United Breweries

1.  We have audited the attached Balance Sheet of United Breweries
 Limited as at March 31, 2009, the related Profi t and Loss Account and
 the Cash Flow Statement for the year ended on that date annexed
 thereto, which we have signed under reference to this report. These
 financial statements are the responsibility of the Companys
 management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 2.  We conducted our audit in accordance with auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and signifi cant estimates
 made by management, as well as evaluating the overallfinancial
 statement presentation. We believe that our audit provides a reasonable
 basis for our opinion
 
 3.  As required by the Companies (Auditors Report) Order, 2003, as
 amended by the Companies (Auditors Report) (Amendment) Order, 2004
 (together ‘the Order), issued by the Central Government of India in
 terms of sub-section (4A) of section 227 of the ‘Companies Act, 1956
 of India (the ‘Act) 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 a
 statement on the matters specified in paragraphs 4 and 5 of the said
 Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 (i) We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 (ii) In our opinion, proper books of account as required by law have
 been kept by the Company so far as appears from our examination of
 those books;
 
 (iii) The Balance Sheet, Profit and Loss Account and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 (iv) In our opinion the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement dealt with by this report comply with the accounting
 standards referred to in sub-section (3C) of section 211 of the Act;
 
 (v) On the basis of written representations received from the directors
 of the Company, as on March 31, 2009 and taken on record by the Board
 of Directors, we report that none of the directors are disqualified as
 on March 31, 2009 from being appointed as a director in terms of clause
 (g) of sub-section (1) of section 274 of the Act;
 
 (vi) In our opinion and to the best of our information and according to
 the explanations given to us, the said financia statements, together
 with the notes thereon and attached thereto, give in the prescribed
 manner the information required by the Act, and also give a true and
 fair view in conformity with the accounting principles generally
 accepted in India
 
 (a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2009;
 
 (b) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 (c) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date
 
 Annexure to Auditors Report
 
 [Referred to in Paragraph 3 of the Auditors Report of even date to the
 members of United Breweries Limited on the financial statements for the
 year ended March 31, 2009]
 
 a) The Company is maintaining proper records showing full particulars
 including quantitative details and situation of fixed assets.
 
 b) The fixed assets of the Company 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 except for assets
 aggregating to Rs.721,522 (original cost in thousands) at 3 locations
 of the Company, and no material discrepancies between the book records
 and the physical inventory have been noticed.
 
 c) In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 of by the Company during the year.
 
 i.  a) The inventory has been physically verified by the management
 during the year. In our opinion, the frequency of verification is
 reasonable.
 
 b) In our opinion, the procedures of physical verifi cation of
 inventory followed by the management are reasonable and adequate in
 relation to the size of the Company and the nature of its business.
 
 c) In our opinion, and according to the information and explanations
 given to us, the Company is maintaining proper records of inventory.
 The discrepancies between the physical inventory and the book records
 as noticed on physical verification are not material and have been
 properly dealt with in the books of accounts.
 
 iii.  a) The Company has not granted any loans, secured or unsecured,
 to companies, firms or other parties covered in the register maintained
 under Section 301 of the Act, and accordingly, clauses (iii)(b),
 (iii)(c) and (iii)(d) of paragraph 4 of the Order are not applicable.
 b) The Company has not taken any loans secured or unsecured, from
 companies, firms or other parties covered in the register maintained
 under Section 301 of the Act and therefore paragraphs iii(f) and iii(g)
 of the Order are not applicable.
 
 iv. In our opinion and according to the information and explanations
 given to us, having regard to the explanations that certain items
 purchased are of a special nature for which suitable alternative
 sources do not exist for obtaining comparative quotations, there is an
 adequate internal control system, commensurate with the size of the
 Company and the nature of its business for the purchase of inventory,
 fixed assets and for the sale of goods and services. Further, on the
 basis of our examination of the books and records of the Company, and
 according to the information and explanations given to us, we have
 neither come across nor have we been informed of any continuing failure
 to correct major weaknesses in the aforesaid internal control system
 
 v.  a) In our opinion and based on the examination of the records of
 the Company, the particulars of the contracts / arrangements referred
 to in Section 301 of the Act have been entered in the register required
 to be maintained under that section. b) In our opinion and according to
 the information and explanations given to us, the transactions made in
 pursuance of such contracts or arrangements and exceeding the value of
 Rupees Five Lakhs in respect of any party during the year, have been
 made at prices which are reasonable having regard to the prevailing
 market prices at the relevant time.
 
 vi. The Company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA of the Act and the rules framed
 thereunder.
 
 vii. In our opinion, the Company has an internal audit system
 commensurate with the size and the nature of its business
 
 viii. The Central Government of India has not prescribed the
 maintenance of cost records under clause (d) of sub-section (1) Section
 209 of the Act for any of the products of the Company
 
 ix. 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
 including provident fund, investor education and protection fund,
 employees state insurance, income-tax, sales-tax, wealth tax, service
 tax, customs duty, excise duty, cess and other material statutory dues
 as applicable with the appropriate authorities. b) According to the
 information and explanations given to us and the records of the Company
 examined by us, the particulars of income-tax, sales-tax, wealth tax,
 service tax, customs duty, excise duty and cess as at March 31, 2009
 which have not been deposited on account of a dispute are given in
 Appendix 1.
 
 x. The Company has no accumulated losses as at March 31, 2009 and it
 has not incurred any cash losses in the financial year ended on that
 date or in the immediately preceding financial year.
 
 xi. 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 dues to any financial institution or bank or debenture
 holders as at the balance sheet date.
 
 xii. In our opinion, the Company has maintained adequate documents and
 records in the cases where the Company has granted loans and advances
 on the basis of security by way of pledge of shares, debentures and
 other securities.
 
 xiii. The provisions of any special statute applicable to chit fund /
 nidhi / mutual benefit fund/societies are not applicable to the
 Company.
 
 xiv. In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments
 
 xv. In our opinion and according to the information and explanations
 given to us, the terms and conditions of the guarantees given by the
 Company, for loans taken by others from banks or financial institutions
 during the year are not prejudicial to the interest of the Company.
 
 xvi. In our opinion, and according to the information and explanations
 given to us, on an overall basis, the term loans have been applied for
 the purposes for which they were obtained.
 
 xvii. On the basis of an overall examination of the balance sheet of
 the Company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on short-term basis
 which have been used for long-term investment.
 
 xviii. The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under Section
 301 of the Act during the year.
 
 xix. The Company has not issued debentures during the year and there
 are no debentures outstanding as at the year-end
 
 xx. The management has disclosed the end use of money raised by public
 issues (Refer Schedule 19, Note 1) and the same has been verified by
 us.
 
 xxi. 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
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
 Appendix 1 to the Auditors Report
 
 Referred to in paragraph ix (b) of the Annexure to the Auditors report
 of even date to the members of United Breweries Limited on the
 financial statements for the year ended March 31, 2009
 
 Name of the statute    Rs. in Thousands
 
 Customs Act, 1962          4,148
                            2,033
                            2,972
                            3,174
 
 Central Excise Act, 1944 / 4,253
 State Excise Acts            571
                            1,866
                            8,076
                            1,229
                              637
                            2,955
                            4,028
                              490
                              277
 
 Sales Tax Acts               401
                              628
                               38
                            4,225
                            1,088
                               90
                               13
                            5,404
                               69
                              130
                              107
                              124
                              289
                              498
                              459
                              185
                               83
                              841
 
 Income Tax Act            61,340
                           10,726
                            2,968
                            1,375
                            5,853
  
 Service Tax Act          223,466
                           46,954
                          107,287
 
 Employee State 
 Insurance Act                265
 
 Forum where dispute is pending           Year to which amount relates
 
 Commissioner of Customs, Ludhiana                   1991-92
 
 High Court at Bombay                                1991-92
 
 High Court of Madras                                1998-99
 
 Deputy Commissioner of Customs, Siliguri            1998-99
 
 High Court of Calcutta                              1998-99
 
 High Court of Andhra Pradesh                        1992-98
 
 High Court, Calcutta                                1987-88
 
 High Court of Karnataka               2001-2002 to 2003-2004, 2005-06
 
 High Court, Calcutta                                1981-82
 
 High Court, Calcutta                                1988-89
 
 High Court, Calcutta                                1998-99
 
 Commissioner of Excise                            2000 to 2005
 
 Commissioner (Appeals) Central Excise               2005- 2007
 
 Commissioner (Appeals) Central Excise               2007- 2008
 
 High Court of Andhra Pradesh                    1997-98 to 1998-99
 
 High Court of Kerala                            1983-84 to 1986-87
 
 High Court of Kerala                                 1990-91
 
 High Court, Calcutta                                 1997-98
 
 Sales tax Appellate Tribunal, Karnataka              2002-03
 
 Sales tax Appellate Tribunal, Mumbai                 1990-91
 
 Assistant Commissioner (Assessment) Special Circle   2002-03
 
 Sales Tax Appellate Tribunal / 
 Deputy Commissioner (Appeals)    1975-76 to 1998-99, 2000-01 to 2001-02
 
 Deputy Commissioner of Commercial 
 Taxes (Appeals) Kollam                                2001-02
 
 Deputy Commissioner of Commercial Taxes 
                     (Appeals) Kollam                  2000-01
 
 Deputy Commissioner Appeals                           1991-92
 
 high Court of Kerala                                  1988-89
 
 High Court of Kerala                                  1989-90
 
 High Court of Kerala                                  1990-91
 
 Court of Civil Judge, (Senior Division) Gurgaon       2001-02
 
 Sales Tax Appellate Tribunal                          1997-98
 
 Sales Tax Appellate Tribunal                          1998-99
 
 Appellate Tribunal, Cherthala                       1975 to 1994
 
 Commissioner of Income Tax (Appeals)                  2004-05
 
 Commissioner of Income Tax (Appeals)                  1997-98
 
 Commissioner of Income Tax (Appeals)                  1997-98
 
 Commissioner of Income Tax (Appeals)                  2000-01
 
 Commissioner of Income Tax (Appeals)                  2000-01
 
 Director General Central Excise & 
 Intelligence, Bangalore                               2006-07
 
 Commissioner of Service Tax, Bangalore                2006-07
 
 Commissioner of Service Tax, Bangalore                2007-08
 
 High Court of Kerala                                  1991-92
 
 
                                             J. Majumdar
                                             Partner
                                     Membership Number - F51912
 
                                      For and on behalf of 
 Place: New Delhi                     Price Waterhouse
 Date: July 23, 2009                  Chartered Accountants