Company overview

United Spirits Limited ("the Company” or "USL”) is a public company domiciled and headquartered in Bengaluru, Karnataka, India. It is
incorporated under the Companies Act, 1956 and its shares are listed on the BSE Limited and National Stock Exchange of India Limited. The
Company is engaged in the business of manufacture, purchase and sale of beverage alcohol and other allied spirits, including through tie-up
manufacturing units and through strategic franchising of some of its brands.

These financial statements (also referred as standalone financial statements) are approved for issue by the Company's Board of Directors
on May 20, 2025.

Note 1: Basis of preparation of standalone financial statements

(i) Compliance with Ind AS

These financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of
the Companies Act, 2013 (the 'Act') [Companies (Indian Accounting Standards) Rules, 2015, as amended] and other relevant
provisions of the Act.

(ii) Historical cost convention

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

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

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

• investment in mutual funds is measured at fair value.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria
set out in the Schedule III (Division II) to the Act. Based on the nature of products and the time between the acquisition of asset for
processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for
the purpose of current / non- current classification of assets and liabilities.

(iii) New and amended standards adopted

The Ministry of Corporate Affairs vide notification dated September 9, 2024 and September 28, 2024 notified the Companies (Indian
Accounting Standards) Second Amendment Rules, 2024 and Companies (Indian Accounting Standards) Third Amendment Rules, 2024,
respectively, which amended/ notified certain accounting standards, and are effective for annual reporting periods beginning on or
after April 1, 2024:

• Insurance contracts - Ind AS 117; and

• Lease Liability in Sale and Leaseback - Amendments to Ind AS 116

These amendments did not have any material impact on the amounts recognised in prior periods and are not expected to significantly
affect the current or future periods.

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

Note 2: Critical estimates and judgements

The preparation of standalone financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual
result. This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely
to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information
about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each
affected line item in the standalone financial statements.

The areas involving critical estimates and judgements are:

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

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

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of
future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

Notes:

(a) Land includes:

(i) gross carrying amount of ' 64 crores (2024: ' 79 crores) in respect of which the title deeds are in the name of erstwhile
merged entities;

(ii) gross carrying amount of Nil (2024: ' 8 crores) in respect of which the Company is not in the possession of title deeds. This property
was acquired by the Company through amalgamations effected in the prior years and the amalgamation order is in possession
of the Company; and

(iii) gross carrying amount of Nil (2024: ' 3 crores) in respect of which title deeds are jointly held in the name of the Company
and a third party.

(b) Buildings include gross carrying amount of ' 34 crores (2024: ' 34 crores) in respect of which the Company has initiated litigation for

execution of sale deed in favour of the Company.

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(c) The Company holds many properties, both freehold and leasehold. Many of the freehold properties have been acquired during the past
two decades through mergers and amalgamations and as such their title deeds are in the name of the erstwhile transferor companies.
The Company has title documents and other supporting evidences establishing ownership of these properties, makes payment of
property taxes in relation to these properties, and is in peaceful possession.

Property, plant and equipment pledged as security

Refer note 33 for information on property, plant and equipment pledged as security by the Company.

Contractual obligations

Refer note 41 for disclosure of contractual commitments for the acquisition of property, plant and equipment.

3.2 Right-of-use assets and lease liabilities
As a lessee

The Company recognises a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by
the Company. Contracts may contain both lease and non-lease components. The Company allocates the consideration in the contract
to the lease and non-lease components based on their relative stand-alone prices.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value
of the following lease payments:

• fixed payments (including in-substance fixed payments, for example arrangements that require payments based on agreed
minimum production volumes),

• variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date

• amounts expected to be payable by the Company under residual value guarantees

• the exercise price of a purchase option if the Company is reasonably certain to exercise that option, and

• payments of penalties for terminating the lease, if the lease term reflects the Company exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease
payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the
case for leases in the Company, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to
pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with
similar terms, security and conditions.

To determine the incremental borrowing rate, the Company:

• where possible, uses recent third-party financing as a starting point, adjusted to reflect changes in financing conditions since third
party financing was received; and

• makes adjustments specific to the lease, e.g. term and security.

If a readily observable amortising loan rate is available to the individual lessee (through recent financing or market data) which has a
similar payment profile to the lease, then the company use that rate as a starting point to determine the incremental borrowing rate.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so
as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Variable lease payments that depend on sales are recognised in profit or loss in the period in which the condition that triggers those
payments occurs.

Right-of-use assets are measured at cost comprising the following:

• the amount of the initial measurement of lease liability

• any lease payments made at or before the commencement date less any lease incentives received, and

• restoration costs.

Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If the
Company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset's useful life.

Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on a straight-line basis as an
expense in Standalone Statement of Profit & Loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets
comprise items of buildings, office equipment and furniture.

This note provides information for leases where the Company is a lessee. The Company has taken on lease land, offices, warehouses,
plant and equipment and office equipment. Lease contracts are typically entered into for 30 years to 100 years for leasehold land and
for periods of 11 months to 10 years for other categories, and may have extension options as described in note (c) below. Some of the
leasing arrangements entered into by the Company include cancellable lease terms.

Notes:

(a) Additions / adjustments to the right-of-use assets for the year ended March 31, 2025 aggregate to ' 394 crores (2024: ' 184 crores).

(b) Variable lease payments

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

(c) Extension and termination options

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

(d) Leasehold land includes gross carrying amount of ' 8 crores (2024: ' 8 crores) in respect of which the Company is in possession
of photocopies of the title deeds.

3.4 Intangible assets
Brand and licenses

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

Computer software

Computer software acquired or developed are carried at cost less accumulated amortisation and impairment losses, if any. Costs
associated with maintaining software programs are recognised as an expense as incurred. Development costs that are directly
attributable to the design and testing of customised computer software applications are recognised as intangible assets under
development or intangible assets when ready for intended use, when the following criteria are met:

a) it is technically feasible to complete the software so that it will be available for use,

b) there is an ability to use or sell the software,

c) it can be demonstrated that the software will generate probable future economic benefits,

d) adequate technical, financial and other resources to complete the development and to use the software are available, and

e) the expenditure attributable to the software during its development can be reliably measured.

Directly attributable costs that are capitalised as part of the customised software applications include employee costs and other directly
attributable costs are amortised from the point at which the software asset is available for use.

Estimation of fair value:

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

(a) current prices in an active market for properties of different nature or recent prices of similar properties in less active markets,
adjusted to reflect those differences;

(b) discounted cash flow projections based on reliable estimates of future cash flows; and

(c) capitalised income projection based upon a property's estimated net market income, and a capitalisation rate derived from an
analysis of market evidence.

The fair value of investment property has been determined by a valuation expert who holds relevant professional qualification and
experience. The market value of the investment properties has been assessed on an open market basis with the benefit of vacant
possession. In the course of valuation, a direct comparison method has been adopted by making a reference to the relevant market
transaction in land and building where the investment property is located. The appropriate adjustments have been made in order to
account for the differences between the subject property and comparable terms of time, floor level, view, condition, quality and facilities
etc. All resulting fair value estimates for investment properties are included in level 3.

Notes:

(a) Investment properties include land of:

(i) gross carrying amount of ' 72 crores (2024: ' 113 crores) in respect of which the title deeds are in the name of erstwhile
merged entities;

(ii) gross carrying amount of ' 2 crores (2024: ' 1 crore) in respect of which title deeds are jointly held in the name of the
Company and third party;

(iii) gross carrying amount of ' 1 crore (2024: ' 1 crore) in respect of which the Company is in possession of photocopies of
the title deeds;

(iv) gross carrying amount of ' 7 crores (2024: ' 6 crores) in respect of which the Company is in possession of combination of
original and photocopy of title deeds; and

(v) gross carrying amount of ' 8 crores (2024: Nil ) in respect of which the Company is not in the possession of title deeds. This
property was acquired by the Company through amalgamations effected in the prior year and the amalgamation order is
in possession of the Company;

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

(c) The Company periodically reviews the fair value of investment properties. Fair value of investment properties is ' 516 crores
(2024: ' 485 crores).

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

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

Notes:

(i) Investment as a sole beneficiary in USL Benefit Trust (the 'Trust') was recorded as per the terms of composite scheme of arrangement
approved by the Honourable High Courts of Karnataka and Bombay, upon amalgamating various companies with United Spirits
Limited. The Trust has been established for the exclusive benefit of the Company and holds 1,72,95,450 equity shares of ' 2/- face
value (2024: 1,72,95,450 equity shares of ' 2/- face value) of the Company [refer note 13(h)]. As per the terms of the aforesaid
scheme of arrangement, the Company has carried this investment at the aggregate of book value as per the books of the
concerned transferor companies. Also refer note 33(b) for assets pledged and note 40(d). The Company is the sole beneficiary
of the Trust. Hence, dividend paid by the Company to the Trust on the treasury shares held by the Trust is remitted back to the
Company. Accordingly, the Company in its Standalone Statement of Changes in Equity and Standalone Statement of Cash Flows
has disclosed the dividend paid to the shareholders net of the amount received back from the trust.

(ii) During the year ended March 31, 2023, the Company acquired the interest in Nao Spirits & Beverages Private Limited ("Nao
Spirits”) by investing ' 32 crores by subscribing to 8,094 compulsory convertible preference shares and 4,670 equity shares. During
the prior year, the Company infused additional amount of ' 15 crores by subscribing to 6,078 compulsorily convertible preference
shares. The Company holds 30% (2024: 30%) ownership interest on a fully diluted basis (11% of equity ownership interest) as
at March 31, 2025. Management has considered Nao Spirits to be an joint venture since the company has joint control over its
operating and financing decisions.

In accordance with the Shareholder's agreement, the Company has a right to purchase all or any of the shares held by promoters,
existing investors and other shareholders upon occurrence of earlier of the Nao Spirits achieving the specified sales volume
threshold or July 1, 2025. The exercise price of the call option as specified in the Shareholders' agreement is equal to its fair value
and shall be in accordance with applicable law, including the Foreign Exchange Management Act, 1999.

(iii) During the current year, the Company acquired the interest in below joint ventures and details are as follows :

1. Inspired Hospitality Private Limited ("Pistola”) - Invested ' 6 crores by subscribing to 3,494 compulsory convertible
preference shares and 10 equity shares.The Company holds 15% (2024: Nil) ownership interest on a fully diluted basis as at
March 31, 2025.

2. V9 Beverages Private Limited ("Sober”) - Invested ' 2 crores by subscribing to 1,972 compulsory convertible preference shares
and 10 equity shares. The Company holds 15% (2024: Nil) ownership interest on a fully diluted basis as at March 31, 2025.

3. I ndie Brews and Spirits Private Limited ("Quaffine”) - Invested ' 5 crores by subscribing to 4,016 compulsory convertible
preference shares and 10 equity shares. The Company holds 25% (2024: Nil) ownership interest on a fully diluted basis as at
March 31, 2025.

Management has considered these investments as joint ventures since the company has joint control over its operating and
financing decisions. In accordance with the shareholder's agreement with the respective joint ventures, the Company has a right
to purchase all or any of the shares held by promoters, existing investors and other shareholders upon occurrence of earlier of
achieving the specified sales volume threshold or date specified thereon. The exercise price of the call option shall be determined
in accordance with a formula specified in the shareholder's agreement. As at March 31, 2025, fair value of the said call option has
been determined to be immaterial.

(iv) The outstanding loans (including interest accrued and reimbursement of expenses) to USL Holdings Limited aggregating to USD
76,61,40,114, in equivalent USD terms (' 5,627 crores) was converted to equity shares of USL Holdings Limited on September 21,
2020. Management has made the relevant filing with the RBI on December 19, 2020 for the above conversion.

Subsequently, the Authorised Dealer (AD) Bank has intimated the Company to file certain regulatory forms to regularise the
conversion. Management is in the process of filing the forms with the AD bank.

4.2 Investments - current
(i) Debt instruments:

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

• Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal
and interest are measured at amortised cost.

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

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

10 Inventories

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

Cost of inventories also include all other costs incurred in bringing the inventories to their present location and condition. Cost is
computed on a weighted average basis. Excise duty, as applicable, is included in the valuation.

Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price
in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

Notes:

(a) Allowance for obsolete inventories (net) for the year amounting to ' (2) crores (2024: ' 67 crores) has been recognised as a
(credit)/charge during the year and is included in cost of materials consumed and change in inventories of finished goods, work-
in-progress and stock-in-trade in the Standalone Statement of Profit and Loss.

(b) Inventories include inventory held by tie up manufacturing units amounting to ' 74 crores (2024: ' 82 crores).

11 Trade receivables

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business and
reflect the Company's unconditional right to consideration (that is, payment is due only on the passage of time).Trade receivables are
recognised initially at the transaction price, unless it contains a significant financing component in which case, it is recognised at fair
value. The company holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them
subsequently at amortised cost using the effective interest method, less loss allowance. For trade receivables, the Company applies
the simplified approach required by Ind AS 109, which requires expected lifetime losses to be recognised from initial recognition of
the receivables.

Note: On December 20, 2013, the Honorable Karnataka High Court passed an order in the matter involving United Breweries
(Holdings) Limited (UBHL) and its creditors and the Diageo Plc. setting aside an earlier leave order which permitted UBHL to sell
1,01,41,437 equity shares of ' 10/- each (prior to the face value of the shares being split from ' 10 each to ' 2 each during the year
ended March 31, 2019) in the Company to Diageo Relay B.V. (formerly known as Relay B.V.), pending disposal of the winding up
petitions against UBHL. On the above matter, UBHL and Diageo plc. have approached the Honorable Supreme Court by way
of special leave petitions (SLPs) challenging the order of the division bench. Pending, disposal of the above SLPs, the Honorable
Supreme Court has directed that status quo be maintained in respect of the above mentioned transaction of sale of shares
to Diageo Relay B.V. (formerly known as Relay B.V.). Such shares are included in arriving at Diageo Relay B.V.'s shareholding
in the Company.

Nature and purpose of reserves:

a) Capital reserve: Created pursuant to a Scheme of Amalgamation between the Company and SW Finance Co. Limited, sanctioned

by the Honourable High Court of Karnataka and Honourable High Court of Bombay under the orders dated June 12, 2015 and

August 28, 2015, respectively. The balance also includes capital reserve arising on amalgamation of Pioneer Distilleries Limited
("PDL”) with the Company vide order of the Honourable National Company Law Tribunal (NCLT) on December 02, 2022.

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

c) Securities premium account: Securities premium account is credited when shares are issued at premium. The balance is utilised in

accordance with the provisions of the Act.

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

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

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

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

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