United Breweries

The Directors have pleasure in presenting this Annual Report on the
 business and operations with audited accounts of your Company for the
 year ended March 31, 2008
 
 FINANCIAL RESULTS
 
 Your Company’s financial performance for the year ended March 31, 2008
 is summarised below
 
                                             (Rupees in Million)
 Particulars                              2007-2008      2006-2007
 
 Net Turnover                               13948.6       10748.7
 
 Profit before Interest & Depreciation       1972.7        1615.1
 
 Interest                                     428.2         279.8
 
 Depreciation                                 612.3         385.4
 
 Profitt before non recurring items           932.1         949.9
 
 Non recurring items                              -             -
 
 Profit before Taxation                       932.1         949.9
 
 Provision for Taxation                      (307.4)       (299.0)
 
 Profit after Tax available 
 for appropriations                           624.7         650.9
 
 Appropriation
 
 Dividend on Equity Shares 
 (including Taxes thereon)
 
 Interim dividend paid                            -          36.9
 
 Final dividend proposed                          -          25.3
 
 Dividend on preference shares paid
 (including Taxes thereon)                     86.7          84.5
 
 Balance your Directors propose to 
 carry to the Balance Sheet                   538.1         434.2
 
 DIVIDEND
 
 Your Company paid a dividend on the Cumulative Redeemable Preference
 Shares (CRPS) at the rate of 3% under the terms of the issue of the
 24.69 million CRPS held by Scottish & Newcastle.
 
 In order to utilise available Profits during the year under review for
 creating additional capacities and technology up-gradation, your
 Directors consider it prudent to skip Equity dividend for the year.
 
 RIGHTS” ISSUE OF EQUITY SHARES
 
 In the recently concluded “Rights” issue, your Company offered 24004825
 Equity Shares of Re.1 each at a price of Rs.177 aggregating to Rs.
 4,248.85 million. The Issue received a satisfactory response from
 investors and was over subscribed by 7% Your Directors appreciate the
 confidence reaffirmed by the investors in the Company
 
 CAPITAL
 
 During the year under review, the Authorised Share Capital of the
 Company remained unchanged at Rs.2,800 million comprising of Equity
 Share Capital of Rs.300 million and Preference Share Capital of Rs.
 2,500 million. The Issued, Subscribed and Paid-up Share Capital as on
 March 31, 2008 stood at Rs.2,685 million comprising of Rs.216 million
 (Re.1 each) Equity Share Capital and Rs. 2,469 million Cumulative
 Redeemable Preference Shares Consequent upon issue of Equity Shares on
 “Rights” basis, the Issued, Subscribed and Paid-up Equity Share Capital
 of your Company stands increased to Rs.240 million comprising of
 240048255 Equity Shares of Re.1 each effective June 13, 2008
 
 CHANGE IN CONTROL OVER SCOTTISH & NEWCASTLE PLC.
 
 Upon the Scheme of Arrangement for acquisition of Scottish & Newcastle
 Plc. (S&N) by Sunrise Acquisitions Limited (SAL), a Company jointly
 owned by Carlsberg A/S and Heineken, becoming effective in accordance
 with its terms, the entire Equity Shares of S&N were acquired by SAL.
 Through Scottish & Newcastle India Limited, SAL now exercises control
 over 37.5% Equity stake in your Company.
 
 SUBSIDIARY COMPANIES
 
 During the year under review, your Company has acquired 51%
 shareholding in Maltex Malsters Limited and consequently Maltex
 Malsters Limited became a Subsidiary of your Company Associated
 Breweries & Distilleries Limited remains a wholly owned Subsidiary of
 your Company Pursuant to Section 212 of the Companies Act, 1956, the
 Balance Sheet, Profit and Loss Account, Report of the Directors and
 Auditors are attached Statement pursuant to Section 212 (1) (e) also
 forms part of the Annual Report.
 
 CONSOLIDATION
 
 As per the Listing Agreement, Consolidated Accounts conforming to
 applicable Accounting Standards are attached to this Annual Report.
 
 DEPOSITORY SYSTEM
 
 Your Company has entered into Agreement with National Securities
 Depository Limited and Central Depository Services (India) Limited in
 accordance with the provisions of the Depositories Act 1996 and as per
 the directions issued by Securities and Exchange Board of India
 
 DIRECTORS
 
 There has been no change in the Directors of your Company during the
 year under review. Mr. A K Ravi Nedungadi and Mr. C L Jain retire by
 rotation at the ensuing Annual General Meeting and being eligible,
 offer themselves for re-appointment.  Mrs. Lesley Jackson resigned from
 the Board effective June 22, 2008.
 
 AUDITORS
 
 M/s Price Waterhouse, Statutory Auditors, hold office until the
 conclusion of the ensuing Annual General Meeting, and are eligible for
 re-appointment.
 
 AUDITORS’ REPORT
 
 With respect to the observations made by the Auditors in the Audit
 Report, your Directors state as under The investment in Millennium
 Alcobev Private Limited, the Joint Venture is strategic in nature and
 its diminition in value is temporary in nature
 
 LISTING REQUIREMENTS
 
 Your Company’s Equity Shares are listed at Bangalore, Mumbai,
 Ahmedabad, Cochin, Hyderabad, Kolkata, Ludhiana, Madras and New Delhi
 Stock Exchanges. The listing fees have been paid to all the Stock
 Exchanges for the year 2008-2009. The enhanced Capital arising out of
 the “Rights” Issue is also listed and the Company has complied with all
 requirements of the Listing Agreements. For trading convenience of
 investors, your Company has got its Equity Shares listed at the
 National Stock Exchange of India Limited (NSE) also In view of
 negligible / no trading on other Exchanges where listed and
 availability of nation wide trading through terminals of Bombay Stock
 Exchange Limited & NSE, your Company has decided to opt out of all
 Exchanges except Bombay, Bangalore and NSE subject to regulatory
 compliance.
 
 CASH FLOW STATEMENT
 
 A Cash Flow Statement for the year ended March 31, 2008 is appended
 
 CORPORATE GOVERNANCE
 
 A Report on Corporate Governance forms part of this Report along with
 the Certificate from the Company Secretary in Practice.
 
 FIXED DEPOSITS
 
 The Company has not invited any Fixed Deposits.
 
 PARTICULARS OF EMPLOYEES, CONSERVATION OF ENERGY & TECHNOLOGY
 ABSORPTION, ETC.:
 
 Information in accordance with sub-Section (2A) of Section 217 of the
 Companies Act, 1956 read with the Company’s (Particulars of Employees)
 Rules 1975, forms part of this Directors’ Report and is annexed.
 Particulars required under Section 217(1)(e) are also annexed.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, your Board of
 Directors report that:
 
 - in the preparation of the Annual Accounts, the applicable accounting
 standards have been followed along with proper explanation relating to
 material departures, if any
 
 - accounting policies have been selected and applied consistently and
 that the judgements and estimates made are reasonable and prudent so as
 to give a true and fair view of the state of affairs of the Company at
 the end of the financial year and of the profit of the Company for that
 period
 
 - proper and sufficient care have been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956, for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities
 
 - the annual accounts have been prepared on a going concern basis
 
 ACKNOWLEDGEMENT
 
 Your directors wish to place on record their appreciation for the
 continued support received from shareholders, banks, risk assessment
 partners and financial institutions. Your directors are also grateful
 to the Company’s business partners and customers for their continued
 support and patronage. Finally, your directors wish to acknowledge the
 support and contribution on the part of all employees who constitute
 our most valuable asset.
 
                                By Authority of the Board,
 
 Bangalore                    A K Ravi Nedungadi  Kalyan Ganguly
 July 25, 2008                Director Managing   Director