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Auditor Report of Radico Khaitan Ltd.

Mar 31, 2023

To the Members of Radico Khaitan Limited Basis for Opinion

Report on the Audit of the Standalone Financial

Statements

Opinion

1. We have audited the accompanying standalone financial statements of Radico Khaitan Limited (''the Company''), which comprise the Balance Sheet as at 31 March 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (''the Act'') in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (''Ind AS'') specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2023, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (''ICAI'') together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

4. Key audit matters are those matters that, in our professional judgment were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

5. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter

How our audit addressed the key audit matter

Revenue recognition and trade receivables

Our audit procedures related to revenue recognition included, but were not limited, to the following:

Refer to note 1.05 to the accompanying standalone financial statements for the Company''s significant

Understood the nature of revenue transactions and

accounting policies relating to revenue recognition

evaluated the appropriateness of the accounting

and note 28 for the details of revenue recognized

policy adopted by the management in accordance

during the year.

with Ind AS 115;

The Company derives its revenue from sale of liquor

Evaluated the design and tested the operating

products to a wide range of customers through

effectiveness of Company''s internal controls

a network of distributors and state government

around revenue recognition including relating

corporations. Owing to the multiplicity of the

to determination of variable consideration and

Company''s products, volume of sales transactions, size of distribution network, nature of customers and

satisfaction of performance obligations;

varied terms of contracts with different customers,

On a sample basis, tested revenue transactions

revenue is determined to be an area involving

recorded during the year, and transactions recorded

significant risk in line with the requirements of

before and after year end basis inspection of

the Standards on Auditing and hence required

supporting documents such as customer contracts,

significant auditor attention.

purchase orders, price lists, proof of dispatch and

Key audit matter

How our audit addressed the key audit matter

Further, Ind AS 115, "Revenue from Contracts with

delivery including regulatory documents used for

Customers” (''Ind AS 115''), requires management to

movement of liquor as per applicable regulations,

make certain key judgements, such as, identification

invoices, etc. For such samples tested, reviewed the

of performance obligations in contracts with

terms of the contracts with customers to assess

customers, determination of transaction price for

the appropriateness of Company''s identification

the contract including variable consideration in

of performance obligations, its determination of

the form of rebates, discounts and pay-outs to

transaction price, including allocation thereof to

distributors under various promotional schemes

performance obligations and identification of the

of the Company, and assessment of satisfaction

point of revenue recognition, in order to ensure

of the performance obligations under each

revenue is recorded with the correct amount and

contract representing the transfer of control of

in the correct period;

the products sold to the customers including state government corporations.

Tested the adequacy of accruals made for

Evaluation is also required to be made in respect of

various rebates and discounts committed to the distributors of the company basis the promotion

principal versus agent relationship of the Company

schemes active as at the year-end;

with its ''tie-up units'' and ''royalty units'' as explained in the significant accounting policy disclosures

Performed substantive analytical procedures

referred above.

including review of price, quantity and product mix

Further, the Company has significant balance of trade receivables amounting to '' 82,405.59 Lacs

variances and analysis of discounts; and Evaluated adequacy of the disclosures made in the

as at 31 March 2023 as disclosed under note 8 to

accompanying financial statements in respect of

the accompanying standalone financial statements.

revenue recognition in accordance with financial

These receivables include dues from state

reporting framework.

government corporations and private distributors. The Company provides for expected credit loss on

Further, our audit procedures pertaining to related

such trade receivables based on past experience

trade receivables included, but were not limited, to

which is adjusted to reflect current and estimated

the following:

future economic conditions.

Due to the extent of industry knowledge and skills

Circularised requests for direct balance confirmations to a sample of customers for

needed to design and execute audit procedures

outstanding balances as at year-end and evaluated

to address the risks of material misstatements in

the responses received;

revenue recognition and related trade receivables, significance of the amounts and judgments involved

Performed other alternate procedures which

in assessing appropriate revenue recognition, and

included testing of invoices, proof of supply

existence and recoverability of trade receivables,

and subsequent collection of invoices for the

these matters are considered key audit matters in

confirmations not received;

the current year audit.

Evaluated the appropriateness of the model used by the management in determination of expected credit losses, including inputs and assumptions such as classes of customers, past trends of recovery and default rates as adjusted for future expectations, basis our understanding of the business and relevant market conditions;

Recomputed the ageing of trade receivables for a sample of invoices and tested mathematical accuracy of the workings prepared by the management; and

Evaluated the disclosures made in accompanying standalone financial statements in respect of trade receivables in accordance with applicable financial reporting framework.

Key audit matter

How our audit addressed the key audit matter

Additions to property, plant and equipment

Our audit procedures with respect to additions to

including capital work in progress

Refer notes 1.09 and 2A to the accompanying

PPE and CWIP included, but were not limited, to the following:

standalone financial statements.

Evaluated the design and implementation and tested the operating effectiveness of key controls

The Company is in the process of expansion of its existing manufacturing facility at Rampur, UP and

surrounding the capitaliszation of costs;

setting up a new manufacturing facility plant at

Reviewed management''s capitalisation policy,

Sitapur, UP and has incurred '' 66,775.40 Lakh as

including application of the aforesaid policy,

capital expenditure in the current year towards such

in accordance to assess consistency with the

expansion as further explained in note 2A to the accompanying standalone financial statements.

requirements set out by under Ind AS 16;

Ensured that the borrowing cost capitaliszed is as

Determining whether expenditure incurred during the year is operational or capital in nature may

per the principles of Ind AS 23;

require judgement and is essential in order to

Tested the additions made to property, plant

ensure that the recognition and measurement

and equipment and capital work-in-progress on

principles given under Ind AS 16, Property, Plant and

a sample basis for their nature and purpose to

Equipment (''Ind AS 16'') are met.

ensure that the capitaliszation is as per Company''s accounting policy and is recorded in the correct

Further, the aforementioned capital expenditure has been partly funded from the specific borrowing

period and in the correct class of assets;

raised for such purpose. Accordingly, the borrowing

For projects completed during the year, reviewed

costs incurred on such borrowings have been

the project completion/handover certificate

included as a capital expenditure in accordance

provided by the management to determine

with the provisions of Ind AS 23, Borrowing Costs

whether the asset is in the location and condition

(''Ind AS 23'').

This has been determined as a key audit matter

necessary for it to be capable of operating in the manner intended by the management; and

due to the significance of the capital expenditure

Assessed the appropriateness and adequacy of

during the year and the risk that the elements of

the related disclosures in the consolidated financial

costs (including borrowing costs) that are eligible

statements in accordance with the applicable

for capitalization are appropriately capitalised in accordance with the recognition criteria provided under Ind AS 16 and Ind AS 23.

accounting standards.

Information other than the Financial Statements and Auditor’s Report thereon

6. The Company''s Board of Directors are responsible for the other information. The other information comprises the information, such as Management Discussion and Analysis, Report on Corporate Governance, Directors'' Report, etc. included in the Annual Report, but does not include the standalone financial statements and our auditor''s report thereon. The Annual Report is expected to be made available to us after the date of this auditor''s report.

Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the

other Information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

7 The accompanying standalone financial statements have been approved by the Company''s Board of Directors. The Company''s Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the

financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS specified under section 133 of the Act and other accounting principles generally accepted in India. 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 design, implementation and maintenance of adequate internal financial controls, 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.

8. In preparing the standalone financial statements, the Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

9. Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

10. Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

11. As part of an audit in accordance with Standards on Auditing, specified under section 143(10) of the Act we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls;

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

Conclude on the appropriateness of Board of Directors'' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern; and

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation;

12. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

13. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

14. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

15. As required by section 197(16) of the Act based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

16. As required by the Companies (Auditor''s Report) Order, 2020 (''the Order'') issued by the Central Government of India in terms of section 143(11) of the Act we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

17. Further to our comments in Annexure A, as required by section 143(3) of the Act based on our audit we report, to the extent applicable, 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 of the accompanying standalone financial statements;

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 standalone financial statements dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;

e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2023 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 with reference to financial statements of the Company as on 31 March 2023 and the operating effectiveness of such controls, refer to our separate Report in Annexure B wherein we have expressed an unmodified opinion; and

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 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

i. The Company, as detailed in note 38(b) to the standalone financial statements, has disclosed the impact of pending litigation(s) on its financial position as at 31 March 2023;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2023;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2023;

iv. a. The management has represented

that, to the best of its knowledge and belief as disclosed in note 65(h) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person(s) or entity(ies), including foreign entities (''the intermediaries''), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (''the Ultimate Beneficiaries'') or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries;

b. The management has represented that, to the best of its knowledge and belief as disclosed in note 65(i) to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (''the Funding Parties''), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (''Ultimate Beneficiaries'') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under sub-clauses (a) and (b) above contain any material misstatement.

v. The final dividend paid by the Company during the year ended 31 March 2023 in respect of such dividend declared for the previous year is in accordance with section 123 of the Act to the extent it applies to

payment of dividend. Further, as stated in note 41 to the accompanying standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year ended 31 March 2023 which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 requires all companies which use accounting software for maintaining their books of account, to use such an accounting software which has a feature of audit trail, with effect from the financial year beginning on 1 April 2023 and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 (as amended) is not applicable for the current financial year.

For Walker Chandiok & Co LLP

Chartered Accountants Firm''s Registration No.: 001076N/N500013

Ashish Gupta

Partner

Place: New Delhi Membership No.: 504662

Date: 25 May 2023 UDIN: 23504662BGWGFA8188


Mar 31, 2022

To the Members of Radico Khaitan Limited BASIS FOR OPINION

Report on the Audit of the Standalone Financial

Statements

OPINION

1. We have audited the accompanying standalone financial statements of Radico Khaitan Limited (''the Company''), which comprise the Balance Sheet as at 31 March 2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (''the Act'') in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (''Ind AS'') specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2022, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (''ICAI'') together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

KEY AUDIT MATTER

4. Key audit matters are those matters that, in our professional judgment were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

5. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter

How our audit addressed the key audit matter

Revenue recognition and trade receivables

Refer to note 1.05 to the accompanying standalone financial statements for the Company''s significant accounting policies relating to revenue recognition and note 29 for the details of revenue recognised during the year.

The Company derives its revenue from sale of liquor products to a wide range of customers through a network of distributors and state government corporations. Owing to the multiplicity of the Company''s products, volume of sales transactions, size of distribution network, nature of customers and varied terms of contracts with different customers, revenue is determined to be an area involving significant risk in line with the requirements of the Standards on Auditing and hence required significant auditor attention.

Our audit procedures related to revenue recognition included, but were not limited, to the following:

a) Understood the nature of revenue transactions and evaluated the appropriateness of the accounting policy adopted by the management in accordance with Ind AS 115;

b) Evaluated the design and tested the operating effectiveness of Company''s internal controls around revenue recognition including relating to determination of variable consideration and satisfaction of performance obligations;

Key audit matter

How our audit addressed the key audit matter

Further, Ind AS 115, "Revenue from Contracts with

c)

On a sample basis, tested revenue transactions

Customers” (''Ind AS 115''), requires management to

recorded during the year, and transactions recorded

make certain key judgements, such as, identification of

before and after year end basis inspection of

performance obligations in contracts with customers,

supporting documents such as customer contracts,

determination of transaction price for the contract

purchase orders, price lists, proof of dispatch and

including variable consideration in the form of rebates,

delivery including regulatory documents used for

discounts and pay-outs to distributors under various

movement of liquor as per applicable regulations,

promotional schemes of the Company, and assessment

invoices, etc. For such samples tested, reviewed the

of satisfaction of the performance obligations under

terms of the contracts with customers to assess

each contract representing the transfer of control of

the appropriateness of Company''s identification

the products sold to the customers including state

of performance obligations, its determination of

government corporations.

transaction price, including allocation thereof to performance obligations and identification of the

Evaluation is also required to be made in respect of

point of revenue recognition, in order to ensure

principal versus agent relationship of the Company

revenue is recorded with the correct amount and in

with its ''tie-up units'' and ''royalty units'' as explained in

the correct period;

the significant accounting policy disclosures referred above.

d)

Tested the adequacy of accruals made for various rebates and discounts committed to the

Further, the Company has significant balance of trade receivables amounting to '' 75,575.90 Lakhs as

distributors of the company basis the promotion schemes active as at the year-end;

at 31 March 2022 as disclosed under note 8 to the

e)

Performed substantive analytical procedures

accompanying standalone financial statements. These

including review of price, quantity and product

receivables include dues from state government

mix variances and analysis of discounts;

corporations and private distributors. The Company provides for expected credit loss on such trade receivables based on past experience which is adjusted to reflect current and estimated future economic conditions.

f)

Evaluated adequacy of the disclosures made in the accompanying financial statements in respect of revenue recognition in accordance with financial reporting framework.

Further, our audit procedures pertaining to related

Due to the extent of industry knowledge and skills

trade receivables included, but were not limited, to the

needed to design and execute audit procedures to

following:

address the risks of material misstatements in revenue recognition and related trade receivables, significance of the amounts and judgments involved in assessing appropriate revenue recognition, and existence and recoverability of trade receivables, these matters are

a)

Circularised requests for direct balance confirmations to a sample of customers for outstanding balances as at year-end and evaluated the responses received;

considered key audit matters in the current year audit.

b)

Performed other alternate procedures which included testing of invoices, proof of supply and subsequent collection of invoices for the confirmations not received;

c)

Evaluated the appropriateness of the model used by the management in determination of expected credit losses, including inputs and assumptions such as classes of customers, past trends of recovery and default rates as adjusted for future expectations, basis our understanding of the business and relevant market conditions;

d)

Recomputed the ageing of trade receivables for a sample of invoices and tested mathematical accuracy of the workings prepared by the management;

e)

Evaluated the disclosures made in accompanying standalone financial statements in respect of trade receivables in accordance with applicable financial reporting framework.

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR’S REPORT THEREON

6. The Company''s Board of Directors are responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Board''s Report including annexure to Board''s Report, Business Responsibility Report, Corporate Governance and Shareholder''s Information, etc., but does not include the standalone financial statements and our auditor''s report thereon. These reports are expected to be made available to us after the date of this auditor''s report.

Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read these reports, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONE FINANCIAL STATEMENTS

7 The accompanying standalone financial statements have been approved by the Company''s Board of Directors. The Company''s Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS specified under section 133 of the Act and other accounting principles generally accepted in India. 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 design, implementation and maintenance

of adequate internal financial controls, 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.

8. I n preparing the financial statements, the Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

9. Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.

AUDITOR’S RESPONSIBILITIES FOR THEAUDIT OF THE STANDALONE FINANCIALSTATEMENTS

10. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

11. As part of an audit in accordance with Standards on Auditing, specified under section 143(10) of the Act we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

OTHER MATTER

15. The standalone financial statements of the Company for the year ended 31 March 2021 were audited by the predecessor auditor, BGJC & Associates LLP, who have expressed an unmodified opinion on those standalone financial statements vide their audit report dated 1 June 2021.

REPORT ON OTHER LEGAL AND REGULATORY

REQUIREMENTS

16. As required by section 197(16) of the Act based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

17 As required by the Companies (Auditor''s Report) Order, 2020 (''the Order'') issued by the Central Government of India in terms of section 143(11) of the Act we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

18. Further to our comments in Annexure A, as required by section 143(3) of the Act based on our audit, we report, to the extent applicable, 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 of the accompanying standalone financial statements;

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 standalone financial statements dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls;

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

• Conclude on the appropriateness of Board of Directors'' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern;

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation;

12. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

13. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

14. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and

e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2022 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 with reference to financial statements of the Company as on 31 March 2022 and the operating effectiveness of such controls, refer to our separate Report in Annexure B wherein we have expressed an unmodified opinion; and

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 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

i. The Company, as detailed in note 39(b) to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2022;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2022;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2022;

iv. a. The management has represented that,

to the best of its knowledge and belief as disclosed in note 67(h) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person(s) or entity(ies), including foreign entities (''the intermediaries''), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (''the Ultimate Beneficiaries'') or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries;

b. The management has represented that, to the best of its knowledge and belief as disclosed in note 67(i) to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (''the Funding Parties''), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (''Ultimate Beneficiaries'') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under sub-clauses (a) and (b) above contain any material misstatement.

v. The final dividend paid by the Company during the year ended 31 March 2022 in respect of such dividend declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend. Further as stated in note 42 to the accompanying standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year ended 31 March 2022 which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.

For Walker Chandiok & Co LLP

Chartered Accountants Firm''s Registration No.: 001076N/N500013

Ashish Gupta

Partner

Place: New Delhi Membership No.: 504662

Date: 30 May 2022 UDIN: 22504662AJVQWL1762


Mar 31, 2021

OpINION

We have audited the accompanying standalone financial statements of Radico Khaitan Limited ("the Company”), which comprise the Balance Sheet as at March 31, 2021, the Statement of Profit and Loss (including other comprehensive income) for the year ended on that date, the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and notes to the financial statements including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Companies Act, 2013 ("the Act”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2021, the profit and total comprehensive income for the year ended on that date, changes in equity and its cash flows for the year ended on that date.

We conducted our audit in accordance with Standards on Auditing (SAs) issued by the Institute of Chartered Accountants of India (ICAI). Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI”) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

KEY AuDIT MATTERS

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matter

Audit Response

Trade Receivables

principal Audit procedures

Receivables (net of provisioning) of

• Evaluating and testing the controls for managing trade receivables,

'' 69745.74 lakhs constitute 43% of

including subsequent collection and provisioning.

the current assets of the company as at March 31, 2021 and are spread across geography, covering State

• Validating the basis of ECL policy as approved by the Board of Directors, in the present context based on historical data and recent developments.

Corporations, Defence canteens and open market customers (including exports). The realization is linked with actual sales by State Corporations.

• Validating the Aging of receivables, review of trend customer wise, reasons for long outstanding balances, evaluation of disputes and possibility of recovery and existence of the customers.

• Obtaining independent customer confirmations during the current COVID

19 Pandemic was a challenge. Hence greater reliance was placed on alternate substantive audit procedures.

• Assessing the appropriateness and completeness of the related disclosure

in the company’s Financial Statements.

Conclusion

Our procedures did not identify any material exceptions.

Inventory

Principal Audit Procedures

Inventories (net of provisions) of ''

• Testing the inventory provisioning and challenging the assumptions for

48906.57 Lakhs constitute 30% of the current assets of the company

inventory valuation basis non-moving/slow moving items.

as at March 31, 2021. The Inventory is

• Review the policy of the management for physical verification and the

lying at various locations, including at

documents related to management’s physical count procedure actually

3rd party premises. Packing material

followed at different locations.

constitutes a major part of inventory

• Observed the physical verification process at locations of financial

and has risk of impairment.

significance during year end audit along with sample testing.

• Relied on physical verification report by zonal internal auditors.

• Identifying obsolete inventory, if any.

• Obtain confirmation from Tie up units being inventory at 3rd party locations and applying substantive procedure

• Assess the appropriateness and completeness of the related disclosure in the company’s Financial Statements.

Conclusion

Our procedures did not identify any material exceptions.

INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITOR’S REPORT THEREON

The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Board’s Report including annexure to Board’s Report, Business Responsibility Report, Corporate Governance and Shareholder’s Information,, but does not include the financial statements and our auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

The other information has not been made available to us as at the date of this auditor’s report. We have nothing to report in this regard.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONE FINANCIAL STATEMENTS

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of 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, total comprehensive income, changes in equity and cash flows of the Company in accordance with Indian Accounting Standards and other accounting principles generally accepted in India. The Board of Directors of the company are responsible for the 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 design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Board of Directors of the Company is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company’s financial reporting process.

auditor’s responsibilities for the audit of the standalone financial statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this standalone financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including

any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

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 section 143(11) of the Act, we give in "Annexure 1”, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

(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 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 it appears from our examination of those books;

c. The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Statement of Cash Flows and the Statement of Changes in Equity dealt with by this report are in agreement with the relevant books of account;

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

e. On the basis of the written representations received from the directors as on March 31, 2021, and taken on record by the Board of Directors,

none of the directors is disqualified as on March 31, 2021 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 with reference to financial statements of the Company and the operating effectiveness of such controls, we give our separate report in "Annexure 2”.

g. With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act read with Schedule V.

h. 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 standalone financial statements - Refer Note 39b on Contingent Liabilities to the standalone financial statements;

(ii) The Company did not have any long-term contracts including derivative contracts. Hence, the question of any material foreseeable losses does not arise;

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

For BGJC & Associates LLP

Chartered Accountants ICAI Firm Registration No. 003304N/N500056

Darshan Chhajer

Partner

Date: June 1, 2021 Membership No. 088308

Place: Gurugram UDIN: 21088308AAAABB3547


Mar 31, 2018

Independent Auditor''s Report

To the Members of Radico Khaitan Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying Ind AS Financial Statements of Radico Khaitan Limited (-the Company-), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, a summary of significant accounting policies and other explanatory information, (hereinafter referred to as -Standalone Ind AS Financial Statements-).

Management''s Responsibility for the Standalone Ind AS 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 Ind AS Financial Statements that give a true and fair view of the (state of affairs) financial position, profit (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian 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 design, implementation and maintenance of adequate internal financial controls and ensuring their operating effectiveness and the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS 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 Ind AS 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 there under.

We conducted our audit in accordance with the Standards on Auditing 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 Standalone Ind AS Financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Standalone Ind AS Financial Statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS 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 Standalone Ind AS 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 Standalone Ind AS 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 Ind AS Financial Statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS 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 including the Ind AS, of the state of affairs (financial position) of the Company as at March 31, 2018, its profit (financial performance including other comprehensive income), its cash flows and changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

01. As required by the Companies (Auditors'' 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, to the extent applicable.

02. 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 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 it appears from our examination of those books;

c. The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d. In our opinion, the aforesaid Standalone Ind AS Financial Statements comply with the Indian 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, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 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, we give our separate Report in -Annexure 2-.

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 Standalone Ind AS Financial Statements (Refer Note 39 on Contingent Liabilities to the Standalone Ind AS Financial Statements);

ii. The Company did not have any long-term contracts including derivative contracts. Hence, the question of any material foreseeable losses does not arise;

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

[Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' in the Independent Auditor''s

Report of even date to the members of Radico Khaitan Limited on the Standalone Ind AS Financial Statements for the year ended March 31, 2018.]

a. The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.

b. The Company has a regular program of physical verification of its property, plant and equipment under which property, plant and equipment are verified in a phased manner 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. Accordingly, certain property, plant and equipment were verified during the year and no material discrepancies were noticed on such verification.

c. The title deeds of immovable properties recorded in the books of account of the Company are held in the name of the Company.

ii. The inventory, except goods in transit, has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. As informed, no material discrepancies were noticed on physical verification carried out during the year.

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 Act. Accordingly, paragraph 3 (iii) (a), 3 (iii)(b) and 3 (iii)(c) of the Order are not applicable to the Company.

iv. The company has not given any loan or provided any guarantee or security to parties covered under section 185 of the Companies Act, 2013. Further, according to the information and explanation given to us in respect of loans, investments, guarantees and securities, the Company has complied with the provisions of Section 186 of the Act.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the provisions of Sections 73 to 76 of the Act and the rules framed there under.

vi. We have broadly reviewed the books of account maintained by the Company in respect of products where the maintenance of cost records has been specified by the Central Government under sub-section (1) of Section 148 of the Act and the rules framed there under and we 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 records with a view to determine whether they are accurate or complete.

vii.

a. The Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, Goods and Service Tax, value added tax, customs duty, excise duty, cess, and any other material statutory dues applicable to it, and

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, Goods and Service Tax, value added tax, customs duty, excise duty, cess, and any other material statutory dues applicable to it, were outstanding, at the year end, for a period of more than six months from the date they became payable.

b. According to the information and explanation given to us, the dues outstanding with respect to, income tax, sales tax, service tax, value added tax, customs duty, excise duty on account of any dispute, are as follows:

Name of the statute

Nature of dues

Amount Disputed (Amount in Lakhs)

Period to which the amount relates

Forum where dispute is pending

UP VAT ACT/ KARNATAKA VAT ACT /DELHI VAT ACT

Sales Tax/ Entry Tax/VAT

6.86

1999-00

Trade Tax Tribunal, Moradabad

1.81

1998-99

Allahabad High Court

1.21

1999-00

Trade Tax Tribunal, Moradabad

33.79

2012-13

Hyderabad High Court

8.45

2012-13

Hyderabad High Court

84.13

2014-15

Karnataka High Court

United Provinces (Uttar Pradesh) Excise Act, 1910

Excise Duty

102.32

1995 to 2005

Allahabad High Court, Lucknow Bench

37.04

2005-06 to 2008-09

Allahabad High Court, Lucknow Bench

22.00

1997-98

Allahabad High Court, Lucknow Bench

The Custom Act 1962

Custom Duty

10.73

2015

Commissioner of Customs (Appeals)

Finance Act 1994 (Service tax laws)

Service Tax

140.39

July 2003 to March 2012 (including interest and penalty)

CESTAT, Delhi

viii. According to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to financial institutions), bank(s), governments), nor has it issued any debentures as at the Balance Sheet date. Accordingly, the provisions of clause 3(viii) of the Order are not applicable to the Company.

ix. In our opinion and according to the information and explanations given to us, the Company has not raised any money by way of public issue offer, further the Company has utilized the money raised by way of the term loans during the year for the purposes for which they were raised.

x. 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 by the Company or any fraud on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such instance by the management.

xi. According to the information and explanations given to us, managerial remuneration has been provided and paid in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.

xiii. According to the information and explanation given to us, all transactions entered into by the Company with the related parties are in compliance with Sections 177 and 188 of Act, where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards (Refer Note No. 46 on Related Party Transactions and Disclosures).

xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.

xv. According to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him.

xvi. According to the information and explanation given to us the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

[Referred to in paragraph 2 under ''Report on Other Legal and Regulatory Requirements'' in the Independent Auditor''s Report of even date to the members of Radico Khaitan Limited on the Standalone Ind AS Financial Statements for the year ended March 31, 2018]

Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (-the Act-)

We have audited the internal financial controls over financial reporting of Radico Khaitan Limited (-the Company-) as of March 31, 2018 in conjunction with our audit of the Standalone Ind AS Financial Statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (-ICAI-). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the -Guidance Note-) and the Standards on Auditing specified under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting were established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness.

Our audit of internal financial controls over financial rep or ting include d ob tainting an understanding of inter nal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS Financial Statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone Ind AS Financial Statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Standalone Ind AS Financial Statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the Standalone Ind AS Financial Statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on -Audit of Internal Financial Controls Over Financial Reporting- issued by the ICAI.

For BGJC & Associates LLP

Chartered Accountants

ICAI Firm Registration No. 003304N

Darshan Chhajer

Place: New Delhi Partner

Date: May 03, 2018 Membership No. 088308


Mar 31, 2017

Report on the Standalone Ind-AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Radico Khaitan Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended and a summary of significant accounting policies and other explanatory information, (hereinafter referred to as “Ind AS Financial Statements”).

Management’s Responsibility for the Standalone Ind AS 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 Ind AS financial statements to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under section 133 of the Act. 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 design, implementation and maintenance of adequate internal financial controls and ensuring their operating effectiveness and the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS 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 Ind AS 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 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 standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS 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 standalone Ind AS 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 Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 including the Ind AS, of the state of affairs (financial position) of the Company as at March 31, 2017, its profit (financial performance including other comprehensive income) its cash flows and changes in equity for the year ended on that date.

Other Matter

The comparative financial information of the Company for the year ended March 31, 2016 and the transition date opening balance sheet as at April 01, 2015 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor V. Sankar Aiyar & Co. whose report for the year ended March 31, 2016 and March 31, 2015 dated May 10, 2016 and May 22, 2015 respectively expressed an unmodified opinion on those standalone Ind AS financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

(1) As required by the Companies (Auditors’ 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, to the extent applicable.

(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 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 it appears from our examination of those books;

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

d. In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act read with relevant rule issued thereunder;

e. On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 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, we give our separate Report in “Annexure 2”.

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 standalone Ind AS financial statements -Refer Note 38 on Contingent Liabilities;

ii. The Company did not have any long-term contracts including derivative contracts. Hence, the question of any material foreseeable losses does not arise;

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

iv. The company has provided requisite disclosures in its Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 08, 2016 to December 30, 2016 and these are in accordance with the books of account maintained by the company, Refer note no. 57.

For BGJC & Associates LLP

Chartered Accountants

Firm Registration No. 003304N

Darshan Chhajer

Place: New Delhi Partner

Date:- May 23, 2017 Membership Number: 088308


Mar 31, 2016

We have audited the accompanying financial statements of RADICO KHAITAN LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March 2016, the Statement of Profit & Loss and 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 financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the 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 design, implementation and maintenance of adequate internal financial controls, 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 hereunder.

We conducted our audit in accordance with the Standards on Auditing 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 of 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 the accounting principles 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 financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 31st March 2016, and 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, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of 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 "Annexure A" a statement on the matters specified in the paragraphs 3 and 4 of the said 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 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 it appears from our examination of those books;

c) The Balance Sheet, the Statement of Profit and Loss and the 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 31st March 2016 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 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 B";

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 knowledge and information and according to the explanations given to us and such checks as we considered necessary:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 31(i) to 31(iv) to the financial statements.

ii. There are no long-term contracts including derivative contracts, requiring provision for material foreseeable losses, under the applicable law or accounting standards.

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

Annexure-A referred to in the Independent Auditors'' Report to the members of the Radico Khaitan Limited on the financial statements for the year ended 31 March 2016.

(i) (a) The Company is maintaining proper records showing full particulars, including quantitative

details and situation of fixed assets on the basis of available information, read with our comment in (c) below.

(b) The Company has carried out physical verification of its assets in the major plant locations situated at Rampur & Bazpur and also of the assets located at its Delhi Office. We are informed that, prima facie, there are no major discrepancies. However, the reconciliation process of the physically verified assets with SAP maintained fixed assets register is under process. Hence discrepancies, if any, will be adjusted in books once such reconciliation is complete. We are informed that the physical verification of assets at other locations would be carried out in the next financial year. The Company has drawn out a policy of verifying its fixed assets once in three years, which in our opinion, is reasonable in relation to the size of the Company.

(c) According to the information and explanations given to us and the records examined by us, we report that the title deeds comprising of the immovable properties of land and building are held in the name of the Company. However, the Company is in the process of reconciling the land documents with financial records. Hence, the discrepancies, if any, would be ascertained on completion of the reconciliation.

(ii) On the basis of information and explanations obtained, stocks of finished goods and raw materials of the distillery / bottling units have been under physical check by the excise department in coordination with the Company''s supervisory staff at frequent intervals. Other stocks, stores and spares, at various locations have been physically verified by the management during the year. We are informed that no material discrepancy were noticed on such verification.

(iii) 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. Therefore, the provisions of clause 3(iii)(a),(b)&(c) of the Order are not applicable.

(iv) The Company has not given any loan or provided any guarantee or security to parties covered under section 185 of the Companies Act, 2013. In respect of loans, investments, guarantees and security the Company has complied with the provisions of section 186 of the Companies Act, 2013 except to the extent and for reasons explained in note no.45(e).

(v) The Company has not accepted deposits from the public within the meaning of sections 73 or 76 of the Act and hence clause (v) of the Order is not applicable to the Company.

(vi) We have broadly reviewed the books of accounts maintained by the Company, pursuant to rules made under sub-section (1) of section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been maintained and the required statements are in the process of compilation. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the records of the Company, the Company has been generally regular in

depositing undisputed statutory dues including Provident Fund, employees'' State Insurance, Income-tax, Sales-tax, Service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities. There were no arrears of undisputed statutory dues as at 31st March, 2016, which were outstanding for a period of more than six months from the date they became payable.

(b) The disputed statutory dues of different years relating to income tax, sales tax, service tax or duty of excise or value added tax or cess, which have remained unpaid as on 31st March, 2016 for which appeals are pending as under:

Nature of the Dues

Amount (Rs.lacs)

Period to which the amount relates

Forum where dispute is pending

Sales Tax / Entry Tax/ VAT

4.12

1998-99 & 1999-00

Revision before Allahabad High Court

1.27

1999-00

Trade Tax Tribunal, Moradabad

23.24

2012-13, 2013-14

AP High Court

1,863.50

2007-08

DVAT

Kerala

Commercial Tax

84.13

2014-15

Kerala High Court

Excise Duty

17.37

1981

Allahabad High Court -Luck now Bench

92.38

1995 to 2005

Allahabad High Court -Luck now Bench (Bank Guarantee issued)

59.01

2005-06 to 2008-09

Allahabad High Court -Luck now Bench

19.28

1997-98

High Court of Rajasthan

18.44

2014-15

High Court of Rajasthan

Custom duty

10.73

2015

Commissioner of Customs (Appeals)

Service Tax

15,371.50

July 2003 to March 2012 (including interest and penalty)

CESTAT, Delhi

(viii) On the basis of the verification of records and information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or banks or debenture holders.

(ix) In our opinion and according to the information and explanations given to us, the Company has not taken any term loans during the year. The Company has not raised moneys by way of public offer (including debt instruments).

(x) Based on the audit procedures performed and representation obtained from the management, we report that no case of material fraud on or by the Company has been noticed or reported during the year under audit.

(xi) The managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company. Therefore, the provisions of clause 3(xii) of the Order are not applicable.

(xiii) In our opinion and according to the information and explanations given to us, all the transactions with the related parties are in compliance with section 177 and 188 of the Companies Act, 2013 to the

extent applicable and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures. Therefore, the provisions of clause 3(xiv) of the Order are not applicable.

(xv) According to the information and explanations given to us and the representation obtained from the management, the Company has not entered into any non-cash transactions with directors or persons connected with him. Therefore, the provisions of clause 3(xv) of the Order are not applicable.

(xvi) In our opinion and according to the information and explanations given to us, the Company is not required to be registered under section 45-I of the Reserve Bank of India Act, 1934..

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

For V. Sankar Aiyar & Co.

Chartered Accountants

(Firm Regn. No.: 109208W)

Place: New Delhi (M.S. BALACHANDRAN)

Dated: 10-May-2016 Partner

(M. No:024282)


Mar 31, 2015

We have audited the accompanying financial statements of RADICO KHAITAN LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March 2015, the Statement of Profit & Loss and 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 financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the 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 design, implementation and maintenance of adequate internal financial controls, 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 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 a re free of 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 or whether the company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting principles 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 financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 31th March 2015, and 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 a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

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 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 it appears from our examination of those books;

c) The Balance Sheet, the Statement of Profit and Loss and the 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 31st March 2015 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 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 knowledge and information and according to the explanations given to us and such checks as we considered necessary:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements -Refer Note 31(i) to 31 (iv) to the financial statements,

ii. There are no long-term contracts including derivative contracts, requiring provision for material foreseeable losses, under the applicable law or accounting standards.

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

Annexure to the Independent Auditors' Report

The Annexure referred to in our Independent Auditor's Report to the members of the Radico Khaitan Limited on the financial statements for the year ended 31 March 2015.

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

(b) We are informed that the management has not physically verified fixed assets during the year. Therefore, reconciliation with the book records and discrepancies, if any, can be ascertained only after the verification is carried out.

(ii) (a) On the basis of information and explanations obtained, stocks of finished goods and raw materials of the distillery / bottling units have been under physical check by the excise department in coordination with the Company's supervisory staff at frequent intervals. Other stocks, stores and spares, at various locations have been physically verified by the management during the year. 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) In our opinion, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification,

(iii) The Company has granted Rs.1000 lacs as interest free unsecured working capital advance under a specific manufacturing and selling arrangement and Rs.1000 lacs as interest-free unsecured advance to a joint venture company covered under section 189 of the Companies Act, 2013.

In respect of the above:

(a) The working capital advance and the unsecured advance are without any stipulations as to repayment and are interest free.

(b) We are informed that as per the arrangement with the joint venture company, in the absence of any specific stipulation, there is no overdue in respect of the said working capital advance and interest free unsecured loan.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems 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. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the internal control system,

(v) The Company has not accepted deposits from the public within the meaning of sections 73 or 76 of the Act and hence clause (V) of the Order is not applicable to the Company.

(vi) We have broadly reviewed the books of accounts maintained by the Company, pursuant to rules made under sub-section (1) of section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been maintained and the required statements are in the process of compilation. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the records of the Company, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Duty of customs, Duty of Excise, Value added tax. Cess and any other statutory dues with the appropriate authorities. There were no arrears of undisputed statutory dues as at 31" March, 2015, which were outstanding for a period of more than six months from the date they became payable.

(b) The disputed statutory dues of different years relating to income tax, sales tax, service tax or duty of excise or value added taxor cess, which have remained unpaid as on 31st March, 2015for which appeals are pending as under:

Nature of Amount (Rs.lacs) Period to which the Dues the amount relates

Sales Tax/ 4.12 1998-99 & 1999-00 Entry Tax 1.27 1999-00

Rajasthan 157.67 2010-11 Sales Tax

Excise Duty 17.37 1981

Excise Duty 92,38 1995 to 2005

Excise Duty 59.01 2005-06 to 2008-09

Service Tax 15,371.50 July 2003 to March 2012 (including interest and penalty)

Nature of Forum where dispute is pending the Dues

Sales Tax/ Revision before Entry Tax Allahabad High Court

Trade Tax Tribunal, Moradabad

Rajasthan Appellate Tribunal, Jaipur Sales Tax

Excise Duty Allahabad High Court - Lucknow Bench

Excise Duty Allahabad High Court- Lucknow Bench (Bank Guarantee issued)

Excise Duty Allahabad High Court- Lucknow Bench

Service Tax CESTAT, Delhi

(c) Based on the information and explanations obtained, the Company has transferred the required amount within time to the Investor Education & Protection Fund in accordance with the relevant provisions of the Companies Act, 1956,

(viii) The Company has no accumulated losses and has not incurred cash losses during the financial year covered by our audit or in the immediately preceding financial year.

(ix) On the basis of the verification of records and information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or banks or debenture holders.

(x) The Company has given a guarantee of Rs.237.60 lacs for loans taken by Radico NV Distilleries Maharashtra, (a joint venture company, in which the Company holds 36% of the paid-up capital) from a bank, On the basis of information and explanations given to us, the terms and conditions whereof are not, prima facie, prejudicial to the interest of the Company.

(xi) The Company has not taken any term loan during the year and hence clause (xi) of the Order is not applicable.

(xii) Based on the audit procedures performed and representation obtained from the management, we report that no case of material fraud on or by the Company has been noticed or reported during the year under audit.

For V. SankarAiyar&Co. Chartered Accountants (Firm Regn. No.: 109208W)

Place: New Delhi (M.S. BALACHANDRAN) Dated:22-May-2015 Partner (M. No:024282)


Mar 31, 2014

We have audited the accompanying financial statements of RADICO KHAITAN LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March 2014 and the Statement of Profit & 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 the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. The 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 of 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 judgement, 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 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 31st March 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 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 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 sub-section (3C) of section 211 of the Companies Act, 1956 read with General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

e) On the basis of written representations received from the directors as on 31st March 2014 and taken on record by the Board of Directors, none of the directors is disqualified as on 31.03.2014 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

2 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 (4A) of the Act, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable, on the basis of information & explanations obtained and such checks as we considered necessary.

ANNEXURE REFERRED TO IN OUR REPORT OF EVEN DATE TO THE SHAREHOLDERS OF RADICO KHAITAN LIMITED FOR THE YEAR ENDED 31st MARCH, 2014

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

(b) The management has physically verified major part of the fixed assets at the distillery at Rampur and other locations (except Delhi Office) once during the year. The assets physically verified are under reconciliation with the book records and discrepancies, if any, can be ascertained only after the

(c) Since there is no substantial disposal of fixed assets during the year, the preparation of financial statements on a going concern basis is not affected on this account.

ii (a) On the basis of information and explanations obtained, stocks of finished goods and raw materials of the distillery / bottling units have been under physical check by the excise department in coordination with the Company''s supervisory staff at frequent intervals. Other stocks, stores and spares, at various locations have been physically verified by the management during the year. 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) In our opinion, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

iii (a) The Company has granted Rs.1776.83 lacs as interest free unsecured working capital advance under a specific manufacturing and selling arrangement and Rs.1037.96 lacs as interest-free unsecured advance to a joint venture company. The maximum amounts outstanding during the year aggregated to Rs2399.46 lacs and year end outstanding balance aggregated to Rs.2814.79 lacs respectively.

(b) Keeping in view similar arrangement with other parties, the working capital arrangement financed by the Company is free of interest under a specific manufacturing and selling arrangement. In relation to both advances, there are no other terms and conditions that are prejudicial to the interest of the Company.

(c) There is no stipulation regarding repayment of principal as the amount has been financed under a specific manufacturing and selling arrangement with the party. As mentioned above, the loan has been financed interest free. In the case of interest-free advance also, there are no stipulations regarding repayment of principal.

(d) As mentioned above, there are no stipulations regarding repayment of principal. Accordingly, there is no overdue amount of more than rupees one lac in respect of amount financed to the Company listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The Company has not taken any loans, secured or unsecured from companies, firms or other parties required to be covered in the register maintained under section 301 of the Companies Act, 1956. Hence, sub-clauses (f) and (g) are not applicable.

iv In our opinion and according to the information and explanations given to us, there are adequate

internal control systems commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and with regard to the sale of goods. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the internal control system.

v (a) According to the information given to us, the particulars of contracts or arrangements during the year that need to be entered into a register in pursuance of section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements, exceeding the value of rupees five lacs, are of specific requirements of the Company for which alternative sources are not available for comparison of prevailing market prices.

vi The Company has not accepted deposits from the public within the meaning of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed thereunder.

vii An outside agency has carried out internal audit during the year. In our opinion, the internal audit system of the Company is commensurate with the size of the Company and the nature of its business.

viii We have broadly reviewed the books of accounts maintained by the Company, pursuant to rules

made by the Central Government for the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been maintained and the required statements are in the process of compilation. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix (a) According to the records of the Company, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, there were no arrears of undisputed statutory dues as at 31st March, 2014, which were outstanding for a period of more than six months from the date they became payable.

(b) According to the records of the Company and the information and explanation given to us, there are no dues of income-tax, wealth tax, custom duty and cess, which have not been deposited on account of any dispute. Details of disputed dues in respect of sales tax, excise duty and service tax of different years, which have remained unpaid as on 31st March, 2014, for which appeals are pending are as under:

Nature of Dues Year(s) Amount Forum where pending (Rs. in Lacs)

Sales Tax / 1998-99 & 1999-00 4.12 Revision before Allahabad High Court Entry Tax

1999-00 1.27 Trade Tax Tribunal, Moradabad

Excise Duty 1981 17.37 Allahabad High Court – Lucknow Bench

1995 to 2005 92.38 Allahabad High Court – Lucknow Bench (Bank Guarantee issued)

2005-06 to 2008-09 59.01 Allahabad High Court – Lucknow Bench

Service Tax July 2003 to March 1,08,65.61 CESTAT, Delhi 2012 (including interest and penalty)

x The Company has no accumulated losses as at the end of the year and has not incurred cash losses during the financial year covered by our audit or in the immediately preceding financial year.

xi On the basis of the verification of records and information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or banks. There are no debentures outstanding in the books of accounts at any time during the year.

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

xiii The Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order are not applicable to the Company.

xiv As regards dealing or trading in shares, securities, debentures and other investments, proper records have been maintained of the transaction of the contracts and timely entries made therein. The shares, securities, and other investments have been held by the Company in its own name except to the extent of exemption, if any, granted under Section 49 of the Companies Act, 1956.

xv The Company has given a guarantee of Rs.1044 lacs for loans taken by Radico NV Distilleries Maharashtra, (a joint venture company, in which the Company holds 36% of the paid-up Capital) from a bank, besides being a coobligant for vehicle loan the balance of which is Rs.35.34 lacs. On the basis of information and explanations given to us, the terms and conditions whereof are not, prima facie, prejudicial to the interest of the Company.

xvi On the basis of verification, information and explanations obtained and on an overall basis, we note that term loans lacs taken during the year were applied for the purpose for which the loans were obtained.

xvii According to the information and explanations given to us, the cash flow statements examined by us and on an overall examination of the financial statements of the Company, we report that funds raised on short term basis have been not been used for long term investments.

xviii During the year, 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.

xix As the Company has no outstanding debentures during the year, the question of creating securities or charge does not arise.

xxi The Company has not raised any money through public issue of securities during the year and therefore verification of the end use of money does not arise.

xxii Based on the audit procedure performed and the representation obtained from the management, we report that no case of material fraud on or by the Company has been noticed or reported during the year under audit.

For V. Sankar Aiyar & Co.

Chartered Accountants (Firm Regn. No.: 109208W)

Place: New Delhi M.S. BALACHANDRAN

Dated: 30-May-2014 Partner

Membership No: 024282


Mar 31, 2013

Report on Financial Statements

We have audited the accompanying financial statements of RADICO KHAITAN LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2013 and the Statement of Profit & 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 the Accounting Standards referred to in sub- section (3C) of section 211 of the Companies Act, 1956 ("the Act"). The 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 auditto obtain reasonable assurance about whether the financial statements are free of 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 judgement, 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 31st March, 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 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 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 sub-section (3C) of section 211 of the Companies Act, 1956.

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

2 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 enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable, on the basis of information & explanations obtained and such checks as we considered necessary.

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

(b) The management has physically verified major part of the fixed assets at the distillery at Rampur and other locations (except Delhi Office) once during the year. The assets physically verified are under reconciliation with the book records and discrepancies, if any, can be ascertained only after the reconciliation is complete.

(c) Since there is no substantial disposal of fixed assets during the year, the preparation of financial statements on a going concern basis is not affected on this account.

ii (a) On the basis of information and explanations obtained, stocks of finished goods and raw materials of the distillery / bottling units have been under physical check by the excise department in coordination with the Company''s supervisory staff at frequent intervals. Other stocks, stores and spares, at various locations have been physically verified by the management during the year. 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) In our opinion, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

iii (a) The Company has granted Rs. 1 1 55.88 lacs as interest free unsecured working capital advance under a specific manufacturing and selling arrangement and Rs.185.39 lacs as interest-free unsecured advance to a joint venture company. The maximum amounts outstanding during the year aggregated to Rs.3042.17 lacs and year end outstanding balance aggregated to Rs.1341.27 lacs respectively.

(b) Keeping in view similar arrangement with other parties, the working capital arrangement financed by the Company is free of interest under a specific manufacturing and selling arrangement. In relation to both advances, there are no other terms and conditions that are prejudicial to the interest of the Company.

(c) There is no stipulation regarding repayment of principal as the amount has been financed under a specific manufacturing and selling arrangement with the party. As mentioned above, the loan has been financed interest free. In the case of interest-free advance also, there are no stipulations regarding repayment of principal.

(d) As mentioned above, there are no stipulations regarding repayment of principal. Accordingly, there is no overdue amount of more than rupees one lac in respect of amount financed to the Company listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The Company has not taken any loans, secured or unsecured from companies, firms or other parties required to be covered in the register maintained under section 301 of the Companies Act, 1956. Hence, sub-clauses (f) and (g) are not applicable.

iv In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and with regard to the sale of goods. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the internal control system.

v (a) According to the information given to us, the particulars of contracts or arrangements during the year that need to be entered into a register in pursuance of section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements, exceeding the value of rupees five lacs, are of specific requirements of the Company for which alternative sources are not available for comparison of prevailing market prices.

vi The Company has not accepted deposits from the public within the meaning of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed thereunder.

vii An outside agency has carried out internal audit during the year. In our opinion, the internal audit system of the Company is commensurate with the size of the Company and the nature of its business.

viii We have broadly reviewed the books of accounts maintained by the Company, pursuant to rules made by the Central Government for the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been maintained and the required statements are in the process of compilation. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix (a) According to the records of the Company, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, there were no arrears of undisputed statutory dues as at 31st March, 2013, which were outstanding for a period of more than six months from the date they became payable.

(b) According to the records of the Company and the information and explanation given to us, there are no dues of income-tax, wealth tax, custom duty and cess, which have not been deposited on account of any dispute. Details of disputed dues in respect of sales tax, excise duty and service tax of different years, which have remained unpaid as on 31st March, 2013, for which appeals are pending are as under:

Nature of dues Year(s) Amount Forum where pending (Rs. in lacs)

Sales Tax/Entry Tax 1998-99 & 1999-00 3.02 Revision before Allahabad High Court

1999-00 6.86 Trade Tax Tribunal, Moradabad

Excise Duty 1981 17.37 Allahabad High Court - Lucknow Bench

1995 to 2005 92.38 Allahabad High Court - Lucknow Bench (Bank Guarantee issued)

2005-06 to 2008-09 56.69 Allahabad High Court - Lucknow Bench

Service Tax July 2003 to March 2012 10865.61 CESTAT, Delhi (including interest and penalty)

x The Company has no accumulated losses as at the end of the year and has not incurred cash losses during the financial year covered by our audit or in the immediately preceding financial year.

xi On the basis of the verification of records and information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or banks. There are no debentures outstanding in the books of accounts at any time during the year.

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

xiii The Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order are not applicable to the Company.

xiv As regards dealing or trading in shares, securities, debentures and other investments, proper records have been maintained of the transaction of the contracts and timely entries made therein. The shares, securities, and other investments have been held by the Company in its own name except to the extent of exemption, if any, granted under Section 49 of the Companies Act, 1956.

xv The Company has given a guarantee of Rs.5640 lacs for loans taken by Radico NV Distilleries Maharashtra, (a joint venture company, in which the Company holds 36% of the paid-up Capital) from a bank, besides being a coobligant for vehicle loan the balance of which is Rs.75.04 lacs. On the basis of information and explanations given to us, the terms and conditions whereof are not, prima facie, prejudicial to the interest of the Company.

xvi On the basis of verification, information and explanations obtained and on an overall basis, we note that term loans of Rs. 10,000 lacs taken during the year from banks for capital expenditure have not been utlised for the stated purpose to the extent of Rs.2436.54 lacs.

xvii According to the information and explanations given to us, the cash flow statements examined by us and on an overall examination of the financial statements of the Company, we report that funds raised on short term basis have been not been used for long term investments.

xviii During the year, 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.

xix As the Company has no outstanding debentures during the year, the question of creating securities or charge does not arise.

xx The Company has not raised any money through public issue of securities during the year and therefore verification of the end use of money does not arise.

xxi Based on the audit procedure performed and the representation obtained from the management, we report that no case of fraud on or by the Company has been noticed or reported during the year under audit.

For V. Sankar Aiyar & Co.

Chartered Accountants

(Firm Regn. No.: 109208W)

M.S. BALACHANDRAN

Place: New Delhi Partner

Dated: 28-May-2013 Membership No: 024282


Mar 31, 2012

1. We have audited the attached Balance Sheet of RADICO KHAITAN LIMITED as at 31st March, 2012 and also the Statement of Profit and Loss and Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted the audit in accordance with 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. We report that

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary 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, 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 dealt with by this report comply with the accounting standards referred to in section 211 (3C) of the Companies Act, 1956 to the extent applicable;

(e) On the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the directors are prima facie, disqualified as on 31.03.2012 from being appointed as directors of the Company in terms of section 274(1 )(g) of the Companies Act, 1956.

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts and read with the significant accounting policies and notes thereon, give the information required by the Companies Act, 1956 in the manner so required 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 31st March, 2012;

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

iii in the case of cash flow statement, of the cash flows for the year ended on that date.

4. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Department of Company Affairs, Govt, of India in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report on the matters specified in the paragraphs 4 and 5 of the said Order as under :

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

b) The management has physically verified major part of the fixed assets at the distillery at Rampur and other locations once during the year. The assets physically verified are under reconciliation with the book records and discrepancies, if any, can be ascertained only after the reconciliation is complete.

c) Since there is no substantial disposal of fixed assets during the year, the preparation of financial statements on a going concern basis is not affected on this account.

ii a) On the basis of information and explanations obtained, stocks of finished goods and raw materials of the distillery / bottling units have been under physical check by the excise department in coordination with the Company's supervisory staff at frequent intervals. Other stocks, stores and spares, at various locations have been physically verified by the management during the year. 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) In our opinion, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

iii a) The Company has granted Rs. 1963.03 lacs as interest free unsecured working capital advance under a specific manufacturing and selling arrangement and Rs.1000 lacs as interest bearing unsecured advance to a joint venture company. The maximum amounts outstanding during the year aggregated to Rs.3028.86 lacs and year end outstanding balance aggregated to Rs.3028.86 lacs respectively.

b) Keeping in view similar arrangement with other parties, the working capital arrangement financed by the Company is free of interest under a specific manufacturing and selling arrangement. In relation to both advances, there are no other terms and conditions that are prejudicial to the interest of the Company.

c) There is no stipulation regarding repayment of principal as the amount has been financed under a specific manufacturing and selling arrangement with the party. As mentioned above, the loan has been financed interest free. In the case of interest bearing advance also, there are no stipulations regarding repayment of principal and interest of Rs.56.38 lacs has accrued but not due as at the year end.

d) As mentioned above, there are no stipulations regarding repayment of principal. Accordingly, there is no overdue amount of more than rupees one lac in respect of amount financed to the Company listed in the register maintained under section 301 of the Companies Act, 1956.

e) The Company has not taken any loans, secured or unsecured from companies, firms or other parties required to be covered in the register maintained under section 301 of the Companies Act, 1956 except interest free working capital advance taken from a joint venture company (ceased to be a joint venture w.e.f.: 3rd February, 2012) under a specific manufacturing and selling arrangement. The maximum amount outstanding during the year was Rs,384.08 lacs and year-end outstanding balance was Rs.360.42 lacs.

f) In our opinion and according to the information and explanations given to us, other terms and conditions for such advances are not prima facie prejudicial to the interest of the Company.

g) In respect of the advances taken, there is no repayment schedule and is interest free. Thus question of principal amount due for repayment and payment of interest do not arise.

iv In our opinion and according to the information and explanations given to us, there are 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 with regard to the sale of goods. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the internal control system.

v a) According to the information given to us, the particulars of contracts or arrangements during the year that need to be entered into a register in pursuance of section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements, exceeding the value of rupees five lacs, are of specific requirements of the Company for which alternative sources are not available for comparison of prevailing market prices.

vi The Company has not accepted deposits from the public within the meaning of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed there under.

vii An outside agency has carried out internal audit during the year. In our opinion, the internal audit system of the Company is commensurate with the size of the Company and the nature of its business.

viii We have broadly reviewed the books of accounts maintained by the Company, pursuant to rules made by the Central Government for the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been maintained and the required statements are in the process of compilation. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix a) According to the records of the Company, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, there were no arrears of undisputed statutory dues as at 31st March, 2012, which were outstanding for a period of more than six months from the date they became payable.

b) According to the records of the Company and the information and explanation given to us, there are no dues of income-tax, wealth tax, custom duty and cess, which have not been deposited on account of any dispute. Details of disputed dues in respect of sales tax, excise duty and service tax of different years, which have remained unpaid as on 31st March, 2012, for which appeals are pending are as under:

Nature of Year Amount Forum where dues (Rs. in lacs) pending

Sales Tax / Entry Tax 1998-99 3.02 Revision before & 1999-00 Allahabad High Court

1999-00 6.86 Trade Tax Tribunal, Moradabad

Excise Duty 1981 17.37 Allahabad High Court - Lucknow Bench

1995 to 2005 92.38 Allahabad High Court -

Lucknow Bench (Bank Guarantee issued)

2005-06 to 2008-09 56.03 Allahabad High Court - Lucknow Bench

Service Tax July 2003 to 8259.47 CESTAT. Delhi March 2009 (including Interest and Penalty)

x The Company has no accumulated losses as at the end of the year and has not incurred cash losses during the financial year covered by our audit or in the immediately preceding financial year.

xi On the basis of the verification of records and information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or banks. There are no debentures (other than unsecured FCCBs which were repaid during the year) outstanding in the books of accounts at any time during the year.

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

xiii The Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order are not applicable to the Company.

xiv As regards dealing or trading in shares, securities, debentures and other investments, proper records have been maintained of the transaction of the contracts and timely entries made therein. The shares, securities, debentures and other investments have been held by the Company in its own name except to the extent of exemption, if any, granted under Section 49 of the Companies Act, 1956.

xv The Company has given a guarantee of Rs.5640 lacs for loans taken by Radico NV Distilleries Maharashtra, (a joint venture company, in which the Company holds 36% of the paid-up Capital) from a bank. On the basis of information and explanations given to us, the terms and conditions whereof are not, prima facie, prejudicial to the interest of the Company.

xvi On the basis of verification and information and explanations obtained, on an overall basis, the term loans taken have been applied for the purpose for which they were obtained.

xvii According to the information and explanations given to us, the cash flow statements examined by us and on an overall examination of the financial statements of the Company, we report that funds raised on short term basis have been not been used for long term investments.

xviii During the year, 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.

xix As the Company has no outstanding debentures during the year (other than unsecured FCCBs, which were repaid during the year), the question of creating securities or charge does not arise.

xx The Company has not raised any money through public issue of securities during the year and therefore verification of the end use of money does not arise.

xxi Based on the audit procedure performed and the representation obtained from the management, we report that no case of fraud on or by the Company has been noticed or reported during the year under audit.

For V. Sankar Aiyar & Co.

Chartered Accountants

ICAI Firm Regn. No. 109208W

Sd/-

Place: New Delhi (M.S. Balachandran)

Date : 30.05.2012 Partner

M.No. 024282


Mar 31, 2011

1. We have audited the attached Balance Sheet of RADICO KHAITAN LIMITED as at 31st March, 2011 and also the Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted the audit in accordance with 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. We report that

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary 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 section 211 (3C) of the Companies Act, 1956 to the extent applicable;

(e) On the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the directors are prima facie, disqualified as on 31.03.2011 from being appointed as directors of the Company in terms of section 274(1)(g) of the Companies Act, 1956.

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to Note no. 15 of Schedule 18 regarding managerial remuneration of the years 2009-10 and 2010-11 exceeding the limit approved by the Central Government and read with the significant accounting policies and notes thereon, give the information required by the Companies Act, 1956 in the manner so required 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 31st March, 2011;

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 cash flow statement, of the cash flows for the year ended on that date.

4. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Department of Company Affairs, Govt. of India in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report on the matters specified in the paragraphs 4 and 5 of the said Order as under :

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

b) The management has physically verified major part of the fixed assets at the distillery at Rampur and other locations once during the year. The assets physically verified are under reconciliation with the book records and discrepancies, if any, can be ascertained only after the reconciliation is complete.

c) Since there is no substantial disposal of fixed assets during the year, the preparation of financial statements on a going concern basis is not affected on this account.

ii a) On the basis of information and explanations obtained, stocks of finished goods and raw material of the distillery / bottling units have been under physical check by the excise department in coordination with the Company's supervisory staff at frequent intervals. Other stocks, stores and spares, at various locations have been physically verified by the management during the year. 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) In our opinion, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

iii a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties required to be covered in the register maintained under section 301 of the Companies Act, 1956, except interest free working capital advance given

to a joint venture company under a specific manufacturing and selling arrangement. The maximum amounts outstanding during the year wasRs.1955.81lacs and year-end outstanding balances was Rs.1477.86 lacs.

b) Keeping in view similar arrangement with other parties, this working capital arrangement financed by the Company is free of interest under a specific manufacturing and selling arrangement. There are no other terms and conditions that are prejudicial to the interest of the Company.

c) There are no stipulation regarding repayment of principal as the amount has been financed under a specific manufacturing and selling arrangement with the party. As mentioned above, the amount has been financed interest free.

d) As mentioned above, there are no stipulations regarding repayment of principal as the amount has been financed under a specific manufacturing and selling arrangement with the party. Accordingly, there is no overdue amount of more than rupees one lac in respect of amount financed to the Company listed in the register maintained under section 301 of the Companies Act, 1956.

e) The Company has not taken any loans, secured or unsecured from companies, firms or other parties required to be covered in the register maintained under section 301 of the Companies Act, 1956 except interest free working capital advance taken from a joint venture company under a specific manufacturing and selling arrangement. The maximum amount outstanding during the year was Rs. 422.33 lacs and year-end outstanding balance was Rs.375.68 lacs.

f) In our opinion and according to the information and explanations given to us, other terms and conditions for such advances are not prima facie prejudicial to the interest of the Company.

g) In respect of the advances taken, there is no repayment schedule and is interest free. Thus question of principal amount due for repayment and payment of interest do not arise.

iv In our opinion and according to the information and explanations given to us, there are 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 with regard to the sale of goods. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the internal control system.

v a) According to the information given to us, the particulars of contracts or arrangements during the year that need to be entered into a register in pursuance of section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements, exceeding the value of rupees five lacs, are of specific requirements of the Company for which alternative sources are not available for comparison of prevailing market prices.

vi The Company has not accepted deposits from the public within the meaning of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed thereunder.

vii An outside agency has carried out internal audit during the year. In our opinion, the internal audit system of the Company is commensurate with the size and nature of its business.

viii We have broadly reviewed the books of accounts maintained by the Company, pursuant to rules made by the Central Government for the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been maintained and the required statements are in the process of compilation. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix a) According to the records of the Company, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, there were no arrears of undisputed statutory dues as at 31st March, 2011, which were outstanding for a period of more than six months from the date they became payable.

b) According to the records of the Company and the

information and explanation given to us, there are no dues of income-tax, wealth tax, custom duty and cess, which have not been deposited on account of any dispute. Details of disputed dues in respect of sales tax, excise duty and service tax of different years, which have remained unpaid as on 31st March, 2011, for which appeals are pending are as under:

Nature of Year Amount Forum where dues (Rs. in lacs) pending

Sales Tax/ 1998-99 & 1999-00 1.27 Revision before Allahabad High Court

Entry Tax 1999-00 4.12 Trade Tax Tribunal, Moradabad

2008-09 26.31 Writ petition before Allahabad High Court (Bank Guraantee issued for Rs. 75 lakhs)

Excise Duty 1981 17.37 Allahabad High Court – Lucknow Bench 1995 to 2005 92.38 Allahabad High Court – Lucknow Bench (Bank Guarantee issued)

2005-06 to 2008-09 48.67 Allahabad High Court – Lucknow Bench Service Tax July 2003 to March 2008 3179.84 CESTAT, Delhi Penalty on above 3179.84

x The Company has no accumulated losses as at the end of the year and has not incurred cash losses during the financial year covered by our audit or in the immediately preceding financial year.

xi On the basis of the verification of records and information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or banks. There are no debentures (other than unsecured FCCBs which are not due for repayment during the year) outstanding in the books of accounts at any time during the year.

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

xiii The Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order are not applicable to the Company.

xiv As regard dealing or trading in shares, securities, debentures and other investments, proper records have been maintained of the transaction of the contracts and timely entries made therein. The shares, securities, debentures and other investments have been held by the Company in its own name except to the extent of exemption, if any, granted under Section 49 of the Act.

xv The Company has given a guarantee of Rs. 41.40 crores for loans taken by Radico NV Distilleries Maharashtra, (a joint venture company, in which the Company holds 36% of the paid-up Capital) from a bank. On the basis of information and explanations given to us, the terms and conditions whereof are not, prima facie, prejudicial to the interest of the Company.

xvi On the basis of verification and information and explanations obtained, on an overall basis, the term loans

taken have been applied for the purpose for which they were obtained.

xvii According to the information and explanations given to us, the cash flow statements examined by us and on an overall examination of the financial statements of the Company, we report that funds raised on short term basis have not been used for long term investments to the extent of Rs. 18.21 crores approximately.

xviii During the year, 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.

xix As the Company has no outstanding debentures during the year (other than unsecured FCCBs), the question of creating securities or charge does not arise.

xx The Company has not raised any money through public issue of securities during the year and therefore verification of the end use of money does not arise.

xxi Based on the audit procedure performed and the representation obtained from the management, we report that no case of fraud on or by the Company has been noticed or reported during the year under audit.

For V. Sankar Aiyar & Co.

Chartered Accountants

ICAI Firm Regn. No. 109208W

Sd/- Place: New Delhi (M.S. Balachandran) Date : 18.05.2011 Partner

M.No. 024282


Mar 31, 2010

1. We have audited the attached Balance Sheet of RADICO KHAITAN LIMITED as at 31st March, 2010 and also the Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date, annexed thereto. 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 the audit in accordance with 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. We report that

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary 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 section 211 (3C) of the Companies Act, 1956 to the extent applicable;

(e) On the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the directors are prima facie, disqualified as on 31.03.2010 from being appointed as directors of the Company under section 274(1)(g) of the Companies Act, 1956.

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to Note no. 16 of Schedule 18 regarding managerial remuneration of the year 2008-09 exceeding the limit and requiring approval of the Central Government and read with the significant accounting policies and notes thereon, give the information required by the Companies Act, 1956 in the manner so required 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 31st March, 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 cash flow statement, of the cash flows for the year ended on that date.

4. As required by the Companies (Auditors Report) Order, 2003 issued by the Department of Company Affairs, Govt. of India in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report on the matters specified in the paragraphs 4 and 5 of the said Order as under :

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

b) The management has physically verified major part of the fixed assets at the distillery at Rampur and other locations once during the year. The assets physically verified are under reconciliation with the book records and discrepancies, if any, can be ascertained only after the reconciliation is complete.

c) Since there is no substantial disposal of fixed assets during the year, the preparation of financial statements on a going concern basis is not affected on this account.

ii a) On the basis of information and explanations obtained, stocks of finished goods and raw material of the distillery / bottling units have been under physical check by the excise department in coordination with the Companies supervisory staff at frequent intervals. Other stocks, stores and spares, at various locations have been physically verified by the management during the year. 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) In our opinion, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

iii a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties required to be covered in the register maintained under section 301 of the Companies Act, 1956 except interest free working capital advance given to a joint venture company under a specific manufacturing and selling arrangement. The maximum amount outstanding during the year was Rs. 2132.21lacs and year-end outstanding balance was Rs. 1222.64 lacs.

b) Keeping in view similar arrangement with other parties, this working capital arrangement financed by the Company is free of interest under a specific manufacturing and selling arrangement. There are no other terms and conditions that are not prejudicial to the interest of the Company.

c) There are no stipulation regarding repayment of principal as the amount has been financed under a specific manufacturing and selling arrangement with the party. As mentioned above, the amount has been financed interest free.

d) As mentioned above, there are no stipulation regarding repayment of principal as the amount has been financed under a specific manufacturing and selling arrangement with the party. Accordingly, there is no overdue amount of more than Rs. one lac in respect of amount financed to the Company listed in the register mentioned under register 301 of the Companys Act 1956.

e) The Company has not taken any loans, secured or unsecured from companies, firms or other parties required to be covered in the register maintained under section 301 of the Companies Act, 1956 except interest free working capital advance taken from a joint venture company under a specific manufacturing and selling arrangement. The maximum amount outstanding during the year was Rs. 422.33 lacs and year-end outstanding balance was Rs. 558.66 lacs.

f) In our opinion and according to the information and explanations given to us, other terms and conditions for such advances are not prima facie prejudicial to the interest of the Company.

g) In respect of the advances taken, there is no repayment schedule and is interest free. Thus question of principal amount due for repayment and payment of interest does not arise.

iv In our opinion and according to the information and explanations given to us, there are 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 with regard to the sale of goods. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the internal control system.

v a) According to the information given to us, the particulars of contracts or arrangements during the year that need to be entered into a register in pursuance of section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of rupees five lacs are of specific requirements of the Company for which alternative sources are not available for comparison of prevailing market prices.

vi The Company has not accepted deposits from the public within the meaning of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed thereunder.

vii An outside agency has carried out internal audit during the year. In our opinion, the internal audit system of the Company is commensurate with the size and nature of its business.

viii We have broadly reviewed the books of accounts maintained by the Company, pursuant to rules made by the Central Government for the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been maintained and the required statements are in the process of compilation. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix a) According to the records of the Company, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, there were no arrears of undisputed statutory dues as at 31st March, 2010, which were outstanding for a period of more than six months from the date they became payable.

x The Company has no accumulated losses as at the end of the year and has not incurred cash losses during the financial year covered by our audit or in the immediately preceding financial year.

xi On the basis of the verification of records and information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or banks. There are no debentures (other than unsecured FCCBs which are not due for repayment during the year) outstanding in the books of accounts at any time during the year.

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

xiii The Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order are not applicable to the Company.

xiv As regard dealing or trading in shares, securities, debentures and other investments, proper records have been maintained of the transaction of the contracts and timely entries made therein. The shares, securities, debentures and other investments have been held by the Company in its own name except to the extent of exemption, if any, granted under Section 49 of the Act.

xv The Company has given a guarantee of Rs. 41.40 crores for loans taken by Radico NV Distilleries Maharashtra, (a joint venture company, in which the Company holds 36% of the paid-up Capital) from a bank. On the basis of information and explanations given to us, the terms and conditions whereof are not, prima facie, prejudicial to the interest of the Company.

xvi On the basis of verification and information and explanations obtained, on an overall basis, the term loans taken during the year have been applied for the purpose for which they were obtained.

xvii According to the information and explanations given to us, the cash flow statements examined by us and on an overall examination of the financial statements of the Company, we report that funds raised on short term basis have not been used for long term investments.

xviii During the year, 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.

xix As the Company has no outstanding debentures during the year (other than unsecured FCCBs), the question of creating securities or charge does not arise.

xx The Company has not raised any money through public issue of securities during the year and therefore verification of the end use of money does not arise. However, during the year the Company has allotted 289.19 lac equity shares of Rs. 2 each under Qualified Institutional Placement (Refer Note no. 5 of Schedule 18B).

xxi Based on the audit procedure performed and the representation obtained from the management, we report that no case of fraud on or by the Company has been noticed or reported during the year under audit.

For V. Sankar Aiyar & Co. Chartered Accountants

Sd/- Place: New Delhi (M.S. Balachandran)

Date : 10.05.2010 Partner

M.No. 024282 ICAI Firm Regn. No. 109208W

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