FUTURE UBL Auditors Report

Independent Auditor''''s Report


To the Members of United Breweries Limited


Report on the Standalone Ind AS Financial Statements


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


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 financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the 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 issued by the Institute of Chartered Accountants of India, as specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the 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 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. 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 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, of the state of affairs of the Company as at March 31, 2017, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.


Emphasis of Matter


We draw attention to Note 42 to the accompanying standalone Ind AS financial statements, which more fully describes the decision made by the Bihar State Government for not renewing brewery license from the financial year 2017-18


Independent Auditor''''s Report contd.


and the uncertainty relating to the outcome of special leave petition filed by the Bihar State Government before the Honorable Supreme Court of India. Our opinion is not qualified in respect of this matter.


Report on Other Legal and Regulatory Requirements


1. As required by the Companies (Auditor''''s report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in "Annexure 1" a statement on the matters specified in paragraphs 3 and 4 of the Order.


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


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


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


(c) The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the 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 Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended;


(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, refer to our separate report in "Annexure 2" to this report;


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


i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 16 and 35 to the standalone Ind AS financial statements;


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


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 not provided certain requisite disclosure in the standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Consequently, we are unable to obtain sufficient and appropriate audit evidence to report whether such disclosure is in accordance with books of account maintained by the Company and as produced to us by the management - Refer Note 10 to the standalone Ind AS financial statements.


ANNEXURE 1 TO THE INDEPENDENT AUDITOR''''S REPORT OF EVEN DATE ON THE STANDALONE IND AS


Financial STATEMENTS OF UNITED BREWERIES LIMITED


Statement on the matters specified in paragraphs 3 and 4 of the companies (Auditor''''s report) Order, 2016 (“the Order”)


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


(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.


(c) According to the information and explanations given by the management and confirmation from banks relating to title deeds of immovable properties mortgaged with the banks (refer Note 14 to the accompanying standalone Ind AS financial statements for details) for securing the borrowings raised by the Company, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company, except for 1 immovable property of 9.04 acres (forming part of land parcel of 23.87 acres with gross book value of Rs. 211 Lakhs) where registration of title deed is pending, 2 immovable properties aggregating to 1.8 acres (forming part of land parcel of 142.96 acres with gross book value of Rs. 4,309 Lakhs) for which title deeds are under dispute and pending resolution at the Civil Courts as at March 31, 2017, 4 immovable properties aggregating to 181.63 acres (with gross book value of Rs. 1,754 Lakhs) for which title deeds are held in the name of erstwhile merged entities and 1 immovable property aggregating to 14.39 acres (with gross book value of Rs. 1,590 Lakhs) for which title deed is held in the name of transferor and is pending to be registered in the name of the Company.


(ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.


(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 ("the Act"). Accordingly, the provisions of clause 3(iii)(a),(b) and (c) of the Order are not applicable to the Company and hence not commented upon.


(iv) In our opinion and according to the information and explanations given to us, provisions of section 186 of the Act in respect of investments made by the Company have been complied with. The Company has not advanced loans to directors / to a company in which the director is interested to which provisions of section 185 of the Act apply and has not given loans /guarantees/ provided security to which the provisions of section 186 of the Act apply and hence not commented upon.


(v) The Company has not accepted any deposits within the meaning of sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.


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


(vii) (a) Undisputed statutory dues including provident fund, employees'''' state insurance, income-tax, sales-tax, service


tax, duty of custom, duty of excise, value added tax, cess and other statutory dues have generally been regularly deposited with the appropriate authorities, though there have been serious delays in a large number of cases in deposit of service tax dues on government services.


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


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






















































































































































Name of the statute



Nature of the dues



Amount (including interest and penalty) (Rs. in Lakhs)



Payment under protest (Rs. in Lakhs)



Period to which the amount relates



Forum where the dispute is pending



The Income Tax Act, 1961



Income tax/ tax deducted at



14,613



1,633



FY 2002-03 and 2011-12



Commissioner of Income Tax (Appeals)



source



4,850





FY 2012-13



Dispute Resolution Panel



2,678



713



FY 2002-03 to 2009-10



Income Tax Appellate Tribunal



2,445



458



FY 2001-02 to 2009-10



High Court of Madras



2,159



219



FY 2003-04 to 2008-09



High Court of Karnataka



69



46



FY 2009-10



High Court of Andhra Pradesh and Telengana



15





FY 2007-08 to 2016-17



Commissioner of Income Tax (TDS)



The Finance Act, 1994



Service tax



7,220





2004-05 to 2010-11



Customs, Excise and Service Tax Appellate Tribunal



2,273





2010-11



Commissioner of Service Tax, Bangalore



2,192



96



2009-10 to 2011-12



Commissioner of Customs and Central Excise, Aurangabad



1



2012-13 to 2015-16



Deputy Commissioner (Audit) Central Excise, Customs & Service Tax



The Central Excise Act,



Excise duty/ disallowance of



96





2009-10 to 2015-16



The Commissioner (Appeals)



1944



cenvat


credit



67



9



2005-06 to 2007-08 and 2013-14 to 2014-15



Customs, Excise and Service Tax Appellate Tribunal



16



2010-11 to 2014-15



Commissioner of Central Excise, Customs & Service Tax, Aurangabad



12



2014-15 and 2015-16



Commissioner of Customs, Central Excise & Service Tax (Appeals)



11





2014-15



The Commissioner (Appeals) Central Excise, Jaipur



1





2007-08



Commissioner (Appeals) Central Excise, Chandigarh
























































































































































Name of the statute



Nature of the dues



Amount (including interest and penalty) (Rs. in Lakhs)



Payment under protest (Rs. in Lakhs)



Period to which the amount relates



Forum where the dispute is pending



State Excise (various statutes)



Excise duty, Storage and privilege fee, etc.



218



150



1999-00 to 2005-06



High Court of Karnataka



141



2000-01 to 2014-15



The Commissioner of Prohibition and Excise, Chennai



43



13



1988-89



High Court of Calcutta



38





2011-12 to 2015-16



High Court of Bombay at Goa



19



5



2009-10 to 2012-13



High Court of Madhya Pradesh



7



2



2013-14



Rajasthan Tax Board, Ajmer



3





2000-01 to 2003-04



Excise Commissioner, Karnataka



Sales Tax (various statutes)



Sales tax/ Value added tax/ Entry tax



3,001



1,245



2001-02 to 2013-14



Rajasthan Tax Board, Ajmer



579



24



2012-13



The Appeal Authority, Commercial Taxes, Alwar



438



2006-07 and 2007-08



The West Bengal Sales Tax Appellate and Revisional Board



426





2006-07 to 2013-14



Supreme Court of India



353





2010-11



Deputy Commissioner of Commercial Taxes, Dhanbad



188





2012-13 and 2013-14



The Joint Commissioner of Sales Tax



71





2013-14



Assistant Commissioner of Commercial Taxes, Patna



69



6



2008-09 to 2010-11



Joint Commissioner of Sales Tax (Appeals), Maharashtra



63



2002-03



Jt. Excise and Taxation Commissioner (Appeals), Faridabad



51



2008-09 to 2011-12



Joint Commissioner of Commercial Taxes (Appeal), Patna



26





2011-12 to 2012-13



Commissioner of Commercial Taxes, Bihar



22



8



2003-04 and 2006-07



Maharashtra Sales Tax Tribunal



10



4



2005-06 to 2007-08



Sales Tax Appellate Tribunal, Andhra Pradesh



5





2011-12



Commercial Tax Tribunal, Bihar



3





2008-09



The Commercial Taxes Tribunal, Bihar



(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowings to a financial institution or bank or government. The Company did not have any outstanding dues in respect of debenture holders during the year.


(ix) In our opinion and according to information and explanations given by the management, monies raised by the Company by way of term loans were applied for the purposes for which loans were obtained. The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) and hence not commented upon.


(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the standalone Ind AS financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.


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


(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.


(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Act, where applicable, and the details have been disclosed in the notes to the standalone Ind AS financial statements, as required by the applicable accounting standards.


(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence reporting requirements under clause 3(xiv) are not applicable to the Company and, not commented upon.


(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of the Act.


(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applica4le to the Company.


ANNEXURE 2 TO THE INDEPENDENT AUDITOR''''S REPORT OF EVEN DATE ON THE STANDALONE IND AS Financial STATEMENTS OF UNITED BREWERIES LIMITED


Report on the Internal Financial controls 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 United Breweries Limited ("the Company") as of March 31, 2017, 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. 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 the 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 Act.


Auditor''''s 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 as specified under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. 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 was established and maintained and if such controls operated effectively in all material respects.


An 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 controls based on the assessed risk. 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.


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


Meaning of Internal Financial controls Over Financial Reporting


A company''''s internal financial controls 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 controls 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, 2017, based on the internal controls 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.


For S.R. Batliboi & Associates LLP


Chartered Accountants


ICAI Firm Registration Number: 101049W/E300004



per Mahendra Jain


Partner


Membership Number: 205839



Place of signature: Bengaluru


Date: May 17, 2017

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
“2019 © COPYRIGHT DYNAMIC EQUITIES PVT. LTD.”

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

  • Download our Mobile App
  • Available on Google Play
  • Available on App Store
  • RSS