In Re : Dr.

Vijay Mallya and others

Facts:

United Spirits Limited ("USL") is a company incorporated under the Companies Act,1956, as
'McDowell Spirits Limited'. Subsequently, its name was changed to 'McDowell & Company Limited' and
eventually changed to 'United Spirits Limited' on October 17, 2006. The Registered Office of USL is at
UB Tower, 24 Vittal Mallya Road, Bangalore-560001. The shares of USL are listed on BSE and the
National Stock Exchange of India Limited ("NSE").

During the period from November 28, 2013 to February 4, 2014, Relay B. V. acquired 3.76% equity shares of
USL through open market transactions resulting in an increase of its holding from 25.02% to 28.78%.
Disclosure in this regard was made to stock exchanges under Regulation 29(2) of SEBI (Substantial Acquisition
of Shares and Takeovers) Regulations, 2011 (Takeover Regulations, 2011) on February 4, 2014.
Subsequently, in April 2014, Relay B. V. made a voluntary open offer under the Takeover Regulations, 2011, for
acquisition of 26% equity shares of USL from the public shareholders. Post the aforesaid offer, Relay B. V.s
shareholding in USL increased to 54.78%.

During the intervening period, in the Audit Report for the Financial Year 201314, BSR & Co. LLP (Statutory
Auditor of USL) (BSR & Co. LLP Report) qualified certain transactions by USL, which are detailed below
The company created provisions of 649.55 Crores as reported in the Annual Report for Financial Year 2013
14, giving the following explanation for the provisioning in its notes to accounts:
Certain parties who had previously given the required undisputed balance confirmations for the year ended 31
March 2013, claimed in their balance confirmations to the Company for the year ended 31 March 2014 that
they have advanced certain amounts to certain alleged UB Group entities, and that the dues owed by such
parties to the Company will, to the extent of the amounts owed by such alleged UB Group entities to such
parties in respect of such advances, be paid / refunded by such parties to the Company only upon receipt of
their dues from such alleged UB Group entities. These dues of such parties to the Company are on account of
advances by the Company in the earlier years under agreements for enhancing capacity, obtaining exclusivity
and lease deposits in relation to Tie-up Manufacturing Units (TMUs); agreements for specific projects; or
dues owing to the Company from customers. These dues were duly confirmed by such parties as payable to
the Company in such earlier years. However, such parties have now disputed such amounts as mentioned
above.

Pursuant to the aforementioned, USL appointed Pricewaterhouse Coopers, United Kingdom (PWCUK) to
examine such transactions. PWCUK submitted its Report (PWCUK Report /Initial Inquiry /Initial Inquiry
Page 5 of 32
Report) on March 24, 2015, which indicated diversion of funds from USL at the behest of Dr. Vijay Mallya
(Mallya).

Upon a consideration of the aforesaid PWCUK Report, the Board of USL on April 25, 2015, called upon
Mallya to voluntarily resign from the said Board and to step down from his position in the subsidiaries of USL.
However, Mallya refused to step down from the Board of USL

Securities and Exchange Board of India (SEBI) took cognizance of the public announcement made by USL to
BSE on February 26, 2016, regarding Resignation of Director and ChairmanDr. Vijay Mallya. Thereafter, vide
letter dated March 9, 2016, SEBI sought the following information from USL in relation to the examination
conducted in the matter of disclosure of financial and other information by USL

(b) The announcement inter alia also stated that USL and Mallya agreed to a mutual release in relation to
matters arising out of the Initial Inquiry by USL into certain matters referred to in the financial statements for
the Financial Year 20132014. On perusal of the Annual Report for the Financial Year 20142015, it was
observed that the internal inquiry initiated by USL revealed various improprieties and legal violations which
inter alia include the following
The manner in which certain transactions were conducted between 2010 and 2013 resulted in diversions
of funds from USL and/or its subsidiaries to certain UB Group companies and in particular KFA.
An Agreement was signed with an Alleged Claimant for a lien on certain investments of USL to secure an
advance by the Alleged Claimant to KFA, was entered into without appropriate Board authorization or
approval.
The findings of the inquiry coupled with the managements assessment of recoverability, an aggregate
provisions of 6495.5 million (including interest claimed) was made for bad debts during the Financial Year
20132014 and an additional provision of 216 million was made for interest claimed during the Financial
Year 20142015.
Potential violations of provisions of the Companies Act, Equity Listing Agreement, etc.
Certain transactions undertaken between 2010 and July 2013 and certain accounting entries made in that
regard has resulted into showing a lower exposure of USL to United Breweries (Holdings) Limited (UBHL)
than that which actually existed at that time

Vide letter dated March 28, 2016, USL inter alia replied as under