United Spirits

1.  We have audited the attached Balance Sheet of United Spirits
 Limited, as at March 31, 2009, and the related Profit and Loss Account
 and 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 the 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 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, 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:
 
 4.1.  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;
 
 4.2.  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;
 
 4.3.  The Balance Sheet, Profit and Loss Account and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 4.4.  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;
 
 4.5.  On the basis of written representations received from the
 directors, as on March 31, 2009, and taken on record by the Board of
 Directors of the Company, none of the directors is 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;
 
 4.6.  In our opinion and to the best of our information and according
 to the explanations given to us, the said financial 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:
 
 i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2009;
 
 ii) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 iii) 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 the Auditors Report of even date to the
 members of United Spirits Limited on the financial statements for the
 year ended March 31, 2009]
 
 1.  (a) The Company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) The fixed assets 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 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
 off by the Company during the year.
 
 2.  (a) The inventory (except those in transit at the year-
 
 end amounting to Rs.123.794 Million) 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 verification 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) On the basisof our examination of inventory records, in our
 opinion, the Company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material.
 
 3.  (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, sub clauses (b), (c) and
 (d) of clause (iii) 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 accordingly, sub clauses (f) and (g)
 of clause (iii) of Paragraph 4 of the Order are not applicable.
 
 4.  In our opinion and according to the information and explanations
 given to us, having regard to the explanation that certain items
 purchased are of 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 and 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 been informed of any continuing failure to
 correct major weaknesses in the aforesaid internal control system.
 
 5.  (a) In our opinion and according to the information and
 explanations given to us, the particulars of contracts or 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
 except for sale of goods aggregating to Rs.649.482 million and purchase
 of services aggregating to Rs.94.938 million as there are no market
 prices comparable to those sold/ purchased, which, however, are
 considered to be of special nature as explained by the management of
 the Company.
 
 6.  In our opinion and according to the information and explanations
 given to us, the Company has complied with the provisions of Sections
 58A and 58AA or any other relevant provisions of the Act and the
 Companies (Acceptance of Deposits) Rules, 1975 with regard to the
 deposits accepted from the public. According to the information and
 explanations given to us, no Order has been passed by the Company Law
 Board or National Company Law Tribunal or Reserve Bank of India or any
 Court or any other Tribunal on the Company in respect of the aforesaid
 deposits.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 8.  The Central Government of India has not prescribed the maintenance
 of cost records under clause (d) of sub-section (1) of Section 209 of
 the Act for any of the products of the Company.
 
 9.  (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, wealth tax, service tax,
 customs duty, excise duty and cess, and other material statutory dues,
 as may be applicable, with the appropriate authorities except dues with
 respect to sales-tax. The extent of the arrears of statutory dues
 outstanding as at March 31, 2009 for a period of more than 6 months
 from the date they became payable in respect of sales - tax is as
 follows :
 
                                         Period to           Date of
 Name of       Nature      Amount        which the   Due     Pay- 
 the             of       (Rs. in        amount      date    ment 
 statute        dues       Million)      relates
 
 Maharashtra                                                 Not
 Value Added    Sales      12.938        2005-06   April 1,  yet
 Tax, 2002                                         2006      paid
 
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, the particulars of dues 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.
 
 10.  The Company has neither accumulated losses as at March 31, 2009
 nor has it incurred any cash loss either during the financial year
 ended on that date or in the immediately preceding financial year.
 
 11.  According to the records of the Company examined by us and the
 information and explanations 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.
 
 12.  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.
 
 13.  The provisions of any special statute applicable to chit fund/
 nidhi/ mutual benefit fund/ societies are not applicable to the
 Company.
 
 14.  In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 15.  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.
 
 16.  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.
 
 17.  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 a short-term
 basis which have been used for long-term investment.
 
 18.  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.
 
 19.  The Company has not issued any debenture during the year..
 
 20.  The Company has not raised any money by public issues during the
 year.
 
 21.  21. 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.
 
 Annexure to the Auditors Report
 
 [Referred to in paragraph 9(b) of the Annexure to the Auditors report
 of even date to the members of United Spirit: Limited on the financial
 statements for the year ended March 31, 2009].
 
                        Amount Forum where 
 Name of the Statute    (Rs.in dispute      Year To Which The Amount 
                        Milli- is pending   Relates
                        on)        
 
                                            1993-94,1994-95,1999-00,
                                            2000-01, 2001-02, 2002-03 to
 The Income-Tax                             2005-06
 Act, 1961             126.203 Commissioner 
                               of Income-
                               Tax Appeals
 
                         3.620 Assessing 
                               Officer      2003-04
                       140.476 Income Tax  
                               Appelate 
                               Tribunal     2003-04, 2004-05, 2005-06
 
 The Wealth-Tax Act, 1957 -    Commissioner 
                               of Income 
                               Tax -Appeals
                          -                 1992-93,1994-95,1996-97
 
 
 Central and Respective  
 State                 199.471 Supreme      1996-06
 Sales Tax Acts                Court        1982-83,1984-86,1992-93,
                        56.825 High         1995-96,1996-97, 
                               Court        1997-98,1997-00,1999-00,
                                            2002-03,2003-04,2006-07
 
                        88.749 Appellate    1986-90,1985-86,1986-87,
                               Tribunal     1987-88, 1988-89,1989-96,
                                            1990-91,1991-92, 1991-93, 
                                            1994-95,1995-96,1996-97, 
                                            1997-98, 1997-01,1998-99,
                                            1999-00, 2000-01
 
                        15.756 Joint        1984-85,1985-86,1987-88,
                               Commissioner 1991-92, 1992-93,2000-01,
                                            2006-07,2007-08
                         8.848 Deputy 
                               Commissioner 1984-85,1992-93,2002-03
                         0.291 Commissioner 
                               of Sales Tax 1999-00, 2000-01
                         1.995 Assistant 
                               Commissioner 1974-76, 1995-96,1996-97,
                                            2002-03,2008-09
                         7.183 Assessing 
                               Officer      1993-94,1995-96,1997-98,
                                            2003-04,2004-05
                         0.892 Appellate 
                               and 
                               Revisional 
                               board        1993-94,2004-05,2005-06
                       115.431 Additional 
                               Commissioner 2002-03, 2004-05, 2005-06
                                            1971-72,1972-73,1973-74,
                                            1977-78,1978-79,
 
 Respective State 
 Excise Acts             4.785 Supreme Court
                                            1963-64,1972-74,1983-84, 
                                            1984-85, 1985-86,1986-87, 
                                            1988-91, 1990-91,1991-92,
                                            1992-93, 
                       265.885 High Court   1993-94,1995-00,1996-97,
                                            1997-98,1998-99,
                                            1998-01, 1999-00, 2000-01,
                                            2001-09,2002-03, 2003-04.
 
                        17.464 Appellate 
                               Tribunal     1995-96 1974-81,1980-81,
                                            1981-82,1982-83,1983-84,
                                            1983-85,1984-85,1984-85, 
                                            1985-86,1986-87,1985-87,
                                            1987-88,1987-89,1988-89,
                                            1989-90,
                       193.185 Excise 
                               Commssioner  1991-92, 1995-96, 1993-94, 
                                            1995-98,1993-96,1998-99,
                                            1999-00, 2001-02, 2002-03, 
                                            2004-05, 2005-06.
 
                         1.593 Excise 
                               Superinten-
                               dent         1986-87,1992-93,1992-99,
                                            1997-98, 2001-02
                         1.701 District 
                               Magistrate 
                               and 
                               Collector    1994-95
                        12.170 Chinsurah 
                               Court,>
                               hooghly      1981-84
                         8.311 Additional 
                               District 
                               Magistrate   1993-94
                         0.081 Collector    1994-95
 The Central Excise 
 Act, 1944               6.000 Supreme Court
                        25.635 High Court   1989-97,1996-97,2004-05
                         2.363 Commissioner 1995-96, 2003-04
                               of Central 
                               excise
                          -    Assistant 
                               Commissioner 1995-96
 
 * Net of amounts paid under protest or otherwise
 
 
 
 
                                                 J. Majumdar
                                                     Partner  
                                          Membership Number- F 51912  
 
                               For and on behalf of Price Waterhouse
                                               Chartered Accountants 
 Place : Bangalore 
 Date  : July 29, 2009