United Breweries Holdings

1.  We have audited the attached Balance Sheet of United Breweries
 (Holdings) Limited, Bangalore, as at 31st March 2009, the Profit and
 Loss Account and also the Cash Flow Statement for the year ended on
 that date annexed thereto. 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 significant estimates made
 by the management, as well as evaluating the overall financial
 statement presentation. We believe that our audit provides a reasonable
 basis for our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003 issued
 by the Central Government of India in terms of sub-section (4A) of
 Section 227 of the Companies Act, 1956 (1 of 1956), we enclose in the
 Annexure a statement on the matters specified in paragraphs 4 and 5 of
 the said order.
 
 4.  We draw attention, without qualifying our report, to Note Nos. 8
 and 11 in Schedule 12 regarding the delay in recovery of unsecured
 advances to subsidiaries amounting to Rs. 12,899.522 million and
 companys exposure of guarantees given on behalf of subsidiaries and
 associate companies.
 
 5.  Further to our comments in the annexure referred to 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 purpose 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
 Companies Act, 1956;
 
 v on the basis of written representations received from the directors
 and taken on record by the Board of Directors, we report that none of
 the directors is disqualified as on 31-03-2009 from being appointed as
 a director in terms of clause (g) of sub-section (1) of section 274 of
 the Companies Act, 1956; and
 
 vi in our opinion and to the best of our information and according to
 the explanations given to us, the said accounts, read together with the
 notes thereon, give the information required by the Companies Act,
 1956, in the manner so required and give a true and fair view in
 conformity with accounting principles generally accepted in India;
 
 (a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31-03-2009;
 
 (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 the Auditors Report
 
 (Referred to in paragraph 3 of our report of even date)
 
 Re: United Breweries (Holdings) Limited
 
 (i) (a) The company has maintained proper records showing full
 particulars including quantitative details and situation of its fixed
 assets.
 
 (b) All the assets have not been physically verified by the management
 during the year but there is a regular programme of verification which,
 in our opinion, is reasonable having regard to the size of the company
 and the nature of its assets.  Discrepancies noticed on verification
 during the year have been properly dealt with in the books of account.
 
 (c) During the year, the company has disposed off a portion of its land
 and building. This transaction has not affected the going concern
 status of the company.
 
 (ii) (a) As explained to us, the inventory has been physically verified
 during the year by the management. In our opinion, the frequency of
 such verification is reasonable.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 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 its
 inventory. The discrepancies noticed on physical verification of
 inventory have been properly dealt with in the books of account.
 
 (iii) (a) In our opinion and according to the information and
 explanations given to us, the company has granted unsecured loans to a
 party covered in the register maintained under section 301 of the
 Companies Act, 1956. The amount of such loans outstanding as at
 31-3-2009 is Rs. 976.100 million. The rate of interest and other terms
 and conditions of loans given by the company are prima facie not
 prejudicial to the interest of the company. The repayments of the dues
 are in accordance with terms and conditions stipulated.
 
 (b) The company has not taken any loans from companies, firms or other
 parties covered in the register maintained under section 301 of the
 Companies Act, 1956. Therefore, the provisions of clause 4(iii)(e) to
 4(iii)(g) of the Companies (Auditors Report) Order, 2003 are not
 applicable to the company.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there exists in the company an adequate
 
 internal control system commensurate with the size of the company and
 the nature of its business with regard to purchases of inventory, fixed
 assets and with regard to sale of goods and services. During the course
 of our audit, we have not observed any continuing failure to correct
 major weaknesses in the internal control system of the company.
 
 (v) (a) In our opinion and according to the information and
 explanations given to us, the particulars of all contracts or
 arrangements that need to be entered into the register maintained under
 section 301 of the Companies Act, 1956 have been so entered.
 
 (b) In our opinion and according to the information and explanation
 given to us, the transactions made in pursuance of contracts or
 arrangements entered in the register maintained under section 301 of
 the Companies Act, 1956 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) In our opinion and according to the information and explanations
 given to us, the company has complied with the provisions of section
 58A and 58AA and other relevant provisions of the Companies Act, 1956
 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to
 the deposits accepted from the public. No order has been passed by the
 Company Law Board or Reserve Bank of India or any Court or any other
 Tribunal in relation to the deposits accepted by the company.
 
 (vii) In our opinion and according to the information and explanations
 given to us, the company has an internal audit system commensurate with
 the size and nature of its business.
 
 (viii) In our opinion and according to the information and explanations
 given to us the provisions of section 209(1 )(d) of the Companies Act,
 1956 with regard to maintenance of cost records are not applicable to
 the company.
 
 (ix) (a) In our opinion and according to the information and
 explanations given to us, the company is generally regular in
 depositing with appropriate authorities undisputed statutory dues
 including dues in respect of provident fund, investor education
 protection fund, employees state insurance, income tax, sales tax,
 wealth tax and other material statutory dues applicable to it.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of income tax, wealth tax,
 service tax, sales tax, excise duty etc., were in arrears as at
 31-3-2009 for a period of more than six months from the date they
 became payable except an amount of rupees 0.700 million in respect of
 customs duty.
 
 (c) According to the information and explanations given to us,
 following is the list of dues on account of taxes, which have not been
 deposited on account of disputes.
 
 Name of the    Nature of dues   Disputed amount     Forum where dispute
 Statue                                                     is 
                                 (Rs. in million)        pending.
 
 Income Tax 
 Act, 1961    Income tax for the 
              A.Y. 1984-85.           2.778          Income Tax Appellate 
                                                        Tribunal
 
 Income Tax 
 Act, 1961    Income tax for the 
              A.Y. 1985-86.           3.155          Income Tax Appellate 
                                                        Tribunal
 
 Income Tax 
 Act, 1961    Income tax for the 
              A.Y. 1989-90.           1.129             CIT (Appeals)
 
 Income Tax 
 Act, 1961    Income tax for the 
              A.Y. 1990-91.           4.693             CIT (Appeals)
 
 Income Tax 
 Act, 1961    Income tax for the 
              A.Y. 1991-92.           7.720             CIT (Appeals)
 
 Income Tax 
 Act, 1961    Income tax for the 
              A.Y. 1992-93.           5.831             CIT (Appeals)
 
 Income Tax 
 Act, 1961    Income tax for the 
              A.Y. 1997-98.           2.019             CIT (Appeals)
 
 Income Tax 
 Act, 1961    Income tax for the 
              A.Y. 2006-07.           5.672             CIT (Appeals)
 
 Income Tax 
 Act, 1961    Interest for 
              A.Y 2001-02             1.929             CCIT, Bangalore
 
 Foreign Trade     Penalty            5.000     High Court of Judicature,
 (Development &                                              Madras
 Regulation) Act, 1992 
      
 (X) The company does not have any accumulated losses. The company has
 not incurred cash losses during the financial year covered by our audit
 and during the immediately preceding financial year.
 
 (xi) In our opinion and according to the information and explanations
 given to us, the company has not defaulted in repayment of dues to
 financial institution or banks. The company has not issued any
 debentures.
 
 (xii) In our opinion and according to the information and explanations
 given to us, the company has not granted any loans on the basis of
 security by way of pledge of shares, debentures and other securities.
 Therefore, the provisions of clause 4(xii) of the Companies (Auditors
 Report) Order, 2003 are not applicable to the company.
 
 (xiii) In our opinion and according to the information and explanations
 given to us, the company is not a chit fund or a nidhi/mutual benefit
 fund/society. Therefore, the provisions of clause 4(xiii) of the
 Companies (Auditors Report) Order, 2003 are not applicable to the
 company.
 
 (xiv) In our opinion and according to the information and explanations
 given to us, the company is not dealing in or trading in shares,
 securities, debentures or other investments. Therefore, the provisions
 of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are
 not applicable to the company.
 
 (xv) In our opinion and according to the information and explanations
 given to us, the terms and conditions on which the company has given
 guarantees for loans taken by others from banks or financial
 institutions are not prejudicial to the interest of the company.
 
 (xvi) In our opinion and according to the information and explanations
 given to us, the term loans raised during the year have been applied
 for the purposes for which they were raised.
 
 (xvii) In our opinion and according to the information and explanations
 given to us and on an overall examination of the Balance Sheet of the
 company, we report that no funds raised on short-term basis have been
 used for long-term investment.
 
 (xviii)According to the information and explanations given to us, the
 company has not made any preferential allotment of shares to any
 parties covered in the register maintained under section 301 of the
 Companies Act, 1956. Therefore, the provisions of clause 4(xviii) of
 the Companies (Auditors Report) Order, 2003 are not applicable to the
 company.
 
 (xix) According to the information and explanations given to us, the
 company has not issued any debentures during the year. Therefore, the
 provisions of clause 4(xix) of the Companies (Auditors Report) Order,
 2003 are not applicable to the company.
 
 (xx) According to the information and explanations given to us, the
 company has not raised any money during the year by public issue.
 Therefore, the provisions of clause 4(xx) of the Companies (Auditors
 Report) Order, 2003 are not applicable to the company.
 
 (xxi) According to the information and explanations given to us, no
 fraud on or by the company has been noticed or reported during the
 course of our audit.
 
                                               For Vishnu Ram & Co.,
                                              Chartered Accountants,
                                                   (S.Vishnumurthy)
 Bangalore                                              Proprietor.
 August 11, 2009                               Membership No. 22715