Notes to Accounts of McDowell Holdings Ltd.

Mar 31, 2024

(1) Provisions

Provisions for legal claims and discounts/incentives are recognised when Lhe
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, Provisions are not
recognised for future operating losses.

At the end of each reporting period, provisions are measured at the present
value of management’s best estimate of the expenditure required to settle the
present obligation at a future date.

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.

(m) Contingent Liabilities

Contingent liabilities are disclosed when there is a possible obligation aiising
from past events, the existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the Company or a present obligation that arises
from past events where it is either not probable that an outflow of resources
will be required to settle the obligation or a reliable estimate of the amount
cannot be made. Contingent liabilities are not disclosed in case the possibility of
an outflow of resources embodying economic benefits is remote.

Demand for AY 2014-15 amounting to Rs, 141.53 Lacs has been adjusted
against refund by Income Tax Demand, although there was no outstanding
demand reflecting on the Income Tax portal. The Company has filed an Appeal
before the Appellate Authority and the same has been allowed by the Appellate
Authority in the favour of the company, The company is pursuing to the income
Tax Department for the refund of Adjusted Demand as there is no outstanding
demand for the A.Y 2014-15.

(n) Employee benefits
(i) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits 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 the amounts expected to be
paid when the liabilities are settled. Short term employee benefits are
recognised in statement of profit and loss in the period in which the related
service is rendered. The liabilities are presented as current employee benefit
obligations in the balance sheet,

The obligations are presented as current liabilities in the balance sheet since
the company does not have an unconditional right to defer settlement for at
least twelve months after the reporting period, regardless of when the actual
settlement is expected to occur.

The Company uses the accrual basis of accounting for the purpose of recording
transactions. However, in respect of variable Employee Benefits pertaining to
any year/s, the same is considered and accounted as and when it becomes due
and payable in the subsequent accounting year/s.

(0) Contributed equity

(a) Equity shares are classified as equity,

incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.

(b) Dividends

Provision is made for the amount of any dividend declared including dividend
distribution tax, 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.

(c.) Earnings per share

(1) Basic earnings per share

Basic earnings per share is calculated by dividing:

° the profit attributable to owners of the company

- by the weighted average number of equity shares outstanding during the
financial year, adjusted for bonus elements in equity shares issued during the
year.

nil Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic
earnings per share to take into account:

. the after-income tax effect of interest and other financing costs associated with
dilutive potential equity shares, and

. the weighted average number of additional equity shares that would have been
outstanding assuming the conversion of all dilutive potential equity shares.

(a) Segment Reporting

The Company has been continuing as NBFC - CIC [exempted category) and an
unregistered CSC. It is therefore granted exemption from the application of
section 45IA of RBI Act 1934 and it was informed by RBI on December 11, 201U
that existing Certificate of Registration (CoR) with No. N-02,00249 stands
cancelled suo-moto

In accordance with Indian Accounting Standard (Ind AS) 108 - Operating
Segments and relevant guidelines issued by the Institute of Chartered
Accountants of India (ICAI), the company is required to report financial and
descriptive information about its reportable segments.

However, during the financial year, the company is primarily receiving Dividend
and Interest Income which constitutes a single business segment. 1 he
operations of the company are located in a single geographical area, being m
India, and all revenues earned, and expenses incurred are primarily within this

single geographical segment.

Considering the company''s operations, no additional segment information has
been disclosed as the entire operations are covered under a single reportab -
segment as per the criteria defined in Ind AS 108. Therefore, segment reporting
as required under Ind AS 108 is not applicable for the current financial year.

The management continuously monitors the business activities and will
disclose segment information in future financial statements if multiple
segments are identified as per Ind AS 108 criteria.

(b) Related Party Disclosure

The transactions with related parties are made in the ordinary course of
business and the same is at arm’s length. Outstanding balances at the year-enc
are unsecured and interest free other than fixed deposits and settlement occuis
in cash There have been no guarantees provided or received for any related
party receivables or payables. The Company has not recorded any impairment
for receivables. Other variable employee benefits will be considered as am
when it is due and payable.

NOTE ZO: CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of financial statements requires the use of accounting estimates
which, by definition, will seldom equal the actual results. This note provides an
overview of the areas that involved a higher degree of judgment 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 judgments 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 are:

. Fair value of financial instruments
O Provisions and other contingent liabilities

• Residual value and useful life of property, plant and equipment

Estimates and judgments 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,

NOTE 21: The Hon''ble High Court of Karnataka on 7^th February 2017 had passed an
order of winding-up on a Promoter Company being United Breweries (Holdings)
Ltd. (hereinafter referred to "UBHL"), in which the Company was holding 52,60,002
equity shares. As understood, UBHL had filed an appeal against the said winding up
order before the Hon’ble Divisional Bench of High Court of Karnataka The Hon ble
High Court of Karnataka vide order dated 6* March 2020 dismissed this appeal oi
UBHL. Thereafter, UBHL had filed a Special Leave Petition challenging the order
dated 6^th March, 2020, The aforementioned Special Leave Petition filed by UBHL
was dismissed by an Order dated 26* October, 2020 passed by the Hon’ble Supreme
Court of India confirming UBHL’s winding up. Meanwhile, the Stock Exchanges have
also delisted the shares of UBHL. Considering all these facts, the Company had
written off the investments in UBHL (which was previously provided for).

NOTE 22: The Official Liquidator (OL) of UBHL vide an advertisement dated 28^th
September, 2020 (published in the Times of India (Bangalore Edition) on 30*
September 2020) has asked for furnishing of claims by the creditors of UBHL on or
before 29* October 2020. Pursuant to the same, the Company has on 27* October
2020 filed its claim of Rs.329.52 crores against UBHL with the OL. The Company has
followed up with the OL (including writing a letter in June 2021) for release of the
claim. The matter is pending therein.

Note 23: Two investee companies being United Breweries Limited (hereinafter
referred to UBL ] and UBHL in which the Company holds strategic investments
have t eceived orders in May 2016 from Enforcement Directorate (hereinafter
referred to as "ED"] directing them not to allow the Company to sell / alienate /
create third party mortgage rights in any manner on the shares of such investee
companies. These investee companies have thereafter written to NSDL and CDSL
through their Registrar and Transfer Agent (RTA) to implement the directives of ED.

Note 24; (he Company s investments include 45,51,000 shares in UBL lying in its
demat account which were pledged in favour of erstwhile lenders. Which has been
transferred to SBI Mutual Fund Group on 31^st July, 2023 on the directions of E.D as
informed to us via letter no. IRMSL/MHL/JUL-029/23.

Note 25: Further, 1,22,667 shares of UBL, (being the balance pledged shares],
consequent to invocation by the erstwhile lenders and after liquidation of their
dues, are lying in the demat accounts of the said lenders. The Company understands
fiom these lenders that pursuant to the directions of ED, these shares, dividend
theieon and also the excess sum recovered by the lenders wiii not be released by
the lenders. The Company has written to the lenders in June and August 2021 to
telease the dividends and the excess amount retained, who have replied,
maintaining their stand that they will act upon ED''s directions to release

Note 26: The Company''s investment of 16,71,344 shares in UBL was unilaterally
ttansfeired horn the demat account of the Company to the demat account of the
Deputy Diiector, ED, Mumbai on 3^rd May, 2018. As per the statutory requirements
the Company had intimated the Stock Exchanges. With respect to the same, the
Company came to know vide newspaper articles dated 30^th May 2021 and 7^ June
2021 that pursuant to orders passed by the PM LA court, the ED had transferred
4,13,15,690 UBL shares to the Recovery officer of the DRT for the purpose of sale.
The company has written to the ED on 15* June 2021 seeking clarity on its
shai eholding of 16,71,344 UBL shares. Further, UBL has disclosed to the Stock
Exchanges that Heineken N.V. has acquired 3,96,44'',346 UBL shares on 23^rd June
2021, Further, DRT vide an Order dated 14.06.21 has cancelled the saie of 16,71,344
UBL shares while transferring it back to ED on 11.06,21.

The Company also received a letter dated 2^nd September 2021 from the ED
intimating that 16,71,344 UBL shares belonging to the Company has been
transferred to DRT by ED pursuant to the Hon’ble Special Court''s order dated 31^st
December 2019 / 4^th January 2020,

The Company vide its letter dated 14th September 2021 sought a clarification from
ED, which vide its letter dated 7th October 2021 asked the Company to take up the
matter with Recovery Officer-11, DRT. The Company again vide letter dated 17th
November 2021 clarified to ED regarding the said shares, who vide its Setter dated
25th November 2021 forwarded the Company''s letter to DRT for their
consideration. The matter is pending.

Note 27: On 3^rd May 2018, the Deputy Director, ED, Mumbai had transferred a total
of 22,00,360 shares of the Company, held by three Promoters, to the ED''s demat
account from the demat accounts of the respective Promoters. The ED under the
PMLA has also attached 2 shares of the Company held by an individual Promoter,
The Company has been given to understand now that these Promoters have filed
appeals before the Appellate Tribunal under the PMLA against the attachment of its
shares in the Company and the appeals are pending. Further, as understood from
the letter dated 17^Lh June 2021 of the RTA to the Company, these shares have been
transferred by ED to the Recovery Officer of DRT on 4^lh June 2021. Further, a total
of 25,17,189 shares (which total includes the above 22,00,159 shares) of the
Company held by two Promoters (included in three Promoters above) has also been
attached by an order of attachment dated 21^st June 2018 passed by the Recovery
Officer, Debt Recovery Tribunal, Bangalore.

Note 28: The Company had received a Show Cause Notice dated 3^{I July 2018 under
the Fugitive Economic Offenders Act 2018 (hereinafter referred to as "FEOA") to
show cause why the Company''s investments in UBL and UBHL should not be
confiscated. The Company has filed its objections in the designated court for FEOA,
Mumbai. The matter is still pending in Court.}

Note 29: In a separate proceeding before the Court of Special Judge for Prevention
of Money Laundering Act, 2002 (hereinafter referred to as "PMLA"), an individual
promoter of the Company has been declared as a proclaimed offender, Pursuant to
this declaration, the Company''s investments in DBL and UBHL have been attached
under the PMLA. In related proceedings, before the PMLA Court the Company had
placed its objections on record. The PMLA Court vide order dated 31^st December
2019 lifted the attachment on assets in the name of the individual promoter,

Note 30: The Company''s demat account maintained with Stock Holding Corporation
of India has been suspended for debit on the instructions of ED since 29^th July 2019.
The Company has filed submissions with ED seeking removal of this attachment.
Thereafter ED had issued summons pursuant to which details were submitted and a
statement has also been given. Further hearings were held by the Enforcement
Directorate in which clarification have been submitted and the matter is pending,

NOTE 31: The Company''s investments include 57,219 shares in Mangalore
Chemicals and Fertilizers Limited (hereinafter referred to as "MCF") which were
frozen by the Stock Holding Corporation of India Limited under an instruction from
the Stock Exchanges, where the shares of the Company are listed. The Company
has filed an appeal before the Securities Appellate Tribunal, Mumbai (hereinafter
referred to as “SAT") has been withdrawn vide order dt. 18^lh February 2019,

Note 32; The Company is one of the claimants in an arbitration matter against Zuari
Fertilisers & Chemicals Limited (hereinafter referred to as "ZFCL") ZFCL and Zuari
Agro Chemicals Ltd (hereinafter referred to as "ZACL’¹), the respondents. The
arbitration proceedings have been concluded and vide the Arbitration Award dated
8¹¹'' May 20X7, the Arbitrator has dismissed the Company''s claims and has ordered
all the claimants to pay to the respondents'' costs of a total sum of Rs. 75 lakhs. The
appeal filed by the Company against the Arbitration Award before the Hon’ble High
Court; Bombay was disposed of in January 2020. The Company has tiled an appeal
against the aforesaid order before a Division Bench of the Hon''ble High Court,
Bombay which is pending. Thereafter in January 2022, the Company has settled this
Arbitration directly with ZACL, by making a payment of Rs. 25 Lakhs towards to its
share of costs and accordingly this matter stands closed.

Note 33: Regarding the dues to ZACL, the Company had entered into a Settlement
Agreement dated 17^th June, 2019 (herein after referred to as "SA") with ZACL
finalizing tire quantum of its dues. Prior to tliis, ZACL liad instituted insolvency
proceedings and other associated proceedings for recovery of their dues from the
Company. The SA was executed to bring an end to these litigations in various
Courts. Pursuant to the SA, the dues of ZACL were partly paid. Alongwith interest
the amount outstanding to ZACL as on 31st March 2021 was Rs.14.25 crores only,
which was payable within IB months from the date of SA and non-payment within
this period gave a right to ZACL to re-initiate the Insolvency proceedings against the
Company, On execution of this SA, all the related proceedings in City Civil Court,
Hon''ble Supreme Court, Hon’ble High Court of Karnataka and NCLT (insolvency
proceedings) were withdrawn by both the parties. The assets of the Company
(being its investments) which could have yielded revenue / income are attached by
authorities and are the subject matter of litigations,

The continuity of COVID-19 pandemic / lockdowns led to a delay in these matters.
The Company was under financial constraints and could only pay a meagre amount
of ZACL dues.

The Company''s request for extension of time for repayment was not acceded to by
ZACL, who sought for payment of the dues. In November 2021, vide a tripartite
agreement between ZACL, the Company and Another Company (hereinafter
referred to as the "Entity"), the total outstanding dues of Rs,14.80 crs of ZACL (upto
October 2021) was paid to ZACL by the Entity, in discharge of the liability of the
Company to ZACL. Post this payment, the Entity got established as a creditor of the
Company. Vide a Segal notice in December 2021, the Entity sought for the
repayment of its dues. The Company sought for 6 months’ time to make the
repayment,

In January 2022, the Entity filed an Application under section 7 of the insolvency
and Bankruptcy Code 2016 against the Company. The NCLT, Bangalore allowed the
application and vide order dated 8th April 2022 initiated the Corporate Insolvency
Process (C1RP) and appointed an Interim Resolution Professional (IRP).

Note 34: The Company''s net worth taking into account the market vaiue of its
investments, would be more than adequate to meet all its liabilities and to continue
to operate in the future. Accordingly, the Company continues to present its financial
statements on the principles applicable to ''going concern''. (Though the Company''s
cash flows are strained). Exigent circumstances are prevailing upon the company
where upon its investments which could generate income has been attached and
frozen by the ED. Under these circumstances, the company is finding it difficult to
meet its expenses. The required data to ED has been submitted along with the fact
that the company is unconnected and independent company which has been
unnecessarily drawn in to the investigation being carried out in the matter of
Kingfisher Airlines Ltd / Dr Vijay Mallya. Till date, the investments have not been
de-frozen. The Company’s efforts are directed towards resolving these issues.

Note 35: The Company, during the Corporate insolvency Resolution Process have
filed cases in different forums, which is listed below. Expenses pertaining to the
undermentioned litigations such as Travel and Lodging, briefing advocates,
organizing meetings/conferences towards the preparation of preliminary review
of legal cases and their detailed discussion and analysis for their logical conclusion
have been captured under RP / General expenses in Note 19 (other expenses)

Note 36: The Stock Exchanges have levied fines on the company for non-compliances
of Regulations 6(1), 17(1), 33 of SEBI (LODR) Regulations 2015. The Company has
regularly submitted for waiver of fines explaining the extraneous situation which has
arisen due to the attachment of Company''s investments by the ED on which the
Company had no control. The Stock Exchanges have sought for compliances before
any waiver and the matter is pending therein

Note 37: Company did not have any long-term contracts including derivative
contracts for which there were any material foreseeable losses.

Note 38: Limited Reviews

Subsequently, in view of the GRP proceedings quarterly accounts for the quarter
ended 30.06.23, 30.09.2023, 31,12.23 and 31.03.24 were not conducted.

Note 41: Change in Classification of Fixed Deposit Receipts (FDRs)

Background: During the current financial year, the management conducted a
comprehensive review of the company''s accounting policies in line with Ind AS l
"Presentation of Financial Statements." As a result of this review, it was determined that
the classification of certain Fixed Deposit Receipts (FDRs) should be revised.

Previous Classification: In the financial statements for the year ended 31^st March 2023,
FDRs amounting to 1253.59 Lakhs were classified under "Cash and Cash Equivalents" in
the Balance Sheet, This classification was based on the understanding that these FDRs
were readily convertible to known amounts of cash with insignificant risk of changes in
value.

Revised Classification: Upon review, iL has been concluded that these FDRs, having
maturities beyond three months from the date of acquisition or being subject to restrictions
that limit their liquidity, do not meet the criteria for classification as "Cash and Cash
Equivalents." Consequently, these FDRs have been reclassified as "Non-Current Assets"
under "Financial Assets — Other Financial Assets" as of l^sl April, 2023, This
reclassification aligns with the company''s updated accounting policy and better reflects the
liquidity and intended use of these assets.

Impact of the Change: This reclassification does not affect the overall financial position,
performance, or cash flows of the company, However, it results in a reallocation ol assets
within the Balance Sheet as follows:

o Decrease in "Cash and Cash Equivalents" by ? 253,59 Lakhs
- Increase in "Noil-Current Financial Assets" by ? 253.59 Lakhs

This change in classification has been applied retrospectively to enhance the comparability
of financial information,

Note 42: Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to
the nearest Rupees in Lakhs as per the requirement of Schedule III, unless otherwise
stated,

Note 43: Change in Registered Office

The Company has shifted its registered office to 104, First Floor, Raheja Chambers, 12,

Museum Road, Bengaluru - 560 001 with effect from 20^lh October 2023

Note 44: As of the reporting date, the Company has made multiple requests via email
to Stock Holding Corporation of India Ltd. and Yes Bank for obtaining the Demat
Holding Statements as of 31st March 2024, Despite these efforts, the statements have
not yet been provided. The last available statement from Stock Holding Corporation of
¦India Ltd. reflects the status of shares only up to 14th February 2024,

The Company is actively following up with the depositories to secure the required
information. Any significant updates or impacts resulting from the delay will be
disclosed in subsequent financial reports as necessary.

The accompanying notes are an integral part of the Financial Statements
As per our report of even date

For S K Bajpai & Co. For McDowell __n|NF,5 j. IMITEP

Chartered Accountants

Firm Registration No. , „ _A „.

/v/CTT, \ P \ KONDURU PR AS AN 1H RAJU

jLy/rR ^ A q. RESOLUTION PROFESSIONAL

^ 004330CJ 11 |BBl/lPA-002/1P -N00708T2018-2019/12200

Sarvesh Kumar Bajpai Konduru Prasanth Raju

Partner Resolution Professional

Membership No. 073277 IBBI/IPA-002/IP-N00708/

^UD1N , , 2018-2019/12200

Place : Bengaluru (Camp Office)

Date : 09.09,2024

For MCDOWELL HOLDINGS LIMITED (In CIRP)

kfftritj''vfl, \JO IVYLW
SHRADHA S0MANI
COMPANY SECRETARY

---

Mar 31, 2018

CORPORATE INFORMATION :

In terms of a Composite Scheme of arrangement sanctioned by the Hon’ble High Court of Karnataka, the investment business of McDowell & Company Limited (now known as United Spirits Limited), was demerged into McDowell India Spirits Limited (now known as McDowell Holdings Limited) with retrospective effect from the opening hours of April 1, 2005. As a part of the Scheme, the name of the Company was changed from McDowell India Spirits Limited to McDowell Holdings Limited.

The Company had obtained registration from the Reserve Bank of India, to carry on the business of a Non-Banking (Non Deposit accepting) Financial Company. On the application of the Company, the Reserve Bank of India has reclassified the Company as a Core Investment Company (CIC).

a. Terms and rights attached to equity shares

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. The rights of shareholder is governed by the Articles of Association of the Company and the Companies Act, 2013.

1. The Hon’ble High Court of Karnataka on 7th February, 2017 had passed an order of winding-up of a Promoter Company, in which the Company also holds 52,60,002 equity shares. The impact of the winding up order on the shareholding in this Promoter Company is being assessed, pending the appeal filed in the Hon’ble High Court of Karnataka by the Promoter Company.

2. The Company’s investments include 45,51,000 shares in United Breweries Limited (hereinafter referred to as UBL) which were pledged in favour of erstwhile lenders. As on date no dues are outstanding to these lenders but the pledge on these shares have not been released. The lenders have communicated to the Company that consequent to the order of Enforcement Directorate the pledge on these shares cannot be released. The Company is in the process of taking appropriate steps in consulting with the lawyers to deal with the matter.

3. Further, 1,22,667 shares of UBL, being the balance pledged shares, consequent to invocation by the erstwhile lenders and after liquidation of their dues, are lying in the Demat accounts of the said lenders. The lenders have communicated to the Company that consequent to the order of Enforcement Directorate these shares, dividend thereon and the excess sum recovered by them cannot be released. The Company is in the process of taking appropriate steps in consulting with the lawyers to deal with the matter.

4. The Company’s investments include 1,71,518 shares in Mangalore Chemicals and Fertilizers Limited (hereinafter referred to as MCF) which have been frozen by Stock Holding Corporation of India Ltd under an instruction from the National Stock Exchange (NSE), where the shares of the Company are listed. The Company has made a representation before NSE & Securities and Exchange Board of India (SEBI) for defreezing the said shares.

5. The Company has received orders from Directorate of Enforcement, Govt of India dated 10th and 12th May 2016 in connection with an ongoing investigation against Kingfisher Airlines Limited and Dr. Vijay Mallya under the provisions of Prevention of Money Laundering Act, 2002, directing the Company that United Breweries Holdings Limited and Kingfisher Finvest Limited shall not be allowed to sell/alienate/create third party mortgage rights in any manner over their shares in the Company. Accordingly the Company has intimated to Registrar and Share Transfer Agent and the two entities.

6. Two investee companies in which the Company holds strategic investments have received an order from Enforcement Directorate (hereinafter referred to as ED) directing them not to allow the Company to sell / alienate / create third party mortgage rights in any manner on the shares of such investee companies. The investee companies have written to NSDL and CDSL through their Registrar and Transfer Agent to implement the directives of ED. The Company is in the process of taking appropriate steps in consulting with the lawyers to deal with the matter.

7. The Company’s net worth, taking into account the market value of investments, would be more than adequate to meet all its liabilities and it could continue to operate in the future. Accordingly, the accounts of the company are presented on principles applicable to a “going concern”.

8. The Company was registered with Reserve Bank of India as a Non-Banking (non deposit accepting) Financial Company. On the application of the Company, the Reserve Bank of India has reclassified the Company as a Core Investment Company (CIC).

9. The Company has dues of Rs. 23.24 crs (includes interest of Rs. 3.24 crs) as on 30th June, 2017 to Zuari Fertilizers & Chemicals Limited (hereinafter referred to as ZFCL). The Company has sought adjustment of Rs. 9.39 crs (dues from MCF, a subsidiary company of ZFCL) against the above dues. ZFCL has also filed a petition in NCLT. In view of the pendency of this NCLT matter and the fact that the Company has sought adjustment of Rs. 9.39 crs, the interest on the principal amount of Rs. 20 crs shall be accounted on the basis of the outcome of the said NCLT matter.

10. Zuari Fertilisers & Chemicals Limited has filed a Petition before the National Company Law Tribunal (NCLT), Bangalore, inter alia against McDowell Holdings Limited u/s 241, 242, 244, 246 and other provisions of Companies Act, 2013, alleging mismanagement of the affairs of Mangalore Chemicals & Fertilizers Ltd. (MCF) and seeking certain reliefs in the form of disinvestment of UB Group’s holding in MCF in their favour, and making good the purported losses arising on account of the alleged mismanagement of the affairs of MCF. The matter is pending before NCLT, Bangalore and is fixed for hearing on 25th May, 2018.

11. Contingent Liabilities :

A) Demand raised by Income tax authorities against which the Company has preferred appeals

B) The Company is one of the Claimants in an Arbitration matter against ZFCL and Zuari Agro Chemicals Ltd (hereinafter referred to as ZACL), the respondents. The arbitration proceeds have been concluded and vide the Arbitration Award dated 8th May 2017, the Arbitrator has dismissed the Company’s claims and has ordered the claimants to pay to the respondents a sum of Rs. 75 lakhs. The Company has filed an appeal against the Arbitration award before the Hon’ble High Court, Bombay and this amount is treated as contingent in nature.

12. The Company does not have a Managing Director. The Company has appointed a Chief Financial Officer on 23rd March 2018. The affairs of the Company in the interregnum are monitored by executives of the Group, with the guidance of the Group Chairman.

13. Estimated amount of contracts remaining to be executed on capital account and not provided for is Nil (Previous year Rs. Nil)

14. The Hon’ble National Company Law Tribunal (NCLT), Mumbai on 5th December, 2017 had passed an order for Liquidation of a Promotee Company, in which the Company also holds 4,52,243 equity shares. The impact of the order on the shareholding in this Promotee Company is being assessed.

15. Events occurring after the date of the Balance Sheet

The company’s investment of 16,71,344 shares in United Breweries Limited has been unilaterally transferred from the Demat account of the company to the Demat account of the Deputy Director, Enforcement Directorate, Mumbai on 3rd May, 2018. On the same day, a total of 5,99,640 shares in the company held by three Promoters has also been transferred from their respective Demat account to the Demat account of the Deputy Director, Enforcement Directorate, Mumbai. The company is consulting the lawyers for the next course of action.

16. Segmental reporting :

Segment-wise business performance for the year ended March 31, 2018 is as follows:

Notes:

1. Income under the segment ‘investments’ represents dividends received.

2. Segment results represent profit / (loss) before tax.

3. Segment assets include Non- Current Assets and Current Assets.

4. Segment liabilities include Non-Current Liabilities and Current Liabilities.

17. Related Party disclosure as required as per Accounting Standard (AS-18) is as below: United Breweries (Holdings) Limited

The following are the transactions during the period with the related party:

18. The Company has adopted Accounting Standard - 20, “Earning Per Share” for calculation of EPS and the disclosures in this regard are as given below :

19. Figures for the previous year have been regrouped /reclassified where ever necessary.

20. Figures in the Balance Sheet, Statement of Profit and Loss and Schedules have been rounded off to the nearest rupee.

---

Mar 31, 2016

b. Terms and rights attached to equity shares

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. The rights of shareholder is governed by the Articles of Association of the Company and the Companies Act, 2013.

1. The company has provided corporate guarantee, pledge of securities, in addition to cash margins in favour of a lender against dues totaling to Rs. 212.08 crore, to secure the borrowings of certain Group Companies.

The said lender has invoked the pledge of securities and demanded repayment of loans amounting to Rs.206.68 crore from the borrowers. In view of the ongoing negotiations with the lender on this issue, the company continues to treat its obligations under the guarantees given, as contingent.

2. Considering the fact that a Group Company has been registered with the Board for Industrial and Financial Reconstruction u/s 15 (1) of the Sick Industrial Companies Act (SP) Act 1985, the Board of Directors has decided and approved to provided for Investments of Rs.1.90 crs.

3. Further, winding up petitions under section 433 and 434 of Company’s Act,1956 have been filed in the High Court of Karnataka against another Group Company to whom the Company has provided a loan of Rs. 50.88 crs and also accounted interest and other dues of Rs. 15.10 crs. Considering the uncertainty involved and also the fact that the recovery of loans from the Group Company will take a protracted period of time, the Board of Directors of the Company have approved the write off of the loan of Rs. 50.88 crs and for provisioning of Interest and Other dues of Rs.15.10 crs pertaining to the said Group Company as a matter of commercial prudence. Likewise, for the quarter ended March 31st 2016, the Company has not recognized Interest of Rs. 2.70 crs and Security/Guarantee commission of Rs. 0.31 crs on loan of Rs. 50.88 crs to the said Group Company.

4. Also, the lender with whom the Company has pledged its securities to secure the borrowing of this Group Company, has invoked and sold the pledged securities, and utilized the proceeds to recover its dues. The Company had initially accounted this adjustment as dues from the respective borrowing entities, totaling to Rs.124.24 crs. However, based on a critical review of the recoverability of these dues, the Board of Directors have approved the write off of Rs.114.85 crs, as a matter of commercial prudence.

5. The company’s net worth, taking into account the market value of investments, would be more than adequate to meet all its liabilities and it could continue to operate in the future. Accordingly, the accounts of the company are presented on principles applicable to a “going concern”.

6. The Company has provided for Rs. 17.91 crore as diminution in value of investment in one of the Group Company after having considered the market value of the same.

7. The Company is registered with Reserve Bank of India as a Non-Banking (non deposit accepting) Financial Company. Certain regulatory requirements prescribed by the Reserve Bank of India under NBFC Regulations are yet to be complied with. The matter is under serious consideration of the Board of Directors.

8. The Company does not have a Managing Director and a Chief Financial Officer. The affairs of the Company in the interregnum are monitored by executives of the Group, with the guidance of the Group Chairman and the Group Chief Financial Officer.

9. Estimated amount of contracts remaining to be executed on capital account and not provided for is Nil (Previous year Rs. Nil)

10. Segmental reporting:

Segment-wise business performance for the year ended March 31, 2016 is as follows:

Notes:

1. Income under the segment ‘investments’ represents dividends received.

2. Segment results represent profit / (loss) before tax, provision for doubtful loans & advances, advance no longer recoverable, diminution in value of investments and exceptional items.

3. Segment assets include Non- Current Assets and Current Assets.

4. Segment liabilities include Non-Current Liabilities and Current Liabilities.

Note: * In the absence of virtual certainty supported by convincing evidence that future taxable income will be available, deferred tax asset has not been recognized.

11. Related Party disclosure as required as per Accounting Standard (AS-18) are as below: United Breweries (Holdings) Limited

The following are the transactions during the period with the related party:

12. The Company has adopted Accounting Standard - 20, “Earning Per Share” for calculation of EPS and the disclosures in this regard are as given below:

13. Figures for the previous year have been regrouped /reclassified where ever necessary.

34. Figures in the Balance Sheet, Statement of Profit and Loss and Schedules have been rounded off to the nearest rupee.

14. In accordance with the Listing Regulations membership/chairmanship of audit committee and stakeholder relationship committees in all public limited company (excluding McDowell Holding Limited) have been considered.

15. None of the Directors is related to any other Director or has any business relationship with the Company.

---

Mar 31, 2015

Note :

87,86,000 shares of United Breweries Limited are under pledge to secure the borrowing availed by the Company as well as Group Companies. The carrying cost of such investments is Rs. 240.90 million and the market value is Rs. 8,807.97 million.

1. The company has provided corporate guarantee, pledge besides cash margins retained by the bank all totaling to Rs, 330.17 core in favor of a lender to secure the borrowings of certain group companies. Of the cash margin amounting to Rs, 18.11 core, the lender has appropriated a sum of Rs, 10.98 core, for the dues of one of the borrowers. The Board of Directors has reviewed and carried out a critical appraisal of the amount recoverable from the borrower entity and, taking into consideration its financial ability to repay and, as a matter of prudence, has provided for the entire amount of Rs, 10.98 core due from this entity.

Although the said lender has also invoked the corporate guarantee and pledge of securities and demanded repayment of loans amounting to Rs, 312.06 core, the borrowers are in negotiation with lender and are regular in servicing their respective obligations. Hence, the company continues to treat its obligations as contingent.

2. The company's net worth, taking into account the market value of investments, would be more than adequate to meet all its liabilities and continue to operate in the future. Accordingly, the accounts of the company are presented on principles applicable to a going concern.

3. An amount of Rs, 61.64 cores (including interest) is due from a Group company, which has substantial marketable assets, in view of which no provision is considered necessary at this time.

4. The Company is registered with Reserve Bank of India as a Non-Banking (no deposit accepting) Financial Company. Certain regulatory requirements prescribed by the Reserve Bank of India under NBFC Regulations could not be met by the Company during the year. The matter is being addressed by the Board of Directors to fnd a suitable solution.

5. The position of Managing Director fell vacant on 12th May 2014 and efforts are being made to identify a successor. The Company presently does not have any Managerial Personnel namely Managing Director and Chief Financial Offer.

6. Decline in the carrying value of long term investments of Rs, 30.30 cores, is considered temporary, having regard to the strategic nature of such investments.

7. There is no income tax liability on the profits of the year, taking into account the exempted profit on sale of securities. Further, having regard to the adjustments required to be made to the book profit in respect of write off of certain advances against the provision made for such advances, there would also not be any liability on account of Minimum Alternate Tax.

8. Estimated amount of contracts remaining to be executed on capital account and not provided for is Nil (Previous year Rs, Nil).

9. Figures for the previous year have been regrouped /reclassified where ever necessary.

10. Figures in the Balance Sheet, Statement of Profit and Loss and Schedules have been rounded off to the nearest rupee.

Notes:

1. Income under the segment 'investments' represents dividends received and profit on sale of investments.

2. Segment results represent profit / (loss) before tax and provision for doubtful loans & advances.

3. Segment assets include Non- Current Assets and Current Assets.

4. Segment liabilities include Non-Current Liabilities and Current Liabilities.

11. Segmental reporting:

Segment-wise business performance for the year ended March 31, 2015 is as follows:

12. The Company has adopted Accounting Standard - 20, "Earning Per Share" for calculation of EPS and the disclosures in this regard are as given below:

1. fast profit in paragraph 2(1) (xii) of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998.

2. Provisioning norms shall be applicable as prescribed in Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directors, 2007.

3. All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of investments and other assets as also assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/fair value/NAV in respect of unquoted investments should be disclosed irrespective of whether they are classified as long term or current in (4) above.

---

Mar 31, 2014

1. Nature of Companies Operations

In terms of a Composite Scheme of arrangement sanctioned by the Hon''ble High Court of Karnataka, the investment business of McDowell & Company Limited (now known as United Spirits Limited), was demerged into McDowell India Spirits Limited (now known as McDowell Holdings Limited) with retrospective effect from the opening hours of April 1, 2005. As a part of the Scheme, the name of the Company was changed from McDowell India Spirits Limited to McDowell Holdings Limited.

The Company has obtained registration from the Reserve Bank of India, to carry on the business of a Non- Banking (Non Deposit accepting) Financial Company. Presently, the company is engaged in the business of investment and financing.

2.1 The Company has provided Corporate Guarantee and created pledge on 6.3 million equity shares in United Breweries Limited, held by it in favour of a lender to secure their lendings to certain Group Companies and the total amount outstanding as on 31st March 2014 is Rs. 496 crores. Three of such borrowers have committed acts of defaults and the lender has demanded repayment of a sum of Rs. 337.52 crores due from them. Simultaneously, the lender has invoked the corporate guarantee and exercised its right of pledge provided by the Company to realize the above dues. The Company is in negotiation with the lender, to restore the facility made available to the defaulting borrowers. No adverse action has been taken against the Company. Pending final outcome of the negotiations, the company continues to recognize its obligation as contingent liabilities

2.2 The Company has prepared its financial statements on a going concern basis, having regard to the ongoing negotiation with the lender who has invoked the corporate guarantee and exercised its right of pledge over the shares pledged by the company, to restore the facilities to the borrower on whose behalf the relevant guarantees were extended.

2.3 The Company has advanced a sum of Rs. 50.88 Crores to a Group Company, which is a defendant in several litigations and also winding up petitions before the Hon''ble High Court of Karnataka. The company has treated the amount as good and recoverable on the assumption that the litigations and the petitions against the borrowers would be resolved in favour of the borrower.

2.4 The Company is registered with Reserve Bank of India as a Non-Banking (Non-deposit accepting) Financial Company. Certain regulatory requirements prescribed by the Reserve Bank of India under the NBFC Regulations could not be met by the Company during the year. The matter is being addressed by the Board of Directors to find a suitable solution.

2.5 The Company along with other constituents of the UB Group is a party to an agreement entered into between the UB Group and Adventz Group in respect of their respective shareholding in Mangalore Chemicals and Fertilizers Limited. Further, the Company has also joined Zuari Fertilizers and Chemicals Limited, a part of Adventz Group, in making a competing offer under Regulation 20 of the SEBI (SAST) Regulations, 2011, as amended, for acquisition of up to 3,08,13,939 equity shares of Rs. 10 each from the public shareholders of Mangalore Chemicals and Fertilizers Limited by Zuari Fertilisers and Chemicals Limited at a price of Rs. 68.55 per equity share. In terms of the agreement, Zuari Fertilisers and Chemicals Limited has agreed to acquire all the shares that will be tendered in the competing offer and all financial obligations, costs, charges and expenses including payment of consideration to Public Shareholders in terms of the SEBI Regulations will be borne by Zuari Fertilisers and Chemicals Limited alone. SEBI has issued its ''No objection'' for the open offer subject to receipt of approval from the Competition Commission of India.

2.6 The Company is carrying certain investments at a carrying cost of Rs 30.30 Crores. There is substantial erosion in the market price of these investments. The company is of the opinion that the diminutions in the value of the shares are temporary in nature and accordingly, has not made any provision for such diminution.

2.7 The Board of Directors has reviewed and carried out a critical appraisal of the amount recoverable from Bangalore Beverages Limited and, taking into consideration its financial ability to repay and, as a matter of prudence, has provided for the entire amount of Rs. 20.50 Crores due from this entity.

2.8 Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. Nil (Previous year Rs. Nil)

2.9 Contingent Liability:

a) Guarantee given on behalf of other body corporate amounting to Rs. 228.34 Crore (PY Rs. 250 Crore).

b) Obligation of third parties secured by pledge of its shares by the Company Rs. 109.18 Crore (PY Rs. Nil).

2.10 Figures for the previous year have been regrouped /reclassified where ever necessary.

2.11 Figures in the Balance Sheet, Statement of Profit and Loss and Schedules have been rounded off to the nearest rupee.

Notes:

1. Income under the segment ''investments'' represents dividends received and profit on sale of investments.

2. Segment results represent profit / (loss) before tax and provision for doubtful loans and advances.

3. Segment assets include Non- Current Assets and Current Assets.

4. Segment liabilities include Non-Current Liabilities and Current Liabilities.

Notes:

1. As defined in paragraph 2(1) (xii) of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998.

2. Provisioning norms shall be applicable as prescribed in Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directors, 2007.

3. All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of invest- ments and other assets as also assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/fair value/NAV in respect of unquoted investments should be disclosed ir- respective of whether they are classified as long term or current in (4) above.

---

Mar 31, 2013

1. Nature of Companies Operations

In terms of a Composite Scheme of Arrangement sanctioned by the Hon''ble High Court of Karnataka, the investment business of McDowell & Company Limited (now known as United Spirits Limited), was demerged into McDowell India Spirits Limited (now known as McDowell Holdings Limited) with retrospective effect from the opening hours of April 1, 2005. As a part of the Scheme, the name of the Company was changed from McDowell India Spirits Limited to McDowell Holdings Limited.

The Company has obtained registration from the Reserve Bank of India, to carry on the business of a Non-Banking (Non Deposit accepting) Financial Company. Presently, the company is engaged in the business of investment and financing.

2.1 Figures for the previous year have been regrouped/reclassified wherever necessary.

2.2 Figures in the Balance Sheet, Statement of Profit and Loss account and Schedules have been rounded off to the nearest rupee.

---

Mar 31, 2012

A. Terms and rights attached to equity shares

The company has only one class of shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share

The company declares and pays dividends in Indian rupees. The dividend proposed by the board of directors is subject to the approval of the shareholders in the Annual General Meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

b. Shares reserved for issue under options

Pursuant to the approval of the shareholders under section 81 (1A) of the Companies Act, 1956, at the Extraordinary General Meeting held on March 25, 2011, the Company allotted 1,751,290, 10% Optionally Convertible Debentures of the face value of Rs. 100/- ("OCDs") each, to Kingfisher Finvest India Limited, one of the promoters of the Company on preferential basis.

The Company on March 31, 2011, allotted 605,000 equity shares of Rs. 10/- each, to Kingfisher Finvest India Limited, pursuant to the conversion of 812,031, OCDs, at a conversion price of Rs. 134.22 per equity share, in accordance with the SEBI Regulations.

The Company on August 8, 2011, allotted 635,000 equity shares of Rs. 10/- each, to Kingfisher Finvest India Limited, pursuant to the conversion of 641,350, OCDs, at a conversion price of Rs. 101/- per equity share, in accordance with the SEBI Regulations.

As on March 31, 2012, Kingfisher Finvest India Limited has the option to convert the balance OCDs of 297,909 to equity shares, which they converted into equity shares on April 17, 2012. Pursuant to that the company allotted 607,977 equity shares at a conversion price of Rs. 49/- per equity shares.

1.1 Related Party disclosures as required as per Accounting Standard (AS-18) are as below: Associate: United Breweries (Holdings) Limited

1.2 Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. Nil (Previous year Rs. Nil).

1.3 Information under paragraphs of 4C and 4D of part II of Schedule VI of the Companies Act, 1956 are not furnished, as they are not applicable.

1.4 Figures for the previous year have been regrouped /reclassified to conform to Revised Schedule VI of the Companies Act, 1956.

1.5 Figures in the Balance Sheet, Profit and Loss account and Schedules have been rounded off to the nearest rupee.

Notes:

1. Income under the segment 'investments' represents dividends received and profit on sale of investments.

2. Segment results represent profit before tax.

3. Segment assets include Investments, Current Assets, Loans and Advances.

4. Segment liabilities include unsecured loan, current liabilities and provisions.

1.8 Investments:

7,026,828 shares in Mangalore Chemicals & Fertilizers Limited, 9,530,000 shares in United Breweries Limited, 5,260,002 shares in United Breweries (Holdings) Limited, 452,243 share of UB Engineering Limited are under pledge against the borrowings availed by a Group Company. The carrying cost of these investments is Rs. 441.279 Million and the market value is Rs. 5,811.760 Million.

N0tes. Compiled by : Dio

1. The proxy form duly completed must reach the Registered office of the Company not less than 48 hours before the time for holding the meeting. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of himself and the proxy need not be a member.

2. Members attending the Annual General Meeting are requested to bring with them the following:

(a) Copy of the Annual Report and Notice, as no copies thereof would be distributed at the meeting.

(b) The Attendance Slip duly completed and signed as per the specimen signature lodged with the Company. The Company would accept only the Attendance Slip from a Member actually attending the Meeting or from the person attending as a duly registered proxy. Attendance Slips of Members / valid proxies, not personally present at the Meeting or relating to proxies which are invalid, will not be accepted from any other member / person. The Meeting is for Members or their Proxies only. Please avoid being accompanied by non-members and / or children.

3. To facilitate members, registration of attendance will commence at 1.30 p.m.

---

Mar 31, 2011

1. Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. Nil (Previous year Rs. Nil).

2. Information under paragraphs 4C and 4D of part II of Schedule VI of the Companies Act, 1956 are not furnished, as they are not applicable.

3. Figures for the previous year have been regrouped /reclassified wherever necessary.

4. Investments

7,026,828 shares in Mangalore Chemicals & Fertilizers Limited, 9,530,000 shares in United Breweries Limited, 5,260,002 shares in United Breweries (Holdings) Limited, 452,243 shares of UB Engineering Limited are under pledge against the borrowings availed by a Group Company. The carrying cost of these investments is Rs. 441.279 Million and the market value is Rs. 5,823.145 Million.

5. Share Capital

Pursuant to the approval of the shareholders under section 81 (1A) of the Companies Act, 1956, at the Extraordinary General Meeting held on March 25, 2011, the Company allotted 1,751,290, 10% Optionally Convertible Debentures of the face value of Rs. 100/- (“OCDs”) each, to Kingfisher Finvest India Limited, one of the promoters of the Company on a preferential basis.

The Company on March 31, 2011, allotted 605,000 equity shares of Rs. 10/- each, to Kingfisher Finvest India Limited, pursuant to the conversion of 812,031, OCDs, at a conversion price of Rs. 134.22 per equity share, in accordance with the SEBI Regulations.

---

Mar 31, 2010

1. Related Party disclosures as required as per Accounting Standard (AS-18) are as below.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. Nil (Previous year Rs. Nil).

3. Information under paragraphs of 4C and 4D of part II of Schedule VI of the Companies Act, 1956 are not furnished, as they are not applicable.

4. Figures for the previous year have been regrouped /reclassified wherever necessary.

5. Figures in the Balance Sheet, Profit and Loss account and Schedules have been rounded off to the nearest rupee.

6. Segmental reporting:

Segment-wise business performance for the year ended March 31, 2010 is as follows :

Primary Segment Information

Notes:

1. Income under the segment ‘investments’ represents dividends received and profit on sale of investments.

2. Segment results represent profit before tax.

3. Segment assets include Investments, Current Assets, Loans and Advances.

4. Segment liabilities include unsecured loan, current liabilities and provisions.

7. Investments

7,026,828 shares in Mangalore Chemicals & Fertilizers Limited, 9,530,000 shares in United Breweries Limited, 5,260,002 shares in United Breweries (Holdings) Limited, 452,243 shares of UB Engineering Limited are under pledge against the borrowings availed by the Group Company. The carrying cost of these investments is Rs. 441.279 Million and the market value is Rs.3510.653 Million.

During the year, the Company has sold shares in Corporation Bank, HDFC Bank Ltd, Housing Development Finance Corporation Ltd, State Bank of Bikaner & Jaipur Ltd, State Bank of Travancore, Vijay Bank and Aventis Pharma Limited. The profit on sale of the above investments amounting to Rs.51.850 Million recognized in the Profit and loss account.