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Auditor Report of United Breweries Ltd.

Mar 31, 2016

We Have Audited The Accompanying Standalone Financial Statements Of United Breweries Limited ("The Company"), Which Comprises The Balance Sheet As At March 31, 2016, The Statement Of Profit And Loss, The Cash Flow Statement For The Year Then Ended, And A Summary Of Significant Accounting Policies And Other Explanatory Information.

Management''s Responsibility For The Financial Statements

The Company''s Board Of Directors Is Responsible For The Matters Stated In Section 134(5) Of The Companies Act, 2013 ("The Act") With Respect To The Preparation Of These Standalone Financial Statements That Give A True And Fair View Of The Financial Position, Financial Performance And Cash Flows Of The Company In Accordance With Accounting Principles Generally Accepted In India, Including The Accounting Standards Specified Under Section 133 Of The Act, Read With Rule 7 Of The Companies (Accounts) Rules, 2014. This Responsibility Also Includes Maintenance Of Adequate Accounting Records In Accordance With The Provisions Of The Act For Safeguarding Of The Assets Of The Company And For Preventing And Detecting Frauds And Other Irregularities; Selection And Application Of Appropriate Accounting Policies; Making Judgments And Estimates That Are Reasonable And Prudent; And The Design, Implementation And Maintenance Of Adequate Internal Financial Control, That Were Operating Effectively For Ensuring The Accuracy And Completeness Of The Accounting Records, Relevant To The Preparation And Presentation Of The Financial Statements That Give A True And Fair View And Are Free From Material Misstatement, Whether Due To Fraud Or Error.

Auditor''s Responsibility

Our Responsibility Is To Express An Opinion On These Standalone Financial Statements Based On Our Audit. We Have Taken Into Account The Provisions Of The Act, The Accounting And Auditing Standards And Matters Which Are Required To Be Included In The Audit Report Under The Provisions Of The Act And The Rules Made Thereunder. We Conducted Our Audit In Accordance With The Standards On Auditing, Issued By The Institute Of Chartered Accountants Of India, As Specified Under Section 143(10) Of The Act. Those Standards Require That We Comply With Ethical Requirements And Plan And Perform The Audit To Obtain Reasonable Assurance About Whether The Financial Statements Are Free From Material Misstatement.

An Audit Involves Performing Procedures To Obtain Audit Evidence About The Amounts And Disclosures In The Financial Statements. The Procedures Selected Depend On The Auditor''s Judgment, Including The Assessment Of The Risks Of Material Misstatement Of The Financial Statements, Whether Due To Fraud Or Error. In Making Those Risk Assessments, The Auditor Considers Internal Financial Control Relevant To The Company''s Preparation Of The Financial Statements That Give A True And Fair View In Order To Design Audit Procedures That Are Appropriate In The Circumstances. An Audit Also Includes Evaluating The Appropriateness Of Accounting Policies Used And The Reasonableness Of The Accounting Estimates Made By The Company''s Directors, As Well As Evaluating The Overall Presentation Of The Financial Statements. We Believe That The Audit Evidence We Have Obtained Is Sufficient And Appropriate To Provide A Basis For Our Audit Opinion On The Standalone Financial Statements.

Opinion

In Our Opinion And To The Best Of Our Information And According To The Explanations Given To Us, The Standalone Financial Statements Give The Information Required By The Act In The Manner So Required And Give A True And Fair View In Conformity With The Accounting Principles Generally Accepted In India, Of The State Of Affairs Of The Company As At March 31, 2016, Its Profit, And Its Cash Flows For The Year Ended On That Date.

Emphasis Of Matter

We Draw Attention To Note 37 To The Accompanying Standalone Financial Statements, Which More Fully Describes The Uncertainty Related To The Outcome Of Writ Petition Fled By The Company With The Honourable High Court At Patna, In Relation To Ban Imposed By The Bihar State Government On Trade And Consumption Of Foreign Liquor In The State Of Bihar With Effect From April 5, 2016. Pending Final Disposal Of The Petition, No Adjustments Are Considered Necessary In These Financial Statements. Our Opinion Is Not Qualified In Respect Of This Matter.

Report On Other Legal And Regulatory Requirements

1. As Required By The Companies (Auditor''s Report) Order, 2016 ("The Order") Issued By The Central Government Of India In Terms Of Sub-Section (11) Of Section 143 Of The Act, We Give In "Annexure 1" A Statement On The Matters Specified In Paragraphs 3 And 4 Of The Order.

2. As Required By Section 143(3) Of The Act, We Report That:

(A) We Have Sought And Obtained All The Information And Explanations Which To The Best Of Our Knowledge And Belief Were Necessary For The Purpose Of Our Audit;

(B) In Our Opinion, Proper Books Of Account As Required By Law Have Been Kept By The Company So Far As It Appears From Our Examination Of Those Books;

(C) The Balance Sheet, Statement Of Profit And Loss, And Cash Flow Statement Dealt With By This Report Are In Agreement With The Books Of Account;

(D) In Our Opinion, The Aforesaid Standalone Financial Statements Comply With The Accounting Standards Specified Under Section 133 Of The Act, Read With Rule 7 Of The Companies (Accounts) Rules, 2014;

(E) On The Basis Of Written Representations Received From The Directors As On March 31, 2016, And Taken On Record By The Board Of Directors, None Of The Directors Is Disqualified As On March 31, 2016, From Being Appointed As A Director In Terms Of Section 164(2) Of The Act;

(F) With Respect To The Adequacy Of The Internal Financial Controls Over Financial Reporting Of The Company And The Operating Effectiveness Of Such Controls, Refer To Our Separate Report In "Annexure 2" To This Report;

(G) With Respect To The Other Matters To Be Included In The Auditor''s Report In Accordance With Rule 11 Of The Companies (Audit And Auditors) Rules, 2014, In Our Opinion And To The Best Of Our Information And According To The Explanations Given To Us:

i. The Company Has Disclosed The Impact Of Pending Litigations On Its Financial Position In Its Financial Statements - Refer Note 7 And 19 To The Financial Statements;

ii. The Company Has Made Provision, As Required Under The Applicable Law Or Accounting Standards, For Material Foreseeable Losses, If Any, On Long-Term Contracts Including Derivative Contracts - Refer Note 7 To The Financial Statements;

iii. There Has Been No Delay In Transferring Amounts, Required To Be Transferred, To The Investor Education And Protection Fund By The Company.

Annexure 1 TO THE Independent Auditor''s Report OF Even Date On THE Standalone Financial Statements OF United Breweries Limited

Statement On The Matters Specified In Paragraphs 3 And 4 Of The Companies (Auditor''s Report) Order, 2016 ("The Order")

(i) (A) The Company Has Maintained Proper Records Showing Full Particulars, Including Quantitative Details And Situation Of Fixed Assets.

(B) All Fixed Assets Have Not Been Physically Verified By The Management During The Year But There Is A Regular Programme Of Verification Which, In Our Opinion, Is Reasonable Having Regard To The Size Of The Company And The Nature Of Its Assets. No Material Discrepancies Were Noticed On Such Verification.

(C) According To The Information And Explanations Given By The Management And Confirmation From Banks Relating To Title Deeds Of Immovable Properties Mortgaged With The Banks (Refer Note 5 To The Accompanying Standalone Financial Statements For Details) For Securing The Borrowings Raised By The Company, The Title Deeds Of Immovable Properties Included In Fixed Assets Are Held In The Name Of The Company, Except For 1 Immovable Property Of 9.04 Acres (Forming Part Of Land Parcel Of 23.87 Acres With Gross Book Value Of Rs. 211 Lakhs) Where Registration Of Title Deed Is Pending, 2 Immovable Properties Aggregating To 1.8 Acres (Forming Part Of Land Parcel Of 142.96 Acres With Gross Book Value Of Rs. 4,309 Lakhs) For Which Titles Are Under Dispute And Pending Resolution At The Civil Courts As At March 31, 2016 And 4 Immovable Properties Aggregating To 181.63 Acres (With Gross Book Value Of Rs. 1,754 Lakhs) For Which Title Deeds Are Held In The Name Of Erstwhile Merged Entities.

(ii) The Inventory (Excluding Inventories With Outside Parties) Has Been Physically Verified By The Management During The Year. In Our Opinion, The Frequency Of Verification Is Reasonable. Inventories Lying With Outside Parties Have Been Confirmed By Them As At Year End And No Material Discrepancies Were Noticed In Respect Of Such Confirmations.

(iii) According To The Information And Explanations Given To Us, The Company Has Not Granted Any Loans, Secured Or Unsecured To Companies, Firms, Limited Liability Partnerships Or Other Parties Covered In The Register Maintained Under Section 189 Of The Companies Act, 2013 ("The Act"). Accordingly, The Provisions Of Clause 3(Iii)(A),(B) And (C) Of The Order Are Not Applicable To The Company And Hence Not Commented Upon.

(iv) In Our Opinion And According To The Information And Explanations Given To Us, Provisions Of Section 186 Of The Act In Respect Of Investments Made By The Company Have Been Complied With. 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 The Provisions Of Section 186 Of The Act Apply And Hence Not Commented Upon.

(v) The Company Has Not Accepted Any Deposits From The PUBLIC.

(vi) To The Best Of Our Knowledge And As Explained, The Central Government Has Not Specified The Maintenance Of Cost Records Under Section 148(1) Of The Act, For The Products/Services Of The Company.

(vii) (A) Undisputed Statutory Dues Including Provident Fund, Employees'' State Insurance, Income-Tax, Sales-Tax, Service Tax, Duty Of Custom, Duty Of Excise, Value Added Tax, Cess And Other Material Statutory Dues Have Generally Been Regularly Deposited With The Appropriate Authorities.

(B) According To The Information And Explanations Given To Us, No Undisputed Amounts Payable In Respect Of Provident Fund, Employees'' State Insurance, Income-Tax, Sales-Tax, Service Tax, Duty Of Custom, Duty Of Excise, Value Added Tax, Cess And Other Material Statutory Dues Were Outstanding, At The Year End, For A Period Of More Than Six Months From The Date They Became Payable.

(C) According To The Records Of The Company, The Dues Outstanding Of Income Tax, Sales-Tax, Service Tax, Duty Of Custom, Duty Of Excise, Value Added Tax And Cess On Account Of Any Dispute, Are As Follows:

Name Of The Nature Of The Amount Payment Under Statute Dues (Including Protest Interest And (Rs. In Lakhs) Penalty) (Rs. In Lakhs)

The Income Tax Income Tax/ 15,704 1,333 Act, 1961 Tax Deducted At Source 114 -

4,859 924

2,445 458

69 46

19 19

The Finance Act, Service Tax 2,192 96 1994

2,273 -

7,220 -

The Central Excise Excise Duty/ 1 - Act, 1944 Disallowance Of Cenvat 16 - Credit 9 9

State Excise Storage And 3 - (Various Statutes) Privilege Fees, Excise Duty, Etc. 2 2

218 150

43 13

19 5

Sales Tax (Various Sales Tax/Value 3,114 - Statutes) Added Tax/Entry tax 3,001 1,245

353 -

71 -

Sales Tax Sales Tax/Value 69 6 (Various Added Tax/ Statutes) Entry Tax 63 -

51 -

26 -

22 8

10 4

5 -

3 -

426 -

Name of the Statute Period To Which Forum Where The Amount Relates Dispute Is Pending

The Income Tax Act, 1961 FY 2002-03 And Commissioner Of Income Tax 2011-12 (Appeals)

FY 2012-13 To Commissioner Of Income Tax 2014-15 (TDS)

FY 2002-03 To Income Tax Appellate Tribunal 2009-10

FY 2001-02 To High Court Of Madras 2009-10

FY 2009-10 High Court Of Andhra Pradesh And Telengana

FY 2003-04 High Court Of Karnataka

The Finance Act,1994 2009-10 To Commissioner Of Customs And 2011-12 Central Excise, Aurangabad

2010-11 Commissioner Of Service Tax, Bangalore

2004-05 To Customs, Excise And Service 2010-11 Tax Appellate Tribunal

The Central Excise 2007-08 Commissioner (Appeals) Central Excise, Chandigarh

2010-11 To Commissioner Of Central 2014-15 Excise, Customs & Service Tax, Aurangabad

2005-06 To Customs, Excise And Service 2007-08 Tax Appellate Tribunal

State Excise 2000-01 To Excise Commissioner, 2003-04 Karnataka

2013-14 Rajasthan Tax Board, Ajmer

1999-00 To High Court Of Karnataka 2005-06

1988-89 High Court Of Calcutta

2009-10 To High Court Of Madhya Pradesh 2012-13

Sales Tax 2007-08 Department Of Trade And Taxes, New Delhi

2001-02 To Rajasthan Tax Board, Ajmer 2013-14

2010-11 Deputy Commissioner Of Commercial Taxes, Dhanbad

2013-14 Assistant Commissioner Of Commercial Taxes, Patna

Sales Tax 2008-09 To Joint Commissioner 2010-11 Of Sales Tax (Appeals), Maharashtra

2002-03 Jt. Excise And Taxation Commissioner (Appeals), Faridabad

2008-09 To Joint Commissioner Of 2011-12 Commercial Taxes (Appeal),Patna

2011-12 To Commissioner Of 2012-13 Commercial Taxes, Bihar

2003-04 And Maharashtra Sales Tax 2006-07 Tribunal

2005-06 To Sales Tax Appellate 2007-08 Tribunal, Andhra Pradesh

2011-12 Commercial Tax Tribunal, Bihar

2008-09 The Commercial Taxes Tribunal, Bihar

2006-07 To Supreme Court Of India 2013-14

(viii) In Our Opinion And According To The Information And Explanations Given By The Management, The Company Has Not Defaulted In Repayment Of Dues To A Financial Institution Or Bank Or Government. The Company Did Not Have Any Outstanding Dues In Respect Of Debenture Holders During The Year.

(ix) In Our Opinion And According To Information And Explanations Given By The Management, Monies Raised By The Company By Way Of Term Loans Were Applied For The Purposes For Which Loans Were Obtained. The Company Has Not Raised Any Money By Way Of Initial PUBLIC Offer Or Further PUBLIC Offer (Including Debt Instruments) And Hence Not Commented Upon.

(x) We Have Been Informed That An Employee Of The Company, Whose Service Has Since Been Terminated, In Collusion With Certain Transport Operators Had Inflated Freight Invoices Raised On The Company Resulting In A Loss Of Rs. 88 Lakhs To The Company, As Estimated By The Management. The Company Has Carried Out A Detailed Investigation In Respect Of This Matter And Has Accordingly Recovered Rs. 49 Lakhs From The Concerned Transport Operators.

(xi) According To The Information And Explanations Given By The Management, The Managerial Remuneration Has Been Paid / Provided In Accordance With The Requisite Approvals Mandated By The Provisions Of Section 197 Read With Schedule V To The Act.

(xii) In Our Opinion, The Company Is Not A Nidhi Company. Therefore, The Provisions Of Clause 3(Xii) Of The Order Are Not Applicable To The Company And Hence Not Commented Upon.

(xiii) According To The Information And Explanations Given By The Management, Transactions With The Related Parties Are In Compliance With Section 177 And 188 Of Act, Where Applicable, And The Details Have Been Disclosed In The Notes To The Financial Statements, As Required By The Applicable Accounting Standards.

(xiv) According To The Information And Explanations Given To Us And On An Overall Examination Of The Balance Sheet, The Company Has Not Made Any Preferential Allotment Or Private Placement Of Shares Or Fully Or Partly Convertible Debentures During The Year Under Review And Hence Reporting Requirements Under Clause 3(Xiv) Are Not Applicable To The Company And, Not Commented Upon.

(xv) According To The Information And Explanations Given By The Management, The Company Has Not Entered Into Any Non-Cash Transactions With Directors Or Persons Connected With Him As Referred To In Section 192 Of The Act.

(Xvi) According To The Information And Explanations Given To Us, The Provisions Of Section 45-Ia Of The Reserve Bank Of India Act, 1934 Are Not Applicable To The Company.



For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

Per Mahendra Jain

Partner

Membership Number: 205839

Place Of Signature: Mumbai

Date: May 13, 2016


Mar 31, 2015

We have audited the accompanying standalone financial statements of United Breweries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, its profit, and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of section 164(2) of the Act;

(f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 7 and 19 to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 7 to the financial statements;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure 1 referred to in paragraph 1 under "Report on Other Legal and Regulatory Requirements" of our report of even date

Re: United Breweries Limited ('the Company')

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(ii) (a) The inventory (excluding inventories with outside parties) has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. Inventories lying with outside parties have been confirmed by them as at year end.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. Discrepancies noted on physical verification of inventories were not material, and have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act. Accordingly, the provisions of clause 3(iii)(a) and (b) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us and having regard to the explanation that purchases of certain items of inventories and fixed assets are of proprietary nature for which alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. However, the management of the Company is in the process of further strengthening the documentation in respect of execution of contracts and sales promotion expenses. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

(v) The Company has not accepted any deposits from the public.

(vi) To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under clause 148(1) of the Act, for the products/services of the Company.

(vii) (a) Undisputed statutory dues including provident fund, employees' state insurance, income-tax, wealth-tax, sales-tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed dues in respect of provident fund, employees' state insurance, income-tax, wealth-tax, sales-tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income tax, sales-tax, wealth tax, service tax, customs duty, excise duty, value added tax and cess on account of any dispute, are as follows:

Name Nature of the Amount Payment under of the dues Rs. in Lakhs) protest statute (Rs. in Lakhs)

The Income Disallowance of 515 — Tax Act, expenses 1961 5,162 1,333

5,136 1,240

19 19

20 —

The Service tax 2,192 96 Finance Act, 1994

2,273 —



7,220 —



The Disallowance of 1 — Central cenvat credit Excise Act, 1944

9 9



State Excise Storage and 43 13 (various privilege fees, 218 150 statutes) excise duty, etc.

3 —

Sales Tax Sales tax/value 84 — (various added tax 51 — statutes)

63 —



83 —



10 4



3 —



19 8



3,000 1,245

Name Nature of the Period to which the Forum where of the dues amount is pending dispute statute relates

The Income Disallowance of FY 2006-07 and Commissioner Tax Act, expenses 2008-09 of Income 1961 Tax FY 2002-03 to Commissioner 2010- 11 of Income Tax (Appeals)

FY 2002-03 and Income Tax 2009-10 Appellate Tribunal FY 2003-04 High Court of Karnataka

FY 2001-02 High Court of Madras

The Service tax 2009-10 to Commissioner Finance 2011- 12 of Customs Act, 1994 and Central Excise, Aurangabad

2010-1 1 Commissioner of Service Tax, Bangalore

2004-05 to Customs, 2010-11 Excise and Service Tax Appellate Tribunal

The Disallowance of 2007-08 Commissioner Central cenvat credit (Appeals) Central Excise, Excise Chandigarh Act, 1944 2005-06 to Customs, Excise 2007-08 and Service Tax Appellate Tribunal

State Storage and 1988-89 High Court Excise privilege fees, 1999-00 of Calcutta (various excise duty, to 2005-06 High Court statutes) etc. of Karnataka

2000-01 to Excise 2003-04 Commissioner, Karnataka

Sales Tax Sales tax/value 2007-08to High Court of (various added tax 2008-09 Karnataka statutes) 2008-09 Joint to 2011-12 Commissioner of Commercial Taxes(Appeal), Patna

2002-03 Jt. Excise and Taxation Commissioner (Appeals), Faridabad

2006-07 and Sales Tax Appellate 2009-10 Tribunal, Karnataka

2005-06 to Sales Tax 2007-08 Appellate Tribunal, Andhra Pradesh

2008-09 The Commercial Taxes Tribunal, Bihar

2003-04 Maharashtra Sales Tax Tribunal

2001-02 to Rajasthan Tax 2013-14 Board, Ajmernd

(d) According to the information and explanations given to us, the amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time.

(viii) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(ix) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution or bank. The Company did not have any outstanding dues in respect of debenture holders during the year.

(x) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xi) Based on information and explanations given to us by the management, term loans were applied, on an overall basis, for the purpose for which the loans were obtained, though idle/surplus funds which were not required for immediate utilization have been gainfully invested in liquid investments payable on demand. The maximum amount of idle/surplus funds invested during the year was Rs. 10,000 Lakhs, of which Rs. Nil was outstanding at the end of the year.

(xii) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Registration Number: 101049W

per Mahendra Jain Partner Membership Number: 205839

Place of signature: Bengaluru Date: May 28, 2015


Mar 31, 2014

We have audited the accompanying financial statements of United Breweries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards notifed under the Companies Act, 1956 ("the Act"), read with General Circular 8/2014 dated April 4, 2014 issued by the Ministry of Corporate Affairs. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our audit opinion.

A

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Companies Act, 1956 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

(b) in the case of the Statement of profit and Loss, of the profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, Statement of profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, the Statement of profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notifed under the Companies Act, 1956, read with General Circular 8/2014 dated April 4, 2014 issued by the Ministry of Corporate Affairs;

(e) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualifed as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure referred to in paragraph 1 under "Report on Other Legal and Regulatory Requirements" of our report of even date

Re: United Breweries Limited (''the Company'')

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets, except that location of coolers and dates of additions in certain cases have not been maintained in an accurate manner

(b) All fixed assets have not been physically verifed by the management during the year but there is a regular programme of verifcation which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verifcation.

(c) There was no disposal of a substantial part of fixed assets during the year.

(ii) (a) The inventory (excluding inventories with outside parties) has been physically verifed by the management during the year. In our opinion, the frequency of verifcation is reasonable. Inventories lying with outside parties have been confirmed by them as at year end.

(b) The procedures of physical verifcation of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. Discrepancies noted on physical verifcation of inventories were not material, and have been properly dealt with in the books of account.

(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii)(a) to (d) of the Order are not applicable to the Company and hence not commented upon.

(b) According to information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii)(e) to (g) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us and having regard to the explanation that purchases of items of inventories and certain fixed assets are of proprietary nature for which alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. However, the management of the Company is in the process of further strengthening the Information Technology/ERP related internal controls in respect of aforementioned areas, controls in respect of recording of purchases, preparation of age analysis in respect of inventories and receivables from contract brewing units, documentation in respect of sales promotion expenses and credit notes against sales. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained under section 301 have been so entered.

(b) In respect of transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakhs entered into during the financial year, because of the unique and specialized nature of the items involved and absence of any comparable prices, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities though there has been serious delays in few cases in deposit of income tax, sales- tax, service tax, octroi/entry tax and customs duty dues and slight delays in few cases in deposit of provident fund and employees'' state insurance dues.

(b) According to the information and explanations given to us, no undisputed dues in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, service tax, sales- tax, customs duty, excise duty, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they become payable, except as follows:

Nature of Amount Period to which the Name of the statute the dues (Rs. in Lakhs) amount relates

Sales Tax (various Sales tax/ value 18 2007-08 to statutes) added tax 2009-10

3 2003-04

The Customs Act, 1962 Customs duty 167 1991-92 and 1998-99

The Mumbai Municipal Octroi/ entry tax 867 2005-06 to Corporation Act, 1888 2013-14

Date of Name of the statute Due date payment

Sales Tax (various statutes) Various dates Not paid

September 2010 Not paid

The Customs Act, 1962 Various dates Not paid

The Mumbai Municipal Corporation Act, 1888 Various dates Not paid

(c) According to the records of the Company, the dues outstanding of income tax, sales-tax, wealth tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Payment under Name of the Nature of Amount protest statute the dues (Rs. in Lakhs) (Rs. in Lakhs)

The Income Tax Disallowance 11,000 1,927 Act, 1961 of expenses

1,000 —

19 —

20 —

The Finance Service tax 2,192 96 Act, 1994 2,273 —

7,220 —

The Central Disallowance 2 1 Excise Act, of cenvat 1944 credit 8 8

State Excise Storage and 43 13 (various privilege fees, 218 150 statutes) excise duty, etc.

3 —

Sales Tax Sales tax/ 84 — (various value added statutes) tax

Name of the statute Period to Forum where dispute which the is pending amount relates

The Income Tax Act, 1961 FY 2002-03 to Commissioner of Income 2009-10 Tax (Appeals)

FY 2002-03 Income Tax Appellate and 2007-08 Tribunal

FY 2003-04 High Court of Karnataka

FY 2001-02 High Court of Madras

The Finance Act, 1994 2009-10 to Commissioner of Customs 2011-12 and Central Excise, Aurangabad

2008-09 to Commissioner of Service 2010-11 Tax, Bangalore

2004-05 to Customs, Excise and Service 2010-11 Tax Appellate Tribunal

The Central Excise Act, 1944 2007-08 Commissioner (Appeals) Central Excise, Chandigarh

2005-06 to Customs, Excise and Service 2007-08 Tax Appellate Tribunal

State Excise (various statutes) 1988-89 High Court of Calcutta

1999-00 to High Court of Karnataka 2005-06

2000-01 to Excise Commissioner, 2003-04 Karnataka

Sales Tax (various statutes) 2007-08 to High Court of Karnataka 2008-09

Payment under Name of the Nature of Amount protest statute the dues (Rs. in Lakhs) (Rs. in Lakhs)



Sales Tax Sales tax/ 51 — (various value added statutes) tax

63 —

142 60

10 4

3 —

28 3



Name of the statute Period to Forum where dispute which the is pending amount relates

Sales Tax (Various Statutes) 2008-09 to Joint Commissioner of 2011-12 Commercial Taxes (Appeal), Patna

2002-03 Jt. Excise and Taxation Commissioner (Appeals), Faridabad

2003-04 to Sales Tax Appellate Tribunal, 2010-11 Karnataka

2005-06 to Sales Tax Appellate Tribunal, 2007-08 Andhra Pradesh

2008-09 The Commercial Taxes Tribunal, Bihar

2003-04 Maharashtra Sales Tax Tribunal

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution or bank. The Company did not have any outstanding dues in respect of debenture holders during the year.

(xii) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) Based on information and explanations given to us by the management, term loans were applied, on an overall basis, for the purpose for which the loans were obtained, though idle/surplus funds which were not required for immediate utilization have been gainfully invested in liquid investments payable on demand. The maximum amount of idle/surplus funds invested during the year was Rs. 19,306 Lakhs, of which Rs. 10,000 Lakhs was outstanding at the end of the year.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Act.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money through public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W

per Mahendra Jain Place: Bengaluru Partner

Date: May 27, 2014 Membership Number: 205839


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of United Breweries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash lows for the year ended on that date.

Emphasis of Matter

We draw attention to Note 37(b) to the financial statements relating to the merger of Scottish and Newcastle India Private Limited (''SNIPL'') into the Company, effective April 1, 2012. Pursuant to the merger scheme duly approved by the Honorable High Court of Karnataka and the Honorable High Court of Maharashtra, the difference on cancellation of investments held by SNIPL in equity shares of the Company and the difference between the amount of shares issued by the Company and the amount of share capital of SNIPL has been adjusted to capital reserve and securities premium account of the Company and dividend income recognized by SNIPL and expenses incurred in connection with the merger have been adjusted to securities premium account. Also, no specific accounting treatment in this regard has been prescribed in the Accounting Standards notified pursuant to the Companies (Accounting Standards) Rules, 2006 as per section 211(3C) of the Companies Act, 1956. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

(e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure referred to in paragraph 1 under "Report on Other Legal and Regulatory Requirements" of our report of even date Re: United Breweries Limited (''the Company'')

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) There was no disposal of a substantial part of fixed assets during the year.

(ii) (a) The inventory (excluding inventories with third parties) has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. Inventories lying with outside parties have been confirmed by them as at year end.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. Discrepancies noted on physical verification of inventories were not material, and have been properly dealt with in the books of account.

(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii)(a) to (d) of the Order are not applicable to the Company and hence not commented upon.

(b) According to information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii)(e) to (g) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us and having regard to the unique and specialized nature of the items involved, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained under section 301 have been so entered.

(b) In respect of transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakhs entered into during the financial year, because of the unique and specialized nature of the items involved and absence of any comparable prices, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities though there has been serious delays in a few cases in deposit of provident fund, employees'' state insurance, income tax, sales-tax, service tax and customs duty dues.

(b) According to the information and explanations given to us, no undisputed dues in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, service tax, sales- tax, customs duty, excise duty, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they become payable, except as follows:

Name of the statute Nature of the Amount Period to which dues (Rs. in the amount relates Lakhs)

Sales Tax Sales tax/value 18 2007-08 to (various statutes) added tax 2009-10

3 2003-04

The Customs Act, 1962 Customs duty 167 1991-92 and 1998-99

Name of the Statute Due date Date of payment

Sales Tax Various dates Not paid

September 2010 Not paid

The Customs Act 1962 Various dates Not paid

(c) According to the records of the Company, the dues outstanding of income tax, sales-tax, wealth tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution or bank. The Company did not have any outstanding dues in respect of debenture holders during the year.

(xii) Based on our examination of documents and records, we are of the opinion that the Company has maintained adequate records where the Company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) Based on information and explanations given to us by the management, term loans were applied, on an overall basis, for the purpose for which the loans were obtained, though idle/surplus funds which were not required for immediate utilization have been gainfully invested in liquid investments payable on demand. The maximum amount of idle/surplus funds invested during the year was Rs.19,306 Lakhs, of which Rs.19,306 Lakhs was outstanding at the end of the year.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Act.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money through public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W

per Mahendra Jain

Place: Mumbai Partner

Date: May 30, 2013 Membership Number: 205839


Mar 31, 2010

1. We have audited the attached Balance Sheet of United Breweries Limited (the "Company") as at March 31, 2010 and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (together the "Order"), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of India (the Act) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on March 31, 2010 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act, and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the company as at March 31, 2010;

(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure to Auditors Report

[Referred to in Paragraph 3 of the Auditors Report of even date to the members of United Breweries Limited on the financial statements for the year ended March 31, 2010]

1. a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year except for asset aggregating to Rs.701,796 (original cost in thousands) at one location of the Company, and no material discrepancies between the book records and the physical inventory have been noticed.

c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

ii. a) The inventory (excluding stocks with third parties) has been physically verified by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

b) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

iii. a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act and, therefore, paragraphs 3(b), 3(c) and 3(d) of the Order are not applicable.

b) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act and, therefore, paragraphs 3(f) and 3(g) of the Order are not applicable.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except for purchase of services aggregating to Rs.66,180 thousands as there are no comparable market prices, which, however, are considered to be of special nature as explained by the management of the Company.

vi. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

vii. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

viii. The Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act for any of the products of the Company.

ix. a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities.

b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise duty and cess as at March 31, 2010 which have not been deposited on account of a dispute, are given in Appendix 1.

x. The Company has no accumulated losses as at March 31, 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

xi. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

xii. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to the Company.

xiv. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

xv. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the Company.

xvi. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

xvii. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

xix. The Company has not issued debentures during the year and there are no debentures outstanding as at the year-end.

xx. The Management has disclosed the end use of money raised by public issues (Refer Note 1 on Schedule 19) which has been verified by us.

xxi. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management. Referred to in paragraph ix (b) of the Annexure to the Auditors report of even date to the members of United Breweries Limited on the financial statements for the year ended March 31, 2010.

Name of the statute Rs. In Thousands Forum where dispute is pending Year to which amount relates

Customs Act, 1962 4,148 Commissioner of Customs, Ludhiana 1991-92

2,033 High Court of Bombay 1991-92

2,972 High Court of Madras 1998-99

3,174 Deputy Commissioner of Customs, Siliguri 1998-99

Central Excise Act, 1944/ 4,253 High Court of Calcutta 1998-99

State Excise Acts 571 High Court of Andhra Pradesh 1992-98

1,866 High Court of Calcutta 1981-82 &1987-88 8,076 High Court of Karnataka 2000-2001 to 2003-2004, 2005-06

1,229 High Court of Calcutta 1981-82

637 High Court of Calcutta 1988-89

2,955 High Court of Calcutta 1998-99

4,028 Commissioner of Excise 2000 to 2005

490 Commissioner (Appeals) Central Excise 2005-2007

277 Commissioner (Appeals) Central Excise 2007-2008

Sales Tax Acts 401 High Court of Andhra Pradesh 1997-98 to 1998-99

628 High Court of Kerala 1983-84 to 1986-87

38 High Court of Kerala 1990-91

4,225 High Court of Calcutta 1997-98

1,088 Sales Tax Appellate Tribunal, Karnataka 2002-03

90 Sales Tax Appellate Tribunal, Mumbai 1990-91

13 Assistant Commissioner (Assessment) Special Circle 2002-03

5,404 Sales Tax Appellate Tribunal / Deputy Commissioner (Appeals) 1975-76 to 1998-99, 2000-01 to 2001-02

69 Deputy Commissioner of Commercial Taxes (Appealsl Kollam 2001-02

130 Deputy Commissioner of Commercial Taxes (Appeals) Kollam 2000-01

107 Deputy Commissioner Appeals 1991-92

124 High Court of Kerala 1988-89

289 High Court of Kerala 1989-90

498 High Court of Kerala 1990-91

459 Court of Civil Judge, (Senior Division) Gurgaon 2001-02

185 Sales Tax Appellate Tribunal 1997-98

83 Sales Tax Appellate Tribunal 1998-99

841 Appellate Tribunal, Cherthala 1975 to 1994

Income Tax Act 61,340 Commissioner of Income Tax (Appeals) 2004-05

10,726 Commissioner of Income Tax (Appeals) 1997-98

2,968 Commissioner of Income Tax (Appeals) 1997-98

1,375 Commissioner of Income Tax (Appeals) 2000-01

5,853 Commissioner of Income Tax (Appeals) 2000-01

106,582 Commissioner of Income Tax (Appeals) 2006-07

Service Tax Act 34.510 Commissioner of Service Tax, Bangalore 2008-09

699 Commissioner of Service Tax, Mangalore 2005-06 (June05) to 2009-10 (June09)

193,905 The Customs, Excise and Service Tax Appellate Tribunal 2004-05 to 2007-08

Employee State Insurance Act 265 High Court of Kerala 1991-92







For Price Waterhouse

Firm Registration Number - 007568 S Chartered Accountants

J. Majumdar

Place: Bangalore Partner

Date: July 21, 2010 Membership Number - F51912



 
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