United Breweries

1. During the quarter ended June 30, 2008 the Company has raised
 Rs.4,248,854 through an issue of shares on rights basis (Rights
 Issue).The proceeds of the rights issue have been utilised in the
 following manner:
 
 a) Rs.3,197,300 for repayment of cash credit/overdraft accounts and for
 additional working capital requirements.
 
 b) Rs.501,500 for Capital Expenditure.
 
 c) Pending utilisation the balance proceeds of Rs.550,258 have been
 invested in mutual funds.
 
 2.  Fixed Assets:
 
 Buildings amounting to Rs.49,619 and Plant and Machinery amounting to
 Rs.473,319 are in premises not owned by the Company.
 
 3.  Investments:
 
 A. The investment in Millennium Alcobev Private Limited is strategic in
 nature and the diminution in its book value is considered temporary.
 The Company has obtained an independent valuation which is in excess of
 the book value of the investment, and,hence, no provision for
 diminution in the value of the investment is considered necessary.
 
 B. The Company has acquired 51% stake by purchasing 22,950 equity
 shares of Rs.10 each in Maltex Malsters Limited (MML) for a
 consideration of Rs.450,000 paid in cash based on valuation done by an
 independent consultant. These shares were purchased during March 2008.
 The net worth of MML based on the audited accounts as of March 31, 2009
 is Rs.23,295. MML is engaged in the manufacturing of certain raw
 materials used by the Company. This is considered to be a strategic
 investment by the Company and provides an important move to manage the
 supply of malt. Further MML owns freehold land worth Rs.200,000 (Fair
 value based on valuation by an independent valuer). The management is
 of the view that currently there is no diminution in the value of the
 investments.
 
 4. Segmental Reporting:
 
 The Company is engaged in manufacture, purchase and sale of beer
 including licensing of brands which constitutes a single business
 segment. The Company operates only in India. Accordingly, primary and
 secondary reporting disclosures for business and geographical segment
 as envisaged in AS-17 are not applicable to the Company.
 
                                                     Rs. in Thousands
 
 5. Contingent Liabilities:
 
 Particulars                                           2009       2008
 
 a) Sales Tax / other taxes demands under appeal-     14,672    12,434
 
 b) Employees State Insurance Demand-                    265       265
 
 c) Demand towards Water charges under appeal-       133,019   114,326
 
 d) Excise Duty / Customs Duty demands under appeal-  36,709    18,915
 
 e) Income Tax demands under appeal-                  82,262    56,747
 
 f) Service Tax demands under appeal-                377,708      -
 
 g) Claims against the Company not 
 acknowledged as debt-                                27,377     1,158 
 
 h)Letter of Credit outstanding                       33,230    64,680 
 
 i) Guarantees given by the
 Company:
 
 - on behalf of Subsidiaries of Joint 
 Venture to third parties
 
 Millennium Beer Industries Limited                  800,000   800,000
 
 United Millennium Breweries Limited                 600,000   600,000
 
 Empee Breweries Limited                             730,000   730,000
 
 - to third parties                                   28,348    24,027
 
 j) Letter of undertaking to distributors 
 towards countervailing duty for                      38,500    38,500 
 imports from Nepal
 
 -In the opinion of the management, the above demands / claims are not
 sustainable in law and accordingly no provision has been made in the
 accounts.
 
 6. Operating Lease:
 
 The Company has entered into leasing arrangements for vehicles,
 computers, equipments, office premises and residential premises that
 are renewable on a periodic basis, and cancellable / non-cancellable in
 nature. Such leases are generally for a period of 11 to 60 months with
 options of renewal against increased rent and premature termination of
 agreement through notice period of 2 to 3 months, except in the case of
 certain leases where there is a lock-in period of 11 to 26 months.
 
 7. Related party disclosures:
 
 A Name of the related parties:
 
 (1) Subsidiary:
 
 Associated Breweries & Distilleries Limited (ABDL) Maltex Malsters
 Limited (MML)
 
 (2) Associate: United East Bengal Football Team Private Limited
 (UEBFTPL)
 
 (3) Joint Venture: Millennium Alcobev Private Limited (MAPL)
 
 (4) Subsidiaries of the Joint Venture:
 
 (a) Empee Breweries Limited (EBL)
 
 (b) United Millennium Breweries Limited (UMBL)
 
 (c) Millennium Beer Industries Limited (MBIL)
 
 (5) Entity which has signifi cant influence Scottish & Newcastle India
 Limited (SNIL)
 
 (6) Others
 
 (a) Scottish & Newcastle Ltd. (S & N), Holding Company of SNIL
 
 (b) Scottish & Newcastle UK Limited (SNUK), Fellow Subsidiary of SNIL
 
 (c) Scottish & Newcastle India Private Limited (SNIPL), Fellow
 Subsidiary of SNIL
 
 (7) Key Management Personnel (KMP): Mr. Kalyan Ganguly (Managing
 Director) Mrs. Lesley Jackson (Part of the year)
 
 (8) Relative of Key Management Personnel: Mrs. Suparna Bakshi Ganguly
 
 (Wife of Mr. Kalyan Ganguly)
 
 8. The Company does not own any brewing facility in Tamil Nadu, which
 is one of the major markets in India contributing about 18% of the
 Companys business. With an intention of ensuring supplies from Balaji
 Distilleries Limited (BDL), having brewing facilities in Tamil Nadu,
 the Company has entered into an agreement with the promoters of BDL to
 secure to the Company perpetual usage of brewery owned by BDL, and has
 advanced an amount of Rs.1,550,000 to one of the Promoter Companies of
 BDL, acting for and on behalf of the other promoters also. In June
 2009, BDL has allotted 90,000 Equity Shares upon conversion of warrants
 to certain parties. These parties have entered into a supplemental
 agreement with the Company to the effect that they will be bound by the
 terms and conditions of the earlier agreement between the Company and
 the promoters of BDL.
 
 In October 2008, the Boards of Directors of BDL and United Spirits
 Limited (USL) have considered and approved a proposal for merger of BDL
 into USL, which is subject to obtaining of the necessary regulatory
 approvals by both the Companies. The Company has obtained a commitment
 from USL that the arrangement with Promoters will be adhered to on
 completion of the proposed merger. The advance will be repaid upon the
 completion of the merger or in accordance with the terms of the related
 Agreement, whichever is earlier.
 
 9.  As the Company does not have any long term monetary item since
 April 1, 2007 till date, the change in the accounting policy referred
 to in Schedule 18 Note 8(b) has no impact on the profi t for the year.
 
 10.  All amounts disclosed in Notes to Account and other Schedules are
 in Rs.000 except for:
 
 (i) Number of Shares / units in Notes on Schedule 1, Schedule 5, Note
 4, Note 15, Note 24, and Note 27. (ii) Basic and Diluted EPS in the
 Profi t and Loss Account and in Note 15. (iii) Quantitative data in
 Schedule 19.
 
 11.  The previous years fi gures have been regrouped to conform to
 current years classification.