-term surplus cash generated, over and above the amount required for working capital management and
other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in bank deposits,
debt mutual funds and other highly rated corporate debentures to optimise the cash returns on investments guided by the tenets of safety,
liquidity and returns.

Financing arrangements

The Company has access to the following undrawn unsecured borrowing facilities as at end of the reporting period:

As at As at
Particulars
March 31, 2024 March 31, 2023
Floating rate
Cash credit / working capital loans 1,045 1,296

The above facilities may be drawn at any time and such borrowings are repayable on demand.

170
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Maturities of financial liabilities

The maturity profile of the Company’s financial liabilities based on the remaining period from the date of balance sheet to the
contractual maturity date is given in the table below. The figures reflect the contractual undiscounted cash obligation of the Company.

March 31, 2024

Particulars Less than 3 3 months to 6 months to Between 1 Between 2 More than 5 Total
months 6 months 1 year and 2 years and 5 years years
Lease liabilities 36 29 52 96 36 29 278
Trade payables 1,827 - - - - - 1,827
Other financial liabilities 204 - - - - - 204
Borrowings 0 - - - - - 0
Total liabilities 2,067 29 52 96 36 29 2,309

March 31, 2023

Particulars Less than 3 3 months to 6 months to Between 1 Between 2 More than 5 Total
months 6 months 1 year and 2 years and 5 years years
Lease liabilities 32 30 49 54 31 6 202
Trade payables 1,738 - - - - - 1,738
Other financial liabilities 285 - - - - - 285
Borrowings - - 1 0 - - 1
Total liabilities 2,055 30 50 54 31 6 2,226

(C) Interest rate risk

Interest rate risk arises due to uncertainties about the future market interest rate on the borrowings or investments. The Company has
repaid all the borrowings by the end of the financial year, except for a liability towards sales tax deferral scheme. As the Company
doesn’t have significant debt as at March 31, 2024, exposure to interest rate risk is not expected to have a significant impact on the
Group’s profit/ loss.

Further, treasury activities, focused on managing investments in debt instruments, are centralised and administered under a set of
approved policies and procedures guided by the tenets of safety, liquidity and returns. This ensures that investments are made within
acceptable risk parameters after due evaluation. The Company’s investments are predominantly held in term deposits, mutual funds
and treasury bills.

The Company invests in debt mutual fund schemes of leading fund houses. Such investments are susceptible to market price risks that
arise mainly from changes in interest rate which may impact the return and value of such investments. However, given the relatively
short tenure of underlying portfolio of the mutual fund schemes in which the Company has invested, such price risk is not significant.

In addition to debt mutual funds, the Company invests in term deposits with banks. The term deposits carry a fixed-coupon rate and
are for a term not exceeding 12-months from the Balance Sheet date. Accordingly, interest rate risks is not significant. Further, such
deposits are carried at amortised cost. Accordingly, exposure to interest rate risk is not considered material.

171
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

(D) Foreign exchange risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions and balances, primarily with respect to
the USD and GBP. Foreign Exchange risk arises from future commercial transactions and monetary assets and liabilities denominated
in a currency that is not the Company’s functional currency (`). 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 receivables and
payables towards exports and imports respectively, and partly represented by the loans extended in foreign currencies.

The Company can hedge its net exposures with a view on forex outlook. Since the net exposure is currently not material, foreign
currency risk has not been hedged.

Foreign currency risk exposure

The Company’s exposure to foreign currency risk at the end of the reporting period expressed in ` crores is as follows:

As at March 31, 2024

USD GBP EURO SGD Total
Financial assets
Cash and cash equivalents 0 0 0 0 0
Other financial assets 0 0 0 - 0
Trade receivables 24 - - - 24
Exposure to foreign currency risk (assets) 24 0 0 - 24
Financial liabilities
Trade payables 5 8 0 1 14
Other financial liabilities - - - - -
Exposure to foreign currency risk (liabilities) 5 8 0 1 14
Net exposure (Assets/liabilities) 19 (8) (0) (1) 10

As at March 31, 2023

USD GBP EURO SGD Total
Financial assets
Cash and cash equivalents - - - -
Other financial assets 1 - 0 - 1
Trade receivables 22 - - - 22
Exposure to foreign currency risk (assets) 23 - 0 - 23
Financial liabilities
Trade payables 1 8 - 1 10
Other financial liabilities 1 - - - 1
Exposure to foreign currency risk (liabilities) 2 8 - 1 11
Net exposure (Assets/liabilities) 21 (8) 0 (1) 12

172
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Notes:

a) A reasonable possible fluctuation in foreign exchange rates are not expected to have a material effect on the profit/ loss.

b) Loans given to overseas subsidiaries, denominated in foreign currency are fully provided for and hence they do not carry any
residual foreign currency risk.

(E) Price risk

a) Mutual funds: Company reviews its investments at regular intervals in order to minimize price risk arising from investments in
mutual funds. In accordance with the investment policy the Company invests in the liquid, overnight and money market mutual
fund schemes which are not subject to significant changes in values.

b) Compulsorily convertible preference shares (CCPS): The Company measures CCPS at FVPL. The fair value of the CCPS has been
determined using the discounted cashflow model. The significant inputs used in discounted cashflow model are the growth rates
and the discount rate. The fair value gain on CCPS for the year ended March 31, 2024 is not material.

Note 32: Capital management

a. 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:

• Diversification of funding sources to manage liquidity and rollover risk

• Financial flexibility in case of adverse business cycles

Net debt to equity ratio:

Particulars As at As at
March 31, 2024 March 31, 2023
Total debt (a) 240 183
Cash and cash equivalents (b) 1,021 81
Net debt (c) = (a) - (b) (781) 102
Total equity (d) 6,963 5,944
Net debt to equity ratio (c) / (d) NA 0

The Company has no external borrowings.

173
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

b. Dividends

Particulars For the year For the year

ended ended
March 31, 2024 March 31, 2023
(i) Equity Shares
Interim dividend of ` 4 (2023 - ` Nil) per fully paid share 291 -
(ii) Dividends not recognised at the end of the reporting period
In addition to the above dividends, subsequent to the year end the board of directors 364 -
have recommended the payment of a final dividend of ` 5 per fully paid equity share
(2023: Nil). This proposed dividend is subject to the approval of shareholders in the
ensuing annual general meeting.

Note 33: Assets pledged as security

(a) In respect of secured loans from banks (‘lenders’) obtained and repaid during earlier years, the Company has in most cases obtained
no objection letters from lenders for the release of the hypothecation / mortgage and have filed the necessary forms with Ministry of
Corporate Affairs (“MCA”) to reflect the release of such charge in MCA’s records. In the few remaining cases, the Company is in the
process of securing no objection letters from the lenders. As there are no secured loans outstanding as at March 31, 2024, no assets
have been shown as hypothecated / mortgaged as at March 31, 2024.

(b) Further the following assets have been pledged with a bank with whom the Company is involved in a litigation [Refer Note 40(d)].

Particulars Notes As at As at
March 31, 2024 March 31, 2023
First charge
Freehold land 3.1 & 3.6 118 118
Buildings 3.1 & 3.6 14 15
Leasehold land 3.1 & 3.6 4 4
Plant and equipment 3.1 0 0
Investments as a sole beneficiary in USL Benefit Trust 4.1 120 120
Total assets pledged as security 256 257

(c) Inventory aggregating to Nil (2023: ` 1 crores) are in the custody of third-party tie-up manufacturing units (TMUs), which have been
hypothecated by the said TMUs for securing credit facilities.

Note 34: Share based payments

Diageo Plc. share based plans

Diageo Plc. (Ultimate holding company) runs various equity settled share based plans such as Diageo Performance Incentive (DPI), Diageo
Executive Long Term Incentive Plan (DELTIP), Performance Share Plan (PSP), Senior Executive Share Option Plan (SESOP) and Diageo Exceptional
Stock Award Plan (DESAP) for qualifying employees of the Group. Vesting under these plans is subject to conditions such as continuity of
employment and achievement of certain other performance factors.

The charge for the year in respect of such plans included in employee benefits expense amounted to ` 4 crores (2023: ` 7 crores).

174
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Share appreciation rights (SAR)

The India SAR Plan creates an opportunity to link the employees’ reward to Company’s share price performance. Under this plan, Company
grants stock appreciation rights (based on USL share price on the date of grant) to qualifying employees. Cash pay-out equivalent to the value
of the Company’s share will be made at the end of three years from the date of grant (the vesting period).

Grant Year No. of units Average Vesting Range of the

outstanding as at Period expected settlement
March 31, 2024 price
(` per unit)
FY 21-22 2,50,007 1,134 to 1,158
FY 22-23 1,83,744 3 years 1,134 to 1,154
FY 23-24 1,64,970 1,134 to 1,370

The fair value of the SARs is determined using the Black-Scholes model using the following inputs at the grant dates and as at each reporting
date:

Particulars As at As at
March 31, 2024 March 31, 2023
Expected volatility (%) 26.74% 29.70%
Risk-free interest rate (%) 7.16% 7.29%

As at March 31, 2024 outstanding SARs are 5,98,721 (2023: 7,12,276). Refer below for movement in provision for SAR:

Particulars Notes Amount

Provision as at April 1, 2022 21
Charge for the year 24 16
Payout during the year (10)
Provision as at March 31, 2023 17 27
Charge for the year 24 33
Payout during the year (16)
Provision as at March 31, 2024 17 44

Provision as at the year-end classified as:

Particulars As at As at
March 31, 2024 March 31, 2023
Current 29 16
Non-current 15 11
Total 44 27

175
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Note 35: Financial Instruments:

Financial instrument by category:

As at March 31, 2024

Amortized Fair value Fair value Total
Particulars cost through Profit through other
and Loss comprehensive
income
Financial assets:
Investments (Refer note 4.1(b)) - 37 - 37
Liquid mutual fund units (Refer note 4.2) - 499 - 499
Treasury bills (Refer note 4.2) 100 - - 100
Non-convertible debentures (Refer note 4.2) - - - -
Loans (Refer note 5) 10 - - 10
Other financial assets (Refer note 6) 152 - - 152
Trade receivables (Refer note 11) 3,128 - - 3,128
Cash and cash equivalents (Refer note 12.1) 474 547 - 1,021
Bank balance other than cash and cash equivalents (Refer note 12.2) 188 - - 188
Total 4,052 1,083 - 5,135
Financial liabilities:
Borrowings (Refer note 15) 0 - - 0
Other financial liabilities (Refer note 16) 204 - - 204
Trade payables (Refer note 18) 1,827 - - 1,827
Total 2,031 - - 2,031

Particulars As at March 31, 2023

Amortized Fair value Fair value Total
cost through Profit through other
and Loss comprehensive
income
Financial assets:
Mutual fund units (Refer note 4.2) - 240 - 240
Non-convertible debentures (Refer note 4.2) 16 - - 16
Loans (Refer note 5) 109 - - 109
Other financial assets (Refer note 6) 283 - - 283
Trade receivables (Refer note 11) 2,383 - - 2,383
Cash and cash equivalents (Refer note 12.1) 81 - - 81
Bank balance other than cash and cash equivalents (Refer note 12.2) 768 - - 768
Total 3,640 240 - 3,880
Financial liabilities:
Borrowings (Refer note 15) 1 - - 1
Other financial liabilities (Refer note 16) 285 - - 285
Trade payables (Refer note 18) 1,738 - - 1,738
Total 2,024 - - 2,024

176
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Fair value hierarchy:

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and
measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. 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 the accounting standard. An explanation of each level follows below:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

Fair value of investment in mutual funds are classified as Level 1 and fair value of all other financial instruments including investments in CCPS
issued by Nao Spirits & Beverages are classified as Level 3.

Management has determined their carrying amounts of current financial assets i.e., trade receivables, current loans, bank deposits, cash and
cash-equivalents, receivable from TMUs, trade payables and other financial liabilities (excluding lease liabilities) to be a fair approximation of
their fair values on account of the short term natures.

Management has determined that the fair values of other non current financial assets i.e., government grants, receivable from TMUs, security
deposits and other receivables are not materially different from their carrying amounts as at March 31, 2024.

Note 36: Related party disclosures

(a) Names of related parties and description of relationship
(i) Parent entities
• Diageo plc United Kingdom (Ultimate Holding Company)
• Tanqueray Gordon & Company Ltd., United Kingdom (Holding Company of Diageo Relay B V)
• Diageo Relay B V, Netherlands (Holding Company)
(ii) Subsidiaries

Sl. No. Name of the subsidiary % of ownership interest Country of incorporation

a. Indian Subsidiaries
(i) Royal Challengers Sports Private Limited 100 India
(ii) Sovereign Distilleries Limited (up to January 24, 2023) 100 India
b. Overseas Subsidiaries
(i) Asian Opportunities and Investments Limited 100 Mauritius
(ii) McDowell & Co. (Scotland) Limited 100 Scotland, U.K.
(iii) Palmer Investment Group Limited 100 British Virgin Islands
(iv) Shaw Wallace Overseas Limited 100 U.K.
(v) United Spirits (Great Britain) Limited 100 U.K.
(vi) United Spirits (Shanghai) Trading Company Limited (up to 100 China
January 12, 2023)
(vii) United Spirits (UK) Limited 100 U.K.
(viii) United Spirits Singapore Pte Ltd (up to November 4, 2022) 100 Singapore
(ix) USL Holdings (UK) Limited 100 U.K.
(x) USL Holdings Limited 100 British Virgin Islands

177
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

iii) Other entity where there is control

• USL Benefit Trust, India
iv) Associate

Sr. No. Name of the associate % of ownership interest Country of incorporation

(i) Nao Spirits & Beverages Private Limited 11 India
[w.e.f. April 29, 2022 referto note 4.1]

(v) Fellow subsidiaries (with whom transactions have taken place during the year or in the previous year)
• Diageo Scotland Limited
• Diageo Brands B.V.
• Diageo Great Britain Limited
• Diageo North America Inc.
• Diageo Singapore Supply Pte. Ltd.
• Guinness Nigeria Plc
• Diageo Ireland
• Diageo Business Services India Private Limited
• UDV Kenya Limited
• Diageo Mexico
• Diageo America Supply Inc.

(vi) Employees’ Benefit Plans:

• McDowell & Company Limited Staff Gratuity Fund
• McDowell & Company Limited Officers’ Gratuity Fund
• McDowell & Company Limited Employees Provident Fund(*)
• Phipson & Company Limited Management Staff Gratuity Fund
• Phipson & Company Limited Gratuity Fund
• Carew & Company Ltd. Gratuity Fund
• United Spirits Superannuation Fund
• UB Group Employee Benefit Trust
• Shaw Wallace Employee Welfare Trust
• Pioneer Distilleries Employees Gratuity Trust

(*) The Company was operating a defined benefit provident fund plan through its own Trust for all permanent employees. During the
year, the Company has transferred its Provident fund obligation from the Trust to Employee Provident Fund Organization (EPFO) after
necessary approval from EPFO. The Company is in process of liquidating the Trust. [Refer note 38(b)].

178
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

(vii) Key management personnel

a. Whole-time directors
• Hina Nagarajan (Managing Director and Chief Executive Officer)
• Pradeep Jain (Chief Financial officer and Executive Director) w.e.f. February 1, 2023

b. Non-executive/ Independent directors

• Mahendra Kumar Sharma – Chairman
• V K Viswanathan
• Dr. Indu Shahani
• D Sivanandhan
• Rajeev Gupta
• Mark Sandys
• John Thomas Kennedy (till 30th June, 2023)
• Randall Ingber (till January 31, 2023)
• Emily Kathryn Gibson (w.e.f. September 7, 2023)
• Mukesh Butani (w.e.f. March 1, 2024)
• Indu Bhushan (w.e.f. March 1, 2024)
• Mamta Sundara (w.e.f. February 1, 2023)

Note 36(b): Summary of the transactions with related parties

Name of the related party Relationship For the year ended For the year ended
March 31, 2024 March 31, 2023
(i) Investment in associate Associate
Nao Spirits & Beverages Private Limited
- Equity shares carried at cost - 12
- Compulsory convertible preference shares carried at 15 20
fair value through profit and loss
Total- Investment in associate 15 32
(ii) Sale of products (including excise duty) to
UDV Kenya Limited Fellow subsidiary 1 0
Total- Sale of products 1 0
(iii) Royalty and brand franchise income
Guinness Nigeria Plc. Fellow subsidiary - 1
UDV Kenya Ltd Fellow subsidiary 0 -
Total- Royalty and brand franchise income 0 1

179
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Name of the related party Relationship For the year ended For the year ended
March 31, 2024 March 31, 2023
(iv) Interest income on loans given to
Royal Challengers Sports Private Limited Subsidiary 0 4
Sovereign Distilleries Limited (Including earlier years) Subsidiary - 0
Total - Interest income from subsidiaries (Refer note 21) 0 4
(v) Reimbursement of expenses from
Diageo plc Parent 5 4
Royal Challengers Sports Private Limited Subsidiary 4 3
Diageo Great Britain Limited Fellow subsidiary 1 -
Diageo Brands BV Fellow subsidiary 1 -
Diageo Scotland Limited Fellow subsidiary 2 0
Diageo North America Inc. Fellow subsidiary - 0
Diageo Business Services India Private Limited Fellow subsidiary - 1
Diageo Mexico Fellow subsidiary 1 -
Diageo America Supply Inc. Fellow subsidiary 0 -
Total - Reimbursement of expenses received 14 8
(vi) Purchase of stock-in-trade from
Diageo Brands BV Fellow subsidiary 422 616
Diageo Ireland Fellow subsidiary - 2
Total- Purchase of stock-in-trade 422 618
(vii) Purchase of raw materials from
Diageo Brands BV Fellow subsidiary 421 371
Total- Purchase of materials 421 371
(viii) Royalty expense
Diageo North America Inc.* Fellow subsidiary 9 10
Total- Royalty expense (Refer note 26) 9 10
(ix) Professional charges
Diageo Business Services India Private Limited Fellow subsidiary 17 16
Total- Professional charges 17 16
(x) Cross charge towards share based payments
Diageo Great Britain Limited Fellow subsidiary 4 6
Total- Cross charge 4 6
(xi) Other services received
Advertisement and sales promotion expenses
Royal Challengers Sports Private Limited Subsidiary 7 8
Information technology expenses
Diageo Great Britain Limited Fellow subsidiary 28 24
Diageo Business Services India Private Limited Fellow subsidiary 1 6
Total- Other services received 36 38

180
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Name of the related party Relationship For the year ended For the year ended
March 31, 2024 March 31, 2023
(xii) Reimbursement of expenses paid to
Diageo Great Britain Limited Fellow subsidiary 3 -
Diageo Scotland Limited Fellow subsidiary 1 -
Diageo Business Services India Private Limited Fellow subsidiary - 0
Diageo North America Inc Fellow subsidiary 1 -
Royal Challengers Sports Private Limited Subsidiary 2 -
Total- reimbursement of expenses paid 7 0
(xiii) Dividend paid to
Diageo Relay B V Holding Company 163 -
USL Benefit Trust Benefit Trust 7 -
Total- Dividend paid 170 -
(xiv) Dividend received from
Royal Challengers Sports Private Limited Subsidiary 125 -
Total- Dividend received 125 -
(xv) Loans given to
Sovereign Distilleries Limited Subsidiary - 2
Royal Challengers Sports Private Limited Subsidiary 29 324
Total- Loans given 29 326
(xvi) Loans repaid by
Royal Challengers Sports Private Limited Subsidiary 121 359
Total- Loans repaid 121 359
(xvii) Loans/ interest written-off
Sovereign Distilleries Limited Subsidiary - 3
Total - Loans/ interest written-off - 3
(xviii) Corporate guarantee given
Royal Challengers Sports Private Limited Subsidiary - 90
Total Corporate guarantee given - 90
(xix) Corporate guarantee revoked
Royal Challengers Sports Private Limited Subsidiary - 90
Total Corporate guarantee revoked - 90
(xx) Contribution to employee benefit plans
McDowell & Company Limited Employees Provident Fund Employee benefits plan 16 14
United Spirits Superannuation Fund Employee benefits plan 2 2
Total- Contribution to employee benefit plans 18 16

* Royalty expense excludes Goods and Services Tax

181
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Note 36(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:

Name of the related party Relationship As at As at

March 31, 2024 March 31, 2023
(i) Financial assets receivable
Royal Challengers Sports Private Limited Subsidiary 2 1
Diageo Scotland Limited Fellow subsidiary 0 0
Diageo Great Britain Limited Fellow subsidiary 1 -
Total- Financial assets receivable (Refer note 6) 4 1
(ii) Trade receivables from
UDV Kenya Ltd Fellow subsidiary 0 -
Guinness Nigeria Plc. Fellow subsidiary 2 6
Total- Trade receivables (Refer note 11) 2 6
(iii) Trade payables to
Diageo Brands BV Fellow subsidiary 208 245
Royal Challengers Sports Private Limited Subsidiary 3 5
Diageo Great Britain Limited Fellow subsidiary 9 4
Diageo North America Inc. Fellow subsidiary 5 9
Diageo Scotland Limited Fellow subsidiary 1 2
Diageo Singapore Supply Pte Limited Fellow subsidiary - 0
Diageo Business Services India Private Limited Fellow subsidiary 5 14
Diageo Ireland Fellow subsidiary - 1
Total trade payables to related parties (Refer note 18) 231 280
(iv) Loans (including interest) outstanding from principal
Royal Challengers Sports Private Limited Subsidiary - 92
Asian Opportunities & Investments Limited Subsidiary 59 59
USL Holdings (UK) Limited Subsidiary 15 14
Total - Loans outstanding (Refer note 5) 74 165
(v) Allowance on loans at year end
Principal
Asian Opportunities & Investments Limited Subsidiary 59 59
USL Holdings (UK) Limited Subsidiary 15 14
Total Allowance on loans (Refer note 5) 74 73
(vi) Minimum offtake commitment for purchase of bulk scotch
Diageo Scotland Limited Fellow subsidiary 123 410

182
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Note 36(d): Key management personnel and compensation

Executive directors For the year ended March 31, 2024 For the year ended March 31, 2023
Hina Nagarajan Pradeep Jain Hina Nagarajan Pradeep Jain (*)
Remuneration (**) 10 4 10 0
Employee share-based payments (***) 4 0 2 -
Total compensation 14 4 12 0

(*) For Pradeep Jain, remuneration has been included w.e.f. February 1, 2023.

(**) The employee benefits obligations such as gratuity, compensated absences and bonuses are provided for the Company as a whole, the
amounts pertaining to individual Key Management Personnel are included on payment basis and not on accrual basis.

(***) Based on options exercised.

Non-executive/ Independent directors For the year ended For the year ended
March 31, 2024 March 31, 2023
Sitting fee Commission Sitting fee Commission
Mr. Mahendra Kumar Sharma 0 1 0 0
Mr. V K Viswanathan (*) 0 0 0 0
Dr. Indu Shahani (*) 0 0 0 0
Mr. D Sivanandhan (*) 0 0 0 0
Mr. Rajeev Gupta (*) 0 0 0 0
Dr. Indu Bhushan (*) - 0 - -
Mr. Mukesh Butani (*) - 0 - -
Total 0 2 0 2

(*) Individually sitting fees and commission paid to the directors is lesser than ` 50 lakhs. Sitting fees and commission paid to the directors
above has been aggregated and disclosed against the total in the table above.

Note 36 (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.

All loans to subsidiaries are unsecured. For tenure of the loans and interest rate, refer note 46(b).

183
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Note 37: Offsetting of financial assets and financial liabilities

The Company provides volume-based incentives and rebates to certain customers. 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. Details of such offset is given in the below table.

Particulars As at As at
March 31, 2024 March 31, 2023
Trade receivable - current 2,995 2,544
Trade receivable - non current 365 -
Trade receivables (gross) 3,360 2,544
Less: Volume based incentives and rebates payable (60) (40)
Trade receivables as reported (Refer note 11) 3,300 2,504

Note 38(a): Defined contribution plans

Provident Fund:

Provident Fund covers all eligible employees of the Company. Both the employees and the Company make monthly contributions to the
Provident Fund as per regulations to a fund administered by government authority, equal to a specified percentage of the employees’ salary.
The obligation of the Company is limited to the extent of contributions made on a monthly basis.

Employee Pension Scheme:

Employee Pension Scheme covers all eligible employees of the Company. A portion of the Company’s contribution in respect of government
administered Provident Fund and Company administered Provident Fund Plan is made to the government administered Employee Pension
Scheme, as per regulations. The obligation of the Company is limited to the extent of contributions made on a monthly basis.

Employees’ State Insurance:

Employees’ State Insurance is a state plan which is applicable to those employees of the Company whose salaries do not exceed a specified
amount. The contributions are made based on a percentage of salary to a fund administered by government authority. The obligation of the
Company is limited to the extent of contributions made on a monthly basis.

Superannuation Fund:

Certain executive staff of the Company participate in United Spirits Superannuation Fund (the ‘Fund’), which is a voluntary contribution plan.
The Company has no further obligations to the plan beyond its monthly contributions to the Fund, the corpus of which is administered by a Trust
and is invested in insurance products.

National Pension Scheme:

Certain executive staff of the Company participate in National Pension Scheme, which is a voluntary contribution plan. The Company has no
further obligations to the plan beyond its monthly contributions to a fund administered by a pension fund manager appointed by Pension Fund
Regulatory and Development Authority.

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 under the employee benefits expense in note 24:

184
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Particulars For the year ended For the year ended

March 31, 2024 March 31, 2023
Provident fund* 17 3
Employees’ pension scheme 4 4
Employees’ state insurance 0 0
Superannuation fund 1 2
National pension scheme 1 1
Total (Refer note 24) 23 10

*Excludes contributions to Provident Fund Trust which are in the nature of defined benefit plans managed by the Company.

Note 38(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 or upon resignation from service, of an amount based on the
respective employee’s last drawn salary and years of employment with the Company. Vesting occurs only upon completion of five years of
service, except in case of death or permanent disability. The funds are managed by a trust administered by the Company.

Pension plan:

The Company operates an unfunded defined benefit pension plan for certain retired employees of an erstwhile entity which has merged
into the Company in earlier years. This plan provides benefits to members in the form of a guaranteed level of pension payable for life post
retirement or termination of employment. The level of benefits provided depends on their salary in the final year leading up to retirement, or
termination.

Provident fund plan:

The executive staff and certain permanent workmen received benefits from the provident fund plan, which was operating as a defined benefit
plan until part of the current year. Both the employees and the Company made monthly contributions to such provident fund plan equal to
a specified percentage of the employee’s salary. A portion of Company’s contribution is transferred to Employee Pension Scheme, which is a
defined contribution plan and the remaining amount is transferred to provident fund plan. The defined plan was discontinued during the year
and the balance contribution was transferred to Employees Provident Fund Organisation(EPFO).

The defined benefit provident fund contributions were made to McDowell & Company Limited Employees Provident Fund Trust which was set
up and managed by the Company. The Trust invested in specific designated instruments as permitted by Indian laws. The Company had an
obligation to make good the shortfall if any, being the difference between the statutory rate prescribed by the Government and the rate of
interest declared by the Trust. The Company also had an obligation to fund any shortfall in the fair value of plan assets as compared with the
defined benefit obligation. The actuarial risk and investment risk fall, in substance, on the Company. During the current year, the Company has
transferred its’ obligation for provident fund from the trust to Employees Provident Fund Organisation (EPFO). Accordingly, the Provident fund
plan has subsequently been accounted as a defined contribution plan.

185
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Gratuity, Provident Fund and Pension

A. Reconciliation of opening and closing balances of the present value of the defined benefit obligation (DBO):

Particulars For the year ended For the year ended

March 31, 2024 March 31, 2023
Gratuity Provident Pension Gratuity Provident Pension
fund fund
(Funded) (Funded) (Unfunded) (Funded) (Funded) (Unfunded)
Obligation at the beginning of the year 106 311 1 121 348 1
Current service cost 10 3 - 11 14 -
Past service cost - - - 2 - -
(Gain)/loss on settlements - - - (9) - -
Interest cost 7 8 - 8 25 0
Benefit payments from plan assets (12) (35) - (19) (113) -
Transfer in/Out - 7 - - 17 -
Employee contributions - 5 - - 19 -
Benefit payments from the Company - - (1) - - (0)
Transfer upon sale of business undertaking (Refer note - - (4) - -
48(a))
Actuarial (gain)/ loss from changes in demographic (4) - - (1) - -
assumptions
Actuarial (gain)/ loss from changes in financial 1 - - (2) 0 (0)
assumptions
Actuarial (gain)/ loss from experience adjustments (1) (0) - (1) 1 (0)
Transferred to EPFO - (299) - - - -
Obligation at the end of the year 107 - 0 106 311 1

B. Reconciliation of opening and closing balances of the fair value of plan assets:

Particulars For the year ended For the year ended

March 31, 2024 March 31, 2023
Gratuity Provident fund Gratuity Provident fund
(Funded) (Funded) (Funded) (Funded)
Plan assets at the beginning of the year 140 305 153 340
Employee contributions - 5 - 19
Transfer in/ (out) - 7 - 17
Contribution by the Company - 3 - 14
Return on plan assets 10 8 11 25
Actuarial gains/ (losses) (0) (11) (19) 3
Benefits paid (13) (35) (5) (113)
Transferred to EPFO - (282) - -
Plan assets at the end of the year 137 - 140 305

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 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

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:

Particulars As at March 31, 2024 As at March 31, 2023

Gratuity Provident Pension Gratuity Provident Pension
(Funded) fund (Unfunded) (Funded) fund (Unfunded)
(Funded) (Funded)
Present value of obligation 107 - 0 107 311 1
Fair value of plan assets 137 - - 140 305 -
Liability/ (asset) recognised in Balance (30) - 0 (33) 6 1
sheet (Refer notes 9 and 17)
Current - - 0 - 6 0
Non-current (30) - (33) - -

D. Expenses recognised in the Statement of Profit and Loss:

Particulars For the year ended March 31, 2024 For the year ended March 31, 2023
Gratuity Provident Pension Total Gratuity Provident Pension Total
fund fund
(Funded) (Funded) (Unfunded) (Funded) (Funded) (Unfunded)
Current service cost 10 3 - 13 11 14 - 25
Past service cost - - - - 2 - - 2
(Gain)/loss on settlement - - - - (8) - - (8)
Net interest cost 3 - 3 - - - -
a. Interest expense on DBO 7 8 - 15 8 25 0 33
b. Interest (income) on plan assets (10) (8) - (18) (11) (25) - (36)
Total net interest cost (a+b) (3) - - (3) (3) - 0 (3)
Defined benefit cost (Refer note 24) 7 3 - 10 2 14 0 16

E. Re-measurement effects recognised in other comprehensive income (OCI):

Particulars For the year ended March 31, 2024 For the year ended March 31, 2023
Gratuity Provident Pension Total Gratuity Provident Pension Total
fund fund
(Funded) (Funded) (Unfunded) (Funded) (Funded) (Unfunded)
a. Actuarial (gain)/ loss due to (4) - - (4) (1) - - (1)
demographic assumptions
changes in DBO
b. Actuarial (gain)/ loss due to 1 - - 1 (2) 0 - (2)
financial assumptions changes
in DBO
c. Actuarial (gain)/ loss due to (1) (0) - (1) (2) 1 - (0)
experience on DBO
d. Return on plan assets (greater)/ 0 7 - 7 5 (2) - 4
less than discount rate
e. Movement in asset ceiling - - - - - - - -
(gain)/ loss
Total actuarial (gain)/ loss included (4) 7 - 3 1 (0) - 1
in OCI
* The actuarial loss has been recorded after netting off the provision.

187
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

F. Total cost recognised in comprehensive income:

Particulars For the year ended March 31, 2024 For the year ended March 31, 2023
Gratuity Provident Pension Total Gratuity Provident Pension Total
fund fund
(Funded) (Funded) (Unfunded) (Funded) (Funded) (Unfunded)
Expense recognised in Profit and Loss 7 3 - 10 2 14 0 16
(Refer Note 24)
Remeasurements effects recognised in (4) 7 - 3 1 - - 1
OCI
Total cost recognised in Comprehensive 3 10 - 13 3 14 0 16
Income

G. Investment details of plan assets:

Particulars As at March 31, 2024 As at March 31, 2023

Gratuity Provident fund Gratuity Provident fund
Government securities - - - 74%
Private sector bonds - - - 7%
Public sector / financial institutional bonds - - - 3%
Special deposit scheme - - - 4%
Pooled assets with an insurance company 100% - 100% -
Others (including bank balances) 0% - 0% 12%
100% 100% 100%

H. Assumptions:

Particulars As at March 31, 2024 As at March 31, 2023

Gratuity Provident Pension Gratuity Provident Pension
fund fund
(Funded) (Funded) (Unfunded) (Funded) (Funded) (Unfunded)
Discount rate (per annum) 7.21% NA NA 7.32% 7.39% 7.32%
Rate of increase in compensation levels 10% NA NA 10% 10% NA
Attrition rate 10% - 15% NA NA 5% - 12% 5% - 12% NA
Mortality rates IALM* (2012- NA IALM* (2012- IALM* (2012- IALM* (2012- IALM* (2012-
14) Ultimate 14) Ultimate 14) Ultimate 14) Ultimate 14) Ultimate
table table table table table

*IALM: Indian Assured Lives Mortality

188
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Note 38(c): Sensitivity analysis:

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is provided below:

Gratuity:

Particulars Changes in assumptions (Decrease)/ Increase in defined benefit obligation

Increase in assumption Decrease in assumption
March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023
Discount rate 1% 1% (4) (5) 5 6
Compensation levels 1% 1% 4 6 (4) (5)

Provident Fund:

Particulars Changes in assumptions (Decrease)/ Increase in defined benefit obligation

Increase in assumption Decrease in assumption
March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023
Discount rate NA 1% NA (5) NA 11
Compensation levels NA 1% NA 10 NA (5)

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 and 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.

Note 38(d): Risk exposure:

Through its defined benefit plans, Company is exposed to number of risks, the most significant of which are detailed below:

Asset volatility The plan liabilities are calculated using a discount rate set with reference to yields of government securities; if plan
assets underperform this yield, this will create a deficit. Plan asset investments for gratuity are made in pre-defined
insurance plans. These are subject to risk of default and interest rate risk. The fund manages credit risk/ interest
rate risk through continuous monitoring to minimise risk to an acceptable level.
Inflation risk In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk.
Life expectancy The pension plan provides benefits for the life of the member, so increases in life expectancy will result in an
increase in the plans’ liabilities. This is particularly significant where inflationary increases result in higher sensitivity
to changes in life expectancy.

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 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 regulations.

189
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Note 38(e): Effect of the defined benefit plan on the entity’s future cash flows

The Company does not expect to contribute any amounts into the gratuity plan assets during the year ending March 31, 2025, considering the
net surplus portion as at March 31, 2024. The Company will not contribute any amount (2024: ` 15 crore) to defined benefit plan for provident
fund as the obligations are transferred to EPFO. Subsequently the Company will directly contribute monthly obligation to EPFO.

The weighted average duration of the defined benefit obligation is 4.62 years (2023: 5.67 years). The expected maturity analysis of undiscounted
provident fund and gratuity is as follows:

March 31, 2024 Less than Between Between Over Total

a year 1-2 years 2- 5 years 5 years
Gratuity 27 21 32 78 158
Provident fund NA NA NA NA NA
Total 27 21 32 78 158

March 31, 2023 Less than Between Between Over Total

a year 1-2 years 2- 5 years 5 years
Gratuity 21 8 43 106 178
Provident fund 41 44 159 374 618
Total 62 52 202 480 796

Note:

The estimates of future increase in compensation levels, considered in the actuarial valuation, take into account inflation, seniority, promotion
and other relevant factors such as supply and demand in the employment market.

Note 39: Long term contracts, including derivative contracts

The Company does not have any derivative contracts as at March 31, 2024. The Company has a process whereby periodically all long term
contracts are assessed for material foreseeable losses. No provision for material foreseeable losses is considered necessary based on the
review of such contracts as at year end.

Note 40: Historical matters

(a) Additional inquiry and other regulatory matters

As disclosed in each of the annual financial statements commencing from year ended March 31, 2014, upon completion in April 2015
of an inquiry into past improper transactions (‘Initial Inquiry’) which identified references to certain additional parties and certain
additional matters, the then MD & CEO, pursuant to the direction of the Board of Directors, carried out an additional inquiry into
past improper transactions (‘Additional Inquiry’) which was completed in July 2016. The Additional Inquiry prima facie identified
transactions indicating actual and potential diversion of funds from the Company and its Indian and overseas subsidiaries to, in most
cases, Indian and overseas entities that appeared to be affiliated or associated with the Company’s former non-executive chairman,
Dr. Vijay Mallya, and other potentially improper transactions. All amounts identified in the Additional Inquiry have been provided for or
expensed in the financial statements of the Company or its subsidiaries in the respective prior periods. The Company has filed recovery
suits against relevant parties and individuals identified pursuant to the Additional Inquiry. Additionally, the Company has also filed a
suit for recovery of excess managerial remuneration amounting to ` 13 crores paid to the former Executive Director and CFO (ED &
CFO) for the year ended March 31, 2015. The receivable recorded for excess managerial remuneration has been fully provided for.

190
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

As disclosed in each of the annual financial statements commencing from the year ended March 31, 2014, in relation to the above-
mentioned Initial Inquiry and Additional Inquiry and the matters arising out of the settlement agreement dated February 25, 2016
entered into by the Company with Dr. Vijay Mallya pursuant to which, inter alia, the Company and Dr. Vijay Mallya agreed a mutual
release in relation to matters arising out of the Initial Inquiry (‘Agreement’), the Company received letters and notices from the Securities
Exchange Board of India (‘SEBI’) during the year ended March 31, 2016 to which the Company has responded. There has been no
further communication with SEBI on these matters since the Company’s response in October 2017.

As disclosed in each of the annual financial statements commencing from the year ended March 31, 2014, in connection with the
investigations carried out by the Directorate of Enforcement (‘ED’) under the Foreign Exchange Management Act, 1999 and Prevention
of Money Laundering Act, 2002, the Company received letters and notices from ED during the year ended March 31, 2016, to which the
Company responded. During the year ended March 31, 2022, the Company received a notice from the ED requesting for information,
which the Company has provided. The Company has also received queries from its authorized dealer banks, based on queries from
the Reserve Bank of India (‘RBI’), with regard to remittances made in the prior years by the Company to its overseas subsidiaries, past
acquisitions and Annual Performance Reports (‘APR’) for prior years, to which the Company has responded.

As disclosed in each of the annual financial statements commencing from the year ended March 31, 2019, with the objective of
divesting its non-core assets, the Company reviewed its subsidiaries’ operations, obligations, and compliances, and recommended
a plan for rationalisation through sale, liquidation or merger (“Rationalisation Process”). After receiving approval from the Board, the
Company has been taking steps to implement this plan. The Rationalisation Process for the existing subsidiaries is subject to regulatory
and other approvals (in India and overseas). If any historical non-compliances are established during the Rationalisation Process,
the Company will consult with its legal advisors, and address any such issues including, if necessary, considering filing appropriate
compounding applications with the relevant authorities. At this stage, it is not possible for the management to estimate the financial
impact on the Company, if any, arising out of potential non-compliances with applicable laws, if established.

(b) Notices from the Ministry of Corporate Affairs

As disclosed in each of the annual financial statements commencing from year ended March 31, 2016, and pursuant to the inspection
conducted by Ministry of Corporate Affairs (‘MCA’) during the year ended March 31, 2016, under Section 206(5) of the Companies Act,
2013, MCA issued show cause notices alleging violation of certain provisions of the Companies Act, 1956 and Companies Act, 2013,
to which the Company had responded. As at the year ended March 31, 2024, the Company is awaiting response from the Registrar
of Companies (RoC) on one compounding application and one show cause notice wherein the Company had requested the RoC to
discontinue further proceedings based on expert legal advice received. The penalty and compounding fees arising out of adjudication
applications and compounding application are not material. The management is of the view that in line with the past compounding/
adjudication orders, the financial impact arising out of compounding/ adjudication of the residual matters will not be material to the
Company’s financial statements.

(c) Loan to United Breweries (Holdings) Limited (‘UBHL’)

As disclosed in each of the annual financial statements commencing from year ended March 31, 2015, the Company had pre-existing
loans/ deposits/ advances/ accrued interest that were due to the Company and its subsidiaries from UBHL and its subsidiaries
aggregating to ` 1,337 crores and that were consolidated into, and recorded as, an unsecured loan through an agreement entered
into between the Company and UBHL on July 3, 2013 (‘Loan Agreement’). UBHL defaulted on its obligations to pay any amounts under
the Loan Agreement. The Company had made provision in prior financial years for the entire principal amount due of ` 1,337 crores,
and for the accrued interest of ` 85 crores up to March 31, 2014. The Company has not recognised interest income on said loan after
March 31, 2014 which cumulatively amounts to ` 1,225 crores up to March 31, 2024. The Company has cumulatively offset ` 206 crores
payable to UBHL arising under a trademark license agreement against the principal amount of loan and interest accrued thereon.

Since UBHL had defaulted on its obligations under the Loan Agreement, the Company sought redressal of disputes and claims through
arbitration under the terms of the Loan Agreement. In April 2018, the arbitral tribunal passed a final award against the Company. The
reasons for this adverse award were disputed by the Company, and the Company obtained leave from the High Court of Karnataka
to challenge this arbitral award. In July 2018, the Company filed a petition challenging the said award before the Jurisdictional Court

191
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

in Bangalore (the “Court”). The Court issued notice pursuant thereto to the Official Liquidator (OL). The Company filed its claim with
the OL. Notwithstanding the arbitral award, based on management assessment supported by an external legal opinion, the Company
has offset payable to UBHL under the trademark license agreement against the balance of loan receivable from UBHL. During the
quarter ended June 30, 2023, the OL filed an application before the High Court of Karnataka, seeking avoidance of setoff by the
Company of the above license fee payments and recovery of the entire license fee payable under trademark license agreement with
interest. Based on the Management assessment supported by external legal opinions, the Company continues to believe that it has
a good case on merits. The Company is contesting the application filed by the OL and has filed its statement of objections during the
quarter ended September 30, 2023. The OL has subsequently filed its rejoinder during the quarter ended March 31, 2024. The Official
Liquidator (UBHL) has filed another claim before the High Court of Karnataka, purportedly as loans and advances repayable to UBHL
by the Company, without substantiating the basis of such a claim. USL has denied this purported debt and is contesting this claim. The
Company believes it has a good case on merits.

(d) Dispute with IDBI Bank Limited

As disclosed in each of the annual financial statements commencing from year ended March 31, 2015, during the year ended March
31, 2014, the Company prepaid a term loan taken from IDBI Bank Limited (the “bank”) in earlier years which was secured by certain
property, plant and equipment and brands of the Company as well as by a pledge of certain shares of the Company held by the USL
Benefit Trust (of which the Company is the sole beneficiary). The bank disputed the prepayment, following which the Company filed a
writ petition (“WP”) in November 2013 before the Hon’ble High Court of Karnataka (‘High Court’) challenging the actions of the bank.

In February 2016, following the original maturity date of the loan, the Company received a notice from the bank seeking to recall the
loan and demanding a sum of ` 46 crores on account of outstanding principal, accrued interest and other amounts as also further
interest till the settlement date as per the security documents. The Company challenged this notice in the pending writ proceedings
during which the High Court directed that, subject to the Company depositing ` 46 crores with the bank in a suspense account, the
bank should not deal with any of the secured assets including the shares until disposal of the writ petition. The Company deposited the
full amount, and the bank was restrained from dealing with any of the secured assets.

In June 2019, a single judge bench of the High Court dismissed the Company’s writ petition, amongst other reasons, on the basis
that the matter involved an issue of breach of contract by the Company and was therefore not maintainable in exercise of the court’s
writ jurisdiction. The Company filed an appeal against this order before a division bench of the High Court, which was admitted and
interim protection on the secured assets was reinstated. The writ appeal is pending.

Based on management assessment supported by external legal opinions, the Company continues to believe that it has a strong case
on merits and therefore continues to believe that the aforesaid amount of ` 46 crores remains recoverable from the bank.

In a separate proceeding before the Debt Recovery Tribunal (DRT), Bengaluru, initiated by a consortium of banks (including the bank)
for recovery of loans advanced by the consortium of banks to Kingfisher Airlines Limited (KAL), the bank filed an application for
attachment of the pledged shares belonging to USL Benefit Trust. DRT dismissed the said application of the bank and the bank filed
an appeal against this order before the Debt Recovery Appellate Tribunal (‘DRAT’), Chennai in September 2017. The bank’s appeal is
pending for final hearing by the DRAT.

Note 41: Capital and other commitments:

Particulars As at As at
March 31, 2024 March 31, 2023
(a) Capital commitments for property, plant and equipment 27 49
(b) Other commitment towards: 51 58
i. advertisement, sales promotion and trade-mark fee
ii. minimum off take commitment for purchase of bulk scotch from a related party 123 410

192
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Note 42: Contingent liabilities

Particulars As at As at
March 31, 2024 March 31, 2023
(a) Income tax matters 235 232
(b) Indirect tax matters
(i) State excise 118 115
(ii) Central excise 0 0
(iii) Sales tax and entry tax 437 417
(iv) Goods and Services Tax 0 12
(v) Service Tax - 1
(c) Other civil litigations and claims 119 142

Notes:

(a) Income tax matters- Income tax matters primarily relate to exposures under transfer pricing and disallowance of certain expenses that
the Company had claimed as deductions in its Income tax returns.

(b) Indirect tax matters- The Company has operations across various states in India. The Company has identified possible exposures relating
to local sales tax, entry tax, state excise duty, goods and services tax and central excise duty.

(c) Other civil litigations and claims- Other civil litigations relate to various claims from third parties under dispute which are lying with
various courts / appellate authorities.

(d) Provident fund- The Company has evaluated the impact of the Supreme Court (“SC”) judgement dated February 28, 2019 in the case
of Regional Provident Fund Commissioner (II) West Bengal v/s Vivekananda Vidyamandir and Others, in relation to non-inclusion
of certain allowances in the definition of “basic wages” of the relevant employees for the purposes of determining contribution to
Provident Fund (“PF”) under the Employees’ Provident Fund & Miscellaneous Provisions Act, 1952. There are interpretation issues
relating to the said SC judgement. In the assessment of the management, the aforesaid matter is not likely to have a significant impact
on the Company and accordingly, no provision has been made in the financial statements.

(e) Use of judgement

Management categorizes the matters based on the probability of cash outflow, which require judgement. Management obtains the
views of external consultants where necessary. Based on the assessment, management recognises liability / provision, or discloses the
matter as a contingent liability, except for matters where the probability of outflow of cash is considered remote. Due to uncertainties
involved in the process, actual outflows may be different from those originally estimated. The Company may be involved in legal
proceedings in respect of which it is not possible to make a reliable estimate of any expected settlement. In such cases, management
has determined that any potential future cash outflows are not likely to be material.

(f) Management is optimistic of a favourable outcome in the above matters based on legal opinions / management assessment. 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.

(g) Contingent liabilities above do not include demands with respect to income tax and indirect tax matters wherein the Company has
assessed the probability of outflows of economic benefits to be remote.

193
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Note 43: Research expenses

Particulars For the year ended For the year ended

March 31, 2024 March 31, 2023
Salaries and wages 9 7
Contribution to provident fund and other funds 1 0
Staff Welfare expense 0 0
Rent 1 1
Miscellaneous 8 7
Total Research expenses 19 15

Note 44: Dues to Micro and Small enterprises

Particulars As at As at
March 31, 2024 March 31, 2023
Principal amount due to supliers registered under the MSMED Act [and remaining unpaid as 75 59
at year end][refer note(ii)]
Interest due on principal amount remaining unpaid as at year end, as above, to suppliers 1 2
registered under the MSMED Act
Principal amounts paid to suppliers registered under the MSMED Act, beyond the appointed 284 400
day during the year
Interest paid, under Section 16 of MSMED Act, to suppliers registered under the MSMED Act, - -
beyond the appointed day during the year
Amount of interest due and payable for the period of delay in making payment (which have 2 -
been paid but beyond the appointed day during the year) but without adding the interest
specified under the MSMED Act
Interest accrued and remaining unpaid at the end of each accounting year 10 8
Amount of further interest remaining due and payable even in the succeeding years, until 10 8
such date when the interest dues above are actually paid to the small enterprise, for the
purpose of disallowance of a deductible expenditure under section 23 of the MSMED Act

Note:

(i) The above information has been determined to the extent such parties have been identified by the Company.

(ii) Includes ` 6 crores (2023: ` 9 crores) which are in nature of capital creditors.

Note 45: Corporate social responsibility (CSR)

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net
profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. A CSR committee has been formed
by the Company as per the Act. The funds were primarily utilized through the year on these activities which are specified in Schedule VII of the
Companies Act, 2013:

194
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Details of actual CSR expenditure incurred:

Particulars As at March 31, 2024 As at March 31, 2023

i) Amount required to be spent by the company during the year (refer 19 19
note 26)
ii) Amount of expenditure incurred 21 19
iii) Shortfall/(excess) at the end of the year [(i)-(ii)]* (2) -
iv) Total of previous years shortfall - -
v) Reason for shortfall NA NA
vi) Nature of CSR activities Employment enhancing vocation skills, Conservation of natural
resources including water, promoting responsible consumption,
promoting sanitation and making available safe drinking water
and other activities in alignment with Schedule VII to the Act.
vii) Details of related party transactions, e.g. contribution to a trust NA NA
controlled by the Company in relation to CSR expenditure as per
relevant Accounting Standard
viii) Where a provision is made with respect to a liability incurred NA NA
by entering into a contractual obligation, the movements in the
provision

The Company had undertaken ongoing projects, and the unspent amount as at March 31, 2024 is Nil (2023 of ` 8 crores) has been transferred
to a separate bank account as per Section 135(6) of the Companies Act, 2013.

* The Company intent to carry forward excess amount spent under CSR activity of ` 2 crore (2023: Nil) for the year ended March 31, 2024.

Note 46(a): Details of investments (Original cost) as per Section 186 (4) of Companies Act, 2013

i) Investment in subsidiaries

Name of the Subsidiaries Relationship As at As at

March 31, 2024 March 31, 2023
Domestic subsidiaries
Royal Challengers Sports Private Limited Wholly owned subsidiary 170 170
Overseas subsidiaries
Asian Opportunities & Investments Limited Wholly owned subsidiary 30 30
McDowell & Co. (Scotland) Limited Wholly owned subsidiary 13 13
USL Holdings Limited Wholly owned subsidiary 5,629 5,629
Shaw Wallace Overseas Limited Wholly owned subsidiary 1 1
Palmer Investment Group Limited Wholly owned subsidiary 692 692
Total 6,535 6,535

ii) Investment in associate:

Name of the associate Relationship As at As at

March 31, 2024 March 31, 2023
Nao Spirits & Beverages Private Limited Associate 47 32

195
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Note 46(b): Details of loans (gross) as per Section 186 (4) of Companies Act, 2013

Name of the Relationship Purpose Rate of interest Rate of interest Term/ As at As at

borrower 2023-24 2022-23 repayment March 31, March 31,
schedule 2024 2023
Domestic
subsidiaries
(Refer note
below):
Royal Wholly Working capital 10% 8% - 10% Principal and - 92
Challengers owned interest to be
Sports Private subsidiary repaid by July
Limited 31, 2023.
Overseas
subsidiaries:
Asian Wholly Working capital Interest free Interest free Term/ 59 59
Opportunities owned / funding repayment
& Investments subsidiary towards schedule not
Limited acquisition specified.
of Bouvet
Ladubay,
erstwhile
subsidiary
USL Holdings Wholly Working capital Interest free Interest free Term/ 15 14
UK Ltd owned repayment
subsidiary schedule not
specified.
Others:
United Breweries Unrelated Refer note 40(c) 9.50% 9.50% 8 years 1,238 1,238
(Holdings)
Limited
Total 1,312 1,403

Note: As per the agreement, simple interest is charged for loans given to domestic subsidiary.

196
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Note 47: 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/ advances/ investments outstanding as at year end

Particulars Investments in equity / Gross loans Maximum amount of loans and

preference outstanding as at advances outstanding during
at cost held as at the year
March 31, March 31, March 31, March 31, March 31, March 31,
2024 2023 2024 2023 2024 2023
Asian Opportunities & Investments 30 30 59 59 59 59
Limited
Shaw Wallace Overseas Limited 1 1 - - - -
USL Holdings Limited 5,629 5,629 - - - -
USL Holdings UK Ltd - - 15 14 15 14
Palmer Investment Group Limited 692 692 - - - -
McDowell & Co (Scotland) Limited 13 13 - - - -
Royal Challengers Sports Private 170 170 - 92 121 92
Limited
Sovereign Distilleries Limited - - - - - 2
Nao Spirits & Beverages Private 47 32 - - - -
Limited
Total 6,582 6,567 74 165

The aforesaid amounts are gross of provisions, if any, made based on management assessment of recoverability. For repayment schedule and
interest related terms, Refer Note 46(b).

Note 48: Exceptional items

a) Transfer pursuant to sale of business undertaking

During the year ended March 31, 2023, the Company (i) completed the slump sale of the entire business undertaking associated with
32 brands in the ‘Popular’ segment to Inbrew Beverages Private Limited (“Inbrew”); and (ii) given effect to the franchise of 11 other
brands in the ‘Popular’ segment in favour of Inbrew for a period of five years, with an option for Inbrew, subject to certain conditions,
(a) to convert the fixed term franchise arrangement into a franchise arrangement with perpetual right to use; and / or (b) to acquire
such brands (collectively, the “Transaction”).

In line with the terms of the slump sale agreement, all the assets and liabilities related to the business undertaking were transferred
to Inbrew for a consideration of ` 818 crores (after certain pre-closure adjustments) and a profit on sale of the business undertaking
amounting to ` 380 crores (net-off costs attributable towards sale and accruals) was recognized as an ‘exceptional item’ during the
year ended March 31, 2023.

During the year ended March 31, 2024, the Company has satisfied last of the post-closure conditions for sale of the undertaking and
has consequently recognised the unrecognised gain on sale amounting to ` 31 crores and has presented it as an exceptional item.
Also refer note 28(b).

Pursuant to the slump sale agreement the Company opened an account with a bank and has authorised designated signatories from
Inbrew to operate the account. The bank account was opened for the sole purpose of facilitating Inbrew to receive collections from a
Government customer and make payments towards liabilities of Inbrew, until certain licenses are transferred to Inbrew. The Company
does not have a present right to appoint authorised signatories and has no right to the economic benefits in respect of the balance
in this account. Accordingly, the Company has not recognised the transactions and the balance in the said bank account in these
financial statements.

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UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

b) Supply agility programme

During the year ended March 31, 2023, the Board of Directors of the Company have approved a multi-year supply chain agility
programme. The programme primarily is directed towards the optimization of the existing manufacturing footprint with an intent
to strengthen its end-to-end supply chain and make it fit for the future. The total implementation cost of the supply chain agility
programme, majority of which are expected to be recognized as exceptional items, will be recorded when the recognition criteria are
satisfied.

During the year ended March 31, 2023, the Company has recognised a provision of ` 157 crores under exceptional items, towards
the impairment loss on property, plant and equipment covered under the programme by writing down their carrying amounts to
net realizable values which includes provision on certain land holdings on account of potential regulatory risks (impaired based on
independent valuation) and severance cost relating to a closed unit.

During the year ended March 31, 2024, the Company has recongnised an additional provision of ` 48 crores under exceptional items,
towards impairment loss of property, plant and equipment covered under the programme by writing down their carrying amounts to
net realizable values and severance cost relating to some closed units. Also refer note 28(c).

Note 49: Claim from customer

During the quarter ended December 31, 2023, the Company received a claim from one of its institutional customers, amounting to ` 365 crores
inclusive of penalty. Subsequently, the Company has not received any further collections from the customer till the end of the financial year i.e.
March 31, 2024. The claim pertains to a historical matter regarding differential trade terms and was disclosed in the annual financial statements
for the years ended March 31, 2017, March 31, 2018, March 31, 2021 and March 31, 2022. The impact of the settlement was accounted for
and disclosed in the financial statements for the earlier years. Management’s assessment is that the claim from the customer is unreasoned,
arbitrary in nature, and is in violation of the principles of natural justice. Management is of the view that matter was resolved and settled in
full in the prior years. Management has therefore not acknowledged the claim from the customer and has chosen to litigate as per the legal
remedies available. The Company filed a petition under the Arbitration and Conciliation Act 1996 (the “Act”) before the Bombay High Court,
seeking interim relief of releasing the withheld payments and to not withhold payments pending constitution of the arbitration tribunal. This is
scheduled to be heard on June 24, 2024. Further, the Company has also filed an application under Section 11 of the Act before the Bombay
High Court, seeking the appointment of an arbitrator. The application under Section 11 is yet to be heard. Management, supported by external
legal opinion, believes that it has a good case on merits with a high probability of success in realising the withheld payments. Management
has also determined that the receivable from the customer at March 31, 2024 is good and recoverable.

Note 50: Investment in Associate and Joint Venture

Inspired Hospitality Private Limited

On April 4, 2024, the Company invested ` 6 crores in Inspired Hospitality Private Limited (“Inspired Hospitality”) by subscribing to 3,494
Compulsory Convertible Preference Shares and 10 equity shares of Inspired Hospitality, resulting in the Company holding 15% ownership
interest on a fully diluted basis. Management has considered Inspired Hospitality to be a joint venture since the Company has joint control over
its operating and financing decisions.

Note 51: Additional regulatory information required by Schedule III

i. Details of benami property held

The Company does not hold any benami property. No proceedings have been initiated on the Company or are pending against the
Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

198
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

ii. Borrowing secured against current assets

The Company has no borrowings from banks and financial institutions on the basis of security of current assets.

iii. Willful defaulter

The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.

iv. Relationship with struck off companies

The Company has no transactions with the companies struck off under the Companies Act, 2013 or the Companies Act, 1956 except
for the following:

Name of the Struck Off company Nature of transactions with the struck Balance Balance Relationship
off company outstanding as at outstanding as at with the struck
March 31, 2024 March 31, 2023 off company
Rmb Hospitality (India) Private Sales of goods and receipt of 0 0 Customer
Limited consideration
Srisri Creations Jewels And No transactions during the period 0 0 Customer
Handicrafts Private Limited
Alkanet Hospitality Private Limited Sales of goods and receipt of 0 - Customer
consideration
Charuu Multi Services Private Sales of goods and receipt of - 0 Customer
Limited consideration
Crudex Lng Petroleum Private Sales of goods and receipt of 0 0 Customer
Limited consideration

v. Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

vi. Compliance with number of layers of companies

The Company has ensured compliance with Section 2(87) of the Companies Act, 2013, read with the Companies (Restriction on
Number of Layers) Rules, 2017 (‘Layering Rules’).

vii. Utilisation of borrowed funds and share premium

The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(intermediaries).

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding
party (ultimate beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

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UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

The Company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding
party (ultimate beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

viii. Undisclosed income

There is no income surrendered or disclosed as income during the current or prior year in the tax assessments under the Income Tax
Act, 1961, that has not been recorded in the books of accounts of the Company.

ix. Compliance with approved scheme(s) of arrangements

The Board of Directors (“Board”) of PDL and of the Company at their respective meetings held on December 2, 2019 considered and
approved a scheme of amalgamation and arrangement (the “Scheme”) in relation to the amalgamation of PDL with the Company
under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 and the rules thereunder. The scheme was
approved by the National Company Law Tribunal (NCLT) on November 4, 2022. The Company has not entered into any such scheme
of arrangement which has an accounting impact on current financial year.

x. Loans or advances to specified persons

The Company has not granted any loans or advances to promoters, directors, KMPs and the related parties (as defined under
Companies Act, 2013), either severally or jointly with any other person, expect for the parties mentioned under Note 46(b) that are:

(a) Repayable on demand

(b) without specifying any terms or period of repayment

xi. Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the current or prior year.

xii. Valuation of property, plant and equipment, intangible asset and investment property

The Company has not revalued its property, plant and equipment or intangible assets or both during the current or previous year.

xiii. Utilisation of borrowings taken from banks and financial institutions for specific purpose

The Company has not availed any borrowings from any banks or financial institutions during the year.

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 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

xiv. Analytical Ratios

Ratios Numerator Denominator Year ended Year ended %

March 31, March 31, Variance
2024 2023
Current ratio Current assets Current liabilities 1.9 1.8 9.9%
Debt-equity ratio (Refer note Debt / borrowings Shareholder's equity NA 0.0 NA
32a)
Debt service coverage ratio Earnings available for Debt service 11.2 2.9 294.0%
debt service
Return on equity ratio Profit after tax Average shareholder's equity 20.3% 19.4% 4.7%
Inventory turnover ratio Cost of goods sold Average inventory 9.7 10.6 -8.8%
and excise duty
Trade receivables turnover ratio Gross sales Average receivables 9.2 11.8 -21.7%
Trade payables turnover ratio Net purchases Average payables 4.7 5.1 -7.4%
Net capital turnover ratio Gross sales Working capital (inventories, 8.5 9.6 -11.8%
trade receivables and trade
payables)
Net profit ratio Net profit Net sales (sales-excise duty) 12.3% 10.1% 21.1%
Return on capital employed Earnings before Capital employed(equity, 24.7% 19.9% 23.8%
interest and taxes debt and lease liabilities)
Return on investment Earnings before Average total assets 17.5% 13.4% 31.1%
interest and taxes

(i) Debt-service coverage ratio: There is a significant change due to increase in profit and reduction in finance cost in the current
year as compared to the previous year.

(ii) Return on investment: This has improved due to increase in profit in the current year as compared to previous year.

Note 52 - Summary of other accounting policies

52.1 Property, plant and equipment

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 expenses in the nature of 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 at the balance sheet date, are disclosed as capital work-
in-progress.

Disposals

Gains and losses on disposals are determined by comparing proceeds with the carrying amounts. These are accounted in Statement of profit
and loss within Other income/ Other expenses, on a net basis.

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UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Transition to Ind AS

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment measured as
per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.

52.2 Intangible assets

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, future 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.

Impairment of assets

Intangible assets that have an indefinite useful life are not subject to amortisation and are tested for impairment at least annually, or more
frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment at least annually
or 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 purpose 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.

52.3 Investment in Subsidiaries and Associates

Investments in subsidiaries and associates are carried at cost/ deemed cost, less accumulated impairment losses, if any. 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.

On disposal of investments in subsidiaries and associates, the difference between net disposal proceeds and the carrying amounts are
recognised in the Statement of profit and loss.

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. The Company has subsequently measured its investments in equity shares of subsidiaries and the associate at cost in
accordance with Ind AS 27.

52.4 Financial Instruments

A) Financial Assets:

a) Recognition and measurement

Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument.

On initial recognition, all financial assets except trade receivables are recognised at fair value. Financial assets are subsequently
classified and measured at amortised cost. Financial assets are not reclassified subsequent to their recognition, except if and in
the period the Company changes its business model for managing financial assets.

i) Loans

On initial recognition, Loans are measured at fair value. Since the objective is to hold these financial assets to collect
contractual cash flows that are solely payments of principal and interest, these assets are subsequently measured at
amortised cost using the EIR method less impairment, if any.

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 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

ii) Other financial assets:

On initial recognition, Other financial assets are measured at fair value, and subsequently, measured at the amortised cost,
less impairment if any. Loss arising from impairment, if any is recognised in the Statement of Profit and Loss.

b) Derecognition

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it
transfers the contractual rights to receive the cash flows from the asset.

c) Impairment of financial assets

The Company applies Expected Credit Losses (ECL) model for measurement and recognition of loss allowance on Trade
receivables and other financial assets measured at amortised cost.

In case of trade receivables, the Company follows the provision matrix approach (as permitted by Ind AS 109) wherein an
amount equal to lifetime ECL is measured and recognised as loss allowance.

The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and
is adjusted for forward-looking estimates. At each reporting date, the historically observed default rates and changes in the
forward-looking estimates are updated.

In case of other financial assets, the Company determines if there has been a significant increase in credit risk of the financial
asset since initial recognition. If the credit risk of such assets has not increased significantly, an amount equal to 12-month ECL
is measured and recognised as loss allowance. However, if credit risk has increased significantly, an amount equal to lifetime
ECL is measured and recognised as loss allowance. Subsequently, if the credit quality of the financial asset improve such that
there is no longer a significant increase in credit risk since initial recognition, the Company reverts to recognising impairment loss
allowance based on 12-month ECL.

ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and the
cash flows that the Company expects to receive (i.e., cash shortfalls), discounted at the original effective interest rate.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial asset.
12-month ECL are a portion of the lifetime ECL which result from default events that are possible within 12 months from the
reporting date.

ECL are measured in a manner that they reflect probability weighted amounts determined by a range of outcomes, taking into
account the time value of money and other reasonable information available as a result of past events, current conditions and
forecasts of future economic conditions.

ECL impairment loss allowance (or reversal) recognised during the period is recognised as income/ expense in the Statement of
Profit and Loss under the head ‘Loss allowance on trade receivables and other financial assets’.

d) Income recognition

Dividend income on investments is recognised and accounted for when the right to receive the payment is established, it
probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can
be measured reliably.

Interest income is accounted for on a time-proportion basis using effective interest rate method taking into account the amounts
invested and the rate of interest, except for financial assets that subsequently become credit impaired.

For credit-impaired financial assets the effective interest rate is applied to the net carrying amount of the financial asset (after
deduction of the loss allowance).

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UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

B) Financial Liabilities:

a) Recognition and measurement

Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. On initial
recognition, financial liabilities are measured at fair value and subsequently measured at amortised cost.

Trade and other payables

In case of trade and other payables, they are initially recognised at fair value and subsequently, these liabilities are held at
amortised cost, using the effective interest rate method.

Trade and other payables 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.

b) Derecognition

The Company derecognises a financial liability when the contractual rights to the cash flows from the financial asset expire, or it
transfers the contractual rights to receive the cash flows from the asset.

C) Off-setting 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.

52.5 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 rendered 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 under ‘Other financial liabilities’ in the balance sheet.

b) Post-employment obligations

The Company’s defined benefit plans comprise 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).

Pension and gratuity obligations

The net liability or asset recognised in the balance sheet in respect of pension and gratuity (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.

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 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

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.

Provident fund

The Company operates a defined benefit provident fund plan for certain category of eligible employees. The minimum statutory
rate at which the annual rate of interest is payable to the beneficiaries of such plan is declared by the Central Government. The
Company has an obligation to make good the shortfall if any, in the statutory rate prescribed by the Government and the rate
of interest declared by the Trust. The Company also has an obligation to fund any shortfall in the fair value of plan assets as
compared with the defined benefit obligation.

During the year, the Company has transferred its Provident Fund obligation from the Trust to Employee Provident Fund
Organization (EPFO). Consequently, the Plan has been accounted as a defined contribution plan.

Defined contribution plans

These are plans in which the Company pays pre-defined amounts to funds administered by government authority and the
Company does not have any legal or constructive obligation to pay additional sums. These comprise contributions in respect
of Employees’ Provident Fund, Employees’ Pension Scheme, Employees’ State Insurance, Superannuation fund and National
Pension Scheme. The Company’s payments to the defined contribution plans are recognised as employee benefit expenses
when they are due.

(c) Other long-term employee benefit obligations

The liabilities for earned 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.

(d) Termination benefits

Termination benefits are payable when employment is terminated by the Company before the normal retirement date, or when
an employee accepts voluntary redundancy in exchange for these benefits. The Company recognises termination benefits at
the earlier of the following dates: (a) when the Company can no longer withdraw the offer of those benefits; and (b) when the
Company recognises costs for a restructuring that is within the scope of Ind AS 37 and involves the payment of terminations
benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the
number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period
are discounted to present value.

(e) Share-based payments

Share based compensation benefits are provided to certain grades of employees in the form of United Spirits Limited- Stock
Appreciation Rights Plan, a cash settled scheme, and various equity settled schemes managed by Diageo group.

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 current/ non-current provisions
in the balance sheet.

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UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

Diageo group share based payment arrangements:

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 recognises 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 plans are cross charged by Diageo group companies, the same is accounted for as a reduction from equity. To
the extent the amount or recharge exceeds the fair value of equity shares on the date of exercise, the same is recognised in the
Statement of Profit and Loss.

52.6 Income tax

Income tax expense 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.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. 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. However, deferred tax liabilities are not recognised if they arise from initial recognition
of goodwill. 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 realized 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.

52.7 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. The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented in case
of share splits.

52.8 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.

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 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

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 present
obligation where the likelihood of outflow of resources is remote, no provision or disclosure is made.

52.9 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.

Borrowings are derecognised 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.

52.10 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.

52.11 Government Grants

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions are
complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related
costs, for which it is intended to compensate, are expensed.

When the grant relates to property, plant and equipment, it is recognised as deferred income and recognised as income in Statement of Profit
and Loss over the expected useful life of the related asset. When loan or similar assistance are provided by government or related institutions,
with an interest rate below the current applicable market rate, the effect of this favourable interest is recognized at government rate. The loan
or assistance is initially recognized and measured at fair value and the government grant is measured as the difference between the initial
carrying value of the loan and the proceeds received.

52.12 Exceptional items

When an item of income or expense within Statement of profit and loss from ordinary activity is of such size, nature and incidence that its
disclosure is relevant to explain more meaningfully the performance of the Company for the year, the nature and amount of such items is
disclosed as exceptional items.

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UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to financial statements (Continued)

(All amounts in ` crores unless otherwise stated)

52.13 Segmental information

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. Executive
committee, which has been identified as the chief operating decision maker, assesses the financial performance and position of the Company
and makes strategic decisions. The executive committee consists of the Managing Director & Chief Executive Officer and other senior
management team members. Since segment disclosures have been provided in the consolidated financial statements, no such disclosures
have been made in these standalone financial statements.

52.14 Equity

Own shares represent shares of the Company and those held in treasury by USL Benefit Trust. Pursuant to orders of the High Court of Karnataka
and the High Court of Bombay, shares held in aforesaid trust have been treated as an investment.

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.

52.15 Foreign currency translation

(i) Functional and presentation currency

The financial statements are presented in Indian Rupee (`), the functional currency of the Company.

(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 the Statement of Profit and Loss.

52.16 Rounding of amounts

For the year ended March 31, 2024, the Company has changed its’ currency denomination from ` million to ` crores. Accordingly, all amounts
disclosed in the financial statements and notes have been rounded off to the nearest crores as per the requirement of Schedule III (Division II)
to the Act, unless otherwise stated. The sign ‘0’ in these financial statements indicates that the amounts involved are below ` Fifty Lakhs and
the sign ‘-’ indicates that amounts are Nil.

For Price Waterhouse & Co Chartered Accountants LLP For and on behalf of the Board of Directors
Firm registration number: 304026E/E-300009
Chartered Accountants
Dibyendu Majumder Mahendra Kumar Sharma Hina Nagarajan
Partner Chairman Managing Director and Chief Executive Officer
Membership number: 057687 DIN: 00327684 DIN: 00048506
Place: Mumbai Place: Mumbai

V K Viswanathan Pradeep Jain

Director Executive Director and Chief Financial Officer
DIN: 01782934 DIN: 02110401
Place: Mumbai Place: Mumbai

Mital Sanghvi
Company Secretary
Place: Mumbai
Place: Mumbai
Date: May 24, 2024 Date: May 24, 2024

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Financial Statements

Independent Auditor’s Report

To the Members of United Spirits Limited Emphasis of Matter
Report on the Audit of the Consolidated Financial Statements 4. We draw attention to the following matters:
Opinion
a) Note 41A(a) to the consolidated financial statements
1. We have audited the accompanying consolidated financial regarding the uncertainties post completion of the Initial
statements of United Spirits Limited (hereinafter referred to Inquiry, which identified references to certain Additional
as the “Holding Company”) and its subsidiaries and trust Parties and certain Additional matters, the then MD &
controlled by it (together referred to as “the Group”) and its CEO of the Holding Company, pursuant to the direction
associate company (refer Group overview section to the of the Board of Directors of the Holding Company,
attached consolidated financial statements), which comprise had carried out an Additional Inquiry that revealed
the Consolidated Balance Sheet as at March 31, 2024, and transactions indicating actual and potential diversion
the Consolidated Statement of Profit and Loss (including Other of funds from the Holding Company and its Indian
Comprehensive Income), the Consolidated Statement of and overseas subsidiaries to, in most cases, Indian
Changes in Equity and the Consolidated Statement of Cash and overseas entities that appear to be affiliated or
Flows for the year then ended, and notes to the consolidated associated with the Company’s erstwhile non-executive
financial statements, including material accounting policy Chairman and other potentially improper transactions.
information and other explanatory information (hereinafter Post the completion of Additional Inquiry certain
referred to as “the consolidated financial statements”). regulatory notices and communications were received
from Securities Exchange Board of India, Directorate of
2. In our opinion and to the best of our information and according Enforcement and Authorised Dealer banks (‘AD’) to which
to the explanations given to us, the aforesaid consolidated the Holding Company has responded. Subsequently, the
financial statements give the information required by the Holding Company had commenced the rationalisation
Companies Act, 2013 (“the Act”) in the manner so required process for divestment/ liquidation/ merger of certain
and give a true and fair view in conformity with the accounting overseas subsidiaries including step down subsidiaries
principles generally accepted in India, of the consolidated and completion of the above Rationalisation process is
state of affairs of the Group, and its associate company as subject to regulatory approvals in India and overseas.
at March 31, 2024, consolidated total comprehensive income The Holding company has also filed suits for recovery
(comprising of profit and other comprehensive income), of certain amounts against relevant parties and
consolidated changes in equity and its consolidated cash individuals identified in the Additional Inquiry including
flows for the year then ended. excess managerial remuneration paid to the former
Executive Director and CFO which have been fully
Basis for Opinion provided for or recognised as an expense in prior years.
3. We conducted our audit in accordance with the Standards The management is currently unable to estimate the
on Auditing (SAs) specified under Section 143(10) of the financial impact on the Holding Company, if any, arising
Act. Our responsibilities under those Standards are further out of potential non compliances with applicable laws as
described in the “Auditor’s responsibilities for the audit of the above.
consolidated financial statements” section of our report. We
are independent of the Group and its associate company in b) Note 41A(e) to the consolidated financial statements,
accordance with the ethical requirements that are relevant to which describes the uncertainty relating to the final
our audit of the consolidated financial statements in India in outcome of litigations with a bank (“the bank”) that
terms of the Code of Ethics issued by the Institute of Chartered continues to retain the pledge of certain assets of the
Accountants of India and the relevant provisions of the Act, Holding Company and of the Holding Company’s
and we have fulfilled our other ethical responsibilities in shares held by USL Benefit Trust (of which the Holding
accordance with these requirements. We believe that the Company is the sole beneficiary) despite the Holding
audit evidence we have obtained and the audit evidence Company prepaying the term loan to that bank along
obtained by the other auditors in terms of their reports referred with the prepayment penalty and further depositing an
to in paragraphs 15 and 16 of the Other Matters section below, additional sum of ` 46 crores demanded by the bank
other than the unaudited financial information as certified by and as directed by the Hon’ble High Court of Karnataka
the management and referred to in paragraph 17 of the Other (the “Court”). Based on management assessment
Matters section below, is sufficient and appropriate to provide supported by external legal opinions, the Holding
a basis for our opinion. Company has disclosed the aforesaid amount of

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Independent Auditor’s Report (Continued)

` 46 crores under other non-current financial assets as Our opinion is not modified in respect of the matters described
recoverable from the bank pending the final outcome of under paragraph 4 above.
the litigation. In a separate proceeding before the Debt
Recovery Appellate Tribunal, the bank’s appeal against Key Audit Matters
the judgement awarded by Debt Recovery Tribunal in 5. Key audit matters are those matters that, in our professional
favour of the Holding Company in respect of attachment judgment, were of most significance in our audit of the
of the aforesaid pledged shares for recovery of the loans consolidated financial statements of the current period. These
advanced by the bank to Kingfisher Airlines Limited is matters were addressed in the context of our audit of the
pending disposal. consolidated financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion
on these matters.

Key audit matter How our audit addressed the key audit matter
Assessment of the appropriateness of provisions recognised and Our audit procedures included the following:
contingent liabilities disclosed in respect of certain tax matters • Understood, assessed and tested the design and operating
(Refer notes 8, 18 and 43 (a) and (b) to the consolidated financial effectiveness of the Holding Company’s controls in respect of
statements). the identifying potential tax exposures and/ or the accounting
As at March 31, 2024, the Holding Company has significant tax and disclosures thereof.
exposures and is subject to periodic assessments/ demands by tax • Evaluated the related accounting policy for recognising
authorities on transfer pricing, income tax and a range of indirect provisions for tax exposures and disclosure of contingent
tax matters. liabilities with the requirements of the relevant accounting
Consequent to such tax assessments and demands relating to past standards.
several years, the Company has paid certain amounts under protest • Obtained management’s assessment in respect of tax
at various dates. The Holding Company has also filed appeals with demands on whether cash outflow is either probable, possible
various appellate authorities against such demands. or remote.
Management judgement is involved in assessing the likelihood of
• Evaluated management’s assessment from the Holding
ultimate outcome of the tax disputes to decide on the accounting/
Company with the help of auditors’ experts, where necessary,
disclosure requirements. For certain complex matters the probable
as follows:
amount of the cash outflows determined by the management
is supported by opinions obtained from external tax counsels/ − For the samples selected, read the correspondences
assessment performed by internal expert (management tax experts). received during the year from the tax authorities/ orders
from the appellate authorities.
We considered this a key audit matter as:
(a) The amounts involved are significant to the consolidated − Read and assessed the views provided by the
financial statements; management/ management tax experts as applicable.

(b) Change in the management’s judgements and estimates may − Assessed management’s position on significant tax
significantly affect the provisions recognised or contingent exposures in accordance with the tax laws and past
liabilities disclosed; and precedents of tax judgements.

(c) Matters of disputes are complex in some cases due to the − Assessed completeness of litigations by inquiring with
nature of the industry in which the Holding Company operates the management, and perusal of Board minutes.
and are subject to interpretations under tax laws. Evaluated the objectivity, independence, competence
and capabilities of the management’s tax experts.
− Evaluated the adequacy of the disclosures made in the
consolidated financial statements.
Based on the above procedures, we considered the management’s
assessment in recognising the provisions and disclosing contingent
liabilities in respect of the stated tax matters, as reasonable.

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Financial Statements

Independent Auditor’s Report (Continued)

Other Information position, consolidated financial performance (including

6. The Holding Company’s Board of Directors is responsible for consolidated other comprehensive income), and consolidated
the other information. The other information comprises the cash flows, and changes in equity of the Group and its
Chairman’s Message, Managing Director and CEO’s Message, associate company in accordance with the accounting
Director’s Report, Management Discussion and Analysis, principles generally accepted in India, including the
and Corporate Governance report but does not include the Accounting Standards specified under Section 133 of the Act.
financial statements and our auditor’s report thereon, which The respective Board of Directors of the companies included
we obtained prior to the date of this auditor’s report. The in the Group and of its associate company and the trustees
Business Responsibility and Sustainability Report (BRSR) and of the Trust are responsible for maintenance of adequate
assurance report thereon are expected to be made available accounting records in accordance with the provisions of the
to us after the date of the auditor’s report. Our opinion on the Act for safeguarding the assets of the Group and its associate
consolidated financial statements does not cover the other company and for preventing and detecting frauds and
information and we do not and will not express any form of other irregularities; selection and application of appropriate
assurance conclusion thereon. In connection with our audit accounting policies; making judgments and estimates that are
of the consolidated financial statements our responsibility is reasonable and prudent; and the design, implementation and
to read the other information identified above and, in doing maintenance of adequate internal financial controls, that were
so, consider whether the other information is materially operating effectively for ensuring accuracy and completeness
inconsistent with the consolidated financial statements or our of the accounting records, relevant to the preparation and
knowledge obtained in the audit, or otherwise appears to be presentation of the consolidated financial statements that give
materially misstated. If, based on the work we have performed a true and fair view and are free from material misstatement,
on the other information that we obtained prior to the date whether due to fraud or error, which have been used for
of this auditor’s report, we conclude that there is a material the purpose of preparation of the consolidated financial
misstatement of this other information, we are required to statements by the Directors of the Holding Company, as
report that fact. We have nothing to report in this regard. aforesaid.
When we read the BRSR and assurance report thereon, if we
conclude that there is a material misstatement therein, we are 8. In preparing the consolidated financial statements, the
required to communicate the matter to those charged with respective Board of Directors of the companies included in
governance. the Group and of its associate company and the trustees of
the Trust are responsible for assessing the ability of the Group
Our opinion on the consolidated financial statements does not and of its associate company to continue as a going concern,
cover the other information and we do not express any form of disclosing, as applicable, matters related to going concern
assurance conclusion thereon. and using the going concern basis of accounting unless
management either intends to liquidate the Group or to cease
In connection with our audit of the consolidated financial operations, or has no realistic alternative but to do so.
statements, our responsibility is to read the other information
and, in doing so, consider whether the other information 9. The respective Board of Directors of the companies included
is materially inconsistent with the consolidated financial in the Group and of its associate company and the trustees of
statements or our knowledge obtained in the audit or the Trust are responsible for overseeing the financial reporting
otherwise appears to be materially misstated. If, based on the process of the Group and of its associate company.
work we have performed and the reports of the other auditors
as furnished to us, we conclude that there is a material Auditor’s Responsibilities for the Audit of the consolidated financial
misstatement of this other information, we are required to statements
report that fact.
10. Our objectives are to obtain reasonable assurance about
We have nothing to report in this regard. whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud
Responsibilities of Management and Those Charged with or error, and to issue an auditor’s report that includes our
Governance for the consolidated financial statements opinion. Reasonable assurance is a high level of assurance
7. The Holding Company’s Board of Directors is responsible but is not a guarantee that an audit conducted in accordance
for the preparation and presentation of these consolidated with SAs will always detect a material misstatement when it
financial statements in terms of the requirements of the Act exists. Misstatements can arise from fraud or error and are
that give a true and fair view of the consolidated financial considered material if, individually or in the aggregate, they

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Independent Auditor’s Report (Continued)

could reasonably be expected to influence the economic (f) Obtain sufficient appropriate audit evidence regarding
decisions of users taken on the basis of these consolidated the financial information of the entities or business
financial statements. activities within the Group and its associate company
to express an opinion on the consolidated financial
11. As part of an audit in accordance with SAs, we exercise statements. We are responsible for the direction,
professional judgment and maintain professional scepticism supervision and performance of the audit of the
throughout the audit. We also: financial statements of such entities included in the
consolidated financial statements of which we are the
(a) Identify and assess the risks of material misstatement independent auditors. For the other entities included
of the consolidated financial statements, whether due in the consolidated financial statements, which have
to fraud or error, design and perform audit procedures been audited by other auditors, such other auditors
responsive to those risks, and obtain audit evidence that remain responsible for the direction, supervision and
is sufficient and appropriate to provide a basis for our performance of the audits carried out by them. We
opinion. The risk of not detecting a material misstatement remain solely responsible for our audit opinion.
resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional
12. We communicate with those charged with governance of
omissions, misrepresentations, or the override of internal
the Holding Company and such other entities included in
control.
the consolidated financial statements of which we are the
independent auditors regarding, among other matters, the
(b) Obtain an understanding of internal control relevant to
planned scope and timing of the audit and significant audit
the audit in order to design audit procedures that are
findings, including any significant deficiencies in internal
appropriate in the circumstances. Under Section 143(3)
control that we identify during our audit.
(i) of the Act, we are also responsible for expressing our
opinion on whether the Holding company has adequate
13. We also provide those charged with governance with a
internal financial controls with reference to consolidated
statement that we have complied with relevant ethical
financial statements in place and the operating
requirements regarding independence, and to communicate
effectiveness of such controls.
with them all relationships and other matters that may
(c) Evaluate the appropriateness of accounting policies reasonably be thought to bear on our independence, and
used and the reasonableness of accounting estimates where applicable, related safeguards.
and related disclosures made by management.
14. From the matters communicated with those charged with
(d) Conclude on the appropriateness of management’s use governance, we determine those matters that were of
of the going concern basis of accounting and, based most significance in the audit of the consolidated financial
on the audit evidence obtained, whether a material statements of the current period and are therefore the key
uncertainty exists related to events or conditions that may audit matters. We describe these matters in our auditor’s
cast significant doubt on the ability of the Group and report unless law or regulation precludes public disclosure
its associate company to continue as a going concern. about the matter or when, in extremely rare circumstances,
If we conclude that a material uncertainty exists, we we determine that a matter should not be communicated in
are required to draw attention in our auditor’s report our report because the adverse consequences of doing so
to the related disclosures in the consolidated financial would reasonably be expected to outweigh the public interest
statements or, if such disclosures are inadequate, to benefits of such communication.
modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s Other Matters
report. However, future events or conditions may cause 15. We did not audit the financial statements of one trust controlled
the Group and its associate company to cease to by the Holding Company and incorporated in India, included
continue as a going concern. in the consolidated financial statements, whose financial
statements reflect total assets of ` 11 crores and net assets
(e) Evaluate the overall presentation, structure and content
of ` 9 crores as at March 31, 2024, total revenue of Nil, net
of the consolidated financial statements, including the
loss of ` 2 crores, total comprehensive loss (comprising of loss
disclosures, and whether the consolidated financial
and other comprehensive income) of ` 2 crores and net cash
statements represent the underlying transactions and
inflows amounting to ` 6 crores for the year ended March
events in a manner that achieves fair presentation.

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Financial Statements

Independent Auditor’s Report (Continued)

31, 2024. These financial statements have been prepared in according to the information and explanations given to us
accordance with accounting principles applicable to the trust by the Holding Company’s Board of Directors, such financial
and have been audited by the other auditor under generally statement is not material to the Group.
accepted auditing standards applicable in India. The Holding
Company’s management has converted the financial 18. Our opinion on the consolidated financial statements, and our
statements of the trust from accounting principles followed by report on Other Legal and Regulatory Requirements below,
the trust to the accounting principles applicable to the Holding is not modified in respect of the above matters specified in
Company. We have audited these conversion adjustments as paragraphs 15 and 16 with respect to our reliance on the work
necessary made by the Holding Company’s management. done and the reports of the other auditors and as specified in
Our opinion on the consolidated financial statements in so far paragraph 17 with respect to the financial information certified
as it relates to the balances and affairs of the trust, including by the Board of Directors.
other information, is based on the report of other auditors and
the conversion adjustments prepared by the Management of Report on Other Legal and Regulatory Requirements
the Holding Company as necessary and audited by us. 19. As required by the Companies (Auditor’s Report) Order, 2020
(“CARO 2020”), issued by the Central Government of India
16. We did not audit the financial statements of 8 overseas in terms of sub-section (11) of Section 143 of the Act, we give
subsidiaries included in the consolidated financial statements, in the “Annexure B”, a statement on the matter specified in
whose financial statements reflect total assets of ` 21 crores paragraph 3(xxi) of CARO 2020.
and net assets of ` 20 crores as at March 31, 2024, total
revenue of Nil, net loss of ` 1 crores, total comprehensive 20. As required by Section 143(3) of the Act, we report, to the
loss (comprising of loss and other comprehensive income) extent applicable, that:
of ` 1 crore and net cash outflows of ` 1 crore for the year
ended March 31,2024. These financial statements have been (a) We have sought and obtained all the information and
prepared in accordance with accounting principles generally explanations which to the best of our knowledge and
accepted in their respective countries and have been belief were necessary for the purposes of our audit of the
audited by other auditors under generally accepted auditing aforesaid consolidated financial statements
standards applicable in their respective countries. The
Holding Company’s management has converted the financial (b) In our opinion, proper books of account as required by
statements of such overseas subsidiaries from the accounting law relating to preparation of the aforesaid consolidated
principles generally accepted in their respective countries to financial statements have been kept so far as it appears
the accounting principles generally accepted in India. We have from our examination of those books except for the
audited these conversion adjustments as necessary made by matters stated in paragraph 20(h)(vi) below on reporting
the Holding Company’s management. Our opinion on the under Rule 11(g) of the Companies (Audit and Auditors)
consolidated financial statements in so far as it relates to the Rules, 2014 (as amended).
balances and affairs of such overseas subsidiaries, including
other information, is based on the report of other auditors and
(c) The Consolidated Balance Sheet, the Consolidated
the conversion adjustments prepared by the Management of
Statement of Profit and Loss (including other
the Holding company as necessary and audited by us.
comprehensive income), the Consolidated Statement of
Changes in Equity and the Consolidated Statement of
17. The consolidated financial statements include Group’s share of Cash Flows dealt with by this Report are in agreement
net loss of ` 1 crore and total comprehensive loss (comprising of with the relevant books of account and records
loss and other comprehensive income) of ` 1 crore for the year maintained for the purpose of preparation of the
ended March 31, 2024 in respect of an associate company. The consolidated financial statements.
said financial information relating to the associate company
have not been audited by us. The financial information relating
(d) In our opinion, the aforesaid consolidated financial
to the associate company are unaudited and have been
statements comply with the Accounting Standards
furnished by the Board of Directors of the Holding Company,
specified under Section 133 of the Act.
and our opinion on the Consolidated Financial Results, in so
far as it relates to the amounts and disclosures included in
(e) On the basis of the written representations received from
respect of the aforesaid associate company, is based solely
the directors of the Holding Company as on March 31,
on such unaudited financial information. In our opinion and
2024 taken on record by the Board of Directors of the

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Independent Auditor’s Report (Continued)

Holding Company and the report of the statutory auditors iv. (a) The respective Managements of the Holding
of its subsidiary company, incorporated in India, none Company and its subsidiary company, which
of the directors of the Group companies incorporated is a Company incorporated in India whose
in India is disqualified as on March 31, 2024 from being financial statements have been audited
appointed as a director in terms of Section 164(2) of the under the Act, have represented to us that,
Act. to the best of their knowledge and belief, no
funds (which are material either individually
(f) With respect to the maintenance of accounts and other or in the aggregate) have been advanced
matters connected therewith, reference is made to our or loaned or invested (either from borrowed
remarks in paragraph 20(b) above on reporting under funds or share premium or any other sources
Section 143(3)(b) and paragraph 20(h)(vi) below on or kind of funds) by the Company or by
reporting under Rule 11(g) of the Rules. the subsidiary company to or in any other
person or entity, including foreign entities
(g) With respect to the adequacy of internal financial controls (“Intermediaries”), with the understanding,
with reference to consolidated financial statements whether recorded in writing or otherwise,
of the Holding Company and a subsidiary company that the Intermediary shall, directly or
incorporated in India and the operating effectiveness of indirectly, lend or invest in other persons or
such controls, refer to our separate report in “Annexure entities identified in any manner whatsoever
A”. Reporting under Section 143(3)(i) of the Act in respect by or on behalf of the Holding Company
of the adequacy of internal controls with reference to or such subsidiary company (“Ultimate
financial statements is not applicable to the controlled Beneficiaries”) or provide any guarantee,
trust as it is not a company. security or the like on behalf of the Ultimate
Beneficiaries.
(h) With respect to the other matters to be included in
the Auditor’s Report in accordance with Rule 11 of the (b) The respective Managements of the Holding
Companies (Audit and Auditors) Rules, 2014, in our Company and its subsidiary company,
opinion and to the best of our information and according which is a company incorporated in India
to the explanations given to us: whose financial statements have been
audited under the Act, have represented
i. The Group has disclosed the impact, if any, of
to us that, no funds (which are material
pending litigations on as at March 31, 2024 on the
either individually or in the aggregate) have
consolidated financial statements. (Refer notes 8,
been received by the Holding Company
18, 41A(a), 41A(d), 41A(e) and 43 to the consolidated
or subsidiary company from any person or
financial statements).
entity, including foreign entities (“Funding
ii. The Holding Company and its subsidiary in India Parties”), with the understanding, whether
was not required to recognise a provision as recorded in writing or otherwise, that the
at March 31, 2024 under the applicable law or Holding Company or subsidiary company
accounting standards, as it does not have any shall, directly or indirectly, lend or invest in
material foreseeable losses on long-term contracts. other persons or entities identified in any
The Holding Company and its subsidiary in India manner whatsoever by or on behalf of the
did not have any derivative contracts as at March Funding Party (“Ultimate Beneficiaries”) or
31, 2024. (Refer note 40 to the consolidated provide any guarantee, security or the like
financial statements). on behalf of the Ultimate Beneficiaries.

iii. During the year ended March 31, 2024, there were (c) Based on the audit procedures, that
no amounts which were required to be transferred has been considered reasonable and
to the Investor Education and Protection Fund by appropriate in the circumstances, nothing
the Holding Company and its subsidiary company has come to our or other auditor’s notice that
incorporated in India. (Refer note 17 to the has caused us or the other auditors to believe
consolidated financial statements). that the representations under sub-clause (i)
and (ii) of Rule 11(e) contain any material
misstatement.

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Financial Statements

Independent Auditor’s Report (Continued)

v. The dividend declared and paid during the year by it. Other than for the instances mentioned above,
the Holding Company and its subsidiary company, based on our procedures performed, we did not
which is a company incorporated in India, is in notice any instance of the audit trail feature being
compliance with Section 123 of the Act. tampered with.

vi. Based on our examination, which included test 21. The Holding Company has paid/ provided for managerial
checks, the Holding Company and its subsidiary remuneration in accordance with the requisite approvals
company, which is a company incorporated mandated by the provisions of Section 197 read with Schedule
in India, has used an accounting software for V to the Act. The subsidiary company incorporated in India
maintaining its books of account which has a has not paid remuneration to its managerial personnel during
feature of recording audit trail (edit log) facility the year.
and that has operated throughout the year for
all relevant transactions recorded in the software, For Price Waterhouse & Co
except that the audit trail is not maintained for any Chartered Accountants
changes made through specific access and direct Firm Registration Number: 304026E/ E-300009
database changes. Further, in case of the Holding
Company, for the accounting software maintained Dibyendu Majumder
by the third-party payroll service provider, in the Partner
absence of adequate information around the Place: Mumbai Membership Number: 057687
audit trail feature, we are unable to comment on Date: May 24, 2024 UDIN: 24057687BKFTPP3603

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UNITED SPIRITS LIMITED Annual Report 2023–24

Annexure A to Independent Auditor’s Report

Referred to in paragraph 20(g) of the Independent Auditor’s Report of even date to the members of United Spirits
Limited on the consolidated financial statements for the year ended March 31, 2024
Report on the Internal Financial Controls with reference to 5. We believe that the audit evidence we have obtained is
consolidated financial statements under clause (i) of sub-section sufficient and appropriate to provide a basis for our audit
opinion on the Holding Company and a subsidiary company,
3 of Section 143 of the Act
which is a company incorporated in India, internal financial
1. In conjunction with our audit of the consolidated financial controls system with reference to financial statements.
statements of the Holding Company as of and for the year
Meaning of Internal Financial Controls with reference to financial
ended March 31, 2024, we have audited the internal financial
statements
controls with reference to consolidated financial statements of
United Spirits Limited (hereinafter referred to as “the Holding 6. A company’s internal financial control with reference to
Company”) and its subsidiary company which is a company financial statements is a process designed to provide
incorporated in India, as of that date. reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for
Management’s Responsibility for Internal Financial Controls external purposes in accordance with generally accepted
2. The respective Board of Directors of the Holding Company and accounting principles. A company’s internal financial control
its subsidiary company, to whom reporting under clause (i) of with reference to financial statements includes those policies
sub section 3 of Section 143 of the Act in respect of the adequacy and procedures that (1) pertain to the maintenance of records
of the internal financial controls with reference to financial that, in reasonable detail, accurately and fairly reflect the
statements is applicable, which are companies incorporated in transactions and dispositions of the assets of the company; (2)
India, are responsible for establishing and maintaining internal provide reasonable assurance that transactions are recorded
financial controls based on internal control over financial as necessary to permit preparation of financial statements in
reporting criteria established by the respective Companies accordance with generally accepted accounting principles,
considering the essential components of internal control stated and that receipts and expenditures of the company are being
in the Guidance Note on Audit of Internal Financial Controls made only in accordance with authorisations of management
Over Financial Reporting (“the Guidance Note”) issued by and directors of the company; and (3) provide reasonable
the Institute of Chartered Accountants of India (“ICAI”). assurance regarding prevention or timely detection of
These responsibilities include the design, implementation unauthorised acquisition, use, or disposition of the company’s
and maintenance of adequate internal financial controls assets that could have a material effect on the financial
that were operating effectively for ensuring the orderly and statements.
efficient conduct of its business, including adherence to the
Inherent Limitations of Internal Financial Controls with reference to
respective company’s policies, the safeguarding of its assets,
financial statements
the prevention and detection of frauds and errors, the accuracy
and completeness of the accounting records, and the timely 7. Because of the inherent limitations of internal financial controls
preparation of reliable financial information, as required under with reference to financial statements, including the possibility
the Act. of collusion or improper management override of controls,
material misstatements due to error or fraud may occur and
Auditor’s Responsibility not be detected. Also, projections of any evaluation of the
3. Our responsibility is to express an opinion on the Company’s internal financial controls with reference to financial statements
internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial
based on our audit. We conducted our audit in accordance control with reference to financial statements may become
with the Guidance Note issued by the ICAI and the Standards inadequate because of changes in conditions, or that the
on Auditing deemed to be prescribed under Section 143(10) of degree of compliance with the policies or procedures may
the Companies Act, 2013, to the extent applicable to an audit deteriorate.
of internal financial controls, both applicable to an audit of
Opinion
internal financial controls and both issued by the ICAI. Those
Standards and the Guidance Note require that we comply 8. In our opinion, the Holding Company and its subsidiary
with ethical requirements and plan and perform the audit to company, which is a company incorporated in India, have, in
obtain reasonable assurance about whether adequate internal all material respects, an adequate internal financial controls
financial controls with reference to financial statements was system with reference to financial statements and such internal
established and maintained and if such controls operated financial controls with reference to financial statements were
effectively in all material respects. operating effectively as at March 31, 2024, based on the internal
control over financial reporting criteria established by the
4. Our audit involves performing procedures to obtain audit respective Companies considering the essential components
evidence about the adequacy of the internal financial controls of internal control stated in the Guidance Note issued by the
system with reference to financial statements and their ICAI.
operating effectiveness. Our audit of internal financial controls
with reference to financial statements included obtaining an For Price Waterhouse & Co Chartered Accountants
understanding of internal financial controls with reference to Firm Registration Number: 304026E/ E-300009
financial statements, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating Dibyendu Majumder
effectiveness of internal control based on the assessed risk. Partner
The procedures selected depend on the auditor’s judgement, Place: Mumbai Membership Number: 057687
including the assessment of the risks of material misstatement Date: May 24, 2024 UDIN: 24057687BKFTPP3603
of the financial statements, whether due to fraud or error.

216
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Annexure B to Independent Auditor’s Report

Referred to in paragraph 19 of the Independent Auditors’ Report of even date to the members of United Spirits Limited
on the Consolidated Financial Statements as of and for the year ended March 31, 2024
As required by paragraph 3(xxi) of the CARO 2020, we report that the auditors of the following companies have given qualification or adverse
remarks in their CARO report on the standalone financial statements of the respective companies included in the consolidated financial
Statements of the Holding Company:

Sl. Name of the Company CIN Relationship with the Date of the Paragraph number and
No. Holding Company respective comment in the respective
auditors’ report CARO report reproduced
below
1. United Spirits Limited L01551KA1999PLC024991 Holding Company of May 24, 2024 (i)(c) and (iii) (c)
the Group

The statutory audit report on the financial statements for the year ended March 31, 2024 of Nao Spirits & Beverages Private Limited, an
associate of the Holding Company incorporated in India, has not been issued until the date of this report. Accordingly, no comments for the
said associate have been included for the purpose of reporting under this clause.

For Price Waterhouse & Co Chartered Accountants

Firm Registration Number: 304026E/ E-300009

Dibyendu Majumder
Partner
Place: Mumbai Membership Number: 057687
Date: May 24, 2024 UDIN: 24057687BKFTPP3603

217
UNITED SPIRITS LIMITED Annual Report 2023–24

Consolidated Balance Sheet

(All amounts in ` crores unless otherwise stated)
Particulars Notes As at As at
March 31, 2024 March 31, 2023
ASSETS
Non-current assets
Property, plant and equipment 3.1 844 978
Right-of-use assets 3.2 227 173
Capital work-in-progress 3.3 37 67
Goodwill 3.4 1 1
Other intangible assets 3.4 349 357
Intangible assets under development 3.5 - 16
Investment property 3.6 139 25
Financial assets
Investments accounted for using the equity method 4.1 9 10
Investments 4.2 37 20
Trade receivables 11 365 -
Loans 5 - -
Other financial assets 6 111 146
Deferred tax assets (net) 7 177 157
Current tax assets (net) (Non-current) 8 1,358 1,336
Other non-current assets 9 218 241
Total non-current assets 3,872 3,527
Current assets
Inventories 10 2,063 2,230
Financial assets
Investments 4.3 599 256
Trade receivables 11 3,056 2,434
Cash and cash equivalents 12 1,052 115
Bank balances other than cash and cash equivalents 13 217 768
Loans 5 10 16
Other financial assets 6 37 136
Other current assets 9 343 279
Total current assets 7,377 6,234
Total assets 11,249 9,761
EQUITY AND LIABILITIES
EQUITY
Share capital 14 145 145
Other equity
Reserves and surplus 15 6,976 5,854
Total equity 7,121 5,999

218
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Consolidated Balance Sheet (Continued)

(All amounts in ` crores unless otherwise stated)

Particulars Notes As at As at
March 31, 2024 March 31, 2023
LIABILITIES
Non-current liabilities
Financial liabilities
Borrowings 16 - 0
Lease liabilities 3.2 137 80
Deferred tax liabilities (net) 7 73 45
Provisions 18 15 12
Total non-current liabilities 225 137
Current liabilities
Financial liabilities
Borrowings 16 25 1
Lease liabilities 3.2 103 102
Trade payables
(A) total outstanding dues of micro and small enterprises 19 70 50
(B) total outstanding dues of creditors other than micro and small enterprises 19 1,884 1,733
Other financial liabilities 17 276 285
Provisions 18 368 373
Current tax liabilities (net) 8 332 283
Other current liabilities 20 845 798
Total current liabilities 3,903 3,625
Total liabilities 4,128 3,762
Total equity and liabilities 11,249 9,761
The above consolidated balance sheet should be read in conjunction with the accompanying notes.

As per our report of even date

For Price Waterhouse & Co Chartered Accountants LLP For and on behalf of the Board of Directors
Firm registration number: 304026E/E-300009
Chartered Accountants
Dibyendu Majumder Mahendra Kumar Sharma Hina Nagarajan
Partner Chairman Managing Director and Chief Executive Officer
Membership number: 057687 DIN: 00327684 DIN: 00048506
Place: Mumbai Place: Mumbai
V K Viswanathan Pradeep Jain
Director Executive Director and Chief Financial Officer
DIN: 01782934 DIN: 02110401
Place: Mumbai Place: Mumbai
Mital Sanghvi
Company Secretary
Place: Mumbai
Place: Mumbai
Date: May 24, 2024 Date: May 24, 2024

219
UNITED SPIRITS LIMITED Annual Report 2023–24

Consolidated Statement of Profit and Loss

(All amounts in ` crores unless otherwise stated)
Particulars Notes For the year ended For the year ended
March 31, 2024 March 31, 2023
INCOME
Revenue from operations 21 26,018 27,816
Other income 22 225 73
Total income 26,243 27,889
EXPENSES
Cost of materials consumed 23 5,254 5,337
Purchase of stock-in-trade 675 864
Change in inventories of finished goods, work-in-progress and stock-in-trade 24 119 (137)
Excise duty 14,697 17,204
Employee benefits expense 25 547 610
Depreciation and amortisation expense 26 275 283
Advertisement and sales promotion 1,048 922
Other expenses 27 1,677 1,598
Finance costs 28 76 104
Total expenses 24,368 26,785
Profit before share of net loss of investments in associates, exceptional items and tax 1,875 1,104
Share of net loss in associate (1) (1)
Profit before exceptional items and tax 1,874 1,103
Add/ (Less): Exceptional items (net) 29 (17) 176
Profit before tax 1,857 1,279
Income tax expense: 30
Current tax 450 281
Current tax relating to earlier years (10) (115)
Deferred tax (credit) / charge 9 (13)
Total tax expense 449 153
Profit for the year 1,408 1,126
Other comprehensive income
A. Items that will be reclassified to profit or loss
(i) Exchange difference on translation of foreign operations (1) (1)
(ii) Share of other comprehensive income of associates accounted for using - -
the equity method
B. Items that will not be reclassified to profit or loss

220
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Consolidated Statement of Profit and Loss (Continued)

(All amounts in ` crores unless otherwise stated)

Particulars Notes For the year ended For the year ended
March 31, 2024 March 31, 2023
(i) Remeasurements of post-employment benefit plans 39(b)E (3) (1)
(ii) Share of other comprehensive income of associates accounted for using - -
the equity method
(iii) Income tax credit / (charge) relating to these items 1 0
Other comprehensive income for the year, net of tax (3) (2)
Total comprehensive income for the year 1,405 1,124
Profit is attributable to:
Owners of United Spirits Limited 1,408 1,137
Non-controlling interests - (11)
1,408 1,126
Other comprehensive income is attributable to:
Owners of United Spirits Limited (3) (2)
Non-controlling interests - -
(3) (2)
Total comprehensive income is attributable to:
Owners of United Spirits Limited 1,405 1,135
Non-controlling interests - (11)
1,405 1,124
Basic and diluted earnings per share (in `) 31 19.83 16.01
The above consolidated statement of profit and loss should be read in conjunction with the accompanying notes.

As per our report of even date

For Price Waterhouse & Co Chartered Accountants LLP For and on behalf of the Board of Directors
Firm registration number: 304026E/E-300009
Chartered Accountants
Dibyendu Majumder Mahendra Kumar Sharma Hina Nagarajan
Partner Chairman Managing Director and Chief Executive Officer
Membership number: 057687 DIN: 00327684 DIN: 00048506
Place: Mumbai Place: Mumbai
V K Viswanathan Pradeep Jain
Director Executive Director and Chief Financial Officer
DIN: 01782934 DIN: 02110401
Place: Mumbai Place: Mumbai
Mital Sanghvi
Company Secretary
Place: Mumbai
Place: Mumbai
Date: May 24, 2024 Date: May 24, 2024

221
UNITED SPIRITS LIMITED Annual Report 2023–24

Consolidated Statement of Changes in Equity

A. Equity Share Capital
(All amounts in ` crores unless otherwise stated)
Particulars Note Amount
Equity share capital as at April 1, 2022 14 145
Changes in equity share capital 0
Equity share capital as at March 31, 2023 14 145
Changes in equity share capital -
Equity share capital as at March 31, 2024 14 145

B. Other equity
Attributable to owners of United Spirits Limited Non- Total
Reserves and surplus Controlling
Particulars Notes Capital Capital Securities Treasury Central Share Foreign Contingency General Retained Total interest
reserve redemption premium shares subsidy based currency reserve reserve earnings
reserve account incentive translation
reserve reserve
Balance as at April 1, 2022 568 70 4,568 (120) 5 (0) 21 11 1,041 (1,354) 4,808 (79) 4,730
Profit/(Loss) for the year - - - - - - - - 1,136 1,136 (11) 1,126
Other comprehensive income - - - - - - (2) - - (0) (2) - (2)
(OCI), net of tax
Total comprehensive income - - - - - - (2) - - 1,136 1,134 (11) 1,124
Share based payments 35 - - - - - 7 - - - - 7 - 7
Cross charge by a Diageo group 37(b)(ix) - - - - - (6) - - - - (6) - (6)
company during the year towards
share based payments
Acquisition of shares held by Non - - - - - - - - - (90) (90) 90 -
Controlling Shareholders pursuant
to amalgamation
Balance as at March 31, 2023 15 568 70 4,568 (120) 5 1 19 11 1,041 (308) 5,854 - 5,854
Profit for the year - - - - - - - - 1,408 1,408 - 1,408
Other comprehensive income - - - - - - (1) - - (2) (3) - (3)
(OCI), net of tax
Total comprehensive income - - - - - - (1) - - 1,406 1,405 - 1,405
Share based payments 35 - - - - - 4 - - - - 4 - 4
Cross charge by a Diageo group 37(b)(ix) - - - - - (4) - - - - (4) - (4)
company during the year towards
share based payments
Dividend payment 33b - - - - - - - - - (284) (284) - (284)
Balance as at March 31, 2024 15 568 70 4,568 (120) 5 1 18 11 1,041 814 6,976 - 6,976

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
As per our report of even date
For Price Waterhouse & Co Chartered Accountants LLP For and on behalf of the Board of Directors
Firm registration number: 304026E/E-300009
Chartered Accountants
Dibyendu Majumder Mahendra Kumar Sharma Hina Nagarajan
Partner Chairman Managing Director and Chief Executive Officer
Membership number: 057687 DIN: 00327684 DIN: 00048506
Place: Mumbai Place: Mumbai
V K Viswanathan Pradeep Jain
Director Executive Director and Chief Financial Officer
DIN: 01782934 DIN: 02110401
Place: Mumbai Place: Mumbai
Mital Sanghvi
Company Secretary
Place: Mumbai
Place: Mumbai
Date: May 24, 2024 Date: May 24, 2024

222
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Consolidated Statement of Cash flows

(All amounts in ` crores unless otherwise stated)
Particulars Notes For the year For the year
ended March 31, 2024 ended March 31, 2023
A. CASH FLOW FROM OPERATING ACTIVITIES
Profit before tax 1,857 1,279
Adjustments for
Depreciation and amortisation expense 26 275 283
Employee share-based payment expense 25 37 23
Loss allowance on trade receivables, other assets and other 27 41 5
financial assets (net)
Profit on redemption of mutual fund units 22 (47) (17)
Increase in fair value of investments 22 (18) (3)
Finance costs 28 76 104
Liabilities no longer required written back 22 - (0)
Gain on disposal of property, plant and equipment (net) 22 (12) (20)
Interest income 22 (42) (32)
Interest on direct and indirect tax refund 22 (88) -
Share of net (profit)/loss in associate accounted for using equity 4.1 1 1
method
Exceptional item- Profit on sale of business undertaking 29 (31) (380)
Exceptional item- Supply restructuring cost 29 48 157
Exceptional item - Others 29 - 47
Exchange loss on translation of assets and liabilities 3 1
243 169
Operating profit before working capital changes 2,100 1,448
(Increase) / decrease in trade receivables (1,045) (276)
(Increase) / decrease in loans and other financials assets 154 (96)
(Increase) / decrease in other assets (35) (123)
(Increase) / decrease in inventories 163 (262)
Increase / (decrease) in trade payables 132 203
Increase / (decrease) in other financial liabilities (43) 18
Increase / (decrease) in other liabilities 78 111
Increase / (decrease) in provisions (49) (140)
(645) (565)
Cash generated from operations 1,455 883
Income taxes paid (net of refund) (337) (268)
Net cash generated from operating activities (A) 1,118 615
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment and intangible assets (98) (137)
Proceeds from sale of property, plant and equipment and investment 19 27
properties
Purchase of current investments (1,032) (8,517)
Redemption of current investments 751 8,502
Purchase of term deposits (427) (1,013)
Redemption of term deposits 980 250

223
UNITED SPIRITS LIMITED Annual Report 2023–24

Consolidated Statement of Cash flows (Continued)

(All amounts in ` crores unless otherwise stated)

Particulars Notes For the year For the year
ended March 31, 2024 ended March 31, 2023
Proceeds from sale of a business undertaking - 818
Proceeds from sale of a subsidiary - 32
Acquisition/ additional investment in an associate (15) (32)
Loans given to others - (8)
Repayment of loans given to others 6 3
Interest received 42 20
Net cash inflow / (outflow) from investing activities (B) 226 (55)
C. CASH FLOW FROM FINANCING ACTIVITIES
Net proceeds / (repayment) of working capital loans 16 25 (339)
Principal repayment of lease liabilities 16 (126) (124)
Interest paid on lease liabilities 16 (21) (16)
Repayment of deferred sales tax liability 16 (1) (1)
Interest paid on borrowings 16 - (20)
Dividend paid 33(b) (284) -
Net cash inflow / (outflow) from financing activities (C) (407) (500)
Net increase / (decrease) in cash and cash equivalents 937 60
[D = A+B+C]
Cash and cash equivalents as at the beginning of the year (E) 115 55
Effects of exchange rate changes on cash and cash equivalents 0 0
Net increase / (decrease) in cash and cash equivalents 937 60
Cash and cash equivalents as at the end of the year [D+E] 12 1,052 115
Non-cash financing and investing activity
Acquisition of right-of-use assets 3.2 184 86

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
As per our report of even date

For Price Waterhouse & Co Chartered Accountants LLP For and on behalf of the Board of Directors
Firm registration number: 304026E/E-300009
Chartered Accountants

Dibyendu Majumder Mahendra Kumar Sharma Hina Nagarajan

Partner Chairman Managing Director and Chief Executive Officer
Membership number: 057687 DIN: 00327684 DIN: 00048506
Place: Mumbai Place: Mumbai

V K Viswanathan Pradeep Jain

Director Executive Director and Chief Financial Officer
DIN: 01782934 DIN: 02110401
Place: Mumbai Place: Mumbai

Mital Sanghvi
Company Secretary
Place: Mumbai
Place: Mumbai
Date: May 24, 2024 Date: May 24, 2024

224
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements

(All amounts in ` crores unless otherwise stated)

Group overview

United Spirits Limited (“The Holding Company” or “USL”) which is a public company domiciled and headquartered in Bengaluru, Karnataka,
India, together with its subsidiaries and its controlled trust (collectively “the Group”). It is incorporated under the Companies Act, 1956 and its
shares are listed on the BSE Limited and National Stock Exchange of India Limited. It is engaged in the business of manufacture (including
through third party manufacturing facilities), purchase and sale of beverage alcohol (including franchising of some of its brands in certain
states), and other allied spirits. In addition, the Group has rights to operate sports franchise through Royal Challengers Sports Private Limited.

Consolidated Financial Statements includes the financial statements of the following subsidiaries controlled by the Holding Company:

• Royal Challengers Sports Private Limited

• Sovereign Distilleries Limited (ceased to be a subsidiary w.e.f. January 24, 2023)
• Asian Opportunities and Investments Limited
• McDowell & Co. (Scotland) Limited
• Palmer Investment Group Limited
• Shaw Wallace Overseas Limited
• United Spirits (Great Britain) Limited
• United Spirits (UK) Limited
• USL Holdings Limited
• USL Holdings (UK) Limited
• United Spirits (Shanghai) Trading Company Limited (ceased to be a subsidiary w.e.f. January 12, 2023)
• United Spirits Singapore Pte Ltd (ceased to be a subsidiary w.e.f. November 04, 2022)

Trust controlled by the Holding Company

• USL Benefit Trust

The Holding Company, its Subsidiaries and the Trust controlled by the Holding Company together are referred to as the Group.

The Group also has significant influence over the following associate company:
• Nao Spirits & Beverages Private Limited (w.e.f. from April 29, 2022) (equity ownership interest of 11%) (Refer notes 4.1 & 4.2)

These consolidated financial statements are approved for issue by the Group’s Board of Directors on May 24, 2024.

Note 1: Summary of material accounting policy information

1.1: Basis of preparation of consolidated financial statements

(i) Compliance with Ind AS

These 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, as amended] and
other relevant provisions of the Act.

225
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
(ii) Going concern

These consolidated financial statements are prepared on a going concern basis unless the Holding Company management
either intends to liquidate any entities within the Group or has no realistic alternative but to do so, in which case the financial
statements of such entities are prepared and consolidated on a liquidation basis (i.e. “break up” basis).

(iii) Historical cost convention

These consolidated financial statements have been prepared on a historical cost basis, except for the following:

• defined benefits plans – plan assets are measured at fair value;

• share-based payments are measured at fair value; and
• investment in mutual funds and investment in compulsorily convertible preference shares of associate are measured at fair
value.

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 Act. 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.

(iv) New and amended standards adopted

The Ministry of Corporate Affairs had vide notification dated March 31, 2023 notified Companies (Indian Accounting Standards)
Amendment Rules, 2023 (the “Rules”) which amended certain accounting standards, and are effective 1st April 2023.

• Disclosure of accounting policies – amendments to Ind AS 1

• Definition of accounting estimates – amendments to Ind AS 8
• Deferred tax related to assets and liabilities arising from a single transaction – amendments to Ind AS 12. The other
amendments to Ind AS notified by these rules are primarily in the nature of clarifications.

These amendments did not have any material impact on the amounts recognised in prior periods and are not expected to
significantly affect the current or future periods. Specifically, no changes would be necessary as a consequence of amendments
made to Ind AS 12 as the Group’s accounting policy already complies with the new mandatory treatment.

The material accounting policy information related to preparation of the Consolidated Financial Statements have been disclosed
in the respective notes.

Note 2: Critical estimates and judgements

The preparation of consolidated 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.

226
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
The areas involving critical estimates and judgements are:

• Estimation of provisions recognised and contingent liabilities disclosed in respect of tax matters – Notes 9, 18, and 43;
• Impairment of trade receivables and other financial assets - Notes 6, 11 and 32(A).

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.

The Group holds perpetual franchise right for the Bengaluru team of IPL. The limited over version of the game which was first introduced
in 1970s is continuing even now after 50 years and an even shorter version (20 overs) introduced in 2000s is more popular than the 50
overs format. Although the Management regards the useful life as indefinite, as a measure of prudence a useful life of 50 years/ IPL
seasons is considered as appropriate and the rights are amortized over 50 years/ IPL seasons 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;

ii. The shorter version of the game is increasingly popular;

iii. 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;

iv. IPL and its teams have acquired brand status and teams are not identified with countries or geographies but with brand names;
and

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.

The carrying value of the capitalized rights would be assessed for impairment at every balance sheet date.

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.

227
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
3.1 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 assets.

Depreciation method, 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)

Building
- Roads 5
- Buildings 5 - 60
Plant and Equipment
- Wooden Casks 7 - 15
- Others 7 - 15
Furniture and Fittings 10
Office Equipment
- Computers 3
- Servers 3
- Others 5
Vehicles 5

Useful lives of asset classes determined by management estimate, which are different than those prescribed under Schedule II of the Act are
supported by internal technical assessment of the useful lives. Estimated useful lives based on technical evaluation considers the impact of
additional depreciation for working extra shifts.

Refer note 49.2 for other accounting policy relevant to property, plant & equipment.
3.1 Property, plant and equipment

Particulars Freehold Buildings Plant and Furniture Office Vehicles Total

Land Equipment and Equipment
Fittings
Year ended March 31, 2023
Gross carrying amount
Opening 273 499 1,361 44 72 2 2,251
Additions 10 23 107 3 3 - 146
Transfer pursuant to sale of business - (21) (222) (1) (3) (0) (247)
undertaking [Refer note 47(a)]
Disposals (6) (5) (35) (0) (0) (0) (46)
Transfer to investment property (25) (32) - - - - (57)
Disposal of wholly owned subsidiary (1) (19) (15) (0) - - (35)
Closing gross carrying amount 251 445 1,196 46 72 1 2,012

228
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Particulars Freehold Buildings Plant and Furniture Office Vehicles Total
Land Equipment and Equipment
Fittings
Accumulated depreciation and impairment
Opening 16 163 772 33 50 1 1,035
Depreciation charge during the year - 20 103 2 8 - 133
Transfer pursuant to sale of business - (7) (148) (1) (1) (0) (157)
undertaking [Refer note 47(a)]
Impairment during the year 61 44 - 4 - - 109
[refer note (a) below]
Disposals - (4) (35) (0) (0) (0) (39)
Transfer to investment property (3) (29) - - - - (32)
Disposal of wholly owned subsidiary - (7) (8) (0) - - (15)
Closing accumulated depreciation and 74 180 684 38 56 1 1,034
impairment
Net carrying amount as at March 31, 2023 178 265 512 7 16 0 978
Year ended March 31, 2024
Gross carrying amount
Opening 251 445 1,196 46 72 1 2,012
Additions 3 10 109 1 3 - 126
Disposals - (1) (23) (3) (20) - (47)
Transfer to investment property (113) (85) - - - - (198)
Closing gross carrying amount 141 369 1,282 44 55 1 1,893
Accumulated depreciation and impairment
Opening 74 180 684 38 56 1 1,034
Depreciation charge during the year 0 19 92 3 7 0 121
Impairment during the year [refer note (a) - 10 9 1 - - 20
below]
Assets written off provision during the year - - 1 - - - 1
Disposals - - (19) (3) (20) - (42)
Transfer to investment property (20) (65) - - - - (85)
Closing accumulated depreciation and 54 144 767 39 43 1 1,049
impairment
Net carrying amount as at March 31, 2024 87 225 515 5 12 0 844

Note:
(a) The Group has taken an exceptional charge of ` 20 crores (2023: ` 109 crores) towards impairment of property, plant and equipment
covered under supply agility programme by writing down their carrying amounts to their net recoverable amounts. (Refer note 29(b)).

Property, plant and equipment pledged as security

Refer to note 34 for information on property, plant and equipment pledged as security by the Group.

229
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
3.2 Right of use assets and lease liability
As a lessee
The Group recognises a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group.
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease
components based on their relative stand-alone prices.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the
following lease payments:
• fixed payments (including in-substance fixed payments, for example arrangements that require payments based on agreed minimum
production volumes),
• variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date
• amounts expected to be payable by the Group under residual value guarantees
• the exercise price of a purchase option if the Group is reasonably certain to exercise that option, and
• payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease
payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for
leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and
conditions.
To determine the incremental borrowing rate, the group:
• where possible, uses recent third-party financing as a starting point, adjusted to reflect changes in financing conditions since third
party financing was received; and
• makes adjustments specific to the lease, e.g. term and security.
If a readily observable amortising loan rate is available to the individual lessee (through recent financing or market data) which has a similar
payment profile to the lease, then the Group uses that rate as a starting point to determine the incremental borrowing rate.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or 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.
Variable lease payments that depend on sales are recognised in profit or loss in the period in which the condition that triggers those payments
occurs.
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability
• any lease payments made at or before the commencement date less any lease incentives received, and
• restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. If the group is
reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life.
Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise small items of office
equipment and furniture.
This note provides information for leases where the Group is a lessee. The Group has taken on lease land, offices, warehouses, plant and
equipment and office equipment. Lease contracts are typically entered into for 30 years to 100 years for leasehold land and for periods of 11
months to 5 years for other categories, and may have extension options as described in Note (c) below. Some of the leasing arrangements
entered into by the Group include non-cancellable lease terms.

230
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
(i) Amounts recognised in balance sheet

Particulars As at As at
March 31, 2024 March 31, 2023
Right-of-use assets
Leasehold land 5 6
Buildings 19 20
Plant and equipment 201 140
Office equipment 2 7
Total 227 173

Particulars For the year ended For the year ended

March 31, 2024 March 31, 2023
Movement of right-of-use assets during the year
Opening 173 261
Additions / adjustments 184 86
Depreciation for the year (129) (130)
Termination of leases - (44)
Transfer to investment property (1) (0)
Closing 227 173
Lease liabilities
Current 103 102
Non-current 137 80
Total 240 182

(ii) Amounts recognised in the Statement of Profit and Loss

Particulars Notes For the year ended For the year ended
March 31, 2024 March 31, 2023
a) Depreciation charge of right-of-use assets
Leasehold land 0 0
Buildings 9 10
Plant and equipment 115 115
Office equipment 5 5
Total 26 129 130
b) Interest expenses (included in finance cost) 28 21 16
c) Lease related expenses included in rent expenses
Short term leases 14 9
Leases of low value assets 4 0
Variable lease payments (not included in lease liabilities) 182 222
Total 27 200 231

231
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
(iii) The total cash outflow for leases for the year ended March 31, 2024 was ` 347 crores (2023: ` 371 crores).

Notes:

(a) Additions / adjustments to the right-of-use assets for year ended March 31, 2024 aggregate to ` 184 Crores (2023: ` 86 crores).

(b) Variable lease payments

The Group has lease contracts for plant and equipment that contain variable payments. Variable lease payments that depend on
production volumes are recognised in the statement of profit and loss in the period in which the condition that triggers those payments
occurs. Any changes in production under contracts which includes variable lease payments, would have a proportionate impact
on the variable lease payments. Certain agreements contain clauses for minimum production volumes and hence portion of lease
payments in these agreements are ‘in-substance fixed’. “In-substance” fixed lease payments are included in the determination of the
lease liabilities and consequently included in determining the value of right-of-use assets.

(c) Extension and termination options

Extension and termination options are included in a number of property and equipment leases. These are used to maximise operational
flexibility in terms of managing the assets used in the Group’s operations. Management considers contractual terms and conditions,
leasehold improvements undertaken, costs relating to termination of lease, incentives received from the Government (if any) and
significance of the underlying asset to the Group’s operations in determining the lease term for the purpose of recognising/ measuring
the lease liability.

3.3 Capital work-in-progress

Movement of capital work-in-progress set-out below:

Particulars As at As at
March 31, 2024 March 31, 2023
Opening 67 88
Additions 96 114
Assets capitalised during the year (126) (135)
Closing 37 67

The ageing schedule for capital work in progress is set-out below:

Particulars As at As at
March 31, 2024 March 31, 2023
Projects in progress
Less than 1 year 24 40
1-2 years 9 19
2-3 years 2 8
More than 3 years 2 0
Total 37 67

Projects under suspension amounted to ` 1 crores (2023 : Nil).

232
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Expected completion timelines of CWIP projects whose completion is overdue or has exceeded its cost compared to its original plan
is set-out below:

Particulars As at As at
March 31, 2024 March 31, 2023
Less than 1 year
Health, safety and environment protection projects 1 6
Brand innovation projects 4 8
Support core growth projects 6 7
Productivity improvement projects 7 14
Others 9 8
Total 27 43
1-2 years
Others 0 -

3.4 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 lives and are not amortised, but are assessed for impairment at every reporting date.

Computer software

Computer software acquired or developed are carried at cost less accumulated amortisation and impairment losses, if any. Costs
associated with maintaining software programs are recognised 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 under
development or intangible assets when ready for intended use, 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 that the software will generate probable future economic benefits,
d) adequate technical, financial and other resources to complete the development and to use the 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 software applications include employee costs and other
directly attributable costs are amortised from the point at which the software asset is available for use.

Franchisee right

A wholly owned subsidiary in the Group owns perpetual right to the Bengaluru Franchisee of “BCCI in Indian Premier League” (BCCI
– IPL). Franchisee right acquired is carried at cost less accumulated amortisation and impairment losses, if any.

233
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Amortisation method and useful lives

The Group amortises intangible assets with finite useful life using the straight-line method over their estimated useful lives as follows:

Asset category Useful life (in years)

Licenses Over the license
period
Computer software 5 years
Franchisee rights 50 years/ IPL
seasons

Refer note 49.3 for other accounting policy relevant to intangible assets.
Particulars Other intangible assets Goodwill
Brands License Computer Franchise Total
software right [Refer
note (a)
below]
Year ended March 31, 2023
Gross carrying amount
Opening 11 4 50 400 465 139
Additions to internally developed intangible - - 19 - 19 -
assets
Transfer pursuant to sale of business - (3) - - (3) (20)
undertaking (Refer note 47(a))
Closing gross carrying amount 11 1 69 400 481 119
Accumulated amortisation and impairment
Opening 11 3 27 66 107 118
Amortisation charge for the year - 0 11 8 19 -
Transfer pursuant to sale of business - (2) - - (2) -
undertaking (Refer note 47(a))
Closing accumulated amortisation and 11 1 38 74 124 118
impairment
Net carrying amount as at March 31, 2023 - - 31 326 357 1
Year ended March 31, 2024
Gross carrying amount
Opening 11 1 69 400 481 119
Additions to internally developed intangible - - 18 - 18 -
assets
Closing gross carrying amount 11 1 87 400 499 119

234
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Particulars Other intangible assets Goodwill
Brands License Computer Franchise Total
software right [Refer
note (a)
below]
Accumulated amortisation and impairment
Opening 11 1 38 75 125 118
Amortisation charge for the year - - 14 11 25 -
Closing accumulated amortisation and 11 1 52 86 150 118
impairment
Net carrying amount as at March 31, 2024 - - 35 314 349 1

Notes:

a) The Group has estimated the useful life of the IPL franchisee right to be 50 years/ IPL seasons based on the assessment
performed. The actual useful life may be different depending on various circumstances. If the useful life were shorter by 5 years,
the carrying amount of franchise right would be ` 289 crores (2023: ` 305 crores). If the useful life were longer by 5 years, the
carrying amount would be ` 333 crores (2023: ` 338 crores)

b) The carrying amount of franchise right will be amortized over the remaining period of 34 years/IPL seasons. (2023: 35 years/IPL
seasons).

c) Management has performed an impairment assessment and determined that no impairment of goodwill is required as at March
31, 2024.

3.5 Intangible assets under development

Movement of intangible assets under development set-out below:

Particulars As at As at
March 31, 2024 March 31, 2023
Opening 16 8
Additions 2 27
Intangible assets capitalised during the year (18) (19)
Closing - 16

The ageing schedule for intangible assets under development is set-out below:

Particulars As at As at
March 31, 2024 March 31, 2023
Projects in progress
Less than 1 year - 7
1-2 years - 9
Total - 16

There were no projects under suspension as at March 31, 2024 and March 31, 2023.

235
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Expected completion timeline of intangible assets under development projects whose completion is overdue or has exceeded its cost
compared to its original plan is set-out below:

Particulars As at As at
March 31, 2024 March 31, 2023
Less than 1 year
ERP related development project - 2
Business application related development project - 13
Others - 1
Total - 16

There were no projects which are expected to be completed after the expiry of one year.

3.6 Investment property

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.

Movement of investment property is set-out below:

Particulars As at As at
March 31, 2024 March 31, 2023
Gross carrying amount
Opening 57 -
Transfer from property, plant and equipment 198 57
Transfer from right-of-use assets 2 0
Disposals (14) -
Closing gross carrying amount 243 57
Accumulated depreciation and impairment
Opening 32 -
Transfer from property, plant and equipment 85 32
Transfer from right-of-use assets 1 -
Depreciation and impairment on disposal (14) -
Closing accumulated depreciation and impairment 104 32
Net carrying amount 139 25

Estimation of fair value:

The Group obtains independent valuations for its investment property. The best evidence of fair value is current prices in an active
market for similar properties. When such information is not available, the Group considers information from a variety of sources
including:

236
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
(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; and

(c) capitalised income projection 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 land and building where the investment property is located. The appropriate adjustments have been made in order
to account for the differences between the subject property and comparable terms of time, floor level, view, condition, quality and
facilities etc. All resulting fair value estimates for investment properties are included in level 3.

Notes:

(a) Fair value of investment property is ` 485 crores (2023: ` 146 crores).
(b) There are restrictions on realisability of few investment properties.
(c) There is no contractual obligation to purchase, construct or develop investment property or for repairs, maintenance or
enhancements.
(d) Opening and closing cost of buildings includes payments below rounding off norms adopted by the Group towards fully paid
shares held in a co-operative housing society for the purpose of acquiring the right of occupation in respect of which Group is in
possession of photocopy of share certificate in co-operative society.

4.1 Investments accounted for using equity method

An analysis of the Group’s interests in associates is as follows:

Particulars As at As at
March 31, 2024 March 31, 2023
Opening 10 -
Acquired during the year - 12
Share of total comprehensive losses for the year (1) (1)
As at the end of the year 9 10

Management has determined that its investment in associate is not material to the Group.

The financial information of the associate is as follows:

Particulars For the year ended For the year ended

March 31, 2024 March 31, 2023
Profit/ (Loss) after tax (11) (15)
Other comprehensive income - (0)
Total comprehensive income (11) (15)

Note: Also refer note 4.2 below

237
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
4.2 Investments- Non current

Investment in compulsory convertible preference shares (CCPS) carried at fair As at As at

value through profit and loss (fully paid-up) March 31, 2024 March 31, 2023
Nao Spirits & Beverages Private Limited [Refer note below] 37 20
[14,172 CCPS (2023: 8,094) having face value of ` 10 each]
As at the end of the year 37 20

Note:

During the prior year, the Group acquired the interest in Nao Spirits & Beverages Private Limited (“Nao Spirits”) by investing ` 32
crores by subscribing to 8,094 Compulsory Convertible Preference Shares and 4,670 equity shares. During the year, the Group infused
additional amount of ` 15 crores by subscribing to 6,078 Compulsorily Convertible Preference Shares. The Group holds 30% (2023:
22.5%) ownership interest on a fully diluted basis (11% of equity ownership interest) as at March 31, 2024. Management has considered
Nao Spirits to be an associate since the Company has significant influence over its operating and financing decisions.

In accordance with the Shareholder’s agreement, the Group has a right (not an obligation) to purchase all or any of the shares held by
promoters, existing investors and other shareholders upon occurrence of earlier of the Nao Spirits achieving the specified sales volume
threshold (or) March 31, 2025. The exercise price of the call option shall be determined in accordance with a formula specified in the
Shareholder’s Agreement. As at March 31, 2024, fair value of the said call option has been determined to be immaterial.

4.3 Investments- Current

(i) Debt instruments:

On initial recognition, the debt instruments are measured at fair value. Subsequent measurement of debt instruments depends
on the Group’s business model for managing the asset and the cash flow characteristics of the asset

• 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.

• Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows
represent solely payments of principal and interest, are measured at FVOCI.

• Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss.

(ii) Investment in mutual fund:

On initial recognition, these are measured at fair value, and subsequently, carried at fair value through profit and loss.

As at March 31, 2024 As at March 31, 2023

Quoted
Money market funds 499 240
Treasury bills at amortized cost 100 -
Non-convertible debentures - 16
Total current investments 599 256
Aggregate amount of quoted investments 599 256
Aggregate market value of quoted investments 599 256

238
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
5. Loans

As at March 31, 2024 As at March 31, 2023

Current Non-current Current Non-current
Loan to UBHL and related entities [Refer note 41A(d)] - 1,238 - 1,238
Loans to employees 1 - 1 -
Loan to others 9 - 15 -
10 1,238 16 1,238
Less: Loss allowance
Loan to UBHL and related entities [Refer note 41A(d)] - (1,238) - (1,238)
- (1,238) - (1,238)
Total loans 10 - 16 -

As at As at
March 31, 2024 March 31, 2023
Details of securities/ categorisation of credit risk on loans
Loans considered good- secured 9 15
Loans considered good- unsecured 1 1
Loans- credit impaired 1,238 1,238
Total 1,248 1,254
Less: Loss allowance (1,238) (1,238)
Total loans 10 16

Refer note 32 for information about financial risk management.

6. Other financial assets

As at March 31, 2024 As at March 31, 2023
Current Non-current Current Non-current
Balances with banks [Refer note below] - 46 63 82
Receivable from related parties [Refer note 37(c)(i)] 1 - 0 -
Government grant 16 72 27 72
Receivable from Tie-up manufacturing units 7 25 71 9
Security deposits 13 17 23 5
Other receivables 1 14 2 13
38 174 186 181
Less: Loss allowance
Government grant - (15) - (13)
Receivable from Tie-up manufacturing units - (25) (39) (9)
Security deposits - (9) (10) -
Other receivables (1) (14) (1) (13)
(1) (63) (50) (35)
Total other financial assets 37 111 136 146

239
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Notes:
Balances with banks comprise of:
(a) Deposit of ` 46 crores (2023: ` 46 crores) as at 31st March, 2024 with a bank in suspense account (Refer note 41A(e)).
(b) Term deposit of Nil (2023: ` 34 crores) as at 31st March, 2024 with a bank kept under escrow pending resolution of various
taxation matters in connection with a sale of business undertaking in an earlier year.
(c) Deposit of Nil (2023 : ` 63 crores) with a bank kept under escrow subject to fulfilment of certain conditions [Refer note 47(a)].
(d) Margin money against bank guarantees ` 0 crore (2023: ` 0 crore).
(e) Represents bank deposits under lien in respect of bank guarantees provided to tax authorities ` 0 crore (2023: ` 2 crores).

Refer note 32 for information about financial risk management.

7. Deferred tax assets (net)

As at As at
March 31, 2024 March 31, 2023
Deferred tax assets
Allowance for doubtful receivable balances 71 61
Expenses allowed on payment basis 86 78
Carried forward tax losses and unabsorbed depreciation 0 29
Indexation benefit on land 11 7
Lease liabilities 60 30
Others 23 23
252 228
Deferred tax liabilities
Difference between carrying amount and tax base of property, plant and equipment, 92 91
investment property and intangible assets
Right-of-use assets 56 25
148 116
104 112
Deferred tax assets (net) 177 157
Deferred tax liabilities (net) 73 45

240
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Movement in deferred tax assets
Doubtful Expenses Difference between Indexation Depreciation Right- Lease Others Total
receivable allowed carrying amount and benefit on and of-use liabilities
balances on tax base of property, land amortization assets
payment plant and equipment
basis and intangible assets
At April 01, 2022 80 84 27 7 (105) 3 (3) 7 100
(Charged) / Credited:
- to profit and loss (19) (6) 2 - 14 (28) 33 16 12
- to other comprehensive - 0 - - - - - - 0
income
At March 31, 2023 61 78 29 7 (91) (25) 30 23 112
(Charged) / Credited:
- to profit and loss 10 8 (29) 4 (1) (31) 30 (0) (9)
- to other comprehensive - 1 - - - - - - 1
income
At March 31, 2024 71 87 - 11 (92) (56) 60 23 104

8. Income tax balances

As at As at
March 31, 2024 March 31, 2023
Current tax liabilities (net of advance tax) 332 283
Current tax assets (Non-current) (net of provision for current tax) 1,358 1,336
Closing balance 1,026 1,053

Note:
(a) The above balances include amounts paid under protest of ` 1,481 crores (2023: ` 1,344 crores) pertaining to various assessment
years.
9. Other assets
As at March 31, 2024 As at March 31, 2023
Current Non-current Current Non-current
Capital advances (Refer note (b) below)
Considered good - 6 - 6
Balances with government authorities (Refer note (a) below)
Considered good 122 182 116 201
Considered doubtful 25 18 21 20
Advances to suppliers
Considered good 76 - 50 -
Considered doubtful - 84 7 78
Net surplus in gratuity plan [Refer note 39(b)C] - 30 33
Pre-paid expenses 145 - 113 -
368 320 307 337
Less: Loss allowance (25) (102) (28) (96)
Total other assets 343 218 279 241

241
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Notes:

(a) Balance with government authorities includes:

(i) ` 123 crores (2023: ` 132 crores) paid under protest in respect of disputed indirect tax matters; and
(ii) ` 5 crores (2023 : ` 2 crores) paid under protest in respect of water charges (refer note 18).

(b) Capital advances considered good includes an amount of ` 2 crores (2023 : ` 2 crores) being advance paid towards purchase
of land pursuant to an “agreement to sell” entered by the Group with the owners of the land. This matter is currently litigated at
the High Court of Bombay.

10. Inventories

(Valued at lower of cost and net realisable value)

Raw materials, stores and spares, work in progress, traded and finished goods are stated at the lower of cost and net realisable value.
Cost of raw materials and traded goods comprises cost of purchases. Cost of work-in-progress and finished goods comprises direct
materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the
basis of normal operating capacity.

Cost of inventories also include all other costs incurred in bringing the inventories to their present location and condition. Cost includes
the reclassification from equity of any gains or losses on qualifying cash flow hedges relating to purchases of raw material but excludes
borrowing costs. Excise duty, as applicable, is included in the valuation.

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.

As at As at
March 31, 2024 March 31, 2023
Raw materials 472 447
[including materials in transit ` 82 crores (2023: ` 49 crores)]
Work-in-progress [Refer note (a) below] 636 602
Finished goods 500 550
[including goods in transit ` 56 crores (2023: ` 27 crores)]
Stock-in-trade 266 390
[including goods in transit ` 64 crores (2023: ` 34 crores)]
Packing materials 172 226
[including materials in transit ` 8 crores (2023: ` 7 crores)]
Stores and spares 17 15
Total inventories 2,063 2,230

Notes:
(a) Allowance for obsolete inventories (net) for the year amounting to ` 67 crores (2023: ` 19 crores) has been recognised as an
expense during the year and is included in cost of materials consumed and change in inventories of finished goods, work-in-
progress and stock-in-trade in the Statement of Profit and Loss.
(b) Inventories include inventory held by tie up manufacturing units amounting to ` 82 crores (2023: ` 175 crores).
(c) For details of Inventories pledged as security Refer note 34.

242
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
11. Trade receivables

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business and reflect
the Group’s unconditional right to consideration (that is, payment is due only on the passage of time). Trade receivables are recognised
initially at the transaction price as they do not contain significant financing components. The Group holds the trade receivables with
the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective
interest method, less loss allowance.

For trade receivables and contract assets, the Group applies the simplified approach required by Ind AS 109, which requires expected
lifetime losses to be recognised from initial recognition of the receivables.

As at March 31, 2024 As at March 31, 2023

Current Non-current* Current Non-current
From contract with customers - related parties [Refer note 37(c)(ii)] 2 - 6 -
From contract with customers 3,227 365 2,549 -
3,229 365 2,555 -
Less: Loss allowance (173) - (121) -
Total trade receivables 3,056 365 2,434 -
Details of securities/ categorisation of credit risk of trade
receivables
Trade Receivables considered good- unsecured 3,229 365 2,555 -
Total 3,229 365 2,555 -
Less: Loss allowance (173) - (121) -
Total trade receivables 3,056 365 2,434 -

*Refer note 41(B)

Notes:
(a) Includes unbilled receivables of ` 94 crores (2023: ` 35 crores)
(b) Refer note 32 for information about financial risk management

As at As at
Trade receivables ageing schedule is set-out below:
March 31, 2024 March 31, 2023
Undisputed - considered good
Unbilled dues 94 35
Not due 2,298 2,314
Less than 6 months 731 108
6 months -1 year 20 24
1-2 Years 22 19
2-3 years 8 6
More than 3 years 23 25
Sub-total 3,196 2,532
Disputed - considered good

243
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
As at As at
Trade receivables ageing schedule is set-out below:
March 31, 2024 March 31, 2023
Unbilled dues - -
Not due 221 -
Less than 6 months 145 1
6 months -1 year 4 2
1-2 Years 7 3
2-3 years 4 4
More than 3 years 17 14
Sub-total 398 24
Less: Loss allowance (173) (121)
Total 3,421 2,434

12 Cash and cash equivalents

Cash and cash equivalents includes cash on hand and balances with banks that are readily convertible to known amounts of cash
and other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value. Highly liquid investments also includes overnight
and liquid mutual funds which the Company has intention to hold for very short period of time to manage day to day cashflow.

As at As at
March 31, 2024 March 31, 2023
Balances with banks
In current account 99 104
Term deposits with original maturity of less than three months 397 -
Other cash equivalents
Overnight and liquid mutual funds 547 -
Cheques on hand 9 11
Total cash and cash equivalents 1,052 115

13 Bank balances other than cash and cash equivalents

As at As at
March 31, 2024 March 31, 2023
In unpaid dividend accounts 0 0
In unpaid public deposit accounts [Refer note (a) below] 0 0
Bank deposits due to mature within 12 months from the reporting date [Refer note (b) below] 219 768
220 768
Less : Loss allowance (3) -
Total bank balances other than cash and cash equivalents 217 768

Notes:
a) Includes ` 0 crores (2023: ` Nil) transferred to a separate non-interest bearing escrow account pertaining to unclaimed public
deposits which had matured in earlier years and for which duly discharged deposit receipts were not received from deposit
holders.
b) Includes ` 7 crores (2023 : ` 5 crores) being term deposits with banks held under lien.

244
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
14 Equity share capital

As at As at
March 31, 2024 March 31, 2023
Authorised
2,82,75,00,000 equity shares of ` 2 each 565 565
(2023: 2,82,75,00,000 equity shares of ` 2 each)
17,37,00,000 preference shares of ` 10 each 174 174
(2023: 17,37,00,000 preference shares of ` 10 each)
739 739
Issued, subscribed and paid-up
72,73,50,853 equity shares of ` 2 per share 145 145
(2023: 72,73,50,853 equity shares of ` 2 per share fully paid up)
145 145

(a) Reconciliation of the number of shares outstanding

As at March 31, 2024 As at March 31, 2023

No. of Amount No. of Amount
Shares Shares
Balance at the beginning of the year 72,73,50,853 145 72,66,38,715 145
Add: Equity shares issued during the year - - 7,12,138 0
Balance at the end of the year 72,73,50,853 145 72,73,50,853 145

(b) Rights, preferences and restrictions attached to equity shares

The Holding Company has one class of equity shares having a face value of ` 2 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 USL’s holding / ultimate holding company and / or their subsidiaries / associates

Out of the equity shares issued by the Holding Company, shares held by USL’s holding company are as below:
As at March 31, 2024 As at March 31, 2023
No. of Amount No. of Amount
Shares Shares
Diageo Relay B V (wholly owned subsidiary of 40,64,47,245 81 40,64,47,245 81
Diageo Plc.) [Refer note (i) below]
40,64,47,245 81 40,64,47,245 81

(d) The Group has not issued any shares for consideration other than cash during the period of five years immediately preceding
the reporting date except for 7,12,138 shares allotted to the shareholders of Pioneer Distilleries Limited (PDL) as a result of
amalgamation during the year ended March 31, 2023.

245
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
(e) Details of shareholders holding more than 5% shares in the Holding Company.

As at March 31, 2024 As at March 31, 2023

No. of Shares % of Holding No. of Shares % of Holding
Diageo Relay B V [Refer note (i) below] 40,64,47,245 55.88% 40,64,47,245 55.88%

(f) There are no shares reserved for issue under options and contracts / commitments for the sale of shares.
(g) There are no bonus shares issued or bought back during the period of five years immediately preceding the reporting date.
(h) Details of shares in the Company held by subsidiaries, associates or controlled trusts

As at March 31, 2024 As at March 31, 2023

No. of Shares % of Holding No. of Shares % of Holding
USL Benefit trust [Refer note (j) below] 1,72,95,450 2.38% 1,72,95,450 2.38%

(i) 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
1,01,41,437 equity shares of ` 10 each (prior to the face value of the shares being split from ` 10 each to ` 2 each during the year
ended March 31, 2019) in the Company to Diageo 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 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 Diageo Relay B V. Such shares
are included in arriving at Diageo Relay BV’s shareholding in the Holding Company.

(j) Investment as a sole beneficiary in USL Benefit Trust (the ‘Trust’) was made as per the terms of composite scheme of arrangement
approved by the Honourable High Court of Karnataka and High Court of Bombay, upon amalgamating various companies with
United Spirits Limited. The Trust has been established for the exclusive benefit of the Holding Company and holds 1,72,95,450
equity shares of ` 2 face value (2023: 1,72,95,450 equity shares of ` 2 face value) of the Holding Company. As per the terms of
the aforesaid scheme of arrangement, the Group has carried this investment at the aggregate of book value as per the books
of the concerned transferor companies. Also refer Note 34(b) for assets pledged and Note 41A(e).

(k) Disclosure of shareholding of promoters

Name of promoter As at March 31, 2024 As at March 31, 2023 % Change

No. of Shares % of total Shares No. of Shares % of total Shares during the
year
Diageo Relay B V 40,64,47,245 55.88% 40,64,47,245 55.88% -
United Breweries Holdings Limited 55,55,265 0.76% 55,68,895 0.77% 0.01%
Vijay Mallya 62,550 0.01% 62,550 0.01% -
Vittal Investments Private Limited 1,56,350 0.02% 1,56,350 0.02% -
Total 41,22,21,410 56.67% 41,22,35,040 56.68% 0.00

246
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
15 Reserves and surplus

As at As at
March 31, 2024 March 31, 2023
Capital reserve 568 568
Capital redemption reserve 70 70
Securities premium account 4,568 4,568
Treasury shares (120) (120)
Central subsidy 5 5
Share based incentive reserve 1 1
Foreign currency translation reserve 18 19
Contingency reserve 11 11
General reserve 1,041 1,041
Retained earnings 814 (308)
Total reserves and surplus 6,976 5,854

Nature and purpose of reserves:

a) Capital reserve: Created pursuant to a Scheme of Amalgamation between the Company and SW Finance Co. Limited,
sanctioned by the Honourable High Court of Karnataka and Honourable High Court of Bombay under the orders dated June 12,
2015 and August 28, 2015, respectively.

b) Capital redemption reserve: Capital Redemption Reserve is created for an amount equivalent to the nominal value of shares
redeemed in earlier years by the Company (including the erstwhile Companies that were merged with the Company through
several schemes of amalgamations / mergers).

c) Securities premium account: Securities premium account is credited when shares are issued at premium. The balance is utilised
in accordance with the provisions of the Act.

d) Treasury shares: Pursuant to the terms of composite scheme of arrangement approved by the Honourable High Courts of
Karnataka and Bombay, upon amalgamating various companies with United Spirits Limited, USL Benefit Trust (of which
Company is the sole beneficiary) held 1,72,95,450 (post - split) shares in the Company (own shares). As per the term of the
aforesaid scheme of arrangement, the Company has carried the aggregate value of such shares as per the books of the
concerned transferor companies as investment in its standalone financial statements. For the purpose of consolidated financial
statements such investment has been shown as treasury shares.

e) Central subsidy: The balance is taken over on amalgamation of Shaw Wallace Distilleries Limited with the Company during the
year ended March 31, 2006 as per the terms of the arrangement approved by the Honorable High Courts of Karnataka and
Bombay.

f) Share based incentive reserve : The share-based incentive reserve is used to recognise grant date fair value of Diageo Plc’s share
options under the group share-based payment arrangements. Recharges under this arrangement are debited to this reserve.

g) Foreign currency translation reserve: Exchange differences arising on translation of the foreign operations are recognised in
other comprehensive income and accumulated in this separate reserve within equity. The cumulative amount is reclassified to
profit or loss when the net investment in a foreign operation is disposed off.

247
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
h) Contingency reserve: The balance is taken over on amalgamation of McDowell Spirits Limited with the Company during the year
ended March 31, 2001 as per the terms of the arrangement approved by the Honorable High Court of Karnataka.

i) General reserve: The general reserve is created by way of transfer of profits from retained earnings for appropriation purposes.
This reserve is utilised in accordance with the provisions of the Act.

j) Retained earnings: Retained earnings are the profits that the Group has earned till date, less any transfers to general reserve,
dividends or other distributions paid to shareholders.

16. Borrowings
Maturity date Terms of repayment Coupon/ As at As at
interest rate March 31, 2024 March 31, 2023
Non-current
Unsecured
Sales tax deferment liability [Refer April 21, 2024 Repayable in five 12% p.a. 0 1
note (a) below] equal annual
installments
(2019-20 to 2024-25)
0 1
Less: Current maturities of deferred 0 1
sales tax liability
Total non-current borrowings - 0
Current
Unsecured
Working capital loans from bank Payable on Payable on demand 8.5% p.a. 25 -
[Refer note (b) below] demand
Total 25 -
Add: Current maturities of deferred 0 1
sales tax liability
Total current borrowings 25 1
Total borrowings 25 1

Notes:
a) Sales tax collected under deferral scheme of State Government of Maharashtra for 11 years (from 1999-00 to 2009-10) and is
repayable in 5 equal annual installments with final installment due in 2024-25.
b) Net debt reconciliation
(i) Net debt summary:
Particulars Notes As at As at
March 31, 2024 March 31, 2023
Non-current borrowings 16 - 0
Current borrowings 16 25 1
Lease liabilities 3.2 240 182
Total debt 265 183
Less: Cash and cash equivalents 12 1,052 115
Net debt/ (cash) (787) 68

248
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
(ii) Movements in net debt:

Particulars Lease Sales tax Working (Less) Cash Net debt

liabilities deferment capital and cash
loans equivalents
Balance as on April 1, 2022 264 2 339 (55) 551
Acquisition- leases (net) 42 - - - 42
Net proceeds from / (Repayment of) borrowings - - (339) - -
Net proceeds from / (Repayment of) working - - - - (339)
capital loans
Interest expense (Refer note 28) 16 - 20 - 36
Interest paid (16) - (20) - (36)
Principal lease payments (124) - - - (124)
Cash outflows / (inflows) - (1) - (61) (62)
Net debt as at March 31, 2023 182 1 - (115) 68
Acquisition- leases (net) 184 - - - 184
Net proceeds from / (Repayment of) borrowings - - 25 - 25
Interest expense (Refer note 28) 21 - - - 21
Interest paid (21) - - - (21)
Principal lease payments (126) - - - (126)
Cash outflows / (inflows) (1) (937) (938)
Net debt as at March 31, 2024 240 0 25 (1,052) (787)

17. Other financial liabilities

As at As at
March 31, 2024 March 31, 2023
Current
Unpaid / unclaimed dividends (Refer note (a) below) 0 0
Others
Due to Tie-up manufacturing units 43 60
Capital creditors 20 20
Employee benefits payables 100 143
Others 113 62
Total other financial liabilities 276 285

Note:
(a) As at March 31, 2024 no balances are due to be transferred to IEPF (2023: Nil)

249
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
18. Provisions

As at March 31, 2024 As at March 31, 2023

Current Non-current Current Non-current
Employee benefits
Provident Fund obligation [Refer note 39(b)C] - - 6 -
Compensated absences 33 - 37 -
Pension liability [Refer note 39(b)C] 0 - 0 1
Share appreciation rights [Refer note 35] 29 15 16 11
Provision for indirect tax and other legal matters [Refer note 306 - 312 -
(a) below]
Commitment towards “Raising the Bar” programme 0 - 2 -
[Refer note (b) below]
Total provisions 368 15 373 12

Notes:
(a) Movement in provisions

Description As at Additions/ Amounts utilised As at

April 1, 2023 (amounts written March 31, 2024
back)
Indirect taxes and other legal matters [refer 312 (6) - 306
(i) below]

(b) Movement in Commitment towards “Raising the Bar” programme

Description As at Additions/ Amounts utilised As at

April 1, 2023 (amounts written March 31, 2024
back)
Commitment towards “Raising the Bar” 2 - 2 0
programme

(i) Provision for indirect tax and other legal matters includes provision for water charges in the State of Maharashtra. The
Holding Company has filed petition before the High Court of Bombay, challenging multiple demands raised by Water
Resources Department, State of Maharashtra, levying additional water charges and an interim relief against any coercive
steps has been received. The Holding Company has received further demands from the said Department levying water
charges at a higher rate along with penalties for the period November 2018 to March 2024. Based on a legal opinion
obtained, Management has determined that the provision recorded in the books represents probable cash outflows on
account of additional water charges. Any further cash outflows in addition to the provision amount on account of this
matter are considered remote.

(ii) Provision is made for probable cash outflow arising out of pending or potential indirect tax disputes / litigations. 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. Refer note 9 for payments made under protest in respect of indirect tax and other legal matters.

250
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
19. Trade payables

As at As at
March 31, 2024 March 31, 2023
Dues to Micro and Small enterprises 70 50
Dues to creditors other than Micro and Small enterprises
Dues to related parties [Refer note 37(c)(iii)] 228 274
Others 1,656 1,459
1,884 1,733
Total trade payables 1,954 1,783

As at As at
March 31, 2024 March 31, 2023
(i) Undisputed dues - Micro and small enterprises
Unbilled 6 -
Not due 52 37
Less than 1 year 11 12
1-2 years 0 0
2-3 years 0 1
> 3 years 1 0
Sub-total 70 50
(ii) Undisputed dues - Others
Unbilled 974 855
Not due 562 627
Less than 1 year 331 204
1-2 Years 7 5
2-3 years 2 34
> 3 years 8 8
Sub-total 1,884 1,733
Total 1,954 1,783

20. Other current liabilities

As at As at
March 31, 2024 March 31, 2023
Contract liabilities 39 88
Statutory dues 451 371
Liability for taxes on closing inventory (net of prepaid taxes) 355 339
Total other current liabilities 845 798

251
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
21. Revenue from operations

Revenue comprises revenue from contracts with customers for sale of goods and income from brand franchisee royalties receivable.
Revenue from sale of goods is inclusive of excise duties, as applicable, and is net of returns, trade allowances, rebates, value added
taxes and such amounts collected on behalf of third parties. Revenue is recognised as and when performance obligations are satisfied
by transferring goods or services to the customer, as below:

a. Revenue from sale of products:

Revenue is recognised on transfer of control, being on dispatch of goods or upon delivery to customer, in accordance with the
terms of sale.

b. Revenue from manufacture and sale of products from tie-up manufacturing arrangements:

The Group has entered into arrangements with Tie-up Manufacturing Units (TMUs), where-in TMUs manufacture and sell
beverage alcohol on behalf of the Group. Under such arrangements, the Group has exposure to significant risks and rewards
in such arrangements i.e. it has the primary responsibility for providing goods to the customer, has pricing latitude and is also
exposed to inventory and credit risks. The Group is considered to be a principal in such arrangements with TMUs. Accordingly,
the transactions of the TMUs under such arrangements have been recorded as gross revenue, excise duty and expenses as
if they were transactions of the Group. The Group presents inventory held by the TMUs under such arrangements as its own
inventory. The net receivables from/ payable to TMUs are recognised under other financial assets/ other financial liabilities
respectively.

c. Income from brand franchise arrangements:

Revenue in respect of fixed income brand franchise arrangements is recognised proportionately in each period. Income from
variable franchise arrangements is recognised based on the terms of the respective contracts upon sale of products by the
franchisees.

d. Revenue from BCCI-IPL and WPL franchise arrangements:

One of the principal activity of the Group is that of a franchisee playing in the cricket leagues organised by the Board of Control
for Cricket in India (BCCI). The Group has determined that it is a principal in all its revenue contracts. Revenue is measured at the
amount of transaction price based on the consideration received or receivable as per the contracts with customers.

The revenues from BCCI-IPL and WPL franchise arrangements can be broadly categorised into ‘Central rights revenue’ earned
from BCCI participating in the cricket leagues, and sponsorship revenue and other commercial revenue earned from exploiting
the franchisee rights:

Central Rights revenue – The Group considers BCCI as its customer in relation to Central rights revenue, which represents the
revenue earned by the Group for participating in cricket leagues. Central rights revenue is by specific agreements with BCCI.
The Company receives a share of the net receipts of each season earned by BCCI for participating in the cricket leagues, Central
Rights revenue for each league season is recognised on an estimated basis, to the extent it is highly probable that a significant
reversal in the amount of cumulative revenue recognised will not occur. Such revenue is pro-rated for matches played during the
year as against the total number of matches playable for the season.

The Group earns play-off revenue from BCCI when it qualifies for additional matches (based on the league ranking) in the cricket
league. Play-off revenue is recognised when such matches are played.

252
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Commercial revenue earned from exploiting the franchisee rights:

• Sponsorship and other similar revenue is recognised over the league season, based on number of matches played and
terms of contracts with the customers.

• Royalty and licensing revenue is received from customers for usage of the Group’s brand name. Revenue is recognised
over time based on the terms of contracts with the customers.

• Revenue from sale of tickets for home league matches and events is recognised as and when the matches are played and
events are conducted.

• Fee received for transfer of players to another franchisee is recognised when the Group transfers control of rights on the
player.

Sponsorship Income, Royalty and licensing fee – The Group receives sponsorship revenue for displaying sponsor’s logo/ brand
on the players jersey, company website etc. Royalty and licensing revenue is received from customers for usage of RCB brand
name, RCB logo, player photograph etc. Revenue from Sponsorship and Royalty and Licensing Contracts are recognised over
the period of IPL/WPL league season, based on number of matches played, which corresponds with the period of service.

Estimates of revenues, costs or extent of progress towards completion are revised if circumstances change. Any resulting increases
or decreases in estimated revenues are reflected in the statement of profit and loss in the period in which the circumstances that
give rise to the revision become known to the management.

Contract assets are in the nature of unbilled receivables where the Group has partially satisfied the performance obligation and
hence does not have an unconditional right to consideration. Where the Group has an obligation to transfer goods or services
to a customer for which the Group has received consideration from the customer in advance, a contract liability is recognised.

The Group does not have any contracts where the period between the transfer of the promised services to the customer and
payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the
time value of money.

If the services rendered by the Group exceed the payment, a contract asset is recognised. If the payments exceed the services
rendered, a contract liability is recognised.

For the year ended For the year ended

March 31, 2024 March 31, 2023
Revenue from contracts with customers:
Sale of products (including excise duty) 25,251 27,449
Revenue from brand franchise arrangements 76 71
Revenue from central rights, sponsorship, sale of tickets and others [Refer 629 238
notes below]
25,956 27,758
Other operating revenue:
Sales of scrap and by-products 51 45
Miscellaneous 11 13
62 58
Total revenue from operations 26,018 27,816

253
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Notes:

(a) Revenue from operations does not include prize money and other player awards amounting to ` 7 crores (2023: ` 9 crores)
collected from BCCI and other IPL franchises and distributed to concerned players.

(b) Central rights revenue includes ticketing revenue received from BCCI amounting to ` 8 crores (2023 : ` 2 crores)

(c) Aggregate amount of transaction price allocated to sponsorship revenue that is partially unsatisfied at March 31, 2024 amounted
to ` 98 crores (2023: Nil). Unsatisfied performance obligations are contractually due to be satisfied within a period of 1 year from
the balance sheet date. In the absence of communication from the BCCI regarding share of central right revenue, no amount
has been disclosed in relation to the performance obligations under the central rights contract that are unsatisfied at March 31,
2023.

(d) Reconciliation between contract price and revenue recognised

For the year ended For the year ended

March 31, 2024 March 31, 2023
Contract price 27,413 29,129
Less: Items offset against revenue from customers as required by Ind AS 115 (1,457) (1,371)
Revenue from contracts with customers 25,956 27,758

(e) Disaggregation of revenue and payments made to customers:

(I) In relation to the Group :

For the year ended For the year ended

March 31, 2024 March 31, 2023
(i) Categories of sale of products
Prestige and above 9,345 8,357
Popular 1,113 1,837
Others 172 122
Add: Excise duty collected from customers 14,697 17,204
25,327 27,520
(ii) Category of services - Revenue from BCCI-IPL and WPL franchise
arrangements
Central rights revenue 422 150
Sponsorship revenue 117 77
Play-off fee 6 4
Revenue from sale of ticket 61 1
Transfer fee - 2
Royalty and licensing fee 23 4
629 238
Total 25,956 27,758

254
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
(II) In relation to IPL:

For the year ended For the year ended

March 31, 2024 March 31, 2023
Gross revenue 770 286
Less: Franchisee fees paid/ payable to BCCI (156) (57)
614 229
Presented under:
Revenue from Operations 614 229
614 229

III) In relation to WPL:

For the year ended For the year ended

March 31, 2024 March 31, 2023
Gross revenue 40 28
Less: Franchisee fees paid/ payable to BCCI (90) (90)
(50) (62)
Presented under:
Revenue from operations 15 9
Operational expenses (65) (71)
(50) (62)

Franchisee fee paid to BCCI (net of central rights income received from BCCI), amounting to ` 65 crores (2023: 71 crores) for WPL
is recognised as an expense for the year ended March 31, 2024.

22. Other income

For the year ended For the year ended

March 31, 2024 March 31, 2023
Interest income on fixed deposits and investments held at amortised cost 42 32
Interest income from statutory refund 88 -
Gain on disposal of property, plant and equipment (net) 12 20
Profit on redemption of mutual fund units 47 17
Fair value gains on current investments (net) 18 3
Liabilities no longer required written back - 0
Bad debts / advances recovered 4 0
Miscellaneous income 14 1
Total other income 225 73

255
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
23. Cost of materials consumed

For the year ended For the year ended

March 31, 2024 March 31, 2023
Raw materials 3,262 3,497
Packing materials 1,992 1,840
Total cost of materials consumed 5,254 5,337

24. Changes in inventories of finished goods, work-in-progress and stock-in-trade

For the year ended For the year ended

March 31, 2024 March 31, 2023
Opening inventory:
Finished goods 550 823
Work-in-progress 602 600
Stock-in-trade 390 151
Total opening balance (A) 1,542 1,574
Closing inventory:
Finished goods 501 550
Work-in-progress 636 602
Stock-in-trade 266 390
Total closing balance (B) 1,403 1,542
Increase / (decrease) in excise duty on finished goods, net (C) (20) (169)
Total changes in inventories of finished goods, work-in-progress and stock-in-trade 119 (137)
(A-B+C)

25. Employee benefits expense

For the year ended For the year ended

March 31, 2024 March 31, 2023
Salaries, wages and bonus 440 525
Contribution to provident and other funds [Refer note 39(a)] 23 10
Defined benefit plans [Refer note 39(b)D] 10 16
Share based payment expense [Refer note 35] 37 23
Staff welfare expenses 37 36
Total Employee benefits expense 547 610

256
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
26. Depreciation and amortisation expense

For the year ended For the year ended

March 31, 2024 March 31, 2023
Depreciation / impairment of property, plant and equipment (Refer note 3.1) 121 133
Depreciation of right-of-use assets (Refer note 3.2) 129 130
Amortisation / impairment of intangible assets (Refer note 3.4) 25 19
Total depreciation and amortisation expense 275 283

27. Other expenses

For the year ended For the year ended

March 31, 2024 March 31, 2023
Consumption of stores and spares 16 16
Operational expenses relating to BCCI-IPL and WPL franchises [Refer note b below] 316 231
Sub-contracting Charges 83 91
Power and fuel 18 17
Rent [Refer note 3.2] 200 231
Repairs and maintenance:
Buildings 4 5
Plant and machinery 28 35
Others 34 31
Insurance 14 17
Rates and taxes 148 138
Travel and conveyance 47 50
Legal and professional 141 139
Auditor remuneration (Refer note a below) 7 6
Freight outwards 243 284
Royalty [Refer note 37(b)(vii)] 11 13
Trade mark license fees 0 0
Exchange loss (net) 4 0
Remuneration to non-executive directors of the Company:
Sitting fee 2 1
Commission 2 2
Allowance for trade receivable and other assets (net) 41 5
Expense towards corporate social responsibility 19 22
Information technology and communication expenses 88 83
Administrative expenses - 0
Sales distribution charges 172 154
Miscellaneous expenses 39 27
Total other expenses 1,677 1,598

257
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
For the year ended For the year ended
March 31, 2024 March 31, 2023
Note:
(a) Auditors’ remuneration*
Statutory audit 2 2
Quarterly reviews 1 1
Certifications 0 0
Other assurance related service 3 3
Total payment to auditors 7 6
* Excluding goods and services tax
(b) Operational expenses relating to BCCI-IPL and WPL franchises includes:
Franchisee fee (net of revenue) 65 71
Players and support staff fees 142 106
Per diem allowances to players and support staff 4 3
Stadium rent 9 0
Insurance 3 2
Travel expenses 13 5
Hotel expenses 10 10
Event management costs 53 22
Commission on sponsorship income 17 13
Man of the match award (net) 0 0
Total operational expenses relating to BCCI-IPL and WPL franchises includes 316 231

28. Finance costs

For the year ended For the year ended

March 31, 2024 March 31, 2023
Interest expense on lease liabilities (Refer note 3.2) 21 16
Interest expense on borrowings at amortised cost 0 20
Interest others 55 68
Total finance costs 76 104

29. Exeptional Items (net)

For the year ended For the year ended

March 31, 2024 March 31, 2023
(a) Profit on sale of Business Undertaking (Refer note 47(a)) 31 380
(b) Supply Restructuring Cost (Refer note 47(b)) (48) (157)
(c) Voluntary Separation Scheme - (39)
(d) Gain/(loss) on sale of a subsidiary - (8)
Total exceptional items (net) (17) 176

258
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
30. Reconciliation of tax expense and accounting profit multiplied by India’s tax rate

For the year ended For the year ended

March 31, 2024 March 31, 2023
Profits before income tax expense 1,857 1,279
Tax calculated at the statutory rate applicable to the Holding Company 498 322
Tax effects of amounts which are not deductible / (taxable) in calculating taxable
income:
- Current tax benefit on account of brought forward losses relating to PDL - (77)
- Tax deduction for dividend received from subsidiary (31) -
- Unrecognised short term capital losses utilised against profit on redemption of mutual (15) (5)
funds
- Expenses disallowed for tax purposes 8 16
- Profit on sale of business undertaking, which was taxed in the previous year (8) -
- Provision/(reversal) of income taxes relating to prior years 1 (21)
- Unrecognised long term capital losses utilised against profit on sale of business - (95)
undertaking
- Impairment provision on land on which deferred tax asset has not been recognised - 15
- Others (4) (3)
Income tax expense as per statement of profit and loss 449 153
Tax losses
Unused tax losses for which no deferred tax asset has been recognised (Refer note 526 583
below)
Potential tax benefit at rates applicable in the country concerned 122 136

Notes:
(a) The unused tax loss comprises of capital losses of the Holding company amounting to ` 469 crores of which long term capital
losses amounting to ` 467 crores, accumulated from prior years, will expire in financial year ending March 31, 2031 and short
term capital losses amounting to ` 2 crores will expire in financial year ending March 31, 2027.
(b) As at March 31, 2024, aggregate amount of temporary differences associated with undistributed earnings of subsidiaries for
which deferred tax liability has not been recognised is ` 33 crores (March 31, 2023: Nil). No liability has been recognised in
respect of such difference because the Group is in a position to control the timing of reversal of the temporary difference and it
is probable that such difference will not reverse in the foreseeable future.

31. Earnings per share

For the year ended For the year ended

March 31, 2024 March 31, 2023
Nominal value of equity shares (`) 2/- 2/-
(a) Profits attributed to the owners of the Holding Company 1,408 1,137
(b) Weighted average number of equity shares used as denominator 70,96,30,072 70,96,30,072
- Issued/paid up share capital 70,96,30,072 70,93,43,265
- Shares issued during the year - 2,86,807
(c) Basic and diluted earnings per share (`) 19.83 16.01

259
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Notes:
(a) There are no dilutive equity shares in the Holding Company.
(b) In calculating the weighted average number of outstanding equity shares during the year, Holding Company has not reduced
the own shares held by USL Benefit Trust (of which Holding Company is the sole beneficiary), as the investment in the said Trust
has been accounted under a scheme approved by courts. [Refer note 14(h)]

Note 32: Financial risk management

The Group’s activities exposes it to credit risk, liquidity risk and market risk. This note explains the sources of risk which the entity is
exposed to and how the Group manages the risk.

Risk Exposure arising from Measurement Management

Credit risk Cash and cash equivalents, deposits Ageing analysis and Diversification of bank deposits, review of
with banks, mutual fund, trade review of receivables mutual fund schemes and its underlying
receivables, loans and other financial and other financial exposure, monitoring of credit limits and
assets measured at amortised cost assets assessment of recoverability of loans to other
counterparties
Liquidity risk Borrowings and other financial Rolling cash flow Investment in highly marketable and liquid
liabilities forecasts investments and availability of committed
credit lines
Market risk — Short-term borrowings at floating Sensitivity analysis of Monitoring of changes in interest rates
interest rate rates, deposits with bank and debt interest rates
Mutual funds
Market risk Primarily represented by receivables Forecast of highly Monitoring of changes in foreign exchange
— foreign and payables towards export and probable foreign rates
exchange risk imports respectively currency cash flows
Market risk — Investment in mutual fund, Market available Group reviews its investments at regular
price risk compulsorily convertible preference information, valuation intervals in order to minimize price risk arising
shares (CCPS) of future cash flow from investments in mutual fund. Group
reviews the fair value as at reporting period
for investments in CCPS

The Group’s financial risk management is carried out by treasury department under policies approved by the Board of Directors (“the
Board”). Corporate treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s other functions. The
Board sets written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk,
interest rate risk and credit risk, and investment of excess funds.

The Group does not have significant exposure to foreign currency fluctuations.

(A) Credit risk

Credit risk management

Trade receivables:

The Group’s credit policy provides guidance to keep the risk of credit sales within an acceptable level. The Group’s management
monitors (at customer group and non-group level) and reviews credit limits, overdue trade receivables, provisioning and write-off
of credit impaired receivables.

260
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Trade receivables are unsecured and are derived from revenues earned from two main classes of customers, receivables from
sales to government corporations/ government owned entities and receivables from sales to private third parties.

Receivables from government corporations/ government owned entities amounted to ` 1,998 crores; 56% (2023: ` 1,230 crores;
48%) and receivable from sales to private customers amounted to ` 1,596 crores; 44% (2023: ` 1,325 crores; 52%) respectively,
of total trade receivables, on the reporting date.

The Group determines allowances for expected credit losses separately for different categories of customers using age-based
provision matrix.

Movement in loss allowances for trade receivables is provided below:

Particulars March 31, 2024 March 31, 2023

Balance at the beginning of the year 121 119
Loss allowance (net) 68 7
Write offs/ adjustments (16) (5)
Balance at the end of the year (Refer note 11) 173 121

Expected credit loss ageing schedule is given below:

March 31, 2024 March 31, 2023

Particulars Rate Amount Amount
Not due 2% 61 44
Less than 3 months 5% 29 4
3 months - 6 months 6% 6 1
6 months -1 year 28% 8 7
1-2 years 75% 21 16
2-3 years 96% 11 10
More than 3 years 100% 37 39
Total 173 121

Loans and other financial assets:

‘Other financial assets’ includes balances with banks, receivable from Tie-up manufacturing units, government grants, loans and
interest accrued on such loans.

The Group recognises allowances using expected credit loss method on other financial assets. Such allowances are measured
considering either 12-month expected credit loss approach or life time credit loss approach, based on management’s assessment of
credit risk. Assets are written-off where there is no reasonable expectation of recovery. Where the loans or receivables are written-off
the Group continues to engage in enforcement activity to attempt to recover the amounts due. Where recoveries are made, these are
recognised in profit or loss.

261
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Movement in loss allowances for financial assets other than for trade receivables during the reporting period is provided below:

Particulars March 31, 2024 March 31, 2023

Balance at the beginning of the year 1,322 1,359
Loss allowance recognised:
• Included in the Statement of Profit and Loss (27) (19)
• Write offs/ adjustments 7 (18)
Balance at the year end (Refer note 5 and 6) 1,302 1,322

Management has assessed credit risk for balances with banks, investments in mutual funds and other financial assets as at year ended
March 31, 2024. Basis this assessment management has determined that no provision for expected credit loss is required, other than
those already provided in these financial statements.

(B) Liquidity risk

The Group monitors daily and monthly rolling forecasts of the liquidity position and cash and cash equivalents on the basis of expected
cash flows. Generally, any short-term surplus cash generated, over and above the amount required for working capital management
and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in
bank deposits, debt mutual funds and other highly rated corporate debentures to optimise the cash returns on investments guided by
the tenets of safety, liquidity and returns.

Financing arrangements

The Group has access to the following undrawn unsecured borrowing facilities as at end of the reporting period:

Particulars As at As at
March 31, 2024 March 31, 2023
Floating rate 1,245 1,496
Cash credit / working capital loans

The above facilities may be drawn at any time and such borrowings are repayable on demand.

Maturities of financial liabilities

The maturity profile of the Group’s financial liabilities based on the remaining period from the date of balance sheet to the contractual
maturity date is given in the table below. The figures reflect the contractual undiscounted cash obligation of the Group.

March 31, 2024

Particulars Less than 3 3 months to 6 months to Between 1 Between 2 More than 5 Total
months 6 months 1 year and 2 years and 5 years years
Lease liabilities 36 29 52 96 36 29 278
Trade payables 1,954 - - - - - 1,954
Other financial liabilities 276 - - - - - 276
Borrowings 25 - - - - - 25
Total liabilities 2,291 29 52 96 36 29 2,533

262
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
March 31, 2023

Particulars Less than 3 3 months to 6 months to Between 1 Between 2 More than 5 Total
months 6 months 1 year and 2 years and 5 years years
Lease liabilities 32 30 49 54 31 6 202
Trade payables 1,783 - - - - - 1,783
Other financial liabilities 285 - - - - - 285
Borrowings - - 1 0 - - 1
Total liabilities 2,100 30 50 54 31 6 2,271

(C) Interest rate risk

Interest rate risk arises due to uncertainties about the future market interest rate on the borrowings or investments. The Group has
repaid all the borrowings by the end of the financial year, except for a liability towards sales tax deferral scheme and a liability towards
working capital loan from bank. As the Group doesn’t have significant debt as at March 31, 2024, exposure to interest rate risk is not
expected to have a significant impact on the Group’s profit/ loss.

Further, treasury activities, focused on managing investments in debt instruments, are centralised and administered under a set of
approved policies and procedures guided by the tenets of safety, liquidity and returns. This ensures that investments are made within
acceptable risk parameters after due evaluation. The Group’s investments are predominantly held in fixed deposits, mutual funds and
treasury bills.

The Group invests in debt mutual fund schemes of leading fund houses. Such investments are susceptible to market price risks that
arise mainly from changes in interest rate which may impact the return and value of such investments. However, given the relatively
short tenure of underlying portfolio of the mutual fund schemes in which the Group has invested, such price risk is not significant.

In addition to debt mutual funds, the Group invests in term deposits with banks. The term deposits carry a fixed-coupon rate and are
for a term not exceeding 12-months from the Balance Sheet date. Accordingly, interest rate risks is not significant. Further, such deposits
are carried at amortised cost. Accordingly, exposure to interest rate risk is not considered material.

(D) Foreign exchange risk

The Group is exposed to foreign exchange risk arising from foreign currency transactions and balances, primarily with respect to the
USD and GBP. Foreign Exchange risk arises from future commercial transactions and monetary assets and liabilities denominated in a
currency that is not the functional currency of the Parent company or its Subsidiaries. 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 receivables and payables
towards exports and imports respectively, in foreign currencies.

The Group can hedge its net exposures with a view on forex outlook. Since the net exposure is currently not material, foreign currency
risk has not been hedged.

263
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Foreign currency risk exposure

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

As at March 31, 2024

USD GBP EURO SGD Total
Financial assets
Cash and cash equivalents 0 0 0 - 0
Other financial assets 0 0 - - 0
Trade receivables 24 - - - 24
Exposure to foreign currency risk (assets) 24 0 0 - 24
Financial liabilities
Trade payables 5 8 0 1 14
Other financial liabilities - - - - -
Exposure to foreign currency risk (liabilities) 5 8 0 1 14
Net exposure (Assets/liabilities) 19 (8) (0) (1) 10

As at March 31, 2023

USD GBP EURO SGD Total
Financial assets
Cash and cash equivalents - - - - -
Other financial assets 1 - 0 - 1
Trade receivables 22 - - - 22
Exposure to foreign currency risk (assets) 23 - 0 - 23
Financial liabilities
Trade payables 1 8 - 1 10
Other financial liabilities 1 - - - 1
Exposure to foreign currency risk (liabilities) 2 8 - 1 11
Net exposure (Assets/liabilities) 21 (8) 0 (1) 12

Note:

a) A reasonable possible fluctuation in foreign exchange rates are not expected to have a material effect on the profit/loss.

(E) Price risk

a) Mutual funds: Group reviews its investments at regular intervals in order to minimize price risk arising from investments in mutual
funds. In accordance with the investment policy the Group invests in the liquid, overnight and money market mutual fund
schemes which are not subject to significant changes in values.

b) Compulsorily convertible preference shares: The Group measures CCPS at FVPL. The fair value of the CCPS has been determined
using the discounted cashflow model. The significant inputs used in discounted cashflow model are the growth rates and the
discount rate. The fair value gain on CCPS for the year ended March 31, 2024 was not material.

264
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Note 33: Capital management

a. 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

• 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:

• Diversification of funding sources to manage liquidity and rollover risk

• Financial flexibility in case of adverse business cycles

Net debt to equity ratio:

Particulars As at As at
March 31, 2024 March 31, 2023
Total debt (a) 265 183
Cash and cash equivalents (b) 1,052 115
Net debt (c) = (a) - (b) (787) 68
Total equity (d) 7,121 5,999
Net debt to equity ratio (c) / (d) NA 0

b. Dividends

Particulars For the year For the year

ended ended
March 31, 2024 March 31, 2023
(i) Equity shares
Interim dividend for the year ended 31 March 2024 of ` 4 (31 March 2023 - ` Nil) per 284 -
fully paid share
(ii) Dividends not recognised at the end of the reporting period
In addition to the above dividends, subsequent to the year end, the directors have 355 -
recommended the payment of a final dividend of ` 5 per fully paid equity share
(2023 : Nil). This proposed dividend is subject to the approval of shareholders in the
ensuing annual general meeting.

Note 34: Assets pledged as security

(a) In respect of secured loans from banks (‘lenders’) obtained and repaid during earlier years, the Holding Company has in most cases
obtained no objection letters from lenders for the release of the hypothecation/ mortgage and have filed the necessary forms with
Ministry of Corporate Affairs (“MCA”) to reflect the release of such charge in MCA’s records. In the few remaining cases, the Holding
Company is in the process of securing no objection letters from the lenders. As there are no secured loans outstanding as at March 31,
2024, no assets have been shown as hypothecated/ mortgaged as at March 31, 2024.

265
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
(b) Further the following assets have been pledged with a bank with whom the Holding Company is involved in a litigation [Refer note
41A(e)]

Particulars Notes As at As at
March 31, 2024 March 31, 2023
First charge
Freehold land 3.1 & 3.6 118 118
Buildings 3.1 & 3.6 14 15
Leasehold land 3.1 & 3.6 4 4
Plant and equipment 3.1 0 0
Investments as a sole beneficiary in USL Benefit Trust 120 120
Total assets pledged as security 256 257

(c) Inventory aggregating to Nil (2023: ` 1 crores) are in the custody of third-party tie-up manufacturing units (TMUs), which have been
hypothecated by the said TMUs for securing credit facilities.

Note 35: Share based payments

Diageo Plc. share based plans

Diageo Plc. (Ultimate Holding Company) runs various equity settled share based plans such as Diageo Performance Incentive (DPI), Diageo
Executive Long Term Incentive Plan (DELTIP), Performance Share Plan (PSP), Senior Executive Share Option Plan (SESOP) and Diageo Exceptional
Stock Award Plan (DESAP) for qualifying employees of the Group. Vesting under these plans is subject to conditions such as continuity of
employment and achievement of certain other performance factors.

The charge for the year in respect of such plans included in employee benefits expense amounted to ` 4 crores (March 31, 2023: ` 7 crores).

Share appreciation rights (SAR)

The India SAR Plan creates an opportunity to link the employees’ reward to Holding Company’s share price performance. Under this plan,
Group grants stock appreciation rights (based on USL share price on the date of grant) to qualifying employees. Cash pay-out equivalent to
the value of the Holding Company’s share will be made at the end of three years from the date of grant (the vesting period).

Grant Year No. of units Average Vesting Range of the

outstanding as at Period expected settlement
March 31, 2024 price
(` per unit)
FY 21-22 2,50,007 1,134 to 1,158
FY 22-23 1,83,744 3 years 1,134 to 1,154
FY 23-24 1,64,970 1,134 to 1,370

The fair value of the SARs is determined using the Black-Scholes model using the following inputs at the grant dates and as at each reporting
date:

Particulars As at As at
March 31, 2024 March 31, 2023
Expected volatility (%) 26.74% 29.70%
Risk-free interest rate (%) 7.16% 7.29%

As at March 31, 2024 outstanding SARs are 5,98,721 (March 31, 2023: 7,12,276). Refer below for movement in provision for SAR:

266
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Particulars Notes Amount
Provision as at April 1, 2022 21
Charge for the year 25 16
Payout during the year (10)
Provision as at March 31, 2023 18 27
Charge for the year 25 33
Payout during the year (16)
Provision as at March 31, 2024 18 44

Provision as at the year-end classified as:

Particulars As at As at
March 31, 2024 March 31, 2023
Current 29 16
Non-current 15 11
Total 44 27

Note 36: Financial instruments:

Financial instrument by category:

Particulars As at March 31, 2024

Amortized Fair value Fair value Total
cost through Profit through other
and Loss comprehensive
income
Financial assets:
Investments (Refer note 4.2) - 37 - 37
Liquid mutual fund units (Refer note 4.3(ii)) - 499 - 499
Treasury bills (Refer note 4.3(ii)) 100 - - 100
Non-convertible debentures (Refer note 4.3(ii)) - - - -
Loans (Refer note 5) 10 - - 10
Other financial assets (Refer note 6) 148 - - 148
Trade receivables (Refer note 11) 3,421 - - 3,421
Cash and cash equivalents (Refer note 12) 505 547 - 1,052
Bank balance other than cash and cash equivalents (Refer note 13) 217 - - 217
Total 4,401 1,083 - 5,484
Financial liabilities:
Borrowings (Refer note 16) 25 - - 25
Other financial liabilities (Refer note 17) 276 - - 276
Trade payables (Refer note 19) 1,954 1,954
Total 2,255 - - 2,255

267
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Particulars As at March 31, 2023
Amortized Fair value Fair value Total
cost through Profit through other
and Loss comprehensive
income
Financial assets:
Investments (Refer note 4.2) - 20 - 20
Liquid mutual fund units (Refer note 4.3(ii)) - 240 - 240
Non-convertible debentures (Refer note 4.3(ii)) 16 - - 16
Loans (Refer note 5) 16 - - 16
Other financial assets (Refer note 6) 282 - - 282
Trade receivables (Refer note 11) 2,434 - - 2,434
Cash and cash equivalents (Refer note 12) 115 - - 115
Bank balance other than cash and cash equivalents (Refer note 13) 768 - - 768
Total 3,631 260 - 3,891
Financial liabilities:
Borrowings (Refer note 16) 1 - - 1
Other financial liabilities (Refer note 17) 285 - - 285
Trade payables (Refer note 19) 1,783 - - 1,783
Total 2,069 - - 2,069

Fair value hierarchy:

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and
measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. 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 the accounting standard. An explanation of each level follows below:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

Fair value of investments in mutual funds are classified as Level 1. Fair value of all other financial instruments including investments in CCPS
issued by Nao Spirits & Beverages are classified as Level 3.

Management has determined their carrying amounts of current financial assets i.e., trade receivables, current loans, bank deposits, cash and
cash-equivalents, receivable from TMUs, trade payables and other financial liabilities (excluding lease liabilities) to be a fair approximation of
their fair values on account of the short term natures.

Management has determined that the fair values of other non current financial assets i.e., government grants, receivable from TMUs, security
deposits and other receivables are not materially different from their carrying amounts as at March 31, 2024.

268
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Note 37: Related party disclosures

(a) Names of related parties and description of relationship

(i) Parent entities

• Diageo plc United Kingdom (Ultimate Holding company)

• Tanqueray Gordon & Company Ltd., United Kingdom (Holding Company of Diageo Relay B V)

• Diageo Relay B V, Netherlands (Immediate Holding Company)

(ii) Associate

Sr. No. Name of the associate % of ownership interest Country of Incorporation

(i) Nao Spirits & Beverages Private Limited 11% India
[w.e.f. April 29, 2022 refer to note 4.1]

(iii) Fellow subsidiaries (with whom transactions have taken place during the year or in the previous year)
• Diageo Scotland Limited
• Diageo Brands B.V.
• Diageo Great Britain Limited
• Diageo North America Inc.
• Diageo Singapore Supply Pte. Ltd.
• Guinness Nigeria Plc
• Diageo Ireland
• Diageo Business Services India Private Limited
• UDV Kenya Limited
• Diageo Mexico
• Diageo America Supply Inc.

(iv) Employees’ Benefit Plans:

• McDowell & Company Limited Staff Gratuity Fund

• McDowell & Company Limited Officers’ Gratuity Fund

• McDowell & Company Limited Employees Provident Fund(*)

• Phipson & Company Limited Management Staff Gratuity Fund

• Phipson & Company Limited Gratuity Fund

• Carew & Company Ltd. Gratuity Fund

• United Spirits Superannuation Fund

• UB Group Employee Benefit Trust

• Shaw Wallace Employee Welfare Trust

• Pioneer Distilleries Employees Gratuity Trust

269
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
The Group was operating a defined benefit provident fund plan through its own Trust for all permanent employees. During the
year, the Holding Company has transferred its Provident fund obligation from the Trust to Employee Provident Fund Organization
(EPFO) after necessary approval from EPFO. The Holding Company is in the process of liquidating the Trust. [refer note 39(b)].

(v) Key management personnel

a. Whole-time directors
• Hina Nagarajan (Managing Director and Chief Executive Officer)
• Pradeep Jain (Chief Financial officer and Executive Director) w.e.f. February 1, 2023

b. Non-executive/ Independent directors

• Mahendra Kumar Sharma – Chairman
• V K Viswanathan
• Dr. Indu Shahani
• D Sivanandhan
• Rajeev Gupta
• Mark Sandys
• John Thomas Kennedy (till June 30, 2023)
• Randall Ingber (till January 31, 2023)
• Emily Kathryn Gibson (w.e.f. September 7, 2023)
• Mukesh Butani (w.e.f. March 1, 2024)
• Indu Bhushan (w.e.f. March 1, 2024)
• Mamta Sundara (w.e.f. February 1, 2023)

Note 37(b): Summary of the transactions with related parties

Name of the related party Relationship For the year ended For the year ended
March 31, 2024 March 31, 2023
(i) Investment in associate Associate
Nao Spirits & Beverages Private Limited
- Equity shares carried at cost - 12
- Compulsory convertible preference shares carried at 15 20
fair value through profit and loss
Total- Investment in associate 15 32
(ii) Sale of products (including excise duty) to
UDV Kenya Limited Fellow subsidiary 1 0
Total- Sale of products 1 0
(iii) Royalty and brand franchise income
Guinness Nigeria Plc. Fellow subsidiary - 1
UDV Kenya Ltd Fellow subsidiary 0 -
Total- Royalty and brand franchise income 0 1

270
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Name of the related party Relationship For the year ended For the year ended
March 31, 2024 March 31, 2023
(iv) Reimbursement of expenses from
Diageo plc Parent 5 4
Diageo Great Britain Limited Fellow subsidiary 1 -
Diageo Brands B.V. Fellow subsidiary 1 -
Diageo Scotland Limited Fellow subsidiary 2 0
Diageo North America Inc. Fellow subsidiary - 0
Diageo Business Services India Private Limited Fellow subsidiary - 1
Diageo Mexico Fellow subsidiary 1 -
Diageo America Supply Inc. Fellow subsidiary 0 -
Total - Reimbursement of expenses received 10 5
(v) Purchase of stock-in-trade from
Diageo Brands BV Fellow subsidiary 422 616
Diageo Ireland Fellow subsidiary - 2
Total- Purchase of stock-in-trade 422 618
(vi) Purchase of raw materials from
Diageo Brands B.V. Fellow subsidiary 421 371
Total- Purchase of materials 421 371
(vii) Royalty expense
Diageo North America Inc.* Fellow subsidiary 9 10
Total- Royalty expense (Refer note 27) 9 10
(viii) Professional charges
Diageo Business Services India Private Limited Fellow subsidiary 17 16
Total- Professional charges 17 16
(ix) Cross Charge towards share based payments
Diageo Great Britain Limited Fellow subsidiary 4 6
Total- Cross charge 4 6
(x) Other services received
Information Technology expenses
Diageo Great Britain Limited Fellow subsidiary 28 24
Diageo Business Services India Private Limited Fellow subsidiary 1 6
Total- Other services received 29 30
(xi) Reimbursement of expenses paid to
Diageo Great Britain Limited Fellow subsidiary 3 -
Diageo Scotland Limited Fellow subsidiary 1 -
Diageo North America Inc Fellow subsidiary 1 -
Diageo Business Services India Private Limited Fellow subsidiary - 0
Total- reimbursement of expenses paid 5 0
(xii) Dividend paid to
Diageo Relay B V Immediate Holding 163 -
Company
Total-Dividend paid 163 -

271
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Name of the related party Relationship For the year ended For the year ended
March 31, 2024 March 31, 2023
(xiii) Contribution to employee benefit plans
McDowell & Company Limited Employees Provident Fund Employee benefits plan 16 14
United Spirits Superannuation Fund Employee benefits plan 2 2
Total- Contribution to employee benefit plans 18 16

* Royalty expense excludes Goods and Services Tax

Note 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:

Name of the related party Relationship As at As at

March 31, 2024 March 31, 2023
(i) Financial assets receivable
Diageo Scotland Limited Fellow subsidiary 0 0
Diageo Great Britain Limited Fellow subsidiary 1 -
Total- Financial assets receivable (Refer note 6) 1 0

(ii) Trade receivables from

UDV Kenya Ltd Fellow subsidiary 0 -
Guinness Nigeria Plc. Fellow subsidiary 2 6
Total- Trade receivables (Refer note 11) 2 6
(iii) Trade payables to
Diageo Brands BV Fellow subsidiary 208 245
Diageo Great Britain Limited Fellow subsidiary 9 4
Diageo North America Inc. Fellow subsidiary 5 9
Diageo Scotland Limited Fellow subsidiary 1 2
Diageo Singapore Supply Pte Limited Fellow subsidiary - 0
Diageo Business Services India Private Limited Fellow subsidiary 5 14
Diageo Ireland Fellow subsidiary - 1
Total trade payables to related parties (Refer note 19) 228 274
(iv) Minimum offtake commitment for purchase of bulk scotch
Diageo Scotland Limited Fellow subsidiary 123 410

Note 37(d): Key management personnel and compensation

272
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Executive directors For the year ended March 31, 2024 For the year ended March 31, 2023
Hina Nagarajan Pradeep Jain Hina Nagarajan Pradeep Jain (*)
Remuneration (**) 10 4 10 0
Employee share-based payments (***) 4 0 2 -
Total compensation 14 4 12 0

(*) For Pradeep Jain, remuneration has been included w.e.f. February 1, 2023.
(**) As the employee benefits obligations such as gratuity, compensated absences and bonuses are provided for the Group as a whole, the
amounts pertaining to individual Key management personnel are not included above on an accrual basis. Such, amounts are included
on payment basis.
(***) Based on options exercised.

Non-executive/ Independent directors For the year ended For the year ended
March 31, 2024 March 31, 2023
Sitting Fee Commission Sitting Fee Commission
Mr. Mahendra Kumar Sharma 0 1 0 0
Mr. V K Viswanathan (*) 0 0 0 0
Dr. Indu Shahani (*) 0 0 0 0
Mr. D Sivanandhan (*) 0 0 0 0
Mr. Rajeev Gupta (*) 0 0 0 0
Dr. Indu Bhushan (*) - 0 - -
Mr. Mukesh Butani (*) - 0 - -
Total 0 2 0 2

(*) Individually sitting fees and commission paid to the directors is lesser than ` 50 lakhs. Sitting fees and commission paid to the directors
above has been aggregated and disclosed against the total in the table above.

Note 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.

Note 38: Offsetting of financial assets and financial liabilities

The Group provides volume-based incentives and rebates to certain customers. 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. Details of
such offset is given in the below table.

Particulars As at As at
March 31, 2024 March 31, 2023
Trade receivable - current 3,289 2,595
Trade receivable - non current 365 -
Trade receivables (gross) 3,654 2,595
Less: Volume based incentives and rebates payable (60) (40)
Trade receivables as reported (Refer note 11) 3,594 2,555

Note 39(a): Defined contribution plans

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UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Provident Fund:

Provident Fund covers all eligible employees of the Holding Company. Both the employees and the Holding Company make monthly
contributions to the Provident Fund as per regulations to a fund administered by government authority, equal to a specified percentage of the
employees’ salary. The obligation of the Holding Company is limited to the extent of contributions made on a monthly basis.

Employee Pension Scheme:

Employee Pension Scheme covers all eligible employees of the Holding Company. A portion of the Holding Company’s contribution in respect
of government administered Provident Fund and Holding Company administered Provident Fund Plan is made to the government administered
Employee Pension Scheme, as per regulations. The obligation of the Holding Company is limited to the extent of contributions made on a
monthly basis.

Employees’ State Insurance:

Employees’ State Insurance is a state plan which is applicable to those employees of the Holding Company whose salaries do not exceed a
specified amount. The contributions are made based on a percentage of salary to a fund administered by government authority. The obligation
of the Holding Company is limited to the extent of contributions made on a monthly basis.

Superannuation fund:

Certain executive staff of the Holding Company participate in United Spirits Superannuation fund (the ‘Fund’), which is a voluntary contribution
plan. The Holding Company has no further obligations to the plan beyond its monthly contributions to the Fund, the corpus of which is
administered by a Trust and is invested in insurance products.

National Pension Scheme:

Certain executive staff of the Holding Company participate in National Pension Scheme, which is a voluntary contribution plan. The Holding
Company has no further obligations to the plan beyond its monthly contributions to a fund administered by a pension fund manager appointed
by Pension Fund Regulatory and Development Authority.

During the year, the Holding Company has recognised the following amounts in the Statement of Profit and Loss, which are included in
contribution to provident and other funds under the employee benefits expense in note 25:

Particulars For the year ended For the year ended

March 31, 2024 March 31, 2023
Provident fund* 17 3
Employees’ pension scheme 4 4
Employees’ state insurance 0 0
Superannuation fund 1 2
National pension scheme 1 1
Total (Refer note 25) 23 10

*Excludes contributions to Provident Fund Trust which are in the nature of defined benefit plans managed by the Group.

274
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Note 39(b): Defined benefit plans

Gratuity:

The Holding 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 or upon resignation from service, of an amount based on the
respective employee’s last drawn salary and years of employment with the Holding Company. Vesting occurs only upon completion of five
years of service, except in case of death or permanent disability. The funds are managed by a trust administered by the Holding Company.

Pension plan:

The Holding Company operates an unfunded defined benefit pension plan for certain retired employees of an erstwhile entity which has
merged into the Holding company in earlier years. This plan provides benefits to members in the form of a guaranteed level of pension payable
for life post retirement or termination of employment. The level of benefits provided depends on their salary in the final year leading up to
retirement, or termination.

Provident fund plan:

The executive staff and certain permanent workmen received benefits from the provident fund plan, which was operating as a defined benefit
plan until part of the current year. Both the employees and the Holding Company made monthly contributions to such provident fund plan equal
to a specified percentage of the employee’s salary. A portion of Holding Company’s contribution is transferred to Employee Pension Scheme,
which is a defined contribution plan and the remaining amount is transferred to provident fund plan. The defined plan was discontinued during
the year and the balance contribution was transferred to Employees Provident Fund Organisation(EPFO).

The defined benefit provident fund contributions were made to McDowell & Company Limited Employees Provident Fund Trust which was set
up and managed by the Holding Company. The Trust invested in specific designated instruments as permitted by Indian laws. The Holding
Company had an obligation to make good the shortfall if any, being the difference between the statutory rate prescribed by the Government
and the rate of interest declared by the Trust. The Holding Company also had an obligation to fund any shortfall in the fair value of plan assets
as compared with the defined benefit obligation. The actuarial risk and investment risk fall, in substance, on the Holding Company. During the
current year, the Holding Company has transferred its’ obligation for provident fund from the trust to Employees Provident Fund Organisation
(EPFO). Accordingly, the Provident fund plan has subsequently been accounted as a defined contribution plan.

Gratuity, Provident Fund and Pension

A. Reconciliation of opening and closing balances of the present value of the defined benefit obligation (DBO):

Particulars For the year ended For the year ended

March 31, 2024 March 31, 2023
Gratuity Provident Pension Gratuity Provident Pension
fund fund
(Funded) (Funded) (Unfunded) (Funded) (Funded) (Unfunded)
Obligation at the beginning of the year 106 311 1 121 348 1
Current service cost 10 3 - 11 14 -
Past service cost - - - 2 - -
(Gain)/loss on settlements - - - (9) - -
Interest cost 7 8 - 8 25 -
Benefit payments from plan assets (12) (35) - (19) (113) -
Transfer in/Out - 7 - - 17 -

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UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Particulars For the year ended For the year ended
March 31, 2024 March 31, 2023
Gratuity Provident Pension Gratuity Provident Pension
fund fund
(Funded) (Funded) (Unfunded) (Funded) (Funded) (Unfunded)
Employee contributions - 5 - - 19 -
Benefit payments from the Group - - (1) - - -
Transfer upon sale of business undertaking - - (4) - -
Actuarial (gain)/ loss from changes in demographic (4) - - (1) - -
assumptions
Actuarial (gain)/ loss from changes in financial 1 - - (2) 0 -
assumptions
Actuarial (gain)/ loss from experience adjustments (1) (0) - (2) 1 -
Transferred to EPFO - (299) - - - -
Obligation at the end of the year 107 - - 106 311 1

B. Reconciliation of opening and closing balances of the fair value of plan assets:

Particulars For the year ended For the year ended

March 31, 2024 March 31, 2023
Gratuity Provident fund Gratuity Provident fund
(Funded) (Funded) (Funded) (Funded)
Plan assets at the beginning of the year 140 305 153 340
Employee contributions - 5 - 19
Transfer in/ (out) - 7 - 16
Contribution by the Group - 3 - 14
Return on plan assets 10 8 11 25
Actuarial gains/ (losses) (0) (11) (19) 4
Benefits paid (13) (35) (5) (113)
Transferred to EPFO - (282) - -
Plan assets at the end of the year 137 - 140 305
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:

Particulars As at March 31, 2024 As at March 31, 2023

Gratuity Provident Pension Gratuity Provident Pension
(Funded) fund (Unfunded) (Funded) fund (Unfunded)
(Funded) (Funded)
Present value of obligation 107 - 0 106 311 1
Fair value of plan assets 137 - - 140 305 -
Liability/ (asset) recognised in Balance
sheet (Refer notes 9 and 18) (30) - 0 (33) 6 1
Current - - 0 - 6 0
Non-current (30) - - (33) - 1

276
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
D. Expenses recognised in the Statement of profit and loss:

Particulars For the year ended March 31, 2024 For the year ended March 31, 2023
Gratuity Provident Pension Total Gratuity Provident Pension Total
fund fund
(Funded) (Funded) (Unfunded) (Funded) (Funded) (Unfunded)
Current service cost 10 3 - 13 11 14 - 25
Past service cost - - - - 2 - - 2
(Gain)/loss on settlement - - - - (9) - - (9)
Net interest cost 3 - 3 - - - -
a. Interest expense on DBO 7 8 - 15 8 25 0 33
b. Interest (income) on plan assets (10) (8) - (18) (11) (25) - (36)
Total net interest cost (a+b) (3) - - (3) (3) - 0 (3)
Defined benefit cost (Refer note 25) 7 3 - 10 2 14 0 16

E. Re-measurement effects recognised in other comprehensive income (OCI):

Particulars For the year ended March 31, 2024 For the year ended March 31, 2023
Gratuity Provident Pension Total Gratuity Provident Pension Total
fund fund
(Funded) (Funded) (Unfunded) (Funded) (Funded) (Unfunded)
a. Actuarial (gain)/ loss due to (4) - - (4) (1) - - (1)
demographic assumptions
changes in DBO
b. Actuarial (gain)/ loss due to 1 - - 1 (2) 0 - (2)
financial assumptions changes
in DBO
c. Actuarial (gain)/ loss due to (1) (0) - (1) (2) 1 - (0)
experience on DBO
d. Return on plan assets (greater)/ 0 7 - 7 5 (2) - 4
less than discount rate
e. Movement in asset ceiling - - - - - - - -
(gain)/ loss
Total actuarial (gain)/ loss included (4) 7 - 3 1 - - 1
in OCI
* The actuarial loss has been recorded after netting off the provision.

F. Total cost recognised in comprehensive income:

Particulars For the year ended March 31, 2024 For the year ended March 31, 2023
Gratuity Provident Pension Total Gratuity Provident Pension Total
fund fund
(Funded) (Funded) (Unfunded) (Funded) (Funded) (Unfunded)
Expense recognised in Profit and Loss 7 3 - 10 2 14 0 16
(Refer note 25)
Remeasurements effects recognised in (4) 7 - 3 1 - - 1
OCI
Total cost recognised in Comprehensive 3 10 - 13 2 14 0 16
Income

277
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
G. Investment details of plan assets:

Particulars As at March 31, 2024 As at March 31, 2023

Gratuity Provident fund Gratuity Provident fund
Government securities - - - 74%
Private sector bonds - - - 7%
Public sector / financial institutional bonds - - - 3%
Special deposit scheme - - - 4%
Pooled assets with an insurance Group 100% - 100% -
Others (including bank balances) 0% - 0% 12%
100% 100% 100%

H. Assumptions:

Particulars As at March 31, 2024 As at March 31, 2023

Gratuity Provident Pension Gratuity Provident Pension
fund fund
(Funded) (Funded) (Unfunded) (Funded) (Funded) (Unfunded)
Discount rate (per annum) 7.21% NA NA 7.32% 7.39% 7.32%
Rate of increase in compensation levels 10% NA NA 10% 10% NA
Attrition rate 10% - 15% NA NA 5% - 12% 5% - 12% NA
Mortality rates IALM* (2012- NA IALM* (2012- IALM* (2012- IALM* (2012- IALM* (2012-
14) Ultimate 14) Ultimate 14) Ultimate 14) Ultimate 14) Ultimate
table table table table table

*IALM: Indian Assured Lives Mortality

Note 39(c): Sensitivity analysis:

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is provided below:

Gratuity:

Particulars Changes in assumptions (Decrease)/ Increase in defined benefit obligation

Increase in assumption Decrease in assumption
March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023
Discount rate 1% 1% (4) (5) 5 6
Compensation levels 1% 1% 4 6 (4) (5)

Provident Fund:

Particulars Changes in assumptions (Decrease)/ Increase in defined benefit obligation

Increase in assumption Decrease in assumption
March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023
Discount rate NA 1% NA (5) NA 11
Compensation levels NA 1% NA 10 NA (5)

278
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
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 and 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.

Note 39(d): Risk exposure:

Through its defined benefit plans, Holding Company is exposed to number of risks, the most significant of which are detailed below:
Asset volatility The plan liabilities are calculated using a discount rate set with reference to yields of government securities; if plan
assets underperform this yield, this will create a deficit. Plan asset investments for gratuity are made in pre-defined
insurance plans. These are subject to risk of default and interest rate risk. The fund manages credit risk/ interest
rate risk through continuous monitoring to minimise risk to an acceptable level.
Inflation risk In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk.
Life expectancy The pension plan provides benefits for the life of the member, so increases in life expectancy will result in an
increase in the plans’ liabilities. This is particularly significant where inflationary increases result in higher sensitivity
to changes in life expectancy.

The Holding 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 consists of government and public sector bonds, although the Holding 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 regulations.

Note 39(e): Effect of the defined benefit plan on the entity’s future cash flows

The Group does not expect to contribute any amounts into the gratuity plan assets during the year ending March 31, 2025, considering the
net surplus portion as at March 31, 2024. The Group is expected to contribute NIL amount (2024: ` 15 crore) to Provident fund during the year
ending March 31, 2025.

The weighted average duration of the defined benefit obligation is 4.62 years (2023: 6.46 years). The expected maturity analysis of undiscounted
provident fund and gratuity is as follows:
March 31, 2024 Less than Between Between Over Total
a year 1-2 years 2- 5 years 5 years
Gratuity 27 21 32 78 158
Provident fund NA NA NA NA NA
Total 27 21 32 78 158

March 31, 2023 Less than Between Between Over Total

a year 1-2 years 2- 5 years 5 years
Gratuity 21 8 43 106 177
Provident fund 41 45 159 374 619
Total 62 52 202 480 796

Note:
The estimates of future increase in compensation levels, considered in the actuarial valuation, take into account inflation, seniority, promotion
and other relevant factors such as supply and demand in the employment market.

279
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Note 40: Long term contracts, including derivative contracts

The Group does not have any derivative contracts as at March 31, 2024. The Group has a process whereby periodically all long term contracts
are assessed for material foreseeable losses. No provision for material foreseeable losses is considered necessary based on the review of such
contracts as at year end.

Note 41A: Historical matters

(a) Additional Inquiry and other regulatory matters

As disclosed in each of the annual financial statements commencing from year ended March 31, 2014, upon completion in April 2015
of an inquiry into past improper transactions (‘Initial Inquiry’) which identified references to certain additional parties and certain
additional matters, the then MD & CEO, pursuant to the direction of the Board of Directors, carried out an additional inquiry into
past improper transactions (‘Additional Inquiry’) which was completed in July 2016. The Additional Inquiry prima facie identified
transactions indicating actual and potential diversion of funds from the Holding Company and its Indian and overseas subsidiaries
to, in most cases, Indian and overseas entities that appeared to be affiliated or associated with the Holding Company’s former non-
executive chairman, Dr. Vijay Mallya, and other potentially improper transactions. All amounts identified in the Additional Inquiry have
been provided for or expensed in the financial statements of the Holding Company or its subsidiaries in the respective prior periods.
The Holding Company has filed recovery suits against relevant parties and individuals identified pursuant to the Additional Inquiry.
Additionally, the Holding Company has also filed a suit for recovery of excess managerial remuneration amounting to ` 13 crores
paid to the former Executive Director and CFO (ED & CFO) for the year ended March 31, 2015. The receivable recorded for excess
managerial remuneration has been fully provided for.

As disclosed in each of the annual financial statements commencing from the year ended March 31, 2014, in relation to the above-
mentioned Initial Inquiry and Additional Inquiry and the matters arising out of the settlement agreement dated February 25, 2016
entered into by the Holding Company with Dr. Vijay Mallya pursuant to which, inter alia, the Holding Company and Dr. Vijay Mallya
agreed a mutual release in relation to matters arising out of the Initial Inquiry (‘Agreement’), the Holding Company received letters and
notices from the Securities Exchange Board of India (‘SEBI’) during the year ended March 31, 2016 to which the Holding Company has
responded. There has been no further communication with SEBI on these matters since the Holding Company’s response in October
2017.

As disclosed in each of the annual financial statements commencing from the year ended March 31, 2014, in connection with the
investigations carried out by the Directorate of Enforcement (‘ED’) under the Foreign Exchange Management Act, 1999 and Prevention
of Money Laundering Act, 2002, the Holding Company received letters and notices from ED during the year ended March 31, 2016,
to which the Holding Company responded. During the year ended March 31, 2022, the Holding Company received a notice from the
ED requesting for information, which the Holding Company has provided. The Holding Company has also received queries from its
authorized dealer banks, based on queries from the Reserve Bank of India (‘RBI’), with regard to remittances made in the prior years by
the Holding Company to its overseas subsidiaries, past acquisitions and Annual Performance Reports (‘APR’) for prior years, to which
the Holding Company has responded.

As disclosed in each of the annual financial statements commencing from the year ended March 31, 2019, with the objective of divesting
its non-core assets, the Holding Company reviewed its subsidiaries’ operations, obligations, and compliances, and recommended a
plan for rationalisation through sale, liquidation or merger (“Rationalisation Process”). After receiving approval from the Board, the
Holding Company has been taking steps to implement this plan. The Rationalisation Process for the existing subsidiaries is subject to
regulatory and other approvals (in India and overseas). If any historical non-compliances are established during the Rationalisation
Process, the Holding Company will consult with its legal advisors, and address any such issues including, if necessary, considering filing
appropriate compounding applications with the relevant authorities. At this stage, it is not possible for the management to estimate the
financial impact on the Group, if any, arising out of potential non-compliances with applicable laws, if established.

280
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
(b) Preparation of financial statements of subsidiaries on liquidation basis

Consequent to the Rationalisation Process, the financial information of the following subsidiaries included in the consolidated financial
results have been prepared on a liquidation basis (i.e. “break up” basis) i.e. (i) USL Holdings Limited, (ii) USL Holdings (UK) Limited,
(iii) United Spirits (UK) Limited, (iv) United Spirits (Great Britain) Limited, (v) McDowell & Co. (Scotland) Limited, (vi) Shaw Wallace
Overseas Limited and (vii) Asian Opportunities and Investments Limited. Accordingly, assets and liabilities of such subsidiaries have
been recognized at their fair values that approximate their carrying values as at March 31, 2024. Such remeasurement did not have
any material impact on the consolidated financial statements.

(c) Notices from the Ministry of Corporate Affairs

As disclosed in each of the annual financial statements commencing from year ended March 31, 2016, and pursuant to the inspection
conducted by Ministry of Corporate Affairs (‘MCA’) during the year ended March 31, 2016, under Section 206(5) of the Companies Act,
2013, MCA issued show cause notices alleging violation of certain provisions of the Companies Act, 1956 and Companies Act, 2013,
to which the Holding Company had responded. As at the year ended March 31, 2024, the Holding Company is awaiting response
from the Registrar of Companies (RoC) on one compounding application and one show cause notice wherein the Holding Company
had requested the RoC to discontinue further proceedings based on expert legal advice received. The penalty and compounding
fees arising out of adjudication applications and compounding application are not material. The management is of the view that in
line with the past compounding / adjudication orders, the financial impact arising out of compounding / adjudication of the residual
matters will not be material to the Holding Company’s financial statements.

(d) Loan to United Breweries (Holdings) Limited (‘UBHL’)

As disclosed in each of the annual financial statements commencing from year ended March 31, 2015, the Holding Company had
pre-existing loans / deposits / advances / accrued interest that were due to the Holding Company and its subsidiaries from UBHL
and its subsidiaries aggregating to ` 1,337 crores and that were consolidated into, and recorded as, an unsecured loan through
an agreement entered into between the Holding Company and UBHL on July 3, 2013 (‘Loan Agreement’). UBHL defaulted on its
obligations to pay any amounts under the Loan Agreement. The Holding Company had made provision in prior financial years for the
entire principal amount due of ` 1,337 crores, and for the accrued interest of ` 85 crores up to March 31, 2014. The Holding Company
has not recognised interest income on said loan after March 31, 2014 which cumulatively amounts to ` 1,225 crores up to March 31,
2024. The Holding Company has cumulatively offset ` 206 crores payable to UBHL arising under a trademark license agreement
against the principal amount of loan and interest accrued thereon.

Since UBHL had defaulted on its obligations under the Loan Agreement, the Holding Company sought redressal of disputes and
claims through arbitration under the terms of the Loan Agreement. In April 2018, the arbitral tribunal passed a final award against
the Holding Company. The reasons for this adverse award were disputed by the Holding Company, and the Holding Company
obtained leave from the High Court of Karnataka to challenge this arbitral award. In July 2018, the Holding Company filed a petition
challenging the said award before the Jurisdictional Court in Bangalore (the “Court”).

The Court issued notice pursuant thereto to the Official Liquidator (OL). The Company filed its claim with the OL. Notwithstanding the
arbitral award, based on management assessment supported by an external legal opinion, the Holding Company has offset payable
to UBHL under the trademark license agreement against the balance of loan receivable from UBHL. During the quarter ended June
30, 2023, the OL filed an application before the High Court of Karnataka, seeking avoidance of setoff by the Holding Company of the
above license fee payments and recovery of the entire license fee payable under trademark license agreement with interest. Based
on the Management assessment supported by external legal opinions, the Holding Company continues to believe that it has a good
case on merits. The Holding Company is contesting the application filed by the OL and has filed its statement of objections during the
quarter ended September 30, 2023. The OL has subsequently filed its rejoinder during the quarter ended March 31, 2024. The Official
Liquidator (UBHL) has filed another claim before the High Court of Karnataka, purportedly as loans and advances repayable to UBHL
by the Holding Company, without substantiating the basis of such a claim. USL has denied this purported debt and is contesting this
claim. The Holding Company believes it has a good case on merits.

281
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
(e) Dispute with IDBI Bank Limited

As disclosed in each of the annual financial statements commencing from year ended March 31, 2015, during the year ended March
31, 2014, the Holding Company prepaid a term loan taken from IDBI Bank Limited (the “bank”) in earlier years which was secured by
certain property, plant and equipment and brands of the Holding Company as well as by a pledge of certain shares of the Holding
Company held by the USL Benefit Trust (of which the Company is the sole beneficiary). The bank disputed the prepayment, following
which the Holding Company filed a writ petition (“WP”) in November 2013 before the Hon’ble High Court of Karnataka (‘High Court’)
challenging the actions of the bank.

In February 2016, following the original maturity date of the loan, the Holding Company received a notice from the bank seeking to
recall the loan and demanding a sum of ` 46 crores on account of outstanding principal, accrued interest and other amounts as also
further interest till the settlement date as per the security documents. The Holding Company challenged this notice in the pending writ
proceedings during which the High Court directed that, subject to the Holding Company depositing ` 46 crores with the bank in a
suspense account, the bank should not deal with any of the secured assets including the shares until disposal of the writ petition. The
Holding Company deposited the full amount, and the bank was restrained from dealing with any of the secured assets.

In June 2019, a single judge bench of the High Court dismissed the Holding Company’s writ petition, amongst other reasons, on the
basis that the matter involved an issue of breach of contract by the Holding Company and was therefore not maintainable in exercise
of the court’s writ jurisdiction. The Holding Company filed an appeal against this order before a division bench of the High Court, which
was admitted and interim protection on the secured assets was reinstated. The writ appeal is pending.

Based on management assessment supported by external legal opinions, the Holding Company continues to believe that it has a
strong case on merits and therefore continues to believe that the aforesaid amount of ` 46 crores remains recoverable from the bank.

In a separate proceeding before the Debt Recovery Tribunal (DRT), Bengaluru, initiated by a consortium of banks (including the bank)
for recovery of loans advanced by the consortium of banks to Kingfisher Airlines Limited (KAL), the bank filed an application for
attachment of the pledged shares belonging to USL Benefit Trust. DRT dismissed the said application of the bank and the bank filed
an appeal against this order before the Debt Recovery Appellate Tribunal (‘DRAT’), Chennai in September 2017. The bank’s appeal is
pending for final hearing by the DRAT.

41B : Customer claim

During the quarter ended December 31, 2023, the Holding Company received a claim from one of its institutional customers, amounting to `
365 crores inclusive of penalty. Subsequently, the Holding Company has not received any further collections from the customer till the end of the
financial year i.e. March 31, 2024 . The claim pertains to a historical matter regarding differential trade terms and was disclosed in the annual
financial statements for the years ended March 31, 2017, March 31, 2018, March 31, 2021 and March 31, 2022. The impact of the settlement was
accounted for and disclosed in the financial statements for the earlier years. Management’s assessment is that the claim from the customer
is unreasoned, arbitrary in nature and is in violation of the principles of natural justice. Management is of the view that matter was resolved
and settled in full in the prior years. Management has therefore not acknowledged the claim from the customer and has chosen to litigate
as per the legal remedies available. The Holding Company filed a petition under the Arbitration and Conciliation Act 1996 (the “Act”) before
the Bombay High Court, seeking interim relief of releasing the withheld payments and to not withhold payments pending constitution of the
arbitration tribunal. This is scheduled to be heard on June 24, 2024. Further, the Holding Company has also filed an application under Section
11 of the Act before the Bombay High Court, seeking the appointment of an arbitrator. The application under Section 11 is yet to be heard.
Management, supported by external legal opinion, believes that it has a good case on merits with a high probability of success in realising
the withheld payments. Management has also determined that the receivable from the customer at March 31, 2024 is good and recoverable.

282
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Note 42: Capital and other commitments:

Particulars As at As at
March 31, 2024 March 31, 2023
(a) Capital commitments for property, plant and equipment 27 49
(b) Other commitments:
i. Advertisement, sales promotion and trade-mark fee. 51 58
ii. Minimum offtake commitment for purchase of bulk scotch from a related party. 123 410
iii. Relating to BCCI-IPL Franchise 9 6

Note 43: Contingent liabilities

Particulars As at As at
March 31, 2024 March 31, 2023
(a) Income tax matters 237 233
(b) Indirect tax matters
(i) State excise 118 115
(ii) Central excise 0 0
(iii) Sales tax and entry tax 437 417
(iv) Goods and Services tax 0 12
(v) Service tax 35 36
(c) Other civil litigations and claims 119 142

Notes:
(a) Income tax matters- Income tax matters primarily relate to exposures under transfer pricing and disallowance of certain expenses that
the Group had claimed as deductions in its Income tax returns.
(b) Indirect tax matters- The Group has operations across various states in India. The Group has identified possible exposures relating to
local sales tax, entry tax, state excise duty, goods and services tax and central excise duty.
(c) Other civil litigations and claims- Other civil litigations relate to various claims from third parties under dispute which are lying with
various courts/ appellate authorities.
(d) Provident fund- The Group has evaluated the impact of the Supreme Court (“SC”) judgement dated February 28, 2019 in the case
of Regional Provident Fund Commissioner (II) West Bengal v/s Vivekananda Vidyamandir and Others, in relation to non-inclusion
of certain allowances in the definition of “basic wages” of the relevant employees for the purposes of determining contribution to
Provident Fund (“PF”) under the Employees’ Provident Fund & Miscellaneous Provisions Act, 1952. There are interpretation issues
relating to the said SC judgement. In the assessment of the management, the aforesaid matter is not likely to have a significant impact
on the Group and accordingly, no provision has been made in the financial statements.
(e) Use of judgement
Management categorizes the matters based on the probability of cash outflow, which require judgement. Management obtains the
views of external consultants where necessary. Based on the assessment, management recognises liability / provision, or discloses the
matter as a contingent liability, except for matters where the probability of outflow of cash is considered remote. Due to uncertainties
involved in the process, actual outflows may be different from those originally estimated.
The Group may be involved in legal proceedings in respect of which it is not possible to make a reliable estimate of any expected
settlement. In such cases, management has determined that any potential future cash outflows are not likely to be material.

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Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
(f) Management is optimistic of a favourable outcome in the above matters based on legal opinions / management assessment. 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.
(g) Contingent liabilities above do not include demands with respect to income tax and indirect tax matters wherein the Group has
assessed the probability of outflows of economic benefits to be remote.

Note 44: Research expenses

Particulars For the year ended For the year ended

March 31, 2024 March 31, 2023
Salaries and wages 9 7
Contribution to provident fund and other funds 1 0
Staff Welfare expense 0 0
Rent 1 1
Miscellaneous 8 7
Total Research expenses 19 15

Note 45: Interest in other entities

(a) Subsidiaries / Controlled Trusts

Name of the entity % of ownership interest

Country of Principal business
As at As at Incorporation Activity
March 31, 2024 March 31, 2023
Subsidiaries:
1. Royal Challengers Sports Private Limited 100 100 India BCCI - IPL and WPL
franchises
2. McDowell & Co. (Scotland) Limited 100 100 Scotland, U.K. Dormant
3. Asian Opportunities and Investments 100 100 Mauritius Dormant
Limited
4. Palmer Investment Group Limited 100 100 British Virgin Islands Dormant
5. Shaw Wallace Overseas Limited 100 100 U.K. Dormant
6. USL Holdings Limited 100 100 British Virgin Islands Dormant
7. USL Holdings (UK) Limited 100 100 U.K. Dormant
8. United Spirits (UK) Limited 100 100 U.K. Dormant
9. United Spirits (Great Britain) Limited 100 100 U.K. Dormant
Controlled Trust:
USL Benefit Trust 100 100 India Investment in shares
of holding company

(b) Interest in an Associate

During the prior year, Group acquired the interest in Nao Spirits & Beverages Private Limited (“Nao Spirits”) by investing ` 32 crores by
subscribing to 8,094 Compulsory Convertible Preference Shares and 4,670 equity shares. During the current year, the Group infused
additional amount of ` 15 crores by subscribing to 6078 compulsorily convertible preference shares. The Group holds 30% ownership

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 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
interest on a fully diluted basis (11% of equity ownership interest) as at March 31, 2024. Management has considered Nao Spirits to be
an associate since the company has significant influence over its operating and financing decisions.

In accordance with the Shareholder’s agreement, the Holding Company has a right to purchase all or any of the shares held by
promoters, existing investors and other shareholders upon occurrence of earlier of the Nao Spirits achieving the specified sales volume
threshold (or) March 31, 2025. The exercise price of the call option shall be determined in accordance with a formula specified in the
Shareholder’s Agreement. As at March 31, 2024, fair value of the said call option has been determined to be immaterial.

(c) Inspired Hospitality Private Limited

On April 4, 2024, the Group invested ` 6 crores in Inspired Hospitality Private Limited (“Inspired Hospitality”) by subscribing to 3,494
Compulsory Convertible Preference Shares and 10 equity shares of Inspired Hospitality, resulting in the Group holding 15% ownership
interest on a fully diluted basis. Management has considered Inspired Hospitality to be a joint venture since the Group has joint control
over its operating and financing decisions.

(d) Share of profit and assets of subsidiaries / associate

Name of the entity Net assets, i.e., total Share in profit/(loss) Share in other Share in total
assets minus total comprehensive income comprehensive income
liabilities
% of Amount % of Amount % of Amount % of Amount
consolidated consolidated consolidated consolidated
assets profit/(loss) other total
comprehensive comprehensive
income income
I. Parent Company
United Spirits Limited 95% 6,795 85% 1,192 100% (3) 85% 1,189
II. Indian Subsidiaries/controlled trust
1. Royal Challengers Sports Private Limited 4% 297 16% 221 - - 16% 221
2. USL Benefit Trust 0% 9 (0%) (2) - - (0%) (2)
III. Associates
Nao Spirits & Beverages Private Limited 0% - (0%) (1) - - (0%) (1)
IV. Overseas Subsidiaries
1. Asian Opportunities and Investments Limited 0% 1 (0%) (0) - - (0%) (0)
2. McDowell & Co. (Scotland) Limited 0% 14 0% 0 - - 0% 0
3. Shaw Wallace Overseas Limited 0% 2 (0%) (0) - - (0%) (0)
4. United Spirits (Great Britain) Limited (0%) (0) (0%) (0) - - (0%) (0)
5. United Spirits (UK) Limited (0%) (0) (0%) (0) - - (0%) (0)
6. USL Holdings Limited 0% 3 (0%) (0) - - (0%) (0)
7. USL Holdings (UK) Limited (0%) (0) (0%) (0) - - (0%) (0)
8. Palmer Investment Group Limited 0% 0 (0%) (0) - - (0%) (0)
Total 100% 7,121 100% 1,408 100% (3) 100% 1,405

Note: Net assets given above exclude inter-company balances and treasury shares. Share in profit or loss, other comprehensive income and
total comprehensive income exclude inter-company transactions.

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UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Note 46: Segment reporting

Segment Information

The Group is engaged in the business of manufacture, purchase and sale of beverage alcohol and other allied spirits, including through
tie-up manufacturing units and through strategic franchising of some of its brands. In addition, the Group holds perpetual right to the Royal
Challengers Bengaluru (RCB) cricket franchise of Indian Premier League (IPL) and Women’s Premier League (WPL).

The Operating Segment is the level at which discrete financial information is available. Business segments are identified considering:

(a) the nature of products and services

(b) the differing risks and returns

(c) the internal organisation and management structure, and

(d) the internal financial reporting systems.

Revenue and expenses directly attributable to segments are reported under each reportable segment. Exceptional items and other expenses
which are not attributable or allocable to segments are disclosed separately. Assets and liabilities that are directly attributable or allocable
to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable assets and liabilities.

The Executive Committee of the Holding Company has been identified as the Chief Operating Decision Maker (CODM). The CODM of the
Holding Company assesses performance and allocates resources for the business of the Group. Effective April 1, 2023, the Management
has reassessed the composition of its segments. Accordingly, the operating segments have been changed from single operating segment to
following operating segments:

• Beverage alcohol – Manufacture, purchase, franchise and sale of beverage alcohol and other allied spirits.

• Sports – Rights to operate sports franchise.

Consolidated Segment wise Revenue, Results, Assets and Liabilities as of and for the year ended on March 31, 2024

Particulars Year ended

March 31,2024 March 31, 2023
1 Segment Revenue
Beverage Alcohol 10,692 10,374
Sports 635 244
Total Net Segment Revenue 11,327 10,618
Inter segment elimination (6) (6)
Net Segment Revenue 11,321 10,612
Add: Excise duty (Beverage alcohol) 14,697 17,204
Revenue from operations 26,018 27,816

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 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Particulars Year ended
March 31,2024 March 31, 2023
2 Segment Results - Earning before interest, tax, depreciation and exceptional items
(EBITDA)
Beverage Alcohol 1,707 1,424
Sports 294 (6)
Total Segment results 2,001 1,418
Other income 225 73
Depreciation, amortisation and impairment expense
Beverage Alcohol (264) (275)
Sports (11) (8)
Finance costs (76) (104)
Exceptional items net gain/(loss) - Beverage Alcohol (17) 176
Share of net (loss) in associate accounted for using equity method (1) (1)
Profit before tax 1,857 1,279
3 Segment Assets
Beverage Alcohol 10,598 9,424
Sports 657 436
Total segment assets 11,255 9,860
Inter-Segment elimination (6) (99)
Total Assets 11,249 9,761
4 Segment Liabilities
Beverage Alcohol 3,777 3,629
Sports 357 232
Total segment liabilities 4,134 3,861
Inter-Segment elimination (6) (99)
Total liabilities 4,128 3,762

Additional Information by Geographies

Although the Group’s operations are managed basis type of product (or) service, additional information about external revenues and non-
current assets based on geographies of the customers and assets is as provided below:
Particulars Year ended
March 31,2024 March 31, 2023
Revenue from contracts with customers
India 25,812 27,625
Outside India 144 133
25,956 27,758
Non-current Assets
India 3,872 3,527
Outside India - -
3,872 3,527

The Group has one external customer (2023: one external customer) individually contributing 18 percent of the Group’s revenues (2023: 30
percent).

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UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Note 47: Exceptional items

a) Transfer pursuant to sale of business undertaking

During the year ended March 31, 2023, the Group (i) completed the slump sale of the entire business undertaking associated with 32
brands in the ‘Popular’ segment to Inbrew Beverages Private Limited (“Inbrew”); and (ii) given effect to the franchise of 11 other brands
in the ‘Popular’ segment in favour of Inbrew for a period of five years, with an option for Inbrew, subject to certain conditions, (a) to
convert the fixed term franchise arrangement into a franchise arrangement with perpetual right to use; and / or (b) to acquire such
brands (collectively, the “Transaction”).

In line with the terms of the slump sale agreement, all the assets and liabilities related to the business undertaking were transferred
to Inbrew for a consideration of ` 818 crores (after certain pre-closure adjustments) and a profit on sale of the business undertaking
amounting to ` 380 crores (net-off costs attributable towards sale and accruals) was recognized as an ‘exceptional item’ during the
year ended March 31, 2023.

During the year ended March 31, 2024, the Holding Company has satisfied last of the post-closure conditions for sale of the undertaking
and has consequently recognised the unrecognised gain on sale amounting to ` 31 crores and has presented it as an exceptional item.
Also refer note 29(a).

Pursuant to the slump sale agreement the Holding Company opened an account with a bank and has authorised designated
signatories from Inbrew to operate the account. The bank account was opened for the sole purpose of facilitating Inbrew to receive
collections from a Government customer and make payments towards liabilities of Inbrew, until certain licenses are transferred to
Inbrew. The Holding Company does not have a present right to appoint authorised signatories and has no right to the economic
benefits in respect of the balance in this account. Accordingly, the Holding Company has not recognised the transactions and the
balance in the said bank account in these financial statements.

b) Supply agility programme

During the year ended March 31, 2023, the Board of Directors of the Holding Company have approved a multi-year supply chain
agility programme. The programme primarily is directed towards the optimization of the existing manufacturing footprint with an
intent to strengthen its end-to-end supply chain and make it fit for the future. The total implementation cost of the supply chain agility
programme, majority of which are expected to be recognized as exceptional items, will be recorded when the recognition criteria are
satisfied.

During the year ended March 31, 2023, the Holding Company has recognised a provision of ` 157 crores under exceptional items,
towards the impairment loss on property, plant and equipment covered under the programme by writing down their carrying amounts
to net realizable values which includes provision on certain land holdings on account of potential regulatory risks (impaired based on
independent valuation) and severance cost relating to a closed unit.

During the year ended March 31, 2024, the Holding Company has recongnised an additional provision of ` 48 crores under
exceptional items, towards impairment loss of property, plant and equipment covered under the programme by writing down their
carrying amounts to net realizable values and severance cost relating to some closed units. (refer note 29(b)).

Note 48: Additional regulatory information required by Schedule III

i. Details of benami property held

The Holding company and it’s subsidiary in India does not hold any benami property. No proceedings have been initiated or are
pending against the Holding company and it’s subsidiary in India for holding benami property under the Benami Transactions
(Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

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 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
ii. Borrowing secured against current assets

The Holding company and it’s subsidiary in India have no borrowings from banks and financial institutions on the basis of security of
current assets.

iii. Willful defaulter

None of the Entities in the The Holding company and it’s subsidiary in India have been declared willful defaulter by any bank or
financial institution or government or any government authority.

iv. Relationship with struck off companies

The Holding Company and it’s subsidiary in India have no transactions with the companies struck off under the Companies Act, 2013
or the Companies Act, 1956 except for the following:

Name of the struck off company Nature of transactions with the struck Balance Balance Relationship
off company outstanding as at outstanding as at with the struck
March 31, 2024 March 31, 2023 off company
Rmb Hospitality (India) Private Sales of goods and receipt of 0 0 Customer
Limited consideration
Srisri Creations Jewels And No transactions during the period 0 0 Customer
Handicrafts Private Limited
Alkanet Hospitality Private Limited Sales of goods and receipt of 0 - Customer
consideration
Charuu Multi Services Private Sales of goods and receipt of - 0 Customer
Limited consideration
Crudex Lng Petroleum Private Sales of goods and receipt of 0 0 Customer
Limited consideration

v. Compliance with number of layers of companies

The Holding Company and it’s subsidiary have ensured compliance with Section 2(87) of the Companies Act, 2013, read with the
Companies (Restriction on Number of Layers) Rules, 2017 (‘Layering Rules’).

vi. Utilisation of borrowed funds and share premium

The Holding Company and it’s subsidiary in India have not advanced or loaned or invested funds to any other person(s) or entity(ies),
including foreign entities (intermediaries).

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding
party (ultimate beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

The Holding Company and it’s subsidiary have not received any fund from any person(s) or entity(ies), including foreign entities
(funding party) with the understanding (whether recorded in writing or otherwise) that the Holding Company and it’s subsidiary in India
shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding
party (ultimate beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

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UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
vii. Undisclosed income

There is no income surrendered or disclosed as income during the current or prior year in the tax assessments under the Income Tax
Act, 1961, that has not been recorded in the books of accounts of the Holding Company and it’s subsidiary in India.

viii. Compliance with approved scheme(s) of arrangements

The Board of Directors (“Board”) of PDL and of the Holding Company at their respective meetings held on December 2, 2019 considered
and approved a scheme of amalgamation and arrangement (the “Scheme”) in relation to the amalgamation of PDL with the Holding
Company under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 and the rules thereunder. The
scheme was approved by the National Company Law Tribunal (NCLT) on November 4, 2022. The Holding company and it’s subsidiary
in India have not entered into any such scheme of arrangement which has an accounting impact on current financial year.

ix. Loans or advances to specified persons

The Holding Company and it’s subsidiary in India have not granted any loans or advances to promoters, directors, KMPs and the
related parties (as defined under Companies Act, 2013), either severally or jointly with any other person, expect for the parties
mentioned under Note 46(b) that are:

(a) Repayable on demand

(b) without specifying any terms or period of repayment

x. Details of crypto currency or virtual currency

The Holding Company and it’s subsidiary in India have not traded or invested in crypto currency or virtual currency during the current
or prior year.

xi. Valuation of property, plant and equipment, intangible asset and investment property

The Holding Company and it’s subsidiary in India have not revalued its property, plant and equipment or intangible assets or both
during the current or previous year.

xii. Utilisation of borrowings taken from banks and financial institutions for specific purpose

The Holding Company and it’s subsidiary in India have not availed borrowings from any banks or financial institutions during the year
for a specific purpose.

Note 49 - Summary of other accounting policies

49.1 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.

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 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
The acquisition method of accounting is used to account for business combinations by the Group except for common control
transactions.

The Group combines the financial statements of the parent and its subsidiaries 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 49% 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 entity.

Unrealized gains on transactions between the Group and its associates 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 49.4
below.

The Group does not have any investments in joint ventures.

(iv) Changes in ownership interests

When the Group ceases to consolidate or equity account for an investment because of a loss of control or significant influence, any
retained interest in the entity is re-measured 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 an associate is reduced but 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.”

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UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
49.2 Property, plant and equipment

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 expenses in the nature of 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 at the balance sheet date, are disclosed as capital work-
in-progress.

Disposals

Gains and losses on disposals are determined by comparing proceeds with the carrying amounts. These are accounted in Statement of profit
and loss within Other income / Other expenses, on a net basis.

Transition to Ind AS

On transition to Ind AS, the Group has elected to continue with the carrying value of all of its property, plant and equipment measured as per
the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.

49.3 Intangible assets

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, future 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.

Impairment of assets

Intangible assets that have an indefinite useful life are not subject to amortisation and are tested for impairment at least annually, or more
frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment at least annually
or 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 purpose 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 group has elected to continue with the carrying value of all of intangible assets measured as per the previous GAAP
and use that carrying value as the deemed cost of intangible assets.

49.4 Investment in Associates

Investments in associates are carried at cost/ deemed cost, less accumulated impairment losses, if any. 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.

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 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
On disposal of investments in associates, the difference between net disposal proceeds and the carrying amounts are recognised in the
Statement of profit and loss.

On adoption of Ind AS, Group has measured these investments at deemed cost using the net carrying value as per previous GAAP as at March
31, 2015. The Group has subsequently measured its investments in equity shares of the associate at cost in accordance with Ind AS 27.

49.5 Financial instruments

A) Financial assets:

a) Recognition and measurement

Financial assets are recognised when the Group becomes a party to the contractual provisions of the instrument.

On initial recognition, all financial assets except trade receivables are recognised at fair value. Financial assets are subsequently
classified and measured at amortised cost. Financial assets are not reclassified subsequent to their recognition, except if and in
the period the Group changes its business model for managing financial assets.

i) Loans

On initial recognition, loans are measured at fair value. Since the objective is to hold these financial assets to collect
contractual cash flows that are solely payments of principal and interest, these assets are subsequently measured at
amortised cost using the EIR method less impairment, if any.

ii) Other financial assets:

On initial recognition, other financial assets are measured at fair value, and subsequently, measured at the amortised cost,
less impairment if any. Loss arising from impairment, if any is recognised in the Statement of Profit and Loss.

b) Derecognition

The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it
transfers the contractual rights to receive the cash flows from the asset.

c) Impairment of financial assets

The Group applies Expected Credit Losses (ECL) model for measurement and recognition of loss allowance on trade receivables
and other financial assets measured at amortised cost.

In case of trade receivables, the Group follows the provision matrix approach (as permitted by Ind AS 109) wherein an amount
equal to lifetime ECL is measured and recognised as loss allowance.

The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and
is adjusted for forward-looking estimates. At each reporting date, the historically observed default rates and changes in the
forward-looking estimates are updated.

In case of other financial assets, the Group determines if there has been a significant increase in credit risk of the financial
asset since initial recognition. If the credit risk of such assets has not increased significantly, an amount equal to 12-month ECL is
measured and recognised as loss allowance. However, if credit risk has increased significantly, an amount equal to lifetime ECL
is measured and recognised as loss allowance. Subsequently, if the credit quality of the financial asset improve such that there is
no longer a significant increase in credit risk since initial recognition, the Group reverts to recognising impairment loss allowance
based on 12-month ECL.

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UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
ECL is the difference between all contractual cash flows that are due to the Group in accordance with the contract and the cash
flows that the Group expects to receive (i.e., cash shortfalls), discounted at the original effective interest rate.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial asset.
12-month ECL are a portion of the lifetime ECL which result from default events that are possible within 12 months from the
reporting date.

ECL are measured in a manner that they reflect probability weighted amounts determined by a range of outcomes, taking into
account the time value of money and other reasonable information available as a result of past events, current conditions and
forecasts of future economic conditions.

ECL impairment loss allowance (or reversal) recognised during the period is recognised as income / expense in the Consolidated
Statement of Profit and Loss under the head ‘Loss allowance on trade receivables and other financial assets’.

d) Income recognition

Dividend income on investments is recognised and accounted for when the right to receive the payment is established, it
probable that the economic benefits associated with the dividend will flow to the Group, and the amount of the dividend can be
measured reliably.

Interest income is accounted for on a time-proportion basis using effective interest rate method taking into account the amounts
invested and the rate of interest, except for financial assets that subsequently become credit impaired.

For credit-impaired financial assets the effective interest rate is applied to the net carrying amount of the financial asset (after
deduction of the loss allowance).

B) Financial liabilities:

a) Recognition and measurement

Financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument. On initial
recognition, financial liabilities are measured at fair value and subsequently measured at amortised cost.

Trade and other payables

In case of trade and other payables, they are initially recognised at fair value and subsequently, these liabilities are held at
amortised cost, using the effective interest rate method.

Trade and other payables 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.

b) Derecognition

The Group derecognises a financial liabilities when the contractual rights to the cash flows from the financial asset expire, or it
transfers the contractual rights to receive the cash flows from the asset.

c) Off-setting 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.

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 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
49.6 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 rendered 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 under ‘Other financial liabilities’ in the balance sheet.

b) Post-employment obligations

The Group’s defined benefit plans comprise 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).

Pension and gratuity obligations

The net liability or asset recognised in the balance sheet in respect of pension and gratuity (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.

Provident fund

The Group operates a defined benefit provident fund plan for certain category of eligible employees. The minimum statutory
rate at which the annual rate of interest is payable to the beneficiaries of such plan is declared by the Central Government. The
Group has an obligation to make good the shortfall if any, in the statutory rate prescribed by the Government and the rate of
interest declared by the Trust. The Group also has an obligation to fund any shortfall in the fair value of plan assets as compared
with the defined benefit obligation.

During the year, the Group has transferred its Provident Fund obligation from the Trust to Employee Provident Fund Organization
(EPFO). Consequently, the Plan has been accounted as a defined contribution plan.

Defined contribution plans

These are plans in which the Group pays pre-defined amounts to funds administered by government authority and the Group
does not have any legal or constructive obligation to pay additional sums. These comprise contributions in respect of Employees’
Provident Fund, Employees’ Pension Scheme, Employees’ State Insurance, Superannuation fund and National Pension Scheme.
The Group’s payments to the defined contribution plans are recognised as employee benefit expenses when they are due.

295
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
c) Other long-term employee benefit obligations

The liabilities for earned 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.

d) Termination benefits

Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or when an
employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits at the earlier
of the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the Group recognises
costs for a restructuring that is within the scope of Ind AS 37 and involves the payment of terminations benefits. In the case of
an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees
expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to
present value.

e) Share-based payments

Share based compensation benefits are provided to certain grades of employees in the form of United Spirits Limited- Stock
Appreciation Rights Plan, a cash settled scheme, and various equity settled schemes managed by Diageo group.

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 current / non-current provisions in the
balance sheet.

Diageo group share based payment arrangements

The fair value of equity settled share options based on shares of Diageo plc. (the ultimate holding Group) 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 recognises 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 plans are cross charged by Diageo group companies, the same is accounted for as a reduction from equity. To
the extent the amount or recharge exceeds the fair value of equity shares on the date of exercise, the same is recognised in the
Statement of Profit and Loss.

49.7 Income tax

Income tax expense 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.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. It establishes provisions
where appropriate on the basis of amounts expected to be paid to the tax authorities.

296
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
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. However, deferred tax liabilities are not recognised if they arise from initial recognition
of goodwill. 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 realized 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.

49.8 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. The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented in case
of share splits.

49.9 Provisions and contingencies

Provisions are recognised when the Group 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.

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 present
obligation where the likelihood of outflow of resources is remote, no provision or disclosure is made.

49.10 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.

297
UNITED SPIRITS LIMITED Annual Report 2023–24

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
Borrowings are derecognised 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.

49.11 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.

49.12 Government Grants

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions are
complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related
costs, for which it is intended to compensate, are expensed.

When the grant relates to property, plant and equipment, it is recognised as deferred income and recognised as income in Statement of Profit
and Loss over the expected useful life of the related asset. When loan or similar assistance are provided by government or related institutions,
with an interest rate below the current applicable market rate, the effect of this favourable interest is recognized at government rate. The loan
or assistance is initially recognized and measured at fair value and the government grant is measured as the difference between the initial
carrying value of the loan and the proceeds received.

49.13 Exceptional items

When an item of income or expense within Statement of profit and loss from ordinary activity is of such size, nature and incidence that its
disclosure is relevant to explain more meaningfully the performance of the Group for the year, the nature and amount of such items is disclosed
as exceptional items.

49.14 Equity

Own shares represent shares of the Group and those held in treasury by USL Benefit Trust. Pursuant to orders of the High Court of Karnataka
and the High Court of Bombay, shares held in aforesaid trust have been treated as an investment.

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.

49.15 Foreign currency translation

(i) Functional and presentation currency

The financial statements are presented in Indian Rupee (`), which is Group’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 the Consolidated Statement of Profit and
Loss.

298
 CORPORATE OVERVIEW Statutory Reports
Financial Statements

Notes to the Consolidated financial statements (Continued)

(All amounts in ` crores unless otherwise stated)
(iii) Transaction 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 are translated into the presentation currency 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. 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.

49.16 Rounding of amounts

For the year ended March 31, 2024, the Group has changed its’ currency denomination from ` millions to ` crores. Accordingly, all amounts
disclosed in the financial statements and notes have been rounded off to the nearest crores as per the requirement of Schedule III (Division II)
to the Act, unless otherwise stated. The sign ‘0’ in these financial statements indicates that the amounts involved are below ` fifty lakhs and
the sign ‘-’ indicates that amounts are nil.

For Price Waterhouse & Co Chartered Accountants LLP For and on behalf of the Board of Directors
Firm registration number: 304026E/E-300009
Chartered Accountants

Dibyendu Majumder Mahendra Kumar Sharma Hina Nagarajan

Partner Chairman Managing Director and Chief Executive Officer
Membership number: 057687 DIN: 00327684 DIN: 00048506
Place: Mumbai Place: Mumbai

V K Viswanathan Pradeep Jain

Director Executive Director and Chief Financial Officer
DIN: 01782934 DIN: 02110401
Place: Mumbai Place: Mumbai

Mital Sanghvi
Company Secretary
Place: Mumbai
Place: Mumbai
Date: May 24, 2024 Date: May 24, 2024

299
Notes
Corporate
Information
Executive Director and Registered & Corporate Office
Chief Financial Officer UB Tower, #24,
Pradeep Jain Vittal Mallya Road,
Bengaluru – 560 001

Vice President - Treasury &

Registrars & Transfer Agents
Company Secretary
Integrated Registry Management
Mital Sanghvi
Services Private Limited
30, Ramana Residency,
Auditors 4th Cross, Sampige Road,
Malleswaram,
Price Waterhouse & Co.
Bengaluru – 560 003
Chartered Accountants LLP
Tel: 080 2346 0815 to 818
(Registration No.: 304026E/E-300009)
Fax: 080 2346 0819
5th Floor, Tower ‘D’, The Millenia,
1 & 2 Murphy Road, Ulsoor,
Bengaluru – 560 008
www.diageoindia.com

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