Bengaluru: United Spirits (USL), India’s largest spirits maker, said it wrote off Rs 566 crore in connection with the recovery of funds that were diverted from the company to “alleged UB Group entities” including now-defunct Kingfisher Airlines.
The maker of McDowell and Black Label whiskey said these funds, transferred between 2010 and 2013 to certain UB Group companies, were used to enhance capacity, obtain exclusivity and lease deposits with regard to tie-up manufacturing units and agreement on specific projects among others.
The company, controlled by Britain’s Diageo, added its internal probe related to these transactions indicated “various improprieties ad potential violation of provisions , inter alia, of the Companies Act 1956 and the then listing agreements signed by the company with various stock exchanges in India on which its securities are listed.”
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During the previous fiscal, USL explained it reached a settlement with four such companies for about Rs 55 crore to whom funds were transferred. It is yet to reach an agreement with other parties, the company said in its quarterly report on Thursday.
USL also reported a narrower quarterly loss compared to last year as it recorded lower one time charges.Net loss for the period fell to Rs 8.99 crore, for the fourth quarter ended March 31, from Rs 1,799.28 crore, a year earlier on a standalone basis. In the reported quarter, the company recorded a one time loss of Rs 21.08 crore.
Exceptional items included a profit on sale of United Breweries Ltd (UBL) shares of Rs 853.6 crore, provision of loans and advances to an investment in subsidiaries of Rs 140.1 crore and a write back of provisions for doubtful advances of Rs 22.75 crore. This was the first quarterly results of the company since former liquor baron Vijay Mallya stepped down as the chairman in February.
Net sales rose 13% to Rs 2,283 crore helped by higher revenue from its Premium and Above segment, which includes Smirnoff, VAT69 and Johnnie Walker. The segment contributed about 37% of sales volumes and 51% of net sales, USL said.