ANALYSIS OF THE FINANCIAL STATEMENTS OF

UNITED BREWERIES

PRESENTED BY - AVINASH KAKATI

DEBOPRATIM BORAHPUNEET CHOUDHURY

RADHAKANTA NAIKSWEETY AGARWALLA

VAISHALI GOSWAMI

UNITED BREWERIES GROUP OR UB GROUP

conglomerate of different companies with a major focus on the brewery (beer) and alcoholic beverages industry.

It is owned by Dr. Vijay Mallya.

The company markets beer under the Kingfisher brand.

United Breweries is India's largest producer of beer with a market share of around 48% by volume.

United Breweries now has greater than a 40% share of the Indian brewing market with 79 distilleries and bottling units across the world.

ACCOUNTING POLICY Basis of Presentation of Financial Statements

Use of Estimates

Revenue Recognition

Borrowing Costs

Fixed Assets

Investments

Inventories

ACCOUNTING POLICY

ACCOUNTING POLICY contd. Foreign Currency Transactions

Depreciation and Amortisation

Employee Retirement benefits

Taxation

Earnings per share

Impairment of Assets

Provisions, Contingent Liabilities and Contingent Assets

BALANCE

SHEET

BALANCE SHEET OF UNITED BREWERIES OF 2008, 09, 10 (Rs. In Crores)

Sources of Fund

Mar ‘10 Mar ‘09 Mar ‘08

Net worth 1159.77 1081.54 611.26

Total Debt 671.33 616.36 525.22

Total Liabilities 1831.10 1697.90 1136.48

BALANCE SHEET(contd.) (Rs. In Crores)

Application Of Funds

MARCH’1012 months

MARCH’0912 months

MARCH’0812 months

NET BLOCK 780.78 697.76 560.18

CAPITAL WORK IN PROGRESS 57.53 86.53 157.61

INVESTMENTS 153.07 194.10 104.07

TOTAL CA, LOANS & ADVANCES 1212.73 965.76 567.72

NET CURRENT ASSETS 839.72 719.51 314.62

TOTAL ASSETS 1831.10 1697.90 1136.48

CONTINGENT LIABILITIES 290.66 351.95 331.85

BOOK VALUE(Rs) 38.03 34.77 16.87

PROFIT & LOSS ACCOUNT

PROFIT & LOSS ACCOUNT(In Crores)

Income

Sales Turnover 2957.93 2462.58 1983.44

Less: Excise Duty 971.65 770.83 612.97

Net Sales 1986.28 1691.75 1370.47

Other Income 69.73 27.73 18.30

Stock Adjustments 17.92 14.78 3.93

Total Income 2073.93 1734.26 1392.70

Expenditure

Raw Materials 964.33 817.96 640.48

Power & Fuel Cost 49.11 57.53 55.81

Employee Cost 98.92 87.07 77.44

Other Manufacturing Expenses 12.67 9.93 10.58

Selling and Admin Expenses 626.34 486.06 381.50

Miscellaneous Expenses 33.14 27.24 33.15

Preoperative Exp Capitalised 0.00 0.00 0.00

Total Expenses 1784.51 1485.79 1198.96

MARCH’10 MARCH’09 MARCH’08

PROFIT & LOSS ACCOUNT (Contd.)

Operating Profit 219.69 220.74 175.44

PBDIT 289.42 248.47 193.74

Interest 55.50 75.69 41.74

PBDT 233.92 172.78 152.00

Depreciation 88.27 76.22 61.23

Other Written Off 0.00 0.00 0.00

Profit Before Tax 145.65 96.56 90.77

Extra-ordinary items 5.47 5.11 2.44

PBT (Post Extra-ordinary Items) 151.12 101.67 93.21

Tax 54.16 39.18 30.74

Reported Net Profit 96.97 62.49 62.47

Total Value Addition 820.17 667.83 558.48

Preference Dividend 7.41 7.41 7.41

Equity Dividend 8.64 7.20 0.00

Corporate Dividend Tax 2.69 2.48 1.26

Per share data (annualised)

Shares in issue (lakhs) 2400.48 2400.48 2160.43

Earnings Per Share (Rs) 3.73 2.29 2.55

Equity Dividend (%) 36.00 30.00 0.00

Book Value (Rs) 38.03 34.77 16.87

MARCH’10 MARCH’09 MARCH’08

CASH FLOW(In Crores)MARCH’11 MARCH’10 MARCH’09

Net Profit Before Tax 151.13 101.67 93.21

Net Cash From Operating Activities 133.05 -152.59 83.19

Net Cash (used in)/fromInvesting Activities -78.10 -227.10 -298.38

Net Cash (used in)/from Financing Activities -13.41 403.88 83.80

Net (decrease)/increase In Cash and Cash Equivalents 41.54 24.18 -131.39

Opening Cash & Cash Equivalents 41.77 17.59 139.27

Closing Cash & Cash Equivalents 83.32 41.77 7.89

RATIO ANALYSIS

EXPLANATION OF FINANCIAL RATIOS

Current ratio

Computation= Current assets, loans and advances + short-term investments Current liabilities + Provisions + Short-term Debt

Quick ratio Computation= Current assets, loans and advances – Inventories + short-term investmentsCurrent liabilities + Provisions + Short-term Debt Net of working capital limits

CURRENT RATIO:

YEAR 2008 2009 2010

CURRENT RATIO 0.63 1.57 1.19

2008

2009

20100

0.51

1.52

0.63

1.57

1.19

CURRENT RATIO

CURRENT RATIO

QUICK RATIO:

YEAR 2008 2009 2010

LIQUID RATIO 1.77 3.24 2.71

2008

2009

2010

01234

1.773.24 2.71

QUICK RATIO

QUICK RATIO

Debt equity Computation=

Long-term Debt Total Net Worth (Equity Shareholders Funds) + Preference Capital

Interest Cover

Computation =

PAT + Interest on Long-term debt + Non-cash Charges Interest on long-term debt

DEBT-EQUITY RATIO:

YEAR 2008 2009 2010

DEBT-EQUITY RATIO

2.12 1.03 1.01

2008

2009

20100

0.51

1.52

2.52.12

1.03 1.01

DEBT-EQUITY RATIO

DEBT-EQUITY RATIO

INTEREST COVER:

YEAR 2008 2009 2010

INTEREST COVER 3.28 3.41 3.42

2008 2009 20103.2

3.25

3.3

3.35

3.4

3.45

3.28

3.41 3.42

INTEREST COVER

INTEREST COVER

Return on Net Worth

Computation=

(PAT – Preference Dividend) x 100Equity shareholder’s funds or Net Worth (equity capital + reserves & surplus -

miscellaneous expenditure not written off)

Return on Capital Employed

2008

2009

20100

5

10

15

2014.9

7.68 7.95

RETURN ON NET WORTH

RETURN ON NET WORTH

YEAR 2008 2009 2010

RETURN ON NET WORTH 14.9 7.68 7.95

RETURN ON NET WORTH:

2008 2009 20109.510

10.511

11.512 11.8

10.3510.97

ROCE

OPERATING RATIO

Year 2008 2009 2010

ROCE 19.76 21.19 12.57

ROCE

EARNINGS PER SHARE

Computation = PAT – preference dividend Weighted number of equity shares outstanding

Year 2008 2009 2010

E.P.S 2.55 2.29 3.73

2008 2009 20100

1

2

3

4

EARNING PER SHARE:

EARNING PER SHARE:

HORIZONTAL ANALYSIS OF UNITED BREWERIES

Balance Sheet Base Year 2007 Total assets / liabilities up by 9.93% in 2008 from the base year, 64.24% in 2009 and 77.12% increase in 2010 from the base year.Net Worth up by 9.62% in 2008 from the base year, 93.95% in 2009 from the base year and 107.98% in 2010 as against lower growth in loan fund of 29.44% in 2009 from the base year and 40.99% in 2010.Net fixed assets (net block) up by 35.47% in 2008 from the base year, 68.74% in 2009 from the base year and 88.82% in 2010 from the base year. Utilization of fixed assets is not very efficient.Inventories up by 4.06% in 2008 from the base year, 45.11% in 2009 from the base year and 74.46% in 2010 from the base year. As against increase in net sales by 30.99% in 2008, 61.70 % in 2009 from the base year and 89.85% in 2010 from the base year. Thus we can say that inventory management is somewhat efficient.Current liabilities up by 13.66% in 2008 from the base year, 7.63% in 2009 from the base year and 64.15% in 2010 from the base year. Growth of current liabilities is lower than rise in raw materials cost. Maybe the company is paying its suppliers faster to avail cash discounts.Strong financial position as the company has huge reserves.

Profit And Loss AccountBase year 2007

•Net sales: 30.99% increase in 2008, 61.70 % increase in 2009 from the base year and 89.85% increase in 2010 from the base year.•Employee cost: 15.88% increase in 2008, 30.29% increase in 2009 from the base year and 48.02% increase in 2010 from the base year.•Selling & Administration Costs: 35.11% increase in 2008, 72.14% increase in 2009 from the base year and 121.82% increase in 2010 from the base year.•Total Expenses: 30.28% increase in 2008, 61.44% increase in 2009 from the base year and 93.90% increase in 2010 from the base year.•Raw Material Cost: 32.61% increase in 2008, 69.35% increase in 2009 from the base year and 99.66% increase in 2010 from the base year.•Interest: 49.18 % increase in 2008, 170.51% increase in 2009 from the base year and 98.36% increase in 2010 from the base year.•Depreciation: 58.87% increase in 2008, 97.77% increase in 2009 from the base year and 129.03% increase in 2010 from the base year.•Other Income: -3.89% increase in 2008, 45.64% increase in 2009 from the base year and 266.23% increase in 2010 from the base year.

Profit And Loss Account (CONTD.)

•Operating Profit: 24.27% increase in 2008, 56.35% increase in 2009 from the base year and 55.61% increase in 2010 from the base year.

•PBDIT: 20.92% increase in 2008, 55.08% increase in 2009 from the base year and 80.64% increase in 2010 from the base year.

•PBDT: 14.94% increase in 2008, 30.66% increase in 2009 from the base year and 76.89% increase in 2010 from the base year.

•Reported Net Profit: -4.03% increase in 2008, -3.99% increase in 2009 from the base year and 48.98% increase in 2010 from the base year.

2008 2009 20100.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

30.99%

61.70%

89.85%

32.61%

69.35%

99.66%

15.88%

30.29%

48.02%

Growth in Net sales Raw Material Cost

Employee Cost

comparative growth in net sales, raw material cost & employee cost over the years.

ComparisioN of net worth and loan fund

2009 20100.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

93.95%

107.98%

29.44%

40.99%

Net Worth Loan Fund

CompArision of inventories and net worth

2008 2009 20100.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

4.06%

45.11%

74.46%

30.99%

61.70%

89.85%

Inventories

Net Sales

-THE KING OF GOOD TIMESTHANK YOU