The Shareholders,
 
 The Directors have pleasure in presenting the Annual Report of your
 Company and the audited accounts for the year ended March 31, 2012.
 
 FINANCIAL RESULTS
 
                                            Rupees in Millions
 
                                           2011-12        2010-11
 
 The working of your Company for
 the year under review resulted in
 
 -    Profit from operations               5,755.508     5,925.148
 
 -    Exceptional and other                 (108.163)      368.399
      non-recurring items
 
                                           5,647.345     6,293.547
 
 Less:
 
 -    Depreciation                           608.453       477.470
 
 -    Taxation                             1,610.951     1,961.365
      (including deferred tax)
 
 -    Profit after tax                     3,427.941     3,854.712
 
 Profit B/F from previous year            15,357.972    12,380.525
 
 Profit transferred on Amalgamation            -             4.030
 
 Profit available for appropriation       18,785.912    16,239.267
 
 Your Directors have made the
 following Appropriations :
 
 General Reserve                             500.000       500.000
 
 Proposed Dividend                           326.987       326.987
 
 Corporate Tax on Proposed
 
 Dividend                                     53.046        54.309
 
 Balance carried to the Balance Sheet     17,905.879    15,357.971
 
 EPS - Basic & Diluted (Rupees)                26.91         29.47
 
 Your Directors propose a Dividend on the equity shares of the Company
 at the rate of Rs. 2.50 per share.
 
 CAPITAL
 
 The Authorised Capital of your Company remained unchanged at
 Rs.5,542,000,000/- divided into 395,000,000 Equity Shares of Rs.10/-
 each and 159,200,000 Preference Shares of Rs. 10/- each.
 
 The issued, subscribed and paid-up Equity Share Capital of your Company
 also remained unchanged at Rs.1,307,949,680/- divided into 130,794,968
 equity shares of Rs.10/- each.
 
 GLOBAL DEPOSITORY SHARES
 
 Your Company had issued 17,502,762 Global Depository Shares (GDSs)
 representing 8,751,381 Equity Shares ranking pari-passu in all respects
 with the existing paid up equity shares, 2 GDSs representing 1 equity
 share of par value of Rs.10/- each at US.4274 per GDSs aggregating to
 US$ 130 mn. These GDSs are listed on the Luxembourg Stock Exchange.
 
 As on May 25, 2012, there was an outstanding of 1,284,554 GDSs
 representing 642,277 equity shares.
 
 PERFORMANCE OF THE COMPANY
 
 During the year under review, your Company has achieved a sales volume
 of over 120 million cases (Previous year 112 Million cases),
 representing a growth of 7% over the previous year, thus continuing to
 maintain its position as the largest distilled spirits marketeer in the
 world in terms of volume. Profit from operations stood at Rs.5,755.508
 million (previous year Rs.5,925.148 million) registering a marginal
 decrease over the previous year mainly on account of increase in input
 costs.
 
 SUBSIDIARIES
 
 During the year under review, Chennai Breweries Private Limited (CBPL),
 a wholly owned subsidiary ceased to be the subsidiary of the Company
 consequent to its amalgamation with United Breweries Limited (UBL), a
 UB group Company in terms of Scheme of Amalgamation. Consequent to the
 aforesaid amalgamation of CBPL with UBL, your Company received
 8,500,000 equity shares of Rs. 1/- each of UBL for the shares held by
 the Company in CBPL.
 
 Whyte and Mackay (Americas) Limited, LLC, a wholly owned subsidiary of
 Whyte and Mackay Limited, became an utlimate wholly owned subsidiary of
 your Company.
 
 Sovereign Distilleries Limited (SDL) which became a subsidiary during
 the year under review became a wholly owned subsidiary of your Company
 on April 19, 2012 consequent to the acquisition of the balance 38.47%
 equity shares in terms of Share Purchase Agreement (SPA) executed with
 the erstwhile promoters of Sovereign Distilleries Limited (SDL).
 
 Your Company is considering various steps including infusion of share
 capital to make the net worth of its subsidiaries viz. Pioneer
 Distilleries Limited, Sovereign Distilleries Limited and Tern
 Distilleries Private Limited, positive.
 
 During the year under review, your Company subscribed to 15,612,245 12%
 Non Cumulative Redeemable Optionally Convertible Preference shares of
 Rs.10/- each at par in Four Seasons Wines Limited (FSWL), a subsidiary
 of the Company.  Your Company also subscribed during the current year
 8,000,000 12% Cumulative Redeemable Preference shares of Rs.10/- each
 at par in FSWL.
 
 In terms of Circular No.2/2011 dated February 8, 2011 issued by the
 Ministry of Corporate Affairs, Government of India, a general exemption
 has been granted from the compliance of Section 212 of the Companies
 Act, 1956, requiring holding companies to attach with their balance
 sheet, a copy of the balance sheet, profit and loss account and other
 documents of each of its subsidiaries provided the Board of Directors
 of such companies give consent, by way of a resolution, for not
 attaching the balance sheet of the subsidiary companies concerned with
 the balance sheet of the Company and certain conditions prescribed by
 the Ministry in this regard are complied with.
 
 The Board of Directors of your Company, at their meeting held on May
 29, 2012 have given their consent for not attaching, inter alia, the
 balance sheet, profit and loss account etc. of its subsidiary companies
 since your Company has complied with all the conditions prescribed by
 the Ministry vide its circular dated February 8, 2011, in this regard.
 
 In view of the above, the balance sheet, profit and loss account and
 other documents/details of the subsidiary companies, which are required
 to be attached with the balance sheet of the Company, are not attached.
 The Annual Accounts of the Subsidiaries and the related detailed
 information will be made available to any shareholder of the Company
 seeking such information at any point in time. The Annual Accounts of
 the Subsidiary Companies will also be kept for inspection by any
 shareholder of the Company at its Registered Office and that of the
 Subsidiary Companies concerned, during the business hours on any
 working day.
 
 The Accounting Year of United Spirits Nepal Private Limited (USNPL),
 your Company’s subsidiary in Nepal is from mid-July to mid-July every
 year. Accordingly, Accounting Year of 2010-11 of USNPL ended on July
 16, 2011 and the Accounting Year 2011-12 will end on July 16, 2012
 i.e., after the end of the close of the financial year of the Company,
 which ended on March 31, 2012. For the purpose of compliance under
 Accounting Standard - 21, relating to “Consolidated Financial
 Statement,” the Accounts of USNPL has been drawn up to March 31, 2012.
 
 For the purpose of compliance under Accounting Standard - 21,
 “Consolidated Financial Statement” presented by the Company includes
 the financial information of its subsidiaries.
 
 PROSPECTS
 
 Your Company achieved a sales volume of 10.75 million cases during the
 first month of the current financial year and judging by the continuing
 growth in the current year, the Company is set to maintain its current
 position as the world’s largest distilled spirits marketeer by volume.
 
 With the fixation of a more than comfortable floor price for ethanol
 supplies for oil blending by the Oil Marketing Companies coupled with
 the uncontrolled grant of permissions to export of molasses and spirit,
 the potential availability of Extra Neutral Alcohol (ENA), a primary
 raw material required in the manufacture of Company’s products, has
 been adversely affected. To counter this hardship, as a part of its
 business strategy, your Company is continuing with its initiatives of
 building up supply side security by integrating backwards into
 distillation by way of acquiring substantial interest in Pioneer
 Distilleries Limited in Maharashtra and Sovereign Distilleries Limited
 in North Central Karnataka, both states rich in sugarcane cultivation.
 These will go a long way to reduce the Company’s dependence on external
 supplies of ENA.
 
 In order to mitigate the increase in the cost of glass bottles, which
 is another key ingredient, as a part of its business strategy
 initiatives, your Company has envisaged setting up a glass container
 manufacturing facility in south India for captive consumption, besides
 developing alternate packaging materials in some of the southern states
 of the
 
 Country to reduce the impact of the increased cost of glass bottles.
 
 With all these measures, your Directors are hopeful that your Company
 would achieve a structural improvement in its profitability in the
 years to come.
 
 DEPOSITORY SYSTEM
 
 The trading in the equity shares of your Company is under compulsory
 dematerialisation mode. As on May 25, 2012, equity shares representing
 97.64 % of the equity share capital are in dematerialised form. As the
 depository system offers numerous advantages, members are requested to
 take advantage of the same and avail of the facility of
 dematerialisation of the Company’s shares.
 
 DIRECTORS
 
 Mr. Sreedhara Menon and Dr. Vijay Mallya retire by rotation and being
 eligible, offer themselves for re-appointment.
 
 Mr. G.N.Bajpai was appointed as Additional Director on January 20, 2012
 and will hold office in terms of Section 260 of the Companies Act, 1956
 up to the date of the ensuing Annual General Meeting.
 
 A notice in writing has been received by your Company from a member
 signifying his intention to propose the appointment of Mr. G.N. Bajpai
 as Director at the Annual General Meeting.
 
 AUDITORS
 
 M/s. Walker, Chandiok & Co., your Company’s Auditors, are eligible for
 re-appointment at the Annual General Meeting and it is necessary to fix
 their remuneration.
 
 TAX AUDITORS
 
 Your Directors have appointed M/s. Lodha & Co., Chartered Accountants
 as the Tax Auditors of the Company to carry out the tax audit of the
 Company for the year ended March 31, 2012.
 
 LISTING OF SHARES OF THE COMPANY
 
 The Equity Shares of your Company continue to remain listed with
 Bangalore Stock Exchange Limited, Bombay
 
 Stock Exchange Limited and National Stock Exchange of India Limited.
 The listing fees for the year 2012-13 have been paid to these Stock
 Exchanges.
 
 CORPORATE GOVERNANCE
 
 A report on the Corporate Governance is annexed separately as part of
 this report along with a certificate of compliance from a Company
 Secretary in practice. Necessary requirements of obtaining
 certifications/declarations in terms of Clause 49 have been complied
 with.
 
 MANAGEMENT DISCUSSION AND ANALYSIS
 
 Pursuant to Clause 49 of the Listing Agreement with the Stock
 Exchanges, Management Discussion and Analysis Report is annexed and
 forms an integral part of the Annual Report.
 
 FIXED DEPOSITS
 
 Fixed Deposits from the public and shareholders, stood at Rs. 6,387.556
 Million as at March 31, 2012. Matured deposits for which disposal
 instructions had not been received from the depositors concerned stood
 at Rs. 105.338 Million as at March 31, 2012. Of this, a sum of Rs.
 55.354 Million has since been paid as per instructions received after
 the year-end.
 
 TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
 
 Pursuant to the provisions of Section 205A(5) and 205C of the Companies
 Act, 1956, the Unclaimed Dividend and Deposits, remaining unclaimed and
 unpaid for a period of more than 7 years, have been transferred to the
 Investor Education and Protection Fund.
 
 HUMAN RESOURCES
 
 Employee relations remained cordial at all Company’s locations.
 
 Particulars of employees drawing an aggregate remuneration of Rs.
 60,00,000/- or above per annum or Rs. 5,00,000/- or above per month, as
 required under Section 217(2A) of the Companies Act, 1956, as amended,
 is annexed.
 
 EMPLOYEE STOCK OPTION SCHEME
 
 The Company has not offered any stock option to the Employees during
 the year 2011-12.
 
 CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION, ETC.
 
 In accordance with the provisions of Section 217(1)(e) of the Companies
 Act, 1956, read with Companies (Disclosure of Particulars in the Report
 of the Board of Directors) Rules, 1988, the required information
 relating to Conservation of Energy, Technology Absorption and Foreign
 Exchange earnings and outgo is annexed.
 
 DIRECTORS’ RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217 (2AA) of the Companies Act, 1956, in relation
 to financial statements for the year 2011-12, the Board of Directors
 reports that:
 
 - in the preparation of the annual accounts, the applicable accounting
 standards have been followed along with proper explanation relating to
 material departures;
 
 - accounting policies have been selected and applied consistently and
 that the judgements and estimates made are reasonable and prudent so as
 to give a true and fair view of the state of affairs of the Company as
 at the end of the financial year and of the profit of the Company for
 the year ended March 31, 2012;
 
 - proper and sufficient care have been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956, for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities;
 
 - The annual accounts have been prepared on a going concern basis.
 
 THANK YOU
 
 Your Directors place on record their sincere appreciation for the
 continued support from shareholders, customers, suppliers, banks and
 financial institutions and other business associates. A particular note
 of thanks to all employees of your Company, without whose contribution,
 your Company could not have achieved the year’s performance.
 
                                         By Authority of the Board
 
 Mumbai                                           Dr. VIJAY MALLYA
 
 May 29, 2012                                             Chairman