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United Breweries Ltd.

BSE: 532478 | NSE: UBL |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE686F01025 | SECTOR: Breweries & Distilleries

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Annual Report

For Year :
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Director’s Report

Your Company''s Directors have pleasure in presenting this Annual Report on the business and operations of the Company and the audited accounts of United Breweries Limited (''UBL'' or ''your Company'' or ''the Company'') for the financial year ended March 31, 2021 (''the year under review'', ''the year'' or ''FY21'').


Financial performance for the year ended March 31, 2021 is summarized below:

(Amount in Rupees Million)


Year ended March 31



Gross Turnover



Net Turnover



Other Income






Exceptional Items


Depreciation and amortization









Profit before Taxation



Provision for Taxation



Profit after Tax available for appropriation




Dividend on Equity Shares (including taxes thereon)



Transfer to the General Reserve



Other Comprehensive Income/(Loss)



Balance your Directors propose to carry to the Balance Sheet



The financial statements for the year ended March 31, 2021 have been prepared under Indian Accounting Standards (Ind AS) pursuant to notification by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015 as amended.

From March 2020 India saw a rapid spread of COVID and as a consequence, Industry slowed down and effectively stopped functioning till first week of May 2020. Business opened up gradually only over the next few months with different levels of restrictions in off and on trade channels. Particularly on trade restrictions were lifted gradually only by October onwards. A number of States introduced higher COVID related excise taxation, which were in most cases fully or partly rolled back in the course of the financial year. These factors combined had adverse impact on despatches, sales performance as well as margins. In a year where industry remained sluggish due to COVID and other economic factors, your Company achieved a Net turnover of Rs. 42,407 Million. Being an exceptional year, like to like comparison of financial numbers is less meaningful. The Gross turnover of UBL stood at Rs.101,834 Million. Interest cost was contained with effective working capital management. EBITDA for the year under review stood at Rs. 4,298 Million as compared to Rs. 8,835 Million in the previous year. Increased input cost and increase in price of beer to consumers due to increases in duties and COVID induced reduction in volumes, not only dampened the demand but were also instrumental in putting pressure on margins.

Profit before Taxation for the year stood at Rs.1,680 Million. Profit after Taxation stood at Rs.1,129 Million.


We take pleasure in proposing a dividend of Re.0.50 per Equity Share of Re.1/- each for the year ended March 31,2021. The dividend declared for the previous year was Rs. 2.50/- per Equity Share of Re.1/- each. The total dividend is Rs.132 Million, which amounts to about 11.7% of the Profit after Tax.


UBL proposes to transfer Rs.113 Million to the General Reserve.


The Authorized Share Capital of the Company stands at Rs.9,990 Million, comprising Equity Share Capital of Rs.4,130 Million and Preference Share Capital of Rs.5,860 Million. The Issued, Subscribed and Paid-up Equity Share Capital of the Company as on March 31, 2021 remains unchanged at Rs.264.4 Million comprising 26,44,05,149 Equity Shares of Re.1/- each.


Management Summary

The financial year 20/21 has seen unprecedented circumstances due to the impact of COVID. This resulted in adverse circumstances for the Company due to lock downs, introduction by various States of COVID related additional taxation and prolonged closure of trade channels, including various restrictions on opening hours. Throughout the year, management focus has been on health & safety of employees and stakeholders, the introduction of socially distanced safe ways of working, reviving demand & keeping consumers engaged, while reducing costs and preserving cash. The Company would like to convey its heartfelt appreciation to its employees and stakeholders for showing resilience and dedication under the challenging circumstances. The Company has also actively supported the communities in which we operate through dedicated COVID relief and on-going CSR programmes.

In an extremely challenging year, we continued to engage our consumers both at home and away from home, we renewed our portfolio to provide a wider choice set and re-energized both our internal and external stakeholders by continuous engagement and inspiration. The ''Ghar pe Kingfisher'' campaign, the expansion of our geographic footprint with Amstel, Ultra WitBier, Heineken 0.0 etc. and the integration with our partner ecosystem via the Back to the Bars program are cases in point. Our focus on our people was of paramount importance; not only were we able to operate within the strictest safety guidelines but were also able to keep the channels of communication seamless so that we could re-energize everyone and keep the good times going in an unprecedented period of difficulty.

During the financial year, the Company witnessed strong progressive demand recovery quarter by quarter. The various measures taken by management resulted in recovery of market shares in the second half of the year, improved underlying profitability and strong free operating cash flow results. With the onset of a second COVID wave at the start of financial year 21/22, the beer industry is again negatively impacted, and the outlook is volatile. The Company continues to put health & safety first and actively manages costs and cash flows. Although the trajectory of COVID is unknown, confidence is derived from the trends after the first COVID wave, whereby consumer behavior towards beer consumption remained intact.

While the Company navigates the near term challenging circumstances, the strategy is to remain focused on increasing category penetration, building a strong brand portfolio, managing costs and cash, ensuring further improvements on sustainability, while fostering a highly engaged workforce that is supported by best in class processes.

Industry Overview

Unlike other emerging economies, beer Industry in India continues to remain quite traditional and is controlled by State Governments. It remains highly regulated with high taxation, restrictions on cross border movements, constraints on

production, retailing and other barriers. In many parts of the country, wholesale and/or retail distribution is controlled by State Government monopolies. Also, in over 60% of the markets, State Governments directly dictate the price at which beer can be sold. These State controlled regulations are in addition to all other Central legislations that govern any other Industry.

Beer has become one of the most popular alcoholic beverages in the country over the past two decades. Beer industry has registered a robust growth during the last one and half decades. From a total industry consumption of about 100 Million cases in 2005, the industry consumption crossed 300 Million cases per annum in 2019 prior to the impact of COVID. Three leading players contribute over 85% of the total industry sales with our Company maintaining its leadership in the Indian beer market. Beer comprises about 12% of the total alcohol consumed in India. While the alcohol beverages industry in India has been dominated by spirits, beer is emerging as the preferred alcoholic beverage for young Indians.

Compared to the global average per capita consumption of about 30 litres, the per capita consumption in India still hovers around 2 litres. However, the scope for growth in India continues to remain positive given the climate, young demographics and increasing disposable income.

Due to COVID, retail was completely shut from March 23, 2020 causing a considerable drop in sales for beer. Till first week of May 2020, dispatches could not be made due to lockdown. The initial months of the new financial year remained very challenging as retail reopened gradually in many states in India only after the 1st week of May. Demand was also negatively impacted due to increased taxation and other regulatory and logistical impediments. Generally, high-end consumer prices due to statutory levies inhibited the sales during the year.

On basis of alcohol content, beer in India can be categorized into Strong and Mild Beers. Strong beer which has an alcohol content between 6% and 8% dominates the beer market accounting for over 80% of the total beer consumed in India. The Super Premium beer segment within both the Strong and Mild beer categories has been growing faster than the overall beer industry. Industry volumes grew at a CAGR of about 7% during 2015 to 2020. However, during 2020-21, the Indian beer market shrunk for force majeure reasons of COVID.

The Industry has evolved from manufacturing standard beers such as strong and lager beer to flavoured and variety beers in line with trends in other developed countries. A plethora of beer brands are available in India to address the palate of various consumer segments. Majority of beer market growth is driven by young consumers, who consider beer a trendy drink, compared to traditional spirits.

Brew pubs have emerged in large cities such as Bengaluru, Pune and Gurgaon over the last few years. These outlets have introduced consumers to new types of beers for example ''wheat beer''. Our competitors too, have introduced brands from their international portfolio. UBL has been successful in addressing these new consumer trends and has introduced its own ''Kingfisher Witbier'' thereby continuing to strengthen its position in the market.

Sales and Marketing

During FY21, UBL sales volume declined 38% due to COVID induced depressed market conditions. UBL continues to satisfy its customers with a wide range of quality products and innovative strategies with the ultimate objective of remaining at the fore-front of the highly competitive Indian beer market.

In 2020, the unprecedented extended periods of lockdown in India due to COVID, led our flagship brand Kingfisher to engage with consumers through interactive engagement in the digital medium. We ensured that the brand remained the primary preference among a shared beer audience. The messaging to encourage in-home consumption -''Ghar pe Kingfisher'' - was driven through a series of highly enjoyable and integrated communication pieces. We received multiple industry awards and accolades for the consumer connect we were able to create. The special AR-filter and AI-powered Build Your Own Beat campaign; and the Kingfisher Bird Game- where one needed to confine the bird within the walls of the home to drive the ''stay at home'' message, are cases in point.

Staying agile in rapidly evolving times, Kingfisher launched a campaign when bars started opening up, to help them recover from the lockdown. We focused on three parameters - standing in solidarity with our trade partners; helping them create appropriate ''social distancing'' and safety protocols in their establishments; and, in driving footfalls as the lockdown eased. We provided safety equipment including sneeze guards, sanitization stands, masks and gloves and sanitizers to more than 5000 outlets. Footfalls to outlets were driven through targeted digital campaigns. NRAI & INCA recognized UBL''s effort with the ''Back to the Bars'' campaign and felicitated us with an award.

The 2020 IPL presented a huge opportunity for brands to show consumers they were an authentic part of their real-time experiences during the lockdown, and Kingfisher contextualized and integrated it''s highly successful Kya Plan Hai proposition with a backdrop of one''s home, through a multitude of communication touchpoints. A series of short, digital-first video modules were effectively utilized to build consumption occasions for the brand. We also launched ''Home Packs'' in the market, enabling consumer to stock up and enjoy responsibly in the safety of their homes.

The iconic Kingfisher Calendar continues to maintain its aspirational value, this time conceptualized and creatively manifested in the brand''s own country, shot against the magical and scenic backdrop of Kerala. The brand drove buzz around this property and leveraged it on digital platforms in a large way, socializing it actively with its digital savvy patrons.

Tapping into the highly-engaged football cohort, Kingfisher created a unique campaign with FC Goa wherein it leveraged the reach of digital media. Fans were asked to cheer for their favourite team and lucky winners were given a chance to have their images on hoardings across Goa. This ''spectacular'' opportunity saw high engagement and recall.

Ultra Witbier, UBL''s foray into the craft & variety segment, launched in December 2019 in two markets, further expanded its presence into four new markets during the year. Despite the COVID-induced impediments, Ultra Witbier has created an enviable fan following among category consumers. The brand focused on driving awareness through product differentiation and occasion-led communication, engaging with the consumer through topical campaigns apropos to brand tenets. On-ground, at point-of-sale the brand focused on driving clutter-breaking visibility and product trials.

Kingfisher Ultra, our premium segment offering, launched its TVC featuring brand ambassador Farhan Akhtar on Digital and OTTs in March. Farhan Akhtar''s versatility, suave demeanor and sophistication resonated with Ultra''s brand ethos and values.

On-ground, Ultra continued its association with two prestigious Derby events in Bombay and Bangalore. The events were closed-door & limited capacity ones given COVID guidelines. However, impact was ensured through broad-reaching live-stream features on Facebook and YouTube and through our digital partners.

Music festivals at the end of 2020, the ubiquitous backdrops of year-end celebrations, were cancelled or permitted only for limited audiences. Kingfisher Ultra continued its association with the Satellite beachside music festival and provided its patrons with a safe and premium branded experience, very central to the brand''s experiential leg. The 4-day festival in Goa connected both on-ground and digitally with 4000 consumers.

Kingfisher Ultra revived its music IP Soul Flyp with a series of 10 metro city-based music events. Keeping in mind the prevailing situation, all events were limited capacity events with adherence to COVID appropriate behaviour.

Kingfisher Storm, a smooth, strong beer with bold blue packaging, continued engagement with young consumers with the well-received WOOFER campaign. The brand also extended its footprint entering the Northern markets of Delhi & Rajasthan. In spite of the challenges during this year, Kingfisher Storm was back in off-trade retail outlets with impactful instore promotions & visibility initiatives.

Heineken, one of the flagship brands in the portfolio, aimed to garner traction by amplifying its association with the UEFA Champions League Football via #The Kickoff Campaign, to celebrate the return of the pandemic-deferred tournament, commemorating this with an 8-hour live-streamed virtual festival with the world''s biggest house music community - Defected Records - drawing attention from aficionados due to the brand''s aspirational value and the talent it is associated with. This online event featured DJs from across the world in unique locations, headlined by global star Idris Elba & supported by the likes of Bob Sinclair and Purple Disco Machine.

Heineken went live with its first ingredient-centric campaign to propagate the message of purity and quality, indexing on the presence of pure malt in its brew. On-ground, the brand sponsored Krank & Sisterhood events under its ''Live Your Music'' vertical, co-creating limited capacity events with partner-outlets, driving brand recall through platform associations and placement, in a difficult year. The events were amplified through digital channels. All events adhered to social distancing norms under the #SocialiseResponsibly initiative.

Heineken partnered with INCA & NRAI to reunite all stakeholders of the F&B community, to recognize the heroes who supported the industry during the pandemic, celebrating the human spirit, and discussing best practices for a better future in the new normal.

Owned social media channels, with broad reach capacity, acted as the platform for Heineken to broadcast its stance on ''Back to the Bars'' behaviour. The global campaign was repurposed to help bars during their re-opening by encouraging consumers to #SocialiseResponsibly while providing awareness and visibility to help drive traffic to outlets.

Amstel International Strong Beer continued its footprint expansion despite the operational challenges of navigating through a difficult year. Haryana, Telangana & Maharashtra were added to the list of Amstel markets post the gradual unlock of last year.

In a year which posed significant challenges to the country, our organization focused on keeping our employees safe in the face of the raging pandemic and continued to engage with our consumers in a meaningful manner.

Supply Chain

Manufacturing expenses for the FY21 amounted to Rs.20,363 Million, representing 48% of net sales, as against Rs.31,603 Million in the previous financial year, which constituted 49% of net sales. UBL has focused primarily on following COVID safety guidelines at all our breweries prescribed by Ministry of Home Affairs and local administrations. Delivering volumes as per market demand post national lockdown coupled with tight cost control measures, expanding footprint for premium brands and cost-saving initiatives which have helped us achieve this in an environment impacted by uncertainty, lockdowns and disrupted supply chains for bottles and commodities.

Capacity expansion was carried out in our breweries in Telangana, Karnataka & Rajasthan. Our Telangana Brewery (UBGD) post expansion is the largest brewery in India with capacity of 3 mio HL/annum. Karnataka Brewery (UB Chamundi) is the largest Brewery (2.0 Million HL) in the state. Expansion of our Unit in Rajasthan with addition of Heineken footprint provides a hub for supply of premium brands in North India.

In our quest for sustainability, our total renewable energy usage for FY21 stood at 79.6%. UBL''s own units consumed 30.0% electricity generated from renewable sources. To supplement this, 96% of thermal energy came from use of renewable sources. The renewable energy usage is equivalent to carbon footprint of 25,304 tons of CO2 which is equivalent to 1.24 Million trees.

Bottles remain our biggest cost element. Due to constrained domestic capacity prior to start of 2020-21, imports were planned to bridge the gap and cover peak requirement. Volume drop due to COVID resulted in reduction of about 1,00,000 metric tons equivalent of Glass buying 38% which was mitigated by proportionately reducing contracted volumes with all suppliers without any financial impact. Volume drop in CANs by 47% was mitigated by extending hedge coverage into 2021-22 without any penalty on similar terms & conditions. Strategic long-term contracts are in place for new glass & cans which secures our requirement for coming year.

Recycled bottle collection continues to remain key focus area. Old bottle returns were impacted on account of COVID during 2020-21 due to disturbance in the old return supply chain & loss of bottles in few states due to higher cullet prices.

Value Engineering related to lower gauge cans, light weight ends and additional source from Ceylon Cans-Sri Lanka established during the year.

Barley-malt, the basic raw material in the manufacture of beer, has seen lower prices due to pandemic which lead to reduced demand from brewing as well as cattle feed sector. The prices of the competitive crops grown in the barley area however were trading at all time high prices. This led to a significant drop in barley acreages and farmers shifted their acreages towards those rewarding competitive crops.

We were also able to get the extension of delayed shipments on our imported malt contracts from Australia as well as Europe without any penalty.

In order to make inputs/raw material requirement simplistic across breweries, use of rice flakes was replaced with broken rice. Freight negotiations were routed through auction to contain price push in line with diesel prices.

Research and Development

UBL''s Research and Development function continues to support its growth strategy with a focus on new capabilities, development of new products, enhancement of existing products, productivity improvement and cost reduction.

Human Resources

Human Resources (HR) develops UBL''s most important asset - our people - by engaging and empowering them. At UBL, we recognize that the long-term success and sustainable growth of our organisation depends on our capacity to attract, retain and develop our employees. We are committed to provide our employees all over the country with a safe and healthy work environment and extend our support to ensure a balance of personal and professional life. The organisation fosters an open and transparent culture which drives ownership and nurtures entrepreneurial spirit amongst the employees. The Company believes in celebrating milestones, both big and small and encourages its people to connect, communicate and collaborate through various forums.

UBL has an inclusive culture and takes pride in being an equal opportunity employer. We encourage all forms of Diversity and believe that it adds to building a more engaged workforce thereby contributing to our business performance. Besides the mandated policies to develop a conducive work environment we have a Diversity and Inclusion Council that plays an active role in creating various platforms, opportunities and transparency.

Learning is ingrained in the UBL culture and employees are constantly encouraged and given ample opportunities to upgrade their knowledge and skill. We follow an integrated learning approach where on-the-job is the principal source of learning. The learning initiatives are also curated to build the talent and leadership pipeline to enhance organisational capability to compete and win in the market. Apart from our essential programmes, tailor made customised programmes are also offered to address the specific needs expressed by businesses, aimed at building specific capabilities at various levels of the organisation. The UBL Competency Framework helps in assessing the current and future talent capability. It also helps in highlighting the specific strengths to be further developed and flag critical skills for mitigation.

The organisation believes in ethical governance and abides by the robust policies laid down under Code of Business Conduct. The guidelines laid down in the Code help our employees in handling dilemmas and difficult ethical situations related to the business. Our employees and vendors can report any violation of the code via an online platform named Speak-Up. The platform is managed by a third party to ensure that the identity of the whistle blower is protected.

UBL uses technology effectively in all stages of employee life cycle from hire to retire. Instrumenting such technology has resulted in standardized automated processes, improved productivity and enhanced employee experience.

The inputs from our annual employee engagement survey help us in continuously improving our people practices, policies and programs and stay in touch with the expectations of our employees.

Industrial Relations continue to be harmonious and peaceful at all levels and at all locations of the Company. Timely Long-Term Settlements are done to ensure continuity in healthy industrial relations.

All the wage agreements have been renewed in a timely manner and are valid and subsisting. Workers and unions support implementation of reforms that impact quality, cost and improvements in productivity across all locations, which is commendable.

UBL has 3,070 employees on its rolls across all locations. The Company has not offered any stock options to the employees during the year under review.

Total employee benefit expenses for the year stood at Rs. 4,823 Million, as compared to Rs. 4,998 Million in the previous year. This constituted 4.7% of revenue from operations. Your Directors place on record their sincere appreciation to all employees for their contribution towards the continuous success of the organization.

Significant changes in Key Financial Ratios

Following are the Key Financial Ratios, where variance of more than 25% is noticed as compared to the previous financial year:

Interest Coverage Ratio: EBITDA is 28 times of interest in 2019-20, has come down to 19 times in 2020-21, on account of EBITDA degrowth by 49% while interest costs came down by 27%.

Debt Equity Ratio: Net debt at year end March 31,2021 is zero against 6% of Shareholder funds as on March 31,2020.

Net Profit Ratio: Net profit ratio decreased from 2.92% in 2019-20 to 1.11% in 2020-21, primarily on account of reduction in volumes.

Return on Net worth: Return on Net worth decreased from 12% in 2019-20 to 3% in 2020-21.

Impact of COVID

The entire world today is reeling under the threat of the unprecedented COVID pandemic. This had a huge and significant impact on the global businesses all over the world across sectors and economy including India. COVID has impacted businesses globally by disrupting supply chain, travel, production, consumption and services threatening operations and financial markets. Companies find themselves navigating a new reality, addressing issues from crisis response and business continuity to valuations and financial stress.

As a fall out, various state governments have imposed measures which included tax increases negatively impacting the industry. Majority of these tax increases were partly or fully rolled back during the financial year. The nationwide lockdown implemented in March 2020, led to complete closure of all outlets till May 04, 2020. On-trade sale was progressively closed in weeks leading up to March 23, 2020. State by State decisions led to on trade resuming operations from September & October 2020 onwards.

The ripple effect of lockdown will have a key impact on India''s economy as all business sectors get affected, resulting in low revenue generation due to an eventual halt / slump on the sale of products and / or services. UBL is not an exception to this scenario. Given such a scenario, companies will have to operate differently to effectively manage the crisis. COVID has changed the way we live, work and use technology.

Beer companies reeled under pressure as the lockdown came at the onset of summer which comprises the bulk of sales. All these were a dampener, next to partial or full closure of bars & shops in an environment of overall lower economic growth and reduced consumer confidence.


UBL firmly believes in growing the business in a socially and environmentally responsible way while meeting the interests of all its stakeholders. Our Company is committed to improving the lives of the community it works with and reducing impact of its operations on the environment it draws its resources from.

UBL is committed to water stewardship and makes conscious efforts to conserve and replenish water. Last year, we have spent more than 60% of our CSR funds on Water initiatives. In the next 5 years, we are focused to increase this commitment to 75%.

In addition to implementing large rainwater harvesting and watershed management projects in the vicinity of our breweries for water conservation, we also make extensive efforts in generating awareness in the communities on the adoption of rainwater harvesting practices, promoting climate resilient practices for agriculture and incorporating necessary infrastructure for water preservation. We have active water conservation projects running in the states of Rajasthan, Punjab, Haryana, Maharashtra, Telangana, Karnataka and Kerala. Our water projects have touched the lives of lakhs of people till date.

Our safe drinking water projects aim to provide a sustainable solution for clean drinking water and reduce water borne diseases resulting from consumption of contaminated water. The 1,000 lph Community Safe Drinking Water Hub in Tapukara Village, Rajasthan inaugurated last year, targets to give more than 10,000 denizens access to potable drinking water.

We collaborated with Canpack India to implement a unique initiative to develop an Urban Dense forest in Waluj MIDC area in Aurangabad, Maharashtra. We have planted 75,000 trees in 50 native species in an area of 5 acres to develop this forest and improve the biodiversity in this region using the Miyawaki technique of afforestation.

The COVID pandemic has taken innumerable lives and livelihood. As a responsible corporate citizen, our first response was to stand beside our co-communities and supply them with basic necessities during lockdown. Initiating discussions with the Panchayat and the people on the ground, UBL galvanized its NGO partners to carry a rapid needs assessment to find out requirement of the community. With the help of our NGO partners we distributed ration kits and hygiene kits in the villages benefiting more than 12,000 families all over the country. We also made provisions for ambulances and helped government schools conduct board exams safely in some of our co-communities.

Our next step was to support the brave frontline workers who have been risking their lives for the safety of the community. We got in touch with local government hospitals, police departments and donated PPEs, masks, sanitizers, safety overalls, immunity boosters etc. across the country.

The Amphan super cyclone caused widespread damage to life and property in West Bengal specifically in the ecologically sensitive Sunderbans. UBL supported the 1,400 affected families of 20 villages of Sunderbans with dry ration, household essentials, temporary shelter and hygiene essentials.

The Company has also spearheaded some of the critical community interventions to improve the socioeconomic conditions of its co-communities-major ones being infrastructure development of schools, supporting students through happiness boxes as an alternative to mid-day meals and enhancing the scope of digital learning in the pandemic-stricken world.

The Business Responsibility Report in the format prescribed under the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations) is annexed as Annexure-A. Annual Report on CSR activities in terms of the Companies Act, 2013 (the Act) and the Companies (Corporate Social Responsibility) Rules, 2014, is annexed as Annexure-B.


UBL''s sustainability reporting articulates its perspective on the emerging forces in the global sustainability landscape and UBL''s response on multiple dimensions like economic, ecological and social sustainability. We articulate key issues as well as opportunities that emerge and update our engagements. We are continually working towards reducing our water and energy consumption and adopting renewable sources of energy thereby reducing our carbon footprint. We are also continuously focusing on recycling our packaging materials. More than 65% of bottles used by us are recycled by us and the remaining is also recycled by bottle manufacturers and others. Our secondary packaging like carton is made using more than 80% recycled paper and the same is recycled upwards of 90% by trade. We have tied up with Central Pollution Control Board approved plastic waste recyclers to recycle 100% equivalent of the low-density polyethylene used in our manufacturing process.

Green Energy

UBL has been continuously marching ahead in its journey of maximizing usage of Green Energy. This journey demonstrates the organisational vision to lead the initiative by being proactive and thereby contribute to environmental protection. As an organisation, we currently use 78.7% of our total energy from Renewable Energy sources, with Thermal Renewable Energy contributing 95% and Electrical Renewable Energy at 30%. Our breweries in Karnataka and Tamil Nadu are leading the drive with Total Renewable Energy usage of more than 95% & 89% respectively. Electrical Renewable Energy has improved from 23% in FY19-20 to 30% in FY20-21 in our manufacturing facilities.


1) Pollution Control Board:

• Our brewery at Nanjangud, Mysore won the 20th Annual Greentech Environment Award 2020 for Energy Efficiency.

2) Safety:

• Our brewery at Palakkad received Safety award 2020 from Kerala State Department of Factories & Boilers, under Large Factories - Food and Food Product Category.

3) Confederation of Indian Industry (CII) Environment, Health and Safety (EHS) Excellence Awards:

• Our brewery at Sangareddy, Telangana received EHS 3 star rating award for 2020 and also received supplement award for Best Hygiene at Work Place Initiatives.

• Our brewery at Palakkad recognized with EHS sectoral award under Manufacturing - Food Process Category and EHS 5 star rating (top rating) award from CII.

4) Total Productive Management (TPM):

In our Journey of Operational Excellence through Process of TPM, we are on continual improvement path and in FY 20-21, we bagged 3 Prestigious national level awards in the competition held by various forums like Confederation of Indian Industries etc.

• Our Brewery at Ellora, Aurangabad was awarded at Kaizen Competition organized by Quality Circle forum of India.

• Our Brewery at Palakkad, Kerala was awarded with Platinum award (Restorative Kaizen Category) at Challengers Trophy organized by CII Institute of Quality.

• Our Brewery at Shahjahanpur, Rajasthan was awarded with Gold Medal at 39th Kaizen Competition organized by CII Institute of Quality (Innovative Kaizen Category).


Beer is an increasingly popular drink in India. However, for a variety of socio economic and religious reasons, India''s current per capita consumption of beer still hovers below 2 litres which is well below the Global average of around 30 litres and Asia average of about 27 litres. We believe, such average low per capita consumption has a lot of room to grow in years to come given our population, climate, evolving attitude, increasing income and demography.

Attitude towards alcohol consumption is evolving particularly amongst youth, working women and other urban population who are gaining an appetite for beer as social drinking has become a more adaptable lifestyle in metros and tier two cities. For the urban youth, beer consumption is increasingly becoming part of their social interactions. Beer is gradually becoming a perfect after-work companion for corporate India as well.

India is the second most populous country in the world, with over 1.3 billion people, i.e. more than a sixth of the world''s population. Over 50% of its population is below the age of 25 and more than 65% below the age of 35 as per United Nations, Department of Economic and Social Affairs statistics. Sheer size of India''s population itself is a huge opportunity which will be continuously tapped for future growth.

During peak lockdown months, while the central government had permitted opening of shops to sell essentials, it had denied sale of alcoholic beverages, though a few states did allow online delivery of alcohol. State governments should encourage licensed retail outlets to set up their own portals to sell alcohol and allow aggregators for home delivery. But for the pandemic, there has been a steady growth of beer consumption in India. Except for the last financial year where sales and revenue may be adversely impacted due to the after effect of this force majeure circumstance, the opportunities for beer growth would stay northbound.

While Excise policies across States do not allow online supply or delivery of alcohol, the COVID pandemic has given the alcohol industry an opportunity to pursue home delivery and online sales which is likely to augment easy availability of beer. Should the Government continue to proactively open-up and regulate online sale of alcohol/home delivery it would be favourable for the beer industry in the long term. India has all the necessary infrastructure required for the successful e-commerce and online sale in beer. Your Company is actively supporting the development of these new initiatives.

Threats, Risks and Concerns

A variety of taxes & levies are imposed on beer during and after production, movement and sale by each state. These taxing impositions, pricing regulations, inadequate market infrastructure and restrictions on interstate movement of beer pose a great challenge to the industry. Despite drivers of growth in place, government intervention in distribution, ever increasing taxation, restricted communication and increased cost of raw material prices (glass, barley malt, other packaging material, etc.) and government restrictions applied on advertising, pose huge challenges to industry growth.

The threat to sales in some territories in the country arises due to changes in government regulations as also the threat of prohibitive actions which stems from constant changes in the political climate in the country.

Though sales have been prohibited in certain states, we have effectively identified avenues for increasing sales in other states. In entirety, the industry also faces the threat of partial or total prohibition based on political manifesto of the ruling party in a State.

There is a perennial threat of competition introducing new products in various segments. This would also include introduction of variety of craft and premium beers. Competition in the country''s beer segment is witnessed amongst 3 major players. These companies compete in a healthy manner, based on product variants, product quality, distribution network, brand value and promotion strategies.

In order to cater to new consumers, capture market opportunities, compete with new launches by competitors and in continuous endeavour to offer new product ranges, UBL has added to its portfolio via Kingfisher Ultra Witbier in the premium segment. Kingfisher Ultra Witbier has been launched in the profitable markets of Karnataka and Goa and has received an encouraging response from consumers. Your Company plans to launch this brand in other relevant markets in a phased manner.

The distribution of beer in India is still largely controlled by the state-or state-owned corporations resulting in stricter regulations across various states so as to have better control over prices, consumption and excise duty. This is a great challenge.

Non-availability of water, rationing its supply and restrictions on withdrawal of ground water also poses a major threat. We have built infrastructure which helps in reduction of water consumption in breweries as a sustainability initiative. We have pro-actively managed sustainability under our 3R policy to reduce, recycle and recharge as well as look at opportunities for water conservation through Rain Water Harvesting to achieve a positive or at least neutral water balance.

The Company focuses also on secure IT operations and addressing risks of cyber security. This includes risks from IT security lapses, malware and ransomware attacks, disruptions in key Enterprise Resource Processes and hacking, which could lead to disruptions in business operations and loss and/or leakage of confidential data.


Beer has become one of the most popular alcoholic beverages in the country over the past two decades. The majority of beer market growth is driven by youth and consumers who consider beer a trendy drink as compared to traditional spirits. The healthy growth rate during the last one and half decades in the beer industry is an indication of the immense potential for growth open for Indian breweries. Many international brewers around the world have now created a base in India, either in the form of manufacturing or through distributors and joint ventures. As per market intelligence, pub and bar culture in India is escalating significantly, and is becoming more popular in the age group of 20-45. Further, the market is anticipated to grow at a CAGR of 6-8% over the next decade as alcohol consumption is growing in urban areas of the country.

Beer market in India has evolved from manufacturing usual beers such as strong and lager to flavored / craft beers owing to adoption of latest trends and technologies from western markets.

The per capita beer consumption in India is still very low at less than 2 litres compared to other countries in Asia Pacific region and therefore the market could witness huge growth in the coming years owing to factors such as the shift from hard liquor to beer consumption by consumers in India, increase in disposable income, change in societal perspective amongst others.

It is expected that the demand for premium beer will continue to rise in the future with an increase in personal disposable income and higher living standards. Your Company is actively making representations to various state governments for favourable beer taxation and encourage taxation on the basis of alcohol content, paving the way for incremental growth in the market. Barring the COVID impact, both in terms of revenues and sales volume, which may continue to last during the current FY21, the market is expected to further grow going forward.

The market has been growing mainly because of the growth in the younger demography of the population, proportionate increase in disposable income, rising preference for low alcohol beverage and gradual social acceptance. Drinking in bars is fast becoming a social phenomenon in cities such as Delhi, Gurgaon, Mumbai, Pune and Bangalore and with emergence of craft beers, the growth in beer consumption increased rapidly. The rising number of pubs and bars is another factor which increased beer consumption in metropolitan cities increased the range of product availability and improved the retail environment. Some state governments, for instance Maharashtra and Uttar Pradesh, offered separate licenses for beer sale further boosting the prospects for the industry.

For over three years, the Company has been directly exporting to UAE and a few other countries along with its existing licensing arrangements for brewing in UK (including supplies to European market), Australia, New Zealand and Nepal. The market in Singapore is now also served by a license arrangement.

While the Company navigates the near term challenging circumstances due to COVID, the strategy remains focused on increasing category penetration, building a strong brand portfolio, managing costs and cash, ensuring further improvements on sustainability, while fostering a highly engaged workforce that is supported by best in class processes.

We continue to believe in the long term growth potential of the beer market in India which we are convinced has secular tailwinds. While managing the crisis that descended on us, we have also taken the time to Refresh, Renew and Re-energize the business to realize this potential and keep the Good Times going forever.

Risk Management

Though already established efficiency programmes apply to all aspects of our business, there is a constant drive for further efficiencies and reducing cost. Backed by strong internal control systems, the current Risk Management Framework consists of key elements laying down the roles and responsibilities in relation to risk management covering a range of responsibilities, from the strategic to the operational. These role definitions, inter alia, provide the foundation for appropriate risk management procedures, their effective implementation across your Company and independent monitoring and reporting. The Risk Management Committee, constituted by the Board, monitors and reviews the strategic risk management plans of your Company as a whole and provides necessary directions on the same.

The Corporate Risk Management Cell, through focused interactions with businesses, facilitates the identification and prioritisation of strategic and operational risks, development of appropriate mitigation strategies and conducts periodic reviews of the progress on the management of identified risks.

The competitive environment is expected to remain intense. Your Company''s strategy and focus remains consistent to robustly strengthen its leadership and thereby maintain its position as the clear leader in the Indian Beer Market. In line herewith, your Company endeavours to continually sharpen its Risk Management systems and processes in line with a rapidly changing business environment.

The COVID pandemic has triggered new risks in business operations. While the gravity of the pandemic is still unfolding, your Company pro-actively put in place Crisis /Contingency Management Teams, both at the Breweries as well as at the Corporate levels. These cross-functional teams, represented by senior management, continually review strategic, operational, financial matters as well as measures relating to employee well-being health and safety.

Detailed advisories have been issued to employees on how to safeguard themselves, their colleagues and associates, and their families both at the workplace as well as at their homes. These guidelines also provide details on social distancing norms, how they should seek help on any aspect concerning their health from within the organisational support system. Heightened safety protocols were implemented at all units that resumed operations, with end-to-end solutions from transportation of workmen, screening, regular deep cleaning and sanitisation, innovations to ensure safe distancing and strict adherence to hygiene standards and use of personal protective equipment where required.

Through these actions, your Directors are confident that your Company would sustain its leadership position, grow ahead of the market and realize improved profitability in the years to come.

Internal Control System

UBL has established a robust system of Internal Controls to ensure that assets are safeguarded, and transactions are appropriately authorized, recorded and reported. With the introduction of Internal Controls over Financial Reporting (ICFR) in the Act, we have made an evaluation of functioning and quality of internal controls and Corporate Governance Policy that guides the conduct of affairs of your Company and clearly delineates the roles, responsibilities and authorities at each level of its governance structure and key functionaries involved in governance.

The Internal Financial Control framework of your Company is established in accordance with COSO (Committee of Sponsoring Organizations) framework and is commensurate with the size and operations of your Company''s business. In addition to statutory mandate, Internal Audit evaluates and provides assurance of its adequacy and effectiveness through periodic reporting. Controls in place are routinely evaluated and audited by Internal and Statutory Auditors and gaps are identified by the Auditors through a detailed testing exercise. The process of internal control ensures orderly and efficient conduct of business, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. Financial Statements are prepared based on Significant Accounting Policies that are carefully selected by management. The Accounting Policies are reviewed and updated from time to time.

These, in turn are supported by a set of Standard Operating Procedures (SOPs) that have been established for the business. Internal Control evaluates adequacy of segregation of duties, transparency in authorization of transactions, adequacy of records and documents, accountability & safeguarding of assets and reliability of the management information system. The systems, SOPs and controls are reviewed and audited by Internal Audit periodically for identification of control deficiencies and opportunities, whose findings and recommendations are reviewed by the Audit Committee and tracked through to implementation.

The Company believes that the overall internal control system is dynamic and reflects the current requirements at all times thereby ensuring that appropriate procedures and operating and monitoring practices are in place by regular audit and review processes to ensure that such systems are reinforced on an ongoing basis.


Subsidiary Company

Maltex Malsters Limited is the only subsidiary in which your Company holds 51% of its Equity Share Capital. Maltex Malsters Limited is a non-listed entity and is not a material non-listed subsidiary as defined in Regulation 16(1)(c) of the Listing Regulations.

UBL has formulated a policy for determining material subsidiaries which is placed on the website of the Company and is available through the webpage:

The consolidated financial statement of the Company including the financial statement of its subsidiary forms part of this Report in terms of the Act and the Listing Regulations. A statement containing the salient features of the financial statement of the subsidiary and associate is attached as Annexure-C to this Report.

Cash Flow Statement

A Cash Flow Statement for the year ended March 31, 2021 is appended.

Particulars of Loans, Guarantees or Investments

Details of loans, guarantees and investments covered under Section 186 of the Act are given in the notes to the Financial Statements. The Company has not advanced loans to Directors / to a Company in which the Director is interested to which provisions of Section 185 of the Act apply and has not given loans / guarantees / provided security to which provisions of Section 186 of the Act apply.

Listing requirements

Your Company''s Equity Shares are listed on the BSE Limited and National Stock Exchange of India Limited. Listing fees have been paid to these Stock Exchanges for the year 2021-2022.

Depository System

The trading in the Equity Shares of the Company is under compulsory dematerialization mode. The Company has entered into an agreement with National Securities Depository Limited and Central Depository Services (India) Limited in accordance with the provisions of the Depositories Act, 1996 and as per the directions issued by the Securities and Exchange Board of India. As the depository system offers numerous advantages, Members are requested to take advantage of the same and avail the facility of dematerialization of the Company''s shares.


There were no outstanding deposits at the end of the previous financial year. The Company has not invited any deposits during the year.

Ratio of Remuneration and Particulars of Employees

In terms of sub-section(1) of Section 136 of the Act, the Company has opted to provide full version of financial statements including consolidated financial statements, auditor''s report and other documents required to be annexed to such financial statements excluding the details relating to ratio of the remuneration of each Director to the median employee''s remuneration and remuneration drawn by certain employees over the threshold etc. as provided in sub-section(12) of Section 197 of the Act read with Rule 5(1) & 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The details provided by the Company are in compliance with Section 136(1) of the Act and includes salient features of Form AOC-3A.

Also, in terms of second proviso to this Section, the Company shall keep open for inspection for all Members, statement relating to above details at its registered office. Any Member interested in inspection of the documents pertaining to above information or desires a copy thereof may write to the Company Secretary. The above details be treated as part of this Annual Report.

Cautionary Statement

Statements in this Report, particularly those which relate to ''Management Discussion and Analysis'' and ''Opportunities, Threats, Risks and Concerns'', describing the Company''s objectives, projections, estimates and expectations, may constitute ''forward looking statements'' within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied.

Employees Stock Option Scheme and Sweat Equity Share

The Company has not offered any shares to its employees or Key Managerial Personnel under a scheme of Employees'' Stock Option and has also not issued any Sweat Equity Shares at any time.

Related Party Transactions

Details of transactions with related parties as defined in the Act and the Rules framed thereunder, the Listing Regulations and Accounting Standard 18 of the Companies (Accounting Standards) Rules, 2006, have been reported in the Notes to financial statements. Approval of the Audit Committee and the Board of Directors, as required under the Listing Regulations has been obtained for such transactions.

The Company has formulated a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions which is placed on the website of the Company and is available through the webpage:

All transactions entered by the Company during FY21 with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company has not entered into any transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

Familiarization programme for Independent Directors

During this year the Company has not appointed any new Independent Director. The existing Board comprises Executive, Independent and Non-Executive Directors who have been at the helm of Management of the Company for several years and are fully conversant with the business and operations of the Company. The Familiarization programme for new Independent Directors as and when inducted shall aim to familiarize them with the Company, their roles, rights, responsibility in the Company, market, business model of the Company etc. The Board of Directors has complete access to requisite information within the Company.

Familiarization is done at the Board Meeting itself where business is discussed at length along with Industry dynamics, Strategic planning and other relevant information. Presentations are regularly made to the Board of Directors/Audit Committee/Nomination & Remuneration Committee on various related matters, where Directors get an opportunity to interact with Senior Managers. The Company has issued appointment letters to the Independent Directors which also incorporates their role, duties and responsibilities. The details of the Familiarization Programme for Independent Directors is disclosed on the Company''s website at the webpage:

Whistle Blower Policy

The Company has adopted vigil mechanism which is a channel for receiving and redressing of complaints about any misconduct, actual or suspected fraud, actual or potential violations of the Company''s code of conduct and any other unethical, unlawful or improper practices, acts or activities within the Company. The Company has formulated a Whistle Blower Policy for Employees & Directors and has ensured adequate safeguards against victimization of whistle blowers. The details of establishment of the vigil mechanism are disclosed on the website of the Company.

None of the Employees and Directors have been denied access to the Chairman of the Audit Committee.

Internal Complaints Committee

UBL has constituted an Internal Complaints Committee (ICC) at its Corporate / Registered Office and at all its breweries/ Regional Offices to consider and deal with all reported sexual harassment complaints. The constitution of the ICC is

as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Investigations are conducted, and decision made by the ICC at the respective locations, and the constitution is as prescribed. Details of complaints pertaining to sexual harassment filed, disposed of and pending during the financial year are provided in the Corporate Governance and Business Responsibility Reports of this Annual Report.

Conservation of Energy

The Company is taking continuous steps to conserve energy. Its Sustainability initiatives are disclosed separately as part of this Report.

The information on conservation of energy, technology absorption, foreign exchange earnings and outgo, as stipulated under Clause (m) of sub-section (3) of Section 134 of the Act read with the Companies (Accounts) Rules, 2014 is set out herewith as Annexure-D to this Report.

Code of Business Conduct and Ethics

The Board of Directors of UBL have adopted a Code of Business Conduct and Ethics in terms of the Listing Regulations which has been posted on the website of the Company viz.,

Code for Prevention of Insider Trading

Your Company has adopted a comprehensive ''Code of Conduct to Regulate, Monitor and Report of Trading by Insiders'' and also a ''Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information'' relating to the Company, under the provisions of the Securities Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.

The Board of Directors have approved and adopted the ''Code of Conduct to Regulate, Monitor and Report of Trading by Insiders'' and a ''Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information''.


The Board of Directors of UBL currently comprises of eight Directors with a balanced combination of Executive, Non-Executive and Independent Directors.

Mr. A K Ravi Nedungadi, a Non-Executive Director retires by rotation at this Annual General Meeting (AGM), and being eligible, has offered himself for re-appointment. Resolution for re-appointment of Mr. A K Ravi Nedungadi is proposed at this AGM.

Mr. Rishi Pardal is the Managing Director.

Chief Financial Officer (Key Managerial Personnel)

Mr. Berend Odink is the Chief Financial Officer of the Company.

Meetings of the Board of Directors and Committees of the Board

The Meetings of the Board and Committees are pre-scheduled, and a tentative calendar of the meetings finalized in consultation with the Directors is circulated to them in advance to facilitate them to plan their schedule. In case of special and urgent business needs, approval is taken by passing resolutions through circulation. During FY21, six (6) Board Meetings were held. Other details including the composition of the Board and various Committees and Meetings thereof held in FY21 are given in the Corporate Governance Report forming part of this Report.

Meeting of the Independent Directors

During the year, two Meetings of Independent Directors were held on October 17, 2020 and March 24, 2021. All Independent Directors have given a declaration that they meet the criteria of Independence and in the opinion of the Board, the Independent Directors fulfill the condition of Independence as laid down under the Act and Listing Regulations.

Audit Committee

The Audit Committee of the Board of Directors is constituted to act in accordance with the terms of reference and perform roles, as prescribed under the Act and Listing Regulations. The composition of the Audit Committee, its terms of reference, roles and details of Meetings convened and held during the year under review is given in the Corporate Governance Report forming part of this Report.

During the year under review, all the recommendations of the Audit Committee were accepted by the Board. Nomination and Remuneration Committee

The Nomination and Remuneration Committee is constituted to act in accordance with the terms of reference and perform roles, as prescribed under the Act and Listing Regulations. The composition of the Nomination and Remuneration Committee, its terms of reference, roles and details of Meetings convened and held during the year under review is given in the Corporate Governance Report forming a part of this Report.

Policy on Performance Evaluation

UBL has formulated a Performance Evaluation Policy inter-alia prescribing evaluation criteria for Independent Directors and the Board of Directors of the Company. The Policy is posted on the website of the Company and is available through the webpage:

Performance Evaluation of Directors

Performance evaluation of Non-Executive Directors including Independent Directors, the Board as a whole and Committees of the Board is being carried out in accordance with the statutory provisions as contained in the Act and Listing Regulations.

To ensure an effective evaluation process, the Nomination and Remuneration Committee has put in place a robust framework for conducting the exercise with key steps and practices defined clearly. Performance of the Board is evaluated on various parameters such as composition, strategy, tone at the top, risk and controls and diversity. Also, a questionnaire for Committees is framed on parameters such as adherence to the terms of reference and adequate reporting to the Board. Parameters for the Directors include intellectual independence of the Director, participation in formulation of business plans, constructive engagement with colleagues and understanding of the risk profile of the Company.

Keeping in view the sensitivity, confidentiality is ensured. As part of this process, customized questionnaires, are circulated to all Directors of the Company. Each Director is required to undertake a self-assessment. Additionally, the effectiveness of the Board and Committees is also evaluated by each Member of the Board and Committee through an electronic platform and kept confidential.

Summary of responses received from Directors is placed at a Board Meeting.

Remuneration Policy

The Company carries out periodic reviews of comparable companies and through commissioned survey ascertains the remuneration level prevailing in these companies. The Company''s Remuneration Policy is designed to ensure that the remuneration applicable to Managers in the Company is comparable with Multi-national Companies operating in Brewing or similar industry in India. In line with statutory requirements, the Board of Directors has adopted a Remuneration Policy for Directors, Key Managerial Personnel (KMP) and other employees of the Company. The Remuneration Policy lays down the criteria for appointment and removal of Directors, KMP and Senior Management. The Policy also prescribes the criteria and manner for fixation and approval of remuneration payable to Directors, KMP and other employees. The Policy is posted on the website of the Company

Dividend Distribution Policy

As required under Regulation 43A of the Listing Regulations, the Company has formulated a Dividend Distribution Policy. This policy can be viewed on the Company''s website at

Foreign Exchange Earnings and Outgo

During FY21, total foreign exchange earnings of the Company stood at Rs. 768 Million (Previous Year: Rs. 1,953 Million) and foreign exchange outgo stood at Rs.1,641 Million (Previous Year: Rs. 3,754 Million).

Corporate Governance Report

Report on Corporate Governance forms a part of this Report along with the Certificate from the Company Secretary in Practice.

Annual Return

As required under sub-section (3) of Section 92 of the Act as amended by the Companies (Amendment) Act, 2017, the Company has placed a copy of the Annual Return in Form MGT-9 on its website and is available through the webpage:

Auditors and the Auditor''s Report

Messrs S. R. Batliboi & Associates LLP, Chartered Accountants (Firm Registration No. 101049W/E300004) were re-appointed as Auditors of the Company by the Members at the AGM held on September 23, 2017 to hold office for a period of five years till the conclusion of the AGM in 2022. In terms of Section 139 of the Act, as amended by the Companies (Amendment) Act, 2017 notified on May 07, 2018, appointment of Auditors need not be ratified at every AGM. Accordingly, the Notice convening the ensuing AGM does not carry any resolution for ratification of appointment of Statutory Auditors. The Auditors have confirmed that they continue to fulfil the criteria for appointment as Auditor''s of the Company as prescribed under the Act and the Rules framed thereunder.

There are no qualifications or adverse remarks in the Auditor''s Report.

Secretarial Audit

Pursuant to Section 204 of the Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Sudhir Hulyalkar, Company Secretary in Practice, to undertake Secretarial Audit of the Company for the FY21. The Secretarial Audit Report forms part of this Report and is annexed as Annexure-E.

There are no qualifications or adverse remarks in the Secretarial Audit Report.

Reporting of frauds by auditors

During the year under review, under Section 143(12) of the Act, neither the statutory auditors nor the secretarial auditor have reported to the audit committee, any instance of fraud committed against the Company by its officers or employees, the details of which would be required to be mentioned in this Report.

Details of Significant and Material Orders

No order/s have been passed or stringent action taken by any Regulator or Court or Tribunal impacting the going concern status of the Company. However, we bring to your attention the following developments/orders for sake of transparency.

(i) It is in public domain that United Breweries (Holdings) Limited {UBHL}, a promoter of UBL was ordered to be wound up by Hon''ble High Court of Karnataka vide dated February 07, 2017. Appeal filed by UBHL against the said winding up order was dismissed by the Hon''ble Karnataka High Court on March 06, 2020. Against this dismissal, a special leave petition has been filed by UBHL before the Hon''ble Supreme Court of India. The Supreme Court on October 2, 2020 had also allowed the winding-up of UBHL. However, UBL has not received any confirmation from UBHL in terms of Supreme Court order of Winding-up.

(ii) As per disclosures received by UBL in May 2018 under SEBI (Prohibition of Insider Trading) Regulations, 2015 and SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 from a few Promoter companies controlled by Dr. Vijay Mallya, we notice that 41,315,690 Equity Shares held by such entities in UBL constituting 15.63% of the total paid up capital have been transferred to the demat account of Enforcement Directorate (ED), Mumbai, Government of India. Earlier, in August 2017, 1,389,068 Equity Shares constituting 0.52% of the total paid up capital were also transferred to the demat account of ED. The ED now holds 42,704,758 Equity Shares constituting 16.15% of the total paid up capital in the Company. UBL has not received any communication from the ED in this regard. As per the legal opinion obtained by the Company with respect to such transfer of shares, the ED has only taken possession of the Equity Shares under the Prevention of Money Laundering Act, 2002 and these Equity Shares have not been confiscated. Transfer of these shares, therefore, may not constitute a transfer of ownership.

Further, the Recovery Officer-I, DRT-II, Bengaluru has transferred 7,404,932 Equity Shares comprising 2.80% of the total paid-up Equity Share capital of the Company in its name from the demat account of UBHL which is under liquidation. However, UBL has not received any disclosure from UBHL in terms of SEBI (Prohibition of Insider Trading) Regulations, 2015 and SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011. The Recovery Officer-I, DRT-II, pursuant to a block deal through BSE/NSE on March 27, 2019 has transferred 7,404,932 constituting 2.80% Equity Shares of the Company to Heineken International B.V

(iii) Pursuant to Order of Debt Recovery Tribunal, Karnataka, Bengaluru dated September 30, 2015, dividend for the financial years 2015-2016 onwards payable to Dr. Vijay Mallya and United Breweries (Holdings) Limited (UBHL) have been withheld till disposal of the O.A. The Recovery Officer-I, DRT-II, Bengaluru vide letter dated October 11, 2018 directed the Company to make payment of dividend for the financial year 2017-2018 on Equity Shares held by UBHL in the Company to the account of Recovery Officer-I, DRT-II. Thereafter, the Official Liquidator, vide letter dated October 26, 2018 informed the Company that the Hon''ble High Court of Karnataka has directed the Official Liquidator by Order dated August 29, 2018 to collect rent and other income due to UBHL, the Company which is in liquidation. The Official Liquidator also directed the Company to remit the dividend aggregating to Rs.7,83,89,631.10 for the financial years 2015-2016, 2016-2017 and 2017-2018 payable to UBHL to the account of Official Liquidator. Accordingly, the Company has remitted the aforesaid dividend amounts to the account of Official Liquidator.

(iv) Effective April 05, 2016, the State Government of Bihar had imposed a ban on sale and consumption of alcoholic beverages in Bihar though it had permitted manufacture of alcoholic beverages for export out of the State vide Notification dated April 05, 2016. The said Notification of Bihar Government imposing ban was struck down by Patna High Court vide Judgement dated September 30, 2016. The State Government of Bihar has challenged the Judgement of Patna High Court in Supreme Court which is pending. Subsequently, effective April 01, 2017, total prohibition (including export out of state) has been imposed in Bihar State and production of beer at the Company''s brewery at Kopakalan, Naubatpur, Patna was discontinued. The Company has since commenced manufacture of non-alcoholic beverages at its above facility.

(v) Pursuant to enquiry initiated by Competition Commission of India (CCI) on October 10, 2018 in relation to allegations of price-fixation and cartelisation, the office of the Director General, Competition Commission of India had completed its investigation in November 2019 and had filed its investigation report (DG Report) with the CCI. The CCI had permitted UBL and other parties to the enquiry, to file their comments/objections to the DG Report and appear for an oral hearing in the matter. Hearings were held on February 1 1, 2021 and March 12, 2021 respectively. UBL filed its response and argued during the oral hearings countering the DG report. Subsequently written submissions were filed with the CCI. The Management, along-with its legal advisors, believe that there are likely mitigating circumstances to counter presumptions made against the Company by the CCI as contained in the Competition Act, 2002. Orders are not yet passed.

The orders/proceedings mentioned above do not have any impact on going concern status of the Company.

Directors'' Responsibility Statement

Pursuant to clause (c) of sub-section (3) of Section 134 of the Act, 2013, the Board of Directors report that:

(a) in the preparation of the annual accounts for the financial year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) the Directors have laid down internal financial controls to be followed by the Company and ensured that such internal financial controls are adequate and were operating effectively, and

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and ensured that such systems were adequate and operating effectively.

All Annexures referred to in the Directors'' Report have been disclosed under the Statutory Information forming part of this Annual Report.


Your Directors take this opportunity to thank UBL''s customers, shareholders, suppliers, bankers, business partners and associates, financial institutions and central and state governments for their consistent support and encouragement to the Company. Finally, your Directors would like to convey sincere appreciation to all the employees of the Company for their hard work and commitment.

By Authority of the Board

Rishi Pardal Sunil Kumar Alagh

April 27, 2021 Managing Director Director

Bengaluru DIN: 02470061 DIN: 00103320

Director’s Report