united breweries ltd share price Auditors report


To the Members of United Breweries Limited

Report on the Audit of the Standalone Financial Statements

Opinion

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

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, as amended ("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,_2022, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as 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 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 audit opinion on the standalone financial statements.

Emphasis of Matter

We draw attention to below mentioned notes to the accompanying standalone financial statements:

(a) Note 35(a) which more fully describes the matter pertaining to the levy of a penalty of Rs 75,183 Lakhs on the Company, vide Order issued by the Competition Commission of India (CCI) for alleged contravention of the provisions of section 3 of the Competition Act, 2002. Based on advice of external legal experts, the Company is of the view that it has strong case on merits, there exists uncertainty relating to the final outcome in this matter, which is dependent on judicial proceedings; and that it is not in a position to reliably estimate the final obligation relating to penalties, if any. Accordingly, no provision has been recorded in the books of account; and (b) Note 42 which more fully describes the uncertainty relating to the outcome of special leave petition filed by the Bihar State Government before the Honourable Supreme Court of India and the consequential impact thereof. Our opinion is not modified in respect of aforesaid matters.

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 for the financial year ended March 31, 2022. 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. For each matter below, our description of how our audit addressed the matter is provided in that context. We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.

Key audit matters How our audit addressed the key audit matter
Revenue from sale of products Our procedures included the following:
(as described in Note 2.1(d), (v) and 21 of the standalone financial statements) ? ?Assessed the Company’s revenue recognition accounting policy for sale of products, including those relating to discounts and incentives.
Revenue from sale of products is recognised when control of products has been transferred to the customer and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Revenue from sale of products is measured at the fair value of the consideration received or receivable, net of returns and allowances, discounts and incentives. ? ?Understood, evaluated and tested on sample basis the design and operating effectiveness of key internal controls over recognition and measurement of revenue, discounts, and incentives.
At year end, amounts of discounts and incentives that have been incurred and not yet issued to customers are estimated and accrued. Significant judgement is required in estimating accruals relating to discounts and incentives recognised in relation to sales made during the year. ? ?Performed test of details on a sample basis and inspected the underlying accounting documents relating to sales and accrual of discounts and incentives.
? ?Tested on a sample basis, sales transactions near year end date as well as credit notes issued to customers after the year end date.
? ?Obtained an understanding of and evaluated underlying data used in management assessment of estimates relating to discounts and incentives.
? ?Performed analytical procedures on revenue, discounts and incentives.
? ?Assessed the disclosures in the standalone financial statements in respect of revenue, discounts and incentives for compliance with disclosure requirements.
Provision for trade receivables Our procedures included the following:
(as described in Note 2.1(v), 10 and 40(b) of the standalone financial statements) ? ?Understood, evaluated and tested on a sample basis the design and operating effectiveness of internal controls over trade receivables.
Trade receivable balances represent significant portion of the total assets as at March 31, 2022. Trade receivables include dues from state government corporations, distributors, retailers and contract manufacturing units. The Company records expected credit loss for unsecured trade receivables based on management estimates. ? ?Performed audit procedures on existence of trade receivables, which included reading and comparing balance confirmations with books of account, testing subsequent receipts and testing sales transactions on a sample basis.
Timing of collection of dues from customers may differ from the contractual credit period. Significant judgment is involved in management estimates of the amounts unlikely to be ultimately collected. ? ?Evaluated the assumptions used by management to calculate the expected credit loss for trade receivables through audit procedures which included analysis of ageing, past trend of bad debts write-off.
? ?Assessed the disclosures in the standalone financial statements for compliance with disclosure requirements.
Tax contingencies and provisions Our procedures included the following:
(as described in Note 2.1(v), 17 and 35(b) of the standalone financial statements) ? ?Obtained an understanding of the Company’s process with respect to completeness and recognition of tax contingencies and provisions.
The Company has received income tax demand orders and notices relating to transfer pricing, disallowance of certain expenses, etc. and has also received indirect tax demand orders and notices, which are under litigation. ? ?Read the confirmations, on sample basis, from the Company’s external legal counsel on tax litigations and evaluated the independence, objectivity and competency of the Company’s specialists involved.
The Company is contesting these demands and has made provision where the outflow of resources embodying economic benefits is considered to be probable. ? ?Read relevant tax laws and discussed with the management, to understand the underlying matters in the demand orders / notices and basis for management judgement and estimates.
Significant judgement and estimates are required to assess uncertain income tax/other indirect tax positions and impact of these litigations on the financial position, results of operations and cash flows. ? ?Included tax specialists in our team to perform an evaluation of assumptions used by the management and relevant judgements passed by the authorities, including the interpretation of the relevant tax laws.
? ?Assessed the related disclosures in the standalone financial statements for compliance with disclosure requirements.

Other Information

The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the director’s report and the corporate governance report but does not include the standalone financial statements and our auditor’s report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do 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 and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. 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 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 (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial 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, management 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 these 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 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 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. 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 de_ciencies 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 for the financial year ended March 31, 2022 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, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure_1" a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 Standalone Balance Sheet, the Standalone Statement of Profit and Loss including the Standalone Statement of Other Comprehensive Income, the Standalone Cash Flow Statement and the Standalone 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 financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) The matter described in paragraph (a) of Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;

(f) On the basis of the written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March_31,_2022 from being appointed as a director in terms of section 164(2) of the Act;

(g) With respect to the adequacy of the internal financial controls with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate report in "Annexure 2" to this report;

(h) In our opinion, the managerial remuneration for the year ended March 31, 2022 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act; and (i) 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 has disclosed the impact of pending litigations on its financial position in its standalone financial statements – Refer Note 17, 35 and 42 to the standalone financial statements;

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

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

iv. (a) The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediary"), 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 ("Ultimate Beneficiary") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiary;

(b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person or entity, including foreign entity ("Funding Party"), 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 Beneficiary") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiary; and (c) Based on such audit procedures that were considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.

v. The final dividend paid by the Company during the year pertaining to dividend declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.

As stated in Note 14 to the standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.

For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Aditya Vikram Bhauwala
Partner
Membership Number: 208382
Unique Document Identification Number (UDIN): 22208382AHUZLC2609
Bengaluru
April 26, 2022

ANNEXURE ‘1’ REFERRED TO IN PARAGRAPH UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE

Re: United Breweries Limited ("the Company")

In terms of the information and explanations sought by us and given by the Company and the books of account and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that:

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

(B) The Company has maintained proper records showing full particulars of intangible assets.

(b) Property, plant and equipment have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(c) The title deeds of immovable properties (other than properties where the Company is the lessee, and the lease agreements are duly executed in favour of the lessee) disclosed in Note 3 to the standalone financial statements are held in the name of the Company, as per title deeds available with the Company and per confirmation received from bank where applicable, except for immovable properties as below:

Description of property Gross carrying value (Rs. in Lakhs) Held in name of Whether promoter, director or their relative or employee Period held since Reason for not being held in the name of Company
Freehold land (9.04 acres at Kutthambakkam, Tamil Nadu) 80 Tamil Nadu State Marketing Corporation Ltd. No 2010-11 Application for registration of title deed is pending with the state government for approval
Freehold land (63.07 acres at Kothlapur, Telangana) 654 UB Nizam Breweries Pvt. Ltd.* No 2010-11 Application for registration of name change is pending with the state government for approval
Freehold land (0.533 acres at Nanjangud, Karnataka) 22 United Breweries Limited No 2009-10 Title deeds are under dispute and pending resolution at the Courts as
Freehold land (0.006 acres at Nelamangala, Karnataka) 1 United Breweries Limited No 2006-07 at March 31, 2022
Freehold land (0.002 acres at Mallepally, Telangana) -^ United Breweries Limited No 2010-11
Leasehold land (25.71 acres at Aurangabad, Maharashtra) 1,189 Inertia Industries Limited* No 2010-11 Application for adjudication of stamp duty for name change in the lease deed is pending with
Leasehold land (18.02 acres at Aurangabad, Maharashtra) 66 Aurangabad Breweries Limited* No 2011-12 the concerned authorities

(d) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets during the year ended March 31, 2022.

(e) There are no proceedings initiated or are pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.

(ii) (a) The inventory has been physically verified by the management during the year, except for inventories lying with third parties. In our opinion, the frequency of verification by the management is reasonable and the coverage and procedure for such verification is appropriate. Inventories lying with third parties have been confirmed by them as at March 31, 2022. There were no discrepancies of 10% or more in aggregate that were noted for each class of inventory in respect of such physical verification and third party confirmations.

(b) As disclosed in Note 18 to the standalone financial statements, the Company has been sanctioned working capital limits in excess of Rupees five crores in aggregate from banks during the year on the basis of security of current assets of the Company. The quarterly returns/statements filed by the Company with such banks are in agreement with the books of accounts of the Company, except in instances as below:

Quarter ended Value as per books of account Value as per quarterly return/ statement Discrepancy*
June 30, 2021 - Inventories (Work-in-progress) 25,524 27,468 (1,944)
December 31, 2021 - Inventories (Finished goods) 25,070 24,388 682

*Updated for book closure entries recorded post submission of returns/statements to banks.

(iii) (a) During the year the Company has provided loans or advances in the nature of loans aggregating to Rs. 303 Lakhs to other parties (employees) and the balance outstanding as at March 31, 2022 in respect of above cases is Rs. 258 Lakhs. Other than above, the Company has not provided any other loans, advances in the nature of loans, stood guarantee or provided security to companies, firms, Limited Liability Partnerships or any other parties.

(b) The investments made during the year and loans or advances in the nature of loans provided to other parties (employees) are not prejudicial to the Company’s interest.

(c) The Company has granted interest-free loans or advances in the nature of loans during the year to other parties (employees) where the schedule of repayment of principal has been stipulated and the repayment or receipts are regular.

(d) There are no amounts of loans or advances in the nature of loans granted to other parties (employees) which are overdue for more than ninety days.

(e) There were no loans or advances in the nature of loans granted to other parties (employees) which was fallen due during the year, that have been renewed or extended or fresh loans granted to settle the overdues of existing loans or advances given to the same parties.

(f) The Company has not granted any loans or advances in the nature of loans, either repayable on demand or without specifying any terms or period of repayment to other parties (employees). Accordingly, the requirement to report on clause 3(iii)(f) of the Order is not applicable to the Company.

(iv) Investments made during the year in respect of which provisions of section 186 of the Companies Act, 2013 ("the Act") are applicable have been complied with by the Company. There are no loans, guarantees, and securities in respect of which provisions of sections 185 and 186 of the Act are applicable.

(v) The Company has neither accepted any deposits from the public nor accepted any amounts which are deemed to be deposits within the meaning of sections 73 to 76 of the Act and the rules made thereunder, to the extent applicable. Accordingly, the requirement to report on clause 3(v) of the Order is not applicable to the Company.

(vi) 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, goods and services tax, duty of customs, duty of excise, value added tax, cess and other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us and based on audit procedures performed by us, no undisputed amounts payable in respect of these statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(b) The dues of goods and services tax, 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 which have not been deposited 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 source 30,696 1,567 FY 2002-03 to 2006-07, 2008-09 to 2011- 12 and 2015-16 to 2017-18 Commissioner of Income Tax (Appeals)
24,794 7,679 FY 2001-02 to 2014-15 Income Tax Appellate Tribunal
22,045 664 FY 2003-04 to 2008-09, 2012-13 and 2013-14 High Court of Karnataka
3,599 458 FY 2001-02 to 2009-10 High Court of Madras
69 46 FY 2009-10 High Court of Andhra Pradesh and Telangana
20 — FY 2007-08 to 2017-18 Commissioner of Income Tax (TDS)
The Central Goods and Services Tax Act, 2017 Goods and Services Tax 133 133 2017-18 to 2018-19 High Court of Telangana
The Finance Act, 1994 Service tax 2,192 96 2009-10 to 2011-12 Commissioner of Customs and Central Excise, Aurangabad
401 — 2008-09 to 2010-11 Customs, Excise and Service Tax Appellate Tribunal
6 — 2014-15 The Commissioner GST & Central Excise, Bhubaneswar
The Central Excise Act, 1944 Excise duty/ disallowance of cenvat credit 82 — 2010-11 to 2015-16 Commissioner of Customs, Central Excise & Service tax Appellate Tribunal
67 9 2005-06 to 2007-08, 2013-14 and 2014-15 Customs, Excise and Service Tax Appellate Tribunal
49 — 2014-15 and 2015-16 Commissioner (Appeals), Central Excise
32 2 2017-18 Assistant Commissioner of Central Excise, Sadashivpet Division
29 — 2009-10 to 2016-17 Commissioner of Customs, Central Excise & Service tax (Appeals)
18 — 2016-17 Assistant Commissioner, Appeals, Jaipur
11 1 2015-16 and 2017-18 Assistant Commissioner of Goods and Services Tax (Appeals)
1 — 2007-08 Commissioner (Appeals) Central Excise, Chandigarh
67 9 2005-06 to 2007-08, 2013-14 and 2014-15 Customs, Excise and Service Tax Appellate Tribunal
49 — 2014-15 and 2015-16 Commissioner (Appeals), Central Excise
32 2 2017-18 Assistant Commissioner of Central Excise, Sadashivpet Division
29 — 2009-10 to 2016-17 Commissioner of Customs, Central Excise & Service tax (Appeals)
18 — 2016-17 Assistant Commissioner, Appeals, Jaipur
11 1 2015-16 and 2017-18 Assistant Commissioner of Goods and Services Tax (Appeals)
1 — 2007-08 Commissioner (Appeals) Central Excise, Chandigarh
State Excise (various statutes) Excise duty, Storage and privilege fee, etc. 10,929 — 2015-16 Deputy Commissioner (Excise), Bangalore Rural District, Beerasandra
2,322 2,299 2013-14, 2017-18, 2020-21 and 2021-22 High Court of Rajasthan
619 613 2019-20 Excise Commissioner, Aligarh, Uttar Pradesh
350 50 2007-08 to 2011-12 High Court of Bombay
218 150 1999-00 to 2005-06 High Court of Karnataka
56 — 2015-16 Deputy Commissioner, Guwahati
43 13 1988-89 High Court of Calcutta
38 38 2011-12 to 2015-16 High Court of Bombay at Goa
19 5 2008-09 to 2012-13 High Court of Madhya Pradesh
3 — 2000-01 to 2003-04 Excise Commissioner, Karnataka
Sales Tax (various statutes) Sales tax/ Value added tax/ Entry tax 5,890 2,400 2001-02 to 2013- 14 Rajasthan Tax Board, Ajmer
2,979 535 2008-09, 2012- 13, 2013-14 and 2017-18 Joint Commissioner of Commercial Taxes (Appeal), Maharashtra
447 — 2006-07 and 2007-08 The West Bengal Sales Tax Appellate and Revisional Board
326 5 2012-13 Tax Board, Ajmer
314 — 2017-18 Joint Commissioner of Sales tax, West Bengal
184 172 2009-10, 2010- 11 and 2015-16 Joint Commissioner of Commercial Taxes (Appeal), Patna
166 2 2014-15 and 2015-16 Additional Commissioner of Sales Tax, West Bengal
129 — 2016-17 Joint Commissioner of Sales Tax, West Bengal
63 — 2002-03 Jt. Excise and Taxation Commissioner (Appeals), Faridabad
58 58 2007-08 to 2014-15 Additional Commissioner of Commercial tax, Tamil Nadu
28 — 2015-16 Additional Commissioner of Sales tax, Bihar
26 7 2011-12 and 2013-14 Commissioner of Commercial Taxes, Bihar
17 1 2011-12 to 2016-17 Deputy Commissioner Appeals, Alwar
16 1 2016-17 Assistant Commercial Tax Officer, Ponda
15 8 2003-04 Maharashtra Sales Tax Tribunal
13 1 2008-09 and 2011-12 Commercial Taxes Tribunal, Bihar
7 — 2013-14 and 2014-15 Additional Commissioner of Commercial taxes (Appeal), Berhampur

(viii) The Company has not surrendered or disclosed any transaction, previously unrecorded in the books of account, in the tax assessments under the Income Tax Act, 1961 as income during the year. Accordingly, the requirement to report on clause 3(viii) of the Order is not applicable to the Company.

(ix) (a) The Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender.

(b) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(c) Term loans were applied for the purpose for which the loans were obtained.

(d) On an overall examination of the financial statements of the Company, no funds raised on short-term basis have been used for long-term purposes by the Company.

(e) On an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiary or associate. The Company does not have any joint venture.

(f) The Company has not raised loans during the year on the pledge of securities held in its subsidiary or associate companies and the Company does not have any joint venture. Hence, the requirement to report on clause (ix) (f) of the Order is not applicable to the Company.

(x) (a) The Company has not raised any money during the year by way of initial public offer / further public offer (including debt instruments) hence, the requirement to report on clause 3(x)(a) of the Order is not applicable to the Company.

(b) The Company has not made any preferential allotment or private placement of shares / fully or partially or optionally convertible debentures during the year under audit and hence, the requirement to report on clause 3(x)(b) of the Order is not applicable to the Company.

(xi) (a) No fraud by the Company or no material fraud on the Company has been noticed or reported during the year.

(b) During the year, no report under sub-section (12) of section 143 of the Act has been filed by cost auditor / secretarial auditor or by us in Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government.

(c) We have taken into consideration the whistle blower complaints received by the Company during the year while determining the nature, timing and extent of audit procedures.

(xii) The Company is not a nidhi company as per the provisions of the Act. Therefore, the requirement to report on clause 3(xii)(a) to (c) of the Order is not applicable to the Company.

(xiii) Transactions with the related parties are in compliance with sections 177 and 188 of Act where applicable and the details have been disclosed in the notes to the standalone financial statements, as required by the applicable accounting standards.

(xiv) (a) The Company has an internal audit system commensurate with the size and nature of its business.

(b) The internal audit reports of the Company issued till the date of the audit report, for the year under audit have been considered by us.

(xv) The Company has not entered into any non-cash transactions with its directors or persons connected with its directors and hence requirement to report on clause 3(xv) of the Order is not applicable to the Company.

(xvi) (a) The provisions of section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934) are not applicable to the Company. Accordingly, the requirement to report on clause (xvi)(a) of the Order is not applicable to the Company.

(b) The Company has not conducted any Non-Banking Financial or Housing Finance activities without obtaining a valid Certificate of Registration (CoR) from the Reserve Bank of India as per the Reserve Bank of India Act, 1934.

(c) The Company is not a Core Investment Company as defined in the regulations made by Reserve Bank of India. Accordingly, the requirement to report on clause 3(xvi) of the Order is not applicable to the Company.

(d) There is no Core Investment Company as a part of the Group, hence, the requirement to report on clause 3(xvi) of the Order is not applicable to the Company.

(xvii) The Company has not incurred any cash losses in the current and immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors during the year and accordingly requirement to report on Clause 3(xviii) of the Order is not applicable to the Company.

(xix) On the basis of the financial ratios disclosed in Note 43 to the standalone financial statements, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the standalone financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

(xx) (a) In respect of other than ongoing projects, there are no unspent amounts that are required to be transferred to a fund specified in Schedule VII of the Act, for the year ended March 31, 2022 in compliance with second proviso to sub section 5 of section 135 of the Act. This matter has been disclosed in Note 29 to the standalone financial statements.

(b) The Company has not transferred the amount remaining unspent in respect of ongoing projects for the year ended March 31, 2022 to a Special Account, till the date of the report. However, the period for such transfer i.e., thirty days from the end of the financial year as permitted under sub section (6) of section 135 of the Act, has not elapsed till the date of our report. This matter has been disclosed in Note 29 to the standalone financial statements.

For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Aditya Vikram Bhauwala
Partner
Membership Number: 208382
Unique Document Identification Number (UDIN): 22208382AHUZLC2609
Bengaluru
April 26, 2022

ANNEXURE ‘2’ REFERRED TO IN PARAGRAPH UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE

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 with reference to standalone financial statements of United Breweries Limited ("the Company") as of March 31, 2022, in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

TheCompany’smanagementisresponsibleforestablishingandmaintaininginternalfinancialcontrolsbasedontheinternal financial 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 (the "Guidance Note") issued by the Institute of Chartered Accountants of India (the "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 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 with reference to these standalone financial statements based on our audit. We conducted our audit in accordance with 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, 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 with reference to these standalone financial statements was 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 with reference to these standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of internal financial controls with reference to these standalone financial statements, 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 Company’s internal financial controls with reference to these standalone financial statements.

Meaning of Internal Financial Controls with Reference to Standalone Financial Statements

A company’s internal financial controls with reference to standalone financial statements 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 with reference to standalone financial statements 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised 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 with Reference to Standalone Financial Statements

Because of the inherent limitations of internal financial controls with reference to standalone financial statements, 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 with reference to standalone financial statements to future periods are subject to the risk that the internal financial controls with reference to standalone financial statements 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, adequate internal financial controls with reference to these standalone financial statements and such internal financial controls with reference to these standalone financial statements were operating effectively as at March_31,_2022, 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 issued by the ICAI.

For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Aditya Vikram Bhauwala
Partner
Membership Number: 208382
Unique Document Identification Number (UDIN): 22208382AHUZLC2609
Bengaluru
April 26, 2022