united spirits ltd Auditors report

To the Members of United Spirits Limited

Report on the Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone financial statements of United Spirits Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2023, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of 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 accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, total comprehensive income (comprising of profit and other comprehensive loss), changes in equity and its cash flows for the year then ended.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act . Our responsibilities under those Standards are further described in the "Auditors 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 standalone 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.

Emphasis of Matters:

4. We draw attention to the following matters:

a) Note 40(a) to the Standalone Financial statements which explains the uncertainties post completion of the Initial Inquiry, which identified references to certain Additional Parties and certain Additional matters, the then MD & CEO, pursuant to the direction of the Board of Directors, had carried out an Additional Inquiry that revealed transactions indicating actual and potential diversion of funds from the Company and its Indian and overseas subsidiaries to, in most cases, Indian and overseas entities that appear to be affiliated or associated with the Companys erstwhile non-executive Chairman and other potentially improper transactions. Post the completion of Additional Inquiry certain regulatory notices and communications were received from Securities Exchange Board of India, Directorate of Enforcement and Authorised Dealer banks (AD) to which the Company has responded. Subsequently, the Company commenced the rationalisation process for divestment/ liquidation/ merger of certain overseas subsidiaries including step down subsidiaries and completion of the above Rationalisation process is subject to regulatory approvals in India and overseas. The Company filed suits for recovery of certain amounts against relevant parties and individuals identified in the Additional Inquiry including excess managerial remuneration paid to the former Executive Director and CFO which have been fully provided for or recognised as expense in prior years. The management is currently unable to estimate the financial impact on the Company, if any, arising out of potential non compliances with applicable laws as above.

b) Note 40(d) to the Standalone Financial Statements, which describes the uncertainty relating to the final outcome of litigations with a bank ("the bank") that continues to retain the pledge of certain assets of the Company and of the Companys shares held by USL Benefit Trust (of which the Company is the sole beneficiary) despite the Company prepaying the term loan to that bank along with the prepayment penalty and further depositing an additional sum of Rs459 million demanded by the bank and as directed by the Honble High Court of Karnataka (the "Court"). Based on management assessment supported by external legal opinions, the Company has disclosed the aforesaid amount of Rs459 million under Other Non-current financial assets as recoverable from the bank pending the final outcome of the litigation. In a separate proceeding before the Debt Recovery Appellate Tribunal, the banks appeal against the judgement awarded by Debt Recovery Tribunal in favour of the Company in respect of attachment of the aforesaid pledged shares for recovery of the loans advanced by the bank to Kingfisher Airlines Limited is pending disposal.

c) As explained in Note 49 to the Standalone Financial Statements, the scheme for amalgamation of Pioneer Distilleries Limited with the Company was approved by the National Company Law Tribunal (NCLT) on November 4, 2022, with an appointed date of April 1, 2021. The Company has accounted for the amalgamation as per the accounting treatment specified in the scheme in accordance with Appendix C of Ind AS 103, Business Combinations of entity under common control and, accordingly, the comparative balances presented for the previous year in the Standalone Financial Statements have been restated.

Our opinion is not modified in respect of the matters described under paragraph 4 above.

Key audit matters

5. Key audit matters are those matters that, in our professional judgement, 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.

Key audit matter	How our audit addressed the key audit matter
Assessment of the appropriateness of provisions recognised and contingent liabilities disclosed in respect of certain tax matters. (Refer Notes 8, 17 and 42 to the standalone financial statements)	Our audit procedures included the following:
As at March 31, 2023, the Company has significant tax exposures and is subject to periodic assessments/ demands by tax authorities on transfer pricing, income tax and a range of indirect tax matters. Consequent to such tax assessments and demands relating to past several years, the Company has paid certain amounts under protest at various dates. The Company has also filed appeals with various appellate authorities against such demands.	• Evaluated the related accounting policy for recognising provisions for tax exposures and disclosure of contingent liabilities with the requirements of the relevant accounting standards.
Management judgement is involved in assessing the likelihood of ultimate outcome of the tax disputes to decide on the accounting/ disclosure requirements. For certain complex matters the probable amount of the cash outflow determined by the Management is supported by opinions obtained from external tax counsels/ assessment performed by internal experts (management tax experts).	• Obtained managements assessment in respect of tax demands on whether cash outflow is either probable, possible or remote.
We considered this a key audit matter as:	• Evaluated managements assessment with the help of auditors experts, where necessary, as follows:
• The amounts involved are significant to the standalone financial statements;	- For the samples selected, read the correspondences received during the year from the tax authorities/ orders from the appellate authorities.
• Change in the managements judgements and estimates may significantly affect the provisions recognised or contingent liabilities disclosed; and	- Read and assessed the views provided by the management/ management tax experts as applicable.
• Matters of disputes are complex in some cases due to the nature of the industry in which the Company operates and are subject to interpretations under tax laws.	- Assessed managements position on significant tax exposures in accordance with the tax laws and past precedents of tax judgements.
	- Assessed completeness of litigations by inquiring with the management, and perusal of Board minutes.
	- Evaluated the objectivity, independence, competence and capabilities of the management tax experts.
	- Evaluated the adequacy of the disclosures made in the standalone financial statements.
	Based on the above procedures, we considered the managements assessment in recognising the provisions and disclosing contingent liabilities in respect of the stated tax matters, as reasonable.

Other Information

6. The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the financial statements and our auditors report thereon.

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

8. In connection with our audit of the standalone financial statements, our responsibility is to read the other information 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. 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

9. The Companys 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, changes in equity 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.

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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

10. In preparing the standalone financial statements, management is responsible for assessing the Companys 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. Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors responsibilities for the audit of the standalone financial statements

11. 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 auditors 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.

12. As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

a) 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.

b) 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 standalone financial statements in place and the operating effectiveness of such controls.

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

d) Conclude on the appropriateness of managements 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 Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors 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 auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

e) 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.

13. 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.

14. 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.

15. 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 auditors 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

16. As required by the Companies (Auditors 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 B a statement on the matters specified in paragraphs

3 and 4 of the Order, to the extent applicable.

17. 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 Changes in Equity and the Statement of Cash Flows 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.

(e) On the basis of the written representations received from the directors as on March 31, 2023, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A".

(g) With respect to the other matters to be included in the Auditors 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 Notes 8, 17, 40(c), 40(d) and 42 to the standalone financial statements)

ii. The Company was not required to recognise a provision as at March 31, 2023 under the applicable law or accounting standards, as it does not have any material foreseeable losses on longterm contracts. The Company did not have any derivative contracts as at March 31, 2023. (Refer Note 39 to the standalone financial statements)

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year. (Refer Note 16 to the standalone financial statements)

iv. (a) The management has represented that, to the best of its knowledge and belief, no funds which are material either individually or in aggregate 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(s) or entity(ies), including foreign entities ("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 ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer Note 51(vii) to the standalone financial statements);

(b) The management has represented that, to the best of its knowledge and belief, no funds which are material either individually or in aggregate have been received by the Company from any person(s) or entity(ies), including foreign entities ("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 (Refer Note 51(vii) to the standalone financial statements); and

(c) Based on such audit procedures that we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clauses (a) and

(b) contain any material misstatement.

v. The Company has not declared or paid any dividend during the year.

vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 (as amended), which provides for books of account to have the feature of audit trail, edit log and related matters in the accounting software used by the Company, is applicable to the Company only with effect from financial year beginning April 1, 2023, the reporting under clause (g) of Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), is currently not applicable.

18. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

Annexure A to Independent Auditors Report

Referred to in paragraph 17(f) of the Independent Auditors Report of even date to the members of United Spirits Limited on the Standalone Financial Statements for the year ended March 31, 2023

Report on the Internal Financial Controls with reference to Standalone Financial Statements under clause (i) of sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference to standalone financial statements of United Spirits Limited ("the Company") as of March 31, 2023 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

2. The Companys 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 ("the Guidance Note") 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 companys 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.

Auditors Responsibility

3. Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing deemed to be prescribed under Section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and 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 financial statements was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to 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 standalone financial statements, 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 auditors judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system with reference to standalone financial statements.

Meaning of Internal Financial Controls with reference to standalone financial statements

6. A companys 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 standalone financial statements for external purposes in accordance with generally accepted accounting principles. A companys 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 standalone 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 companys assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls with reference to standalone financial statements

7. 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

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to standalone financial statements and such internal financial controls with reference to standalone financial statements were operating effectively as at March 31, 2023, 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 ICAI.

Annexure B to Independent Auditors Report

Referred to in paragraph 16 of the Independent Auditors Report of even date to the members of United Spirits Limited on the standalone financial statements as of and for the year ended March 31, 2023.

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

(B) The Company is maintaining proper records showing full particulars of intangible assets.

(b) The property, plant and equipment are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the property, plant and equipment has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

(c) The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company), as disclosed in Notes 3.1, 3.2 and 3.6 to the standalone financial statements, are held in the name of the Company, except as disclosed in Appendix II.

(d ) The Company has chosen cost model for its property, plant and equipment (including right of use assets) and intangible assets. Consequently, the question of our commenting on whether the revaluation is based on the valuation by a Registered Valuer, or specifying the amount of change, if the change is 10% or more in the aggregate of the net carrying value of each class of property, plant and equipment (including right of use assets) or intangible assets does not arise.

(e) Based on the information and explanations furnished to us, no proceedings have been initiated on or are pending against the Company for holding benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) (formerly the Benami Transactions (Prohibition) Act, 1988 (45 of 1988)) and Rules made thereunder, and therefore the question of our commenting on whether the Company has appropriately disclosed the details in its standalone financial statements does not arise.

ii. (a) The physical verification of inventory has been conducted

at reasonable intervals by the Management during the year and, in our opinion, the coverage and procedure of such verification by Management is appropriate. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies

noticed on physical verification of inventory as compared to book records were not 10% or more in aggregate for each class of inventory.

(b) During the year, the Company has not been sanctioned working capital limits in excess of Rs50 million, in aggregate from banks and financial institutions on the basis of security of current assets and, accordingly, the question of our commenting on whether the quarterly returns or statements are in agreement with the unaudited books of account of the Company does not arise.

iii. (a) The Company has made investment in equity shares and compulsory convertible preference shares issued by an associate, twenty one mutual fund schemes, non-convertible debentures issued by two companies, granted a secured loan to one company, granted unsecured loans to employees, granted loans to two subsidiary companies and issued a bank guarantee on behalf of a wholly owned subsidiary. The aggregate amount during the year, and balance outstanding at the balance sheet date with respect to such loan to subsidiaries, investment in an associate, investment in mutual fund schemes, investment in non-convertible debentures, loans to parties other than subsidiaries and a bank guarantee issued on behalf of a wholly owned subsidiary are as per the table given below:

Description	Amount in
	Rs million
Aggregate amount granted/ provided during the year
- Investment in an associate	315
- Loans to Subsidiaries	3,263
- Loans to employees	14
- Investment in mutual fund schemes	84,860
- Bank guarantee issued on behalf of a wholly owned subsidiary	901
- Others
- Investment in Non-convertible debentures	309
- Secured loan	80
Balance outstanding as at March 31, 2023 in respect of the above:
- Investment in an associate	315
- Loans to Subsidiaries	924
- Loan to employees	8
- Investment in mutual fund schemes	2,397
- Others
- Investment in Non-convertible debentures	161
- Secured loan	80

Also, refer Notes 4.1, 4.2, 5 and 36 to the standalone financial statements.

(b) In respect of the aforesaid loans granted, investments made and guarantees provided, the terms and conditions under which such loans were granted, investments were made and guarantees provided are not prejudicial to the Companys interest.

(c) In respect of the loans, as disclosed in Note 5 to the standalone financial statements, the schedule of repayment of principal and payment of interest has been stipulated by the Company except for the following instances set out in the table below. Therefore, in the absence of stipulation of repayment terms, we are unable to comment on the regularity of repayment of principal and payment of interest.

(Amount in Rs million)

Name of the entity	Gross outstanding as at March 31, 2023	Net outstanding as at March 31, 2023
Asian Opportunities and Investments Limited	590
USL Holdings UK Ltd	140

The repayment of principal and payment of interest is not regular with respect to the loans set out in the table below:

Name of the entity	Amount in Rs million	Due Date	Extent of delay	Remarks
United Breweries Holding Limited and a related entity	12,378	One third of the loan was to be repaid on July 2 2019, July 2, 2020 and July 2, 2021	1 year and 9 months to 3 years and 9 months	Refer Notes 5 and 40(c) to the standalone financial statements

(d) In respect of the following loan the total amount overdue for more than ninety days as at March 31, 2023 is Rs12,378 million. In our opinion, reasonable steps have been taken by the Company for the recovery of the principal amounts and interest thereon. Refer Notes 5 and 40(c) to the standalone financial statements.

No. of cases	Principal amount	Interest overdue in	Total overdue in	Remarks
	overdue in Rs million	Rs million	Rs million
One	11,532	846	12,378	Refer Notes 5 and 40(c) to the standalone
				financial statements

(e) Following loans were granted to the below mentioned party which has fallen due during the year and were renewed/extended. Further, in respect of following loans, fresh loans were granted to settle the overdue loans.

Name of the party	Aggregate amount dues renewed or extended or settled by fresh loans in	Percentage of the aggregate to the total loans or advances in the nature of loans granted during the year
	Rs million
Royal Challengers Sports Private Limited	811	24%

Also refer Note 5 to the standalone financial statements.

(f) The loans and advances in nature of loans granted during the year, had stipulated the scheduled repayment of principal and payment of interest and the same were not repayable on demand. There were no loans granted during the year to the promoters.

iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of the guarantees issued, loans and investments made. The Company has not provided any security to parties covered under Sections 185 and 186 of the Act.

v. The Company has not accepted any deposits or amounts which are deemed to be deposits referred in Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given

to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of goods and services tax, sales tax and value added tax, though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including provident fund, employees state insurance, profession tax, income tax, duty of customs, duty of excise and other material statutory dues, as applicable, with the appropriate authorities. Also, refer Note 42(d) to the standalone financial statements regarding managements assessment on certain matters relating to provident fund.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax, value added tax, service tax, duty of customs, duty of excise, local body tax and entry tax as at March 31, 2023 which have not been deposited on account of a dispute are disclosed in Appendix I to this report. There have been no dues of goods and services tax, employees state insurance and profession tax which have not been deposited on account of a dispute.

viii. According to the information and explanations given to us and the records of the Company examined by us, there are no transactions in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

ix. (a) According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or other borrowings or in the payment of interest to any lender during the year.

(b) According to the information and explanations given to us and on the basis of our audit procedures, we report that the Company has not been declared Wilful Defaulter by any bank or financial institution or government or any government authority.

(c) According to the records of the Company examined by us and the information and explanations given to us, the Company has not obtained any term loans.

(d) According to the information and explanations given to us, and the procedures performed by us, and on an overall examination of the standalone financial statements of the Company, we report that no funds raised on short-term basis have been used for long-term purposes by the Company.

(e) According to the information and explanations given to us and on an overall examination of the standalone financial statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries or an associate company. The Company has no joint ventures.

(f) According to the information and explanations given to us and procedures performed by us, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries or an associate company. The Company has no joint ventures.

x. (a) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, the reporting under 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 or fully or partially or optionally convertible debentures during the year. Accordingly, the reporting under clause 3(x)(b) of the Order is not applicable to the Company.

xi. (a) 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 material fraud by the Company or on the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

(b) 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, a report under Section 143(12) of the Act, in Form ADT-4, as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 was not required to be filed with the Central Government. Accordingly, the reporting under clause 3(xi)(b) of the Order is not applicable to the Company.

(c) 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, the Company has received whistle-blower complaints during the year, which have been considered by us for any bearing on our audit and reporting under this clause. As explained by the management, there were certain complaints in respect of which investigations are ongoing as on the date of our report and hence, the impact on our audit report in respect of those complaints cannot be determined at this stage.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the reporting under clause 3(xii) of the Order is not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the standalone financial statements as required under Indian Accounting Standard 24 "Related Party Disclosures" specified under Section 133 of the Act.

xiv. (a) In our opinion and according to the information and explanation given to us, the Company has an internal audit system commensurate with the size and nature of its business.

(b) The reports of the Internal Auditor for the period 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 him. Accordingly, the reporting on compliance with the provisions of Section 192 of the Act under clause 3(xv) of the Order is not applicable to the Company.

xvi. (a) The Company is not required to be registered under

Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the reporting under clause 3(xvi)(a) of the Order is not applicable to the Company.

(b) The Company has not conducted non-banking financial or housing finance activities during the year. Accordingly, the reporting under clause 3(xvi)(b) of the Order is not applicable to the Company.

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

(d) Based on the information and explanations provided by the management of the Company, the Group does not have any CICs, which are part of the Group. We have not, however, separately evaluated whether the information provided by the management is accurate and complete. Accordingly, the reporting under clause 3(xvi)(d) of the Order is not applicable to the Company.

xvii. The Company has not incurred any cash losses in the financial year or in the immediately preceding financial year.

xviii. There has been no resignation of the statutory auditors during the year and accordingly the reporting under clause (xviii) is not applicable.

xix. According to the information and explanations given to us and on the basis of the financial ratios (Also refer Note 51(xiv) to the standalone financial statements), ageing and expected dates of realisation 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, as at balance sheet date, the Company does not have any amount remaining unspent under Section 135(5) of the Act. Accordingly, reporting under clause 3(xx)(a) of the Order is not applicable.

(b) The Company has transferred the amount of Corporate Social Responsibility remaining unspent under sub- section (5) of Section 135 of the Act pursuant to ongoing projects to a special account in compliance with the provision of sub-section (6) of Section 135 of the Act. Also, refer Note 45 to the standalone financial statements.

xxi. The reporting under clause 3(xxi) of the Order is not applicable in respect of audit of standalone financial statements. Accordingly, no comment in respect of the said clause has been included in this report.

Appendix I - Particulars of Tax dues not deposited on account of a dispute

Referred to in paragraph vii(b) of Annexure B to the Independent Auditors Report to the members of United Spirits Limited on the standalone financial statements as of and for the year ended March 31, 2023

Name of the statute	Nature of dues	Disputed amount (Rs millions)	Amount paid (Rs millions)	Unpaid Amount (Rs millions)	Financial year to which the amount relates	Forum where the dispute is pending
Income Tax Act, 1961	Income Tax	372	351	21	2005-06, 2009-10	Commissioner of Income Tax (Appeals)
Income Tax Act, 1961	Income Tax	27,964	5,869	22,095	1988-89, 1989- 90, 1991-92 to 1993-94, 1995-96, 2000-01, 2005-06 to 2008-09, 2014-15 to 2017-18	Income Tax Appellate Tribunal
Income Tax Act, 1961	Income Tax	10,946	2,756	8,190	1985-86 to 2004-05, 2006-07 to 2008-09, 2011-12 to 2013-14	High Courts of various states
Customs Act, 1962	Custom Duty	0 #		0 #	1997-98	Commissioner of Customs
Service Tax - Finance Act, 1994	Service Tax	1,344	0 #	1,344	2006-07 to 2015-16	Commissioner of Service Tax
Service Tax - Finance Act, 1994	Service Tax	901	43	858	2004-05 to 2010-11, 2014 -15 to 2017- 18	Customs Excise and Service Tax Appellate Tribunal
Service Tax - Finance Act, 1994	Service Tax	1,242		1,242	2000-01, 2007-08 to 2011-12	High Courts of Kerala and Karnataka
Central Excise Act, 1944	Central Excise Duty	392	14	378	1994-95, 2012-13 to 2017-18	Commissioner of Central Excise
Central Excise Act, 1944	Central Excise Duty	1,598	60	1,538	1997-98 to 2003-04	Customs Excise and Service Tax Appellate Tribunal
West Bengal Sales Tax Act, 1994	Sales Tax/ Value Added Tax	767		767	2002-03, 2014-15 to 2017-18	Commissioner of Commercial Taxes
Central and Various State Sales Tax Acts	Sales Tax/ Value Added Tax	48	2	46	1993-96, 2002-03 to 2007-08, 2018-19 to 2020-21	Commercial Tax Officer
Central and Various State Sales Tax Acts	Sales Tax/ Value Added Tax	167	50	117	1994-95 to 1996-97, 2005-06 to 2006-07, 2009-10 to 2013-14, 2015-16 to 2017-18	Assistant Commissioner of Commercial Taxes
Name of the statute	Nature of dues	Disputed amount (Rs millions)	Amount paid (Rs millions)	Unpaid Amount (Rs millions)	Financial year to which the amount relates	Forum where the dispute is pending
Central and Various State Sales Tax Acts	Sales Tax/ Value Added Tax	67	1	66	2004-05, 2006-07 to 2011-12, 2013-14, 201516 to 2016-17, 2018-19 to 2019-20	Additional Commissioner of Commercial Taxes
Central and Various State Sales Tax Acts	Sales Tax/ Value Added Tax	559	140	419	1985-86, 2006-07 to 2008-09, 2010-11 to 2018-19	Deputy Commissioner of Commercial Taxes
Central and Various State Sales Tax Acts	Sales Tax/ Value Added Tax	3,207	600	2,607	2000-01 to 2001-02 to 2003-04 to 2018-19	Joint Commissioner of Commercial Taxes
Central and Various State Sales Tax Acts	Sales Tax/ Value Added Tax	194	8	186	1990-91, 1992-93 to 1993-94, 1995-96 to 2000-01, 2004-05	Commercial Taxes Appellate Tribunal
Central and Various State Sales Tax Acts	Sales Tax/ Value Added Tax	49		49	1993-94, 2003-04, 2005-06, 2017-18	Commercial Taxes Appellate Tribunal and Revisionary Board
Central and Various State Sales Tax Acts	Sales Tax/ Value Added Tax	208	147	61	1978-79 to 1984-85, 1988-89 to 1989-90, 1992-93 to 1994-95, 1996-97 to 2001-02, 2007-08, 2009-10 to 2011-12	High Courts of various states
Various Entry Tax Acts, Local Body Tax and Octroi Duty	Entry Tax/ Local Body Tax	5	2	3	1989-90, 2015-16	Assessing Officer
Various Entry Tax Acts, Local Body Tax and Octroi Duty	Entry Tax/ Local Body Tax	9		9	2014-15, 2015-16	Assistant Commissioner of Commercial Taxes
Various Entry Tax Acts, Local Body Tax and Octroi Duty	Entry Tax/ Local Body Tax	17	11	6	2007-08 to 2009-10, 2011-12 to 2015-16	Joint Commissioner of Commercial Taxes
Various Entry Tax Acts, Local Body Tax and Octroi Duty	Entry Tax/ Local Body Tax	42	27	15	1987-88, 2000-01, 2004-05, 2007-08	Commercial Taxes Appellate Tribunal
Various Entry Tax Acts, Local Body Tax and Octroi Duty	Entry Tax/ Local Body Tax	48	15	33	2005-06, 2007-08 to 2013-14	High Courts of various states
Various Entry Tax Acts, Local Body Tax and Octroi Duty	Entry Tax/ Local Body Tax/Octroi Duty	41	14	27	1997-98, 2003-04 to 2007-08	Supreme Court
Name of the statute	Nature of dues	Disputed amount (Rs millions)	Amount paid (Rs millions)	Unpaid Amount (Rs millions)	Financial year to which the amount relates	Forum where the dispute is pending
Bengal Excise Act, 1909 and Bengal Excise (Amendment) Act, 2012	State Excise	13		13	1993-94	Civil Court, West Bengal
Various State Excise Acts	State Excise	26		26	2010-11 to 2017-18	Superintendent of State Excise
Various State Excise Acts	State Excise	188	36	152	2019-20	Deputy Superintendent of State Excise
Various State Excise Acts	State Excise	84	33	51	2001-02, 2002-03, 2015-16	Principal Secretary Excise
Various State Excise Acts	State Excise	141	45	96	1963-64 to 1972-73, 1974-75 to 1991-92, 1993-94, 1995-96, 1998-99, 2000-01, 2011-12, 2014-15, 201516, 2022-23	Commissioner of State Excise
Various State Excise Acts	State Excise	7		7	1994-95, 2001-02, 2007-08	State Taxation Tribunals
Various State Excise Acts	State Excise	283	109	174	1972-73, 1973-74, 198081, 1982-83, 1997-98, 1998-99, 2001-02, 2002-03, 2010-11, 201213 to 2015-16, 2018-19	High Courts of various states
Various State Excise Acts	State Excise	1,504	84	1,420	1971-72, 1992-93, 1996-97, 2002-03, 2004-05, 2012-13	Supreme Court
Other Litigations	Stamp Duty	35		35	2019-20	Commissioner
Other Litigations	Stamp Duty	10		10	1999-2000	High Court
Other Litigations	Property tax	5		5	2019-20	High Court

# 0 indicates that the amounts involved are below five lakhs and the sign - indicates that amounts are Nil.

Appendix II - Title deeds not in the name of the Company

Referred to in paragraph i(c) of Annexure B to the Independent Auditors Report to the members of United Spirits Limited on the standalone financial statements as of and for the year ended March 31, 2023

The title deeds of immovable properties not held in the name of the Company are as below:

Description of property	Held in the name of	Gross carrying value (Rs millions)	Whether promoter, director or their relative or employee	Period held- indicate range, where appropriate	Reason for not being held in name of Company
Building in the state of Karnataka	Refer Note 1	339	No	12 years	Refer Note 1 below
Building in the state of Maharashtra	Shaw Wallace & Company Limited	0 #	No	15 years	Refer Note 2 below
Freehold land in Gujarat	Herbertsons Limited	0 #	No	17 years	Refer Note 2 below
Freehold land in Madhya Pradesh	Vitari Distillery Pvt Ltd	5	No	22 years	Refer Note 2 below
Freehold land in Maharashtra	Herbertsons Limited	271	No	17 years	Refer Note 2 below
Freehold land in Maharashtra	Pioneer Distilleries Limited	240	No	1 year	Refer Note 2 below
Freehold land in Maharashtra	Maharashtra Distilleries Limited	10	No	17 years	Refer Note 2 below
Freehold land in Odisha	Poonam Distillery Limited	7	No	17 years	Refer Note 2 below
Freehold land in Punjab	VRV Breweries and Bottling Industries Limited	24	No	17 years	Refer Note 2 below
Freehold land in Rajasthan	Udaipur Distillery Co. Limited	22	No	22 years	Refer Note 2 below
Freehold land in Uttar Pradesh	Carew Phipson Ltd	48	No	27 years	Refer Note 2 below
Freehold land in Uttar Pradesh	Ganges Soap Works Private Limited	0 #	No	17 years	Refer Note 2 below
Freehold land in West Bengal	Bengal Distilleries Co Ltd	0 #	No	14 years	Refer Note 2 below
Freehold land in West Bengal	Serampore Distillery and Chemical Company Limited	9	No	22 years	Refer Note 2 below
Freehold land in West Bengal	Shaw Wallace Distilleries Limited	10	No	17 years	Refer Note 2 below
Freehold land in West Bengal	Jointly Held	15	No	17 years	Refer Note 7 below
Description of property	Held in the name of	Gross carrying value (Rs millions)	Whether promoter, director or their relative or employee	Period held- indicate range, where appropriate	Reason for not being held in name of Company
Leasehold land in Madhya Pradesh	Shaw Wallace Distilleries Limited	10	No	17 years	Refer Note 2 below
Leasehold land in Rajasthan	Udaipur Distillery Co. Limited	12	No	22 years	Refer Note 2 below
Freehold land in Karnataka	Pampasar Distillery Limited	92	No	17 years	Refer Note 2 and Note 3 below
Freehold land in Telangana	Shaw Wallace & Company Limited	630	No	14 years	Refer Note 2 and Note 3 below
Freehold land in Uttar Pradesh	Central Distillery and Chemical Works Ltd	50	No	17 years	Refer Note 2 and Note 3 below
Freehold land in West Bengal	Carew Phipson Ltd	33	No	22 years	Refer Note 2 and Note 3 below
Freehold land in West Bengal	McDowell & Company Limited	60	No	22 years	Refer Note 3 and Note 5 below
Freehold land in West Bengal	Refer Note 6	78	No	22 years	Refer Note 3 and Note 6 below
Freehold land in West Bengal	Shaw Wallace & Company Limited	216	No	15 years	Refer Note 2 and Note 4 below
Freehold land in Goa	McDowell & Company Limited	45	No	22 years	Refer Note 3 and Note 5 below
Freehold land in Goa	Jointly Held	28	No	20 years	Refer Note 3 and Note 7 below
Freehold land in Delhi	McDowell & Co Ltd	90	No	22 years	Refer Note 2 and Note 3 below
Freehold land in Maharashtra	McDowell & Company Limited	271	No	22 years	Refer Note 5 below
Freehold land in Tamil Nadu	McDowell & Company Limited	2	No	22 years	Refer Note 5 below
Freehold land in Telangana	McDowell & Co Ltd	50	No	43 years	Refer Note 2 below
Freehold land in Telangana	McDowell & Company Limited	4	No	43 years	Refer Note 5 below
Description of property	Held in the name of	Gross carrying value (Rs millions)	Whether promoter, director or their relative or employee	Period held- indicate range, where appropriate	Reason for not being held in name of Company
Freehold land in Uttar Pradesh	McDowell & Company Limited	1	No	22 years	Refer Note 5 below
Freehold land in West Bengal	McDowell & Company Limited	17	No	22 years	Refer Note 5 below
Leasehold land in Kerala	McDowell & Co Ltd	10	No	22 years	Refer Note 2 and Note 3 below

Notes:

# 0 indicates that the amounts involved are below five lakhs.

1. The Company has entered into an agreement to sell with the erstwhile owner and is litigating for execution of the sale deed. Refer Note 3.1(b) to the standalone financial statements.

2. Held in the name of erstwhile transferor companies which were amalgamated with the Company through approved Court Schemes. Refer Notes 3.1(a), 3.2(d) and 3.6(a) to the standalone financial statements.

3. These properties are under hypothecation with a bank. Refer Notes 33(b) and 40(d) to the standalone financial statements.

4. Part of this property is under dispute with a regulator and the matter is pending with the Kolkata High Court.

5. McDowell & Company Limited name has been changed to United Spirits Limited w.e.f. October 17, 2006.

6. The Company is not in the possession of the title deeds. Refer Note 3.1(a) to the standalone financial statements.

7. The property is being jointly held by the Company and a third party. Refer Note 3.1(a) to the standalone financial statements.