United Breweries (Holdings) Ltd

Your Directors have pleasure in presenting the 94th Annual Report of your Companytogether with the Audited Accounts for the year ended March 31, 2010.

FINANCIAL RESULTS

The summary of financial results of the Company for the financial year ended March 31,2010 is as under:

DIVIDEND

Taking into account the improved results for the year and also the need for resourcesfor expanding business activities of the Company, your Directors have recommended adividend of Re.1 per share (10%) for the year ended March 31, 2010.

OPERATIONS

The Company’s revenues comprise of rentals of property at UB City, Bangalore,Export Sales, Trade Mark License Fees, Dividends, Guarantee Commission and Interest onLoans and Deposits.

PROPERTY DEVELOPMENT

A Joint Development Agreement was executed on April 26, 2010 with Prestige EstatesProjects Limited [PEPL] to develop 1,93,266 sq. ft [4.44 acres] in the residential area"Brewery House" in the property bearing Municipal No.33, Vittal Mallya Road,Bangalore into a Luxury Residential Apartment Buildings with first class specifications.Itis intended to develop a minimum super built up area of 500000 sq. ft. or such area as mayfinally be approved by the authorities and the Company will be entitled to 55% of theconstructed area. The sanction of the plan is awaited. When built, this residentialdevelopment will add yet another landmark to Bangalore’s skyline.

Reflecting the changed scenario arising from the global economic slow down since lastyear, several Lessees of rental space (both office and retail) have re-negotiated therentals. This has impacted the potential revenue. A re-negotiated package worked out withthe retail lessees is now in place.

SALE OF PROPERTY

During the year, the Company has sold Commercial Space measuring 26,696 sq.ft. ofsaleable super built up area inclusive of proportionate share in all the common areas inthe Comet Block in ‘UB CITY’ and 7868.50 sq.ft. of undivided right, title andinterest and ownership in the land in the UB City Property together with 30 coveredparking spaces in basement to the developer of the property, Prestige Estates ProjectsLtd.

EXPORT BUSINESS

For the eleventh consecutive year, UB Global was awarded APEDA’s Golden Trophy foroutstanding export performance of Alcoholic Beverages, along with the Silver Award for theBest Merchant Exporter from the Federation of Karnataka Chamber of Commerce and Industry.

Recessionary economic conditions continued to haunt UB Global’s markets, withseveral European countries experiencing a liquidity crisis. The gradual boom witnessed bythe domestic economy only added to the woes through increased input costs. The combinedeffect of such environmental impediments marginally affected revenues and profitability.However, performance in the branded leather footwear and apparel export was satisfactory.

For the first time, the overseas beer shipments crossed the one million cases markduring the year. Exports of wines to South Africa, which commenced in January 2009,widened its foot-print, spreading its presence to twelve countries.

Recognizing the financial benefits accruing from owned production units, UB Globalacquired a footwear manufacturing unit at Ambur, a leather industry centre in Tamil Nadu,which is currently in an expansion phase. The exports division is focusing on ascendingthe value- chain and will be putting up a new facility to produce high-endcasual–wear apparel from the following financial year. Both production units havebeen entirely funded from internal accruals.

DIRECTORS

During the year, Mr. M S Kapur was appointed as an Additional Director to hold officeup to the date of the next Annual General Meeting. The Company has received notice underSection 257 of the Companies Act, 1956, from a Member signifying his intention to proposeMr. M S Kapur as a candidate for the office of the Director of the Company liable toretire by rotation.

Mr. R N Pillai was re-appointed as Managing Director with effect from March 18, 2010 upto the close of business hours of August 20, 2010 without remuneration subject to approvalof the Members at the ensuing Annual General Meeting. The Board wishes to place on recordthe valuable services rendered by Mr. Pillai during his tenure as Managing Director of theCompany. Mr. R N Pillai will however continue to be a Director of the Company.

Mr. A Harish Bhat was appointed by the Board as Managing Director of the Company,without remuneration, from the close of business hours of August 20, 2010 for a period ofthree years or date of superannuation whichever is earlier subject to approval of theMembers at the ensuing Annual General Meeting.

Mr. S G Ruparel and Mr. B S Patil, Directors, retire by rotation and, being eligible,offer themselves for re-appointment, as Directors liable to retire by rotation.

A brief resume of the Directors offering themselves for appointment /re-appointment isgiven in the Annexure to the Notice.

AUDITORS

Messrs. Vishnu Ram & Co., Chartered Accountants, retire as Auditors of the Companyat the conclusion of the forthcoming Annual General Meeting and are eligible forre-appointment.

With regard to observations in the Auditors’ Report on the accounts for the yearended March 31, 2010, the relevant financial notes are self explanatory and do not requirefurther elucidation.

LISTING OF SHARES OF THE COMPANY

The shares of your Company are presently listed on Bangalore Stock Exchange Limited[Regional Exchange], The Bombay Stock Exchange Limited, Mumbai and National Stock Exchangeof India Limited.

CORPORATE GOVERNANCE

A report on Corporate Governance is annexed separately as part of the report along witha Certificate of Compliance from the Statutory Auditor. Necessary requirements ofobtaining certifications / declarations in terms of Clause 49 of the Listing Agreementshave been complied with.

SUBSIDIARIES

During the current year, UB Sports Limited became a wholly owned subsidiary of theCompany.

The following are the subsidiaries of the Company:

A. Indian Subsidiary Companies

1. Bangalore Beverages Limited

2. City Properties Maintenance Company Bangalore Limited

3. Kingfisher Finvest India Limited [Formerly Kingfisher Radio Limited]

4. Kingfisher Airlines Limited [Formerly Deccan Aviation Limited)

5. Kingfisher Training and Aviation Services Limited [Formerly Kingfisher AirlinesLimited]

6. Kingfisher Aviation Training Limited [Formerly Kingfisher Training Academy Limited]

7. UB Electronic Instruments Limited

8. UB Infrastructure Projects Limited

9. UB International Trading Limited

10. Vitae India Spirits Limited

B. Overseas Subsidiary Companies

11. Inversiones Mirabel, S.A.

12. Mendocino Brewing Co. Inc, USA

13. Rubic Technologies Inc

14. Rigby International Corp

15. Releta Brewing Company LLC

16. UB Overseas Limited

17. UBHL [BVI] Limited

18 United Breweries of America Inc., Delaware

19. United Breweries International [UK] Limited

20. UBSN Limited

A summary of performance of all the above mentioned subsidiaries including turnover,profit before and after taxation are available in the statement under the headingSummarized Financials of Subsidiary Companies 2009-10 included in the Annual Report.

The Ministry of Corporate Affairs, Government of India, has granted exemption fromattaching the annual accounts of the above Subsidiaries in view of the publication ofconsolidated financials. The Consolidated Financial Statements in the Annual Reportinclude financial information of the Subsidiary Companies.

The Company will, however, make available the Audited Annual Accounts and relatedinformation of the Subsidiary Companies, upon request by any member of the Company. Thesedocuments will also be available for inspection during business hours at the RegisteredOffice of the Company and at the venue of the Annual General Meeting.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, ManagementDiscussion and Analysis Report is appended and forms an integral part of the Report onCorporate Governance which is appended.

FIXED DEPOSITS

The Company started accepting fresh deposits during the year. The response to the FixedDeposit Scheme was quite good. Fixed Deposits from the Public and Shareholders stood atRs.1349.024 million as on March 31, 2010.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 205A[5] and 205C of the Companies Act, 1956, anamount of Rs.0.134 million [Previous Year Rs.1.129 million] being the aggregate of theUnclaimed Dividend and Deposits, remaining unclaimed and unpaid for more than 7 years,have been transferred to the Investor Education and Protection Fund.

PARTICULARS OF EMPLOYEES

The information as are required to be provided in terms of Section 217[2A] of theCompanies Act, 1956 read with the Companies [Particulars of Employees] Rules, 1975 isenclosed.

Particulars of Conservation of Energy, Technology Absorption

The Provisions of Section 217[1][e] of the Act relating to conservation of energy andtechnology absorption do not apply to this Company since it is not engaged inmanufacturing activities.

Foreign Exchange Earnings and outgo

The particulars are as under:

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217[2AA] of the Companies Act, 1956 the Board ofDirectors hereby state that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards havebeen followed along with proper explanation relating to material departures.

(ii) accounting policies have been selected and applied consistently and the judgmentsand estimates made are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year and of the profit of theCompany for that period.

(iii) proper and sufficient care have been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956, forsafeguarding the assets of the Company and for prevention and detection of fraud and otherirregularities.

(iv) the Annual Accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT

Your Directors place on record the support received from Group Companies, shareholders,depositors, banks, financial institutions and employees.

By Order of the Board

Annexure to Directors’ Report

Statement under Section 217(2A) of the Companies Act, 1956 read with the Companies(Particulars of Employees) Rules, 1975 and forming part of the Directors’ Report forthe year ended March 31, 2010.

Employed throughout the year and in receipt of remuneration in aggregate of not lessthan Rs.24,00,000 per annum.

Employed for part of the year and were in receipt of remuneration at the rate / notless than Rs.2,00,000 per month.

* Since retired; ** Since transferred to another Associate Company

Notes:

1. Remuneration shown above includes Salary, Allowance, Medical Leave, Travel Expensesand monetary value of perquisites as per Income Tax Rules.

2. None of the employees mentioned above is a relative of any Director of the Company.

3. None of the above mentioned employees is holding more than 2% of the Paid up EquityCapital of the Company.

Statement pursuant to Section 212(1)(e) of the Companies Act, 1956 as at March 31, 2010