Annual Report 2009-10 - United Breweries Limited

Notes on Consolidated Accounts for the year ended March 31, 2010 (contd.)7. Fixed Assets:Rs. in ThousandsBuildings amounting to Rs.53,030 (2009: Rs.49,619) and Plant and Machinery amounting to Rs.502,517 (2009: Rs.473,319)are in premises not owned by the Group.8. The Company does not own any brewing facility in Tamil Nadu, which is one of the major markets in India contributingabout 18% of the Company’s business. With an intention of ensuring supplies from Balaji Distilleries Limited (BDL), havingbrewing facilities in Tamil Nadu, the Company has entered into an agreement with the promoters of BDL to secure to theCompany perpetual usage of the brewery owned by BDL, and has advanced an amount of Rs.1,550,000 to one of thePromoter Companies of BDL, acting for and on behalf of the other Promoters also.Subsequently, the Boards of Directors of BDL and United Spirits Limited (USL) have considered and approved a proposal formerger of BDL into USL, which is subject to obtaining of the necessary regulatory approvals by both the Companies. TheCompany has obtained a commitment from USL that the arrangement with Promoters will be adhered to on completionof the proposed merger. The advance will be repaid upon the completion of the merger or in accordance with the terms ofthe related Agreement, whichever is earlier.In June 2009, BDL has allotted 90,000 Equity Shares upon conversion of warrants to certain parties. These parties haveentered into a supplemental agreement with the Company to the effect that they will be bound by the terms and conditionsof the earlier agreement between the Company and the promoters of BDL.9. Capital Commitments:Particulars 2010 2009Estimated amount of Contracts remaining to be executed on capital account and notprovided for.257,321 689,134Share of joint venture:Particulars 2010 2009Estimated amount of Contracts remaining to be executed on capital account and not 8,896 46,348provided for.10. Contingent Liabilities:Particulars 2010 2009a) Sales Tax/other taxes demands under appeal* 14,672 14,672b) Employee State Insurance Demand* 265 265c) Demand towards Water charges under appeal* — 133,019d) Excise Duty/Customs Duty demands under appeal* 36,709 36,709e) Income Tax demands under appeal 188,844 82,262f) Service Tax demands under appeal* 229,114 377,708g) Claims against the Company not acknowledged as debt* 30,568 27,377h) Letter of Credit outstanding 78,926 33,230i) Guarantees given by the company:- on behalf of Subsidiaries of Joint Venture to third partiesMillennium Beer Industries LimitedUnited Millennium Breweries LimitedEmpee Breweries Limited- to third parties800,000600,000730,00019,060800,000600,000730,00028,348j) Letter of undertaking to distributors towards countervailing duty for imports fromNepal38,500 38,500Share of joint venture:Particulars 2010 2009a) Sales Tax/other taxes demands under appeal [Amount paid under dispute3,774 3,281Rs.223 (2009: Rs.22) and disclosed in loans and advances in Schedule 10]b) ESIC / PF demands under appeal [Amount paid under dispute Rs.Nil (2009: Rs.53)845 898and disclosed in loans and advances in Schedule 10]c) Bank Guarantees given* 10,155 5,855d) Demand towards Water charges under appeal* — 26,25073