BSE Prices delayed by 5 minutes... << Prices as on Feb 21, 2019 - 3:54PM >>   ABB 1240.15 [ -0.64 ]ACC 1391 [ 0.34 ]AMBUJA CEM 210 [ 1.52 ]ASIAN PAINTS 1397.75 [ 0.24 ]AXIS BANK 696.9 [ -0.57 ]BAJAJ AUTO 2819 [ 1.47 ]BANKOFBARODA 103 [ -0.05 ]BHARTI AIRTE 309.7 [ 0.05 ]BHEL 62.85 [ 0.32 ]BPCL 337 [ -1.33 ]BRITANIAINDS 3004.25 [ 2.81 ]CAIRN INDIA 285.4 [ 0.90 ]CIPLA 543.1 [ 0.38 ]COAL INDIA 213.7 [ -0.74 ]COLGATEPALMO 1239.35 [ -0.36 ]DABUR INDIA 427 [ 0.49 ]DLF 165.7 [ 1.59 ]DRREDDYSLAB 2599.8 [ 3.02 ]GAIL 331.75 [ 0.62 ]GRASIM INDS 746.6 [ 2.22 ]HCLTECHNOLOG 1053.1 [ -0.26 ]HDFC 1890 [ 1.02 ]HDFC BANK 2115.15 [ 0.41 ]HEROMOTOCORP 2655 [ 1.12 ]HIND.UNILEV 1754.5 [ 1.21 ]HINDALCO 194.3 [ 0.78 ]ICICI BANK 350.4 [ 1.51 ]IDFC 36.15 [ 1.26 ]INDIANHOTELS 143.1 [ 2.99 ]INDUSINDBANK 1471.55 [ -0.62 ]INFOSYS 733.35 [ -0.91 ]ITC LTD 274.9 [ -0.34 ]JINDALSTLPOW 155.35 [ 3.64 ]KOTAK BANK 1285 [ -0.49 ]L&T 1282.25 [ 0.56 ]LUPIN 770.05 [ 1.23 ]MAH&MAH 633.35 [ -0.02 ]MARUTI SUZUK 6796.8 [ -0.76 ]MTNL 13.89 [ 15.65 ]NESTLE 10597.2 [ 0.63 ]NIIT 82.7 [ 4.35 ]NMDC 95.2 [ 1.38 ]NTPC 137 [ -0.15 ]ONGC 147 [ 2.05 ]PNB 73.2 [ 2.95 ]POWER GRID 181.75 [ -0.14 ]RIL 1246.45 [ 0.98 ]SBI 267.55 [ 0.19 ]SESA GOA 164.6 [ 2.78 ]SHIPPINGCORP 35.4 [ -0.70 ]SUNPHRMINDS 429.75 [ 1.79 ]TATA CHEM 566.65 [ 0.27 ]TATA GLOBAL 189.95 [ 0.74 ]TATA MOTORS 169.7 [ 2.94 ]TATA STEEL 497.9 [ 1.49 ]TATAPOWERCOM 67.4 [ 1.81 ]TCS 1912.25 [ -0.11 ]TECH MAHINDR 820.4 [ 1.07 ]ULTRATECHCEM 3631.1 [ 1.54 ]UNITED SPIRI 535.65 [ 1.57 ]WIPRO 374.5 [ 0.55 ]ZEETELEFILMS 446.55 [ 0.37 ] BSE NSE
You can view full text of the latest Auditor's Report for the company.

BSE: 532432ISIN: INE854D01024INDUSTRY: Beverages & Distilleries

BSE   ` 535.65   Open: 528.50   Today's Range 519.50
538.30
+8.30 (+ 1.55 %) Prev Close: 527.35 52 Week Range 439.00
730.80
Year End :2018-03 

Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements

1. We have audited the accompanying standalone Ind AS financial statements of United Spirits Limited(“the Company”), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Ind AS Financial Statements

2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design,implementation and maintenance of adequate internal financial controls,that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made thereunder including the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

5. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its total comprehensive income (comprising of profit and other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

9. We draw attention to the following matters:

a) As explained in Note 42 to the standalone Ind AS financial statements, the Managerial remuneration for the year ended March 31, 2015 included amounts paid to managerial personnel in excess of the limits prescribed under the provisions of Schedule V to the Act by INR 51 million to the Managing Director and Chief Executive Officer (MD & CEO) and by INR 134 million to the former Executive Director and Chief Financial Officer (ED & CFO). With regard to excess remuneration paid to MD & CEO the Company has made the necessary application, along with the required clarifications, for Central Government approval, response to which is awaited. Further, in respect of excess remuneration paid to the former ED & CFO the Company has initiated steps, including by way of filing a suit for recovery before the jurisdictional court, to recover such excess remuneration.

b) As explained in Note 40 to the standalone Ind AS financial statements, upon completion of the Initial Inquiry, which identified references to certain Additional Parties and certain Additional Matters, the MD & CEO, pursuant to the direction of the Board of Directors, had carried out an Additional Inquiry that revealed transactions indicating actual or potential fund diversions to entities that appear to be affiliated or associated with the erstwhile non-executive Chairman of the Company and other potentially improper transactions. The amounts identified in the Additional Inquiry have been fully provided for or expensed by the Company or its subsidiaries in earlier periods. Management is currently unable to estimate the financial impact on the Company, if any, arising from potential non-compliances with applicable laws in respect of the above.

c) As explained in Note 44 to the standalone Ind AS financial statements, the Company is in litigation with a bank (‘the Bank’) that continues to retain the pledge of certain assets of the Company and of the Company’s shares held by USL Benefit Trust (of which the Company is sole beneficiary) despite the Company prepaying the term loan to that bank along with the prepayment penalty and further depositing an additional sum of INR 459 million demanded by the Bank and as directed by the Honourable High Court of Karnataka (the ‘Court1). The Court has directed the Bank not to deal with the pledged assets of the Company (including Company’s shares held by USL Benefit Trust) as mentioned above till the disposal of the original writ petition filed by the Company in the Court.

d) Note 46 to the standalone Ind AS financial statements which describes the uncertainty related to the outcome of Special Leave Petition (the “SLP”) filed by the Government of Bihar with the Honourable Supreme court, in relation to the ban imposed by the Government of Bihar on trade and consumption of Indian Made Foreign Liquor and Foreign Liquor in the State of Bihar with effect from April 5, 2016 which was set aside by the Honourable High Court of Patna in its judgment dated September 30, 2016. The statutory duties (VAT and Excise duty) paid on such stocks aggregating to INR 553 million (including duties paid by the tie-up manufacturing units) have been considered as good and receivable from the Government of Bihar not withstanding a letter received during the quarter ended September 30, 2017 by the Company from the Government of Bihar stating that it is not liable to refund the aforesaid statutory duties under the Bihar Prohibition and Excise Act, 2016. The Company has on October 17, 2017, filed a writ petition before the Honourable High Court of Patna seeking refund of the aforesaid statutory duties paid by the Company to the Government of Bihar, which is presently pending adjudication.

e) Note 43 to the standalone Ind AS financial statements:

i. regarding clarifications sought by Securities and Exchange Board of India on matters covered by the Company’s Initial Inquiry and Additional Inquiry and certain aspects of the agreement between the Company and its erstwhile nonexecutive chairman to which the Company has responded;

ii. regarding various issues raised and show cause notices issued pursuant to an inspection under Section 206(5) of the Act by Ministry of Corporate Affairs/ Registrar of Companies, Karnataka, alleging violation of certain provisions of the Companies Act, 1956 and Companies Act, 2013, to which the Company had responded. Further, the Company has received a letter dated October 13, 2017 from the Registrar of Companies, Karnataka (the ‘Registrar’) inviting the Company’s attention to the compounding provisions of the Companies Act, 1956 and Companies Act, 2013 following the aforesaid show cause notices. The Company has filed applications for compounding of offences with the Registrar in relation to three show cause notices, applications for adjudication with the Registrar in relation to two show cause notices and has requested the Registrar to drop one show cause notice based on an expert legal advice received;

iii. regarding the ongoing investigation by the Directorate of Enforcement under the provisions of Foreign Exchange Management Act, 1999 and Prevention of Money Laundering Act, 2002 to which the Company has responded; and

iv. regarding clarifications sought by Authorised Dealers in relation to certain queries from Reserve Bank of India with regard to remittances made in prior years to subsidiaries of the Company, past acquisition of the Whyte and Mackay group, clarifications on Annual Performance Reports submitted for prior years and clarifications on compliances relating to the Company’s overseas Branch office, to which the Company has responded.

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

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditor’s Report) Order, 2016, issued by the Central Government of India in terms of Section 143(11) of the Act (“the Order”), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.

11. 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 Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.

(e) The matters stated in paragraphs (b), (c), (d) and (e) of paragraph 9 above titled ‘Emphasis of matter’, in our opinion, may have an adverse effect on functioning of the Company.

(f) On the basis of the written representations received from the directors as on March 31, 2018 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.

(g) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.

(h) 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, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

i) The Company has disclosed the impact, if any, of pending litigations as at March 31, 2018 on its financial position in its standalone Ind AS financial statements - Refer Notes 18, 41, 42, 44, 46 and 49 to the standalone Ind AS financial statements;

ii) The Company did not have any long-term contracts including derivative contracts as at March 31, 2018 for which there were any material foreseeable losses- Refer Note 55 to the standalone Ind AS 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 ended March 31, 2018; and

iv) The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended March 31, 2018.

ANNEXURE B TO INDEPENDENT AUDITORS’ REPORT

Referred to in paragraph 10 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, 2018

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

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

(c) The title deeds of immovable properties, as disclosed in Note 3.1 (Property, plant and equipment) and Note 13 (Assets classified as held for sale) to the standalone Ind AS financial statements, are held in the name of the Company except as disclosed below:

Particulars

Freehold land

Leasehold land

Buildings

Property, plant and equipment:

Number of cases

6

4

5

Gross carrying amount as at March 31, 2018 (INR millions)

241

36

431

Net carrying amount as at March 31, 2018 (INR millions)

241

21

393

Assets classified as held for sale:

Number of cases

-

-

2

Net carrying amount as at March 31, 2018 (INR millions)

-

-

2

ii. The physical verification of inventory excluding stocks with third parties and stock in transit have been conducted at reasonable intervals by the Management during the year. 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 material.

iii. There are no companies covered in the register maintained under Section 189 of the Act for the purpose of loans granted by the Company.

iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Act in respect of the loans and investments made and guarantees and securities provided by it.

v. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Sections 73, 74, 75 and 76 or any other relevant provisions of the Act and the Rules framed thereunder to the extent notified, with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

vi. The Central Government of India has not specified the maintenance of cost records under Section 148(1) of the Act for any of the products of the Company.

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 the undisputed statutory dues in respect of provident fund, employees’ state insurance, tax deducted at source, tax collected at source, value added tax, entry tax, service tax, krishi kalyan cess and swachh bharat cess though there has been delays in some cases and is regular in depositing other undisputed statutory dues including sales tax,duty of excise, duty of customs, goods and service tax with effect from July 1, 2017 and other material statutory dues, as applicable, with appropriate authorities.

The extent of the arrears of statutory dues outstanding as at March 31, 2018, for a period of more than six months from the date they became payable are as follows:

Name of the statute

Nature of dues

Amount (INR million)

period to which the amount relates

Due date

Date of payment

Maharashtra Stamp Act, 1958

Stamp duty and interest thereon

200 #

September 2006

September 2006

Not yet paid

Income Tax Act, 1961

Tax deducted at Source

18

March 2017 to August 2017

7th of next month

May 18, 2018

West Bengal Tax on Entry of Goods into Local Areas, 2012

Entry tax

1

April 2017 to June 2017

July 6, 2017

April 23, 2018

# Estimated amount of liability including interest for delay in payment.

(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, service tax, duty of customs,duty of excise, entry tax and value added tax as at March 31, 2018 which have not been deposited on account of a dispute are disclosed in Appendix 1.

viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in the repayment of loans or borrowings to any financial institution or bank or dues to the debenture holders as at the balance sheet date. The Company does not have any loans or borrowings from the Government as at balance sheet date.

ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

xi. Read with paragraph 9(a) of our report of even date on the standalone Ind AS financial statements, 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.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are 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 Ind AS financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.

xiv. The Company has not made any preferential allotment of shares or fully or partly convertible debentures during the year. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any noncash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.

For Price Water house & Co Chartered Accountants LLP

Firm Registration Number: 304026E/E-300009

Pradip Kanakia

Partner

Membership Number: 039985

Bengaluru

May 24, 2018